HMRC publishes rates and thresholds for employers 2020 to 2021

25 February 2020

HMRC has published the rates and thresholds for employers to use when operating their payrolls and/or when providing expenses and benefits to employees.

It is important to note that the tax thresholds for the tax year 2020-21 are yet to be officially confirmed, and that they could still potentially change. The official thresholds should be confirmed at the 11 March Budget, so until that point, nothing should be taken as gospel.

At the time of writing, and within HMRC’s publication, the tax thresholds for tax year 202-21 remain unchanged from those applied in the current tax year, 2019-20. The other rates included are as follows:

  • PAYE tax and Class 1 National Insurance contributions
  • Tax thresholds, rates and codes
  • Class 1 National Insurance thresholds
  • Class 1 National Insurance rates
  • Class 1A National Insurance: expenses and benefits
  • Class 1A National Insurance: termination awards and sporting testimonial payments
  • Class 1B National Insurance: PAYE Settlement Agreements (PSAs)
  • National Minimum Wage
  • Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay
  • Statutory Sick Pay (SSP)
  • Student loan and postgraduate loan recovery
  • Company cars: advisory fuel rates
  • Employee vehicles: mileage allowance payments

Just a cautionary note - the new publication relating to thresholds for tax year 2020-21 includes the 2019-20 tax thresholds and rates for Scotland but figures for 2020-21 have already been published by the Scottish government. The Advisory Fuel Rates are those effective from 1 December 2019, and not the most recently published ones relating to 1 March 2020. HMRC has been notified in relation to these issues and will hopefully update the page in due course.


CIPP comment

The CIPP would welcome unchanged tax thresholds for the tax year 2020-21 since there is such limited time between the delivery date of the Budget and the new tax year. This is in consideration of the gigantic task for software developers ahead should there be any amendments, along with considerable additional work for payroll professionals.

However, with a new chancellor in place, and the prime minister implying that tax changes may be imminent, there are no guarantees at this moment in time in relation to what will happen in tax year 2020-21.