Income Tax rates and allowances

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Income tax

Personal allowances and reliefs

 

2018/19

2017/18

2016/17

2015/16

2014/15

2013/14

2012/13

2011/12

2010/11

Personal allowance

£

 £

£

 £

£

 £

£

 £

£

Aged under 65*

11,850

11,500

11,000

10,600

10,000

9,440

8,105

7,475

6,475

PA restricted by £1 for every £2 of income over

100,000

Born between 6 April 1938 and 5 April 1948

-

-

-

-

10,500

10,500

-

-

-

Aged 65–74

-

-

 -

-

 -

 -

10,500

9,940

9,490

Aged 75 & over

-

-

 -

-

-

-

10,660

10,090

9,640

Born before 6 April 1938

-

-

-

10,660

10,660

10,660

     

Blind person's allowance

2,390

2,320

 2,290

2,290

 2,230

2,160

2,100

1,980

1,890

Transferable tax allowance (for married couples and civil partners)**

1,185

1,150

 1,100

1,060

-

-

-

-

-

Married couples allowance (MCA)

                 

Born before 6 April 1935

Max

Min

8,695

3,360

8,445

3,260

8,355

3,220

8,355

3,220

8,165

3,140

7,915

7.705

7,295

6,965

Age allowance limit

MCA reduced by £1 for every £2 exceeding limit

28,900

28,000

 27,700

 27,700

 27,000

26,100

25,400

24'000

22,900

Rent a room relief

7,500

7,500 

 7,500

 4,250

 4,250

4,250

4,250

4,250

4,250

*Personal allowance restriction from 2010/11 on

The personal allowance is restricted by £1 for every £2 of an individual's adjusted net income above £100,000.

** Transferable allowance: in 2016/17 a spouse or civil partner who is not liable to income tax above the basic rate may transfer £1,100 (2015/16 £1,060) of their unused personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. Taxpayers have 4 years in which to make the election.

Income tax rates

Rate

%

2018/19

2017/18

2016/17

2015/16

 2014/15

2013/14

2012/13

2011/12

2010/11

Basic

20%

£0-£34,500

£0 -£33,500

£0 -£32,000

£0 - £31,785

£0 to £31,865

£0 to £32,010

£0 to £34,370

£0 to £35,000

£0 to £37,400

Higher

40%

£34,501

to £150,000

£33,501 to £150,000

£32,001 to £150,000

£31,786 to £150,000

£31,866 to £150,000

£32,011 to £150,000

£34,370 to £150,000

£35,001 to £150,000

£37,401 to £150,000

Top

45%

£150,001+

£150,001 +

£150,001 +

£150,001 +

£150,001 +

£150,001 +

-

-

-

Top

50%

-

   

-

-

-

£150,000 +

£150,000 +

£150,000 +

*Starting rate band (see Savings income: tax on interest)

a starting rate applies to savings income up to:

  • £5,000 2018/19 - rate 0%
  • £5,000 2017/18 “ “
  • £5,000 2016/17   " "
  • £5,000 2015/16   " "
  • £2,880 2014/15 - rate 10%
  • £2,790 2013/14   " "
  • £2,710 2012/13   " "
  • £2,560 2011/12   " "
  • £2,440 2010/11   " "
  • £2,320 2008/09 to 2009/10  " "

This band is not available if taxable non-savings income also exceeds this band. Our guide Savings income: tax on interestshows worked examples.

Note the restriction on personal allowances when income is in excess of £100,000 from 2010/11 on.

Scottish income tax

2018/19

Additional tax bands are effective for Scottish taxpayers for 2018/19 and there will be 19%, 20%, 21%, 41% and 46% income tax rates. The higher rate threshold for 2018/19 is £43,430.

See Scottish Income Tax  for full details on Scottish rates from 2018/19 onwards.

2017/18

The higher rate threshold in Scotland remained frozen at £43,000 in 2017/18, instead of increasing in line with the rest of the UK. 

All other income tax rates, thresholds and allowance are the same as for the rest of the UK for 2017/18.

As a result the higher rate will apply for Scottish taxpayers from £31,501 to £150,000.

Personal Savings Allowance

  • From 2016/17 basic rate taxpayers do not have to pay tax on the first £1,000 of their savings income.
  • From 2016/17 higher rate taxpayers do not have to pay tax on the first £500 of their savings income.
  • There is no personal savings allowance for upper rate taxpayers.
  • There are no changes to these allowances in 2017/18.

From April 2016 banks and building societies no longer deduct basic rate tax from interest.

Child benefit claimants

From 7 January 2013 the High Income Child Benefit Tax Charge provisions claw back Child Benefit payments when a claimant or their partner's income exceeds £50,000.

Dividend tax 2016/17 onwards

  • The dividend tax credit is abolished
  • The first £2,000 of dividend received is tax free (£5,000 for 2016/17 and 2017/18)
  • Basic rate dividends taxed at 7.5%
  • Higher rate dividends taxed at 32.5%
  • Upper rate dividends taxed at 38.1%

Tax rate & effective tax rate on dividends up to 2015/16

Rate

2013/14 to 2015/16 

2012/13

2011/12

2010/11

2009/10

2008/09

Top tax rate

45%

50%

50%

50%

40%

40%

Dividend rate

37.5%

42.50%

42.50%

42.5%

32.5%

32.5%

Effective rate*

30.55%

36.11%

36.11%

36.11%

25%

25%

Higher tax rate

40%

40%

40%

40%

-

-

Dividend rate

32.5%

32.5%

32.5%

32.5%

   

Effective rate*

25%

25%

25%

25%

   
Basic rate ** 10% 10% 10% 10% 10% 10%

* For example: if an individual who is a top rate tax payer receives a dividend of £20,000 in 2013/14 (dividends are paid net of 10% tax), he will face a tax liability of £6,111 on the net dividend.

** Dividend received net of 10% tax. The amount received needs to be grossed up for higher rate tax payers by multiplying by 10/9. The dividend rate is then applied according to your tax band

Special rates for trustees income

Rate

2016/17 onwards

2013/14 to 2015/16

2012/13

Standard rate on first £1,000 of income which would otherwise be taxed at the special rate for trustees

Up to 20% depending on type of income

Trust rate

45%

45%

50%

Dividend trust rate

38.1%

37.5%

42.5%

Pensions - higher rate restrictions

Contribution limits

From 2018/19

From 2016/17 

2014/15 to 2015/16

2011/12 to 2013/14

To 2010/11

Annual allowance

£40,000

£40,000

£40,000

£50,000

£215,000

Tapered Annual Allowance with income over

£150,000

£150,000

n/a

n/a

n/a

Minimum tapered allowance

£10,000

£10,000

n/a

n/a

n/a

Lifetime allowance

£1,030,000

£1 million

£1.25 million

£1.5 million

£1.8 million

see Pensions: tax rules and planning

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