Chancellor confirms increases to Income Tax Personal Allowance and Higher Rate thresholds, and NI limits and thresholds for 2021-22
25 November 2020
Within the Spending Review accompanying documents, it has been confirmed that both the Income Tax Personal Allowance and Higher Rate Threshold will increase in line with the Consumer Price Index (CPI) figure for September 2020. This figure will also be used as the basis for determining what the National Insurance (NI) limits and thresholds, and the rates of class 2 & 3 NI contributions will be for tax year 2021-22.
The CPI figure for September 2020 was 0.5% but we await to see what the official thresholds and limits will be, to be laid out by the Government.
This information is welcomed as speculation was rife that there would be no increase to tax and NI thresholds, and also to the NLW and NMW rates, but it has been confirmed that they will also increase for pay reference periods that start on or after 1 April 2020.
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