Income Tax rates and allowances (England)

Click here for National Insurance rates

Different Income Tax rates and allowances may apply for other parts of the UK, see:

Income tax: personal allowances and reliefs

 Year 2021/22  2020/21  2019/20  2018/19

Personal allowance 

PA restricted by £1 for every £2 of income over £100K*

12,570

12,500

12,500

 11,850

Savings allowance:

Basic Rate

Higher rate

Additional Rate

 

1,000

500

0

 

1,000

500

0

 

1,000

500

0

 

1,000

500

0

Property/Trading allowance **

£1,000

£1,000

£1,000

£1,000

Blind person's allowance

2,520

2,500

2,450

 2,390

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

1,260

1,250

1,250

 1,190

Married Couples Allowance (born before 6 April 1935)

Max

Min

up to 10% of the appropriate Max/Min

9,125

3,530

 9,075

3,510

8.915

3.450

8,695

3,360

MCA Limit

MCA reduced by £1 for every £2 exceeding limit

30,400

 30,200

 29,600

 28,900

 Rent a room relief

See Property Income Reliefs

7,500

 7,500

 7,500

 7,500

 

*Personal allowance restriction: by £1 for every £2 of an individual's adjusted net income above £100,000.

** Property/Trading allowance: Up to £1,000 trading and property allowances are available for each type of income. Restrictions apply.

*** Transferable allowance: a spouse or civil partner who is not liable to Income Tax above the basic rate may transfer their 'Marriage Allowance' which is 10% of their personal allowance (£1,260 for 2021/22) to their spouse/civil partner, provided that the recipient of the transfer is not liable to Income Tax above the basic rate. Taxpayers have four years in which to make the election. 

 Past years

   2017/18  2016/17  2015/16  2014/15

Personal 

allowance 

PA restricted by £1 for every £2 of income over £100K

 11,500  11,000  10,600  10,000

Blind person's

allowance

 2,320  2,290  2,290  2,230

Transferable 

marriage 

allowance (for married couples and civil partners)**

 1,150  1,100  1,060  

Married Couples Allowance 

(born before 6 April 1935)

Max

Min

up to 10% of the appropriate Max/Min

8,445

3,260

8,355

3,220

8,355

3,220

8,165

3,140

MCA Limit

MCA reduced by £1 for every £2 exceeding limit

 28,000  27,700  27,700  27,000

 Rent a room relief

See Property Income Reliefs

 7,500  7,500  7,500  7,500

 

Income Tax rates

Rate

%

2021/22
(frozen until 2025/26)

2019/20 &

2020/21

2018/19

Savings rate*

0%

£0 - £5,000 £0 - £5,000 £0 - £5,000

Basic

20%

£0-£37,700

£0-£37,500

£0-£34,500

Higher

40%

£37,701-£150,000

£37,501
to
£150,00

£34,501
to £150,000

Top

45%

£150,001+

£150,001+

£150,001+

 Past years

 

Rate

%

2017/18

2016/17

2015/16

 2014/15

Savings rate*

0%

£0 - £5,000

£0 - £5,000

£0 - £5,000

n/a

Basic

20%

£0 -£33,500

£0 -£32,000

£0 - £31,785

£0 to £31,865

Higher

40%

£33,501 to £150,000

£32,001 to £150,000

£31,786 to £150,000

£31,866 to £150,000

Top

45%

£150,001 +

£150,001 +

£150,001 +

£150,001 +

 

* The 0% savings rate is available for basic rate taxpayers with income of £17,570. For income above thsi level, the savings allowance may be available.


Child benefit claimants

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


Dividend tax from 2016/17 on

  • The dividend tax credit is abolished.
  • The first £2,000 of dividend received is tax free (£5,000 for 2016/17 - 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

2016/17 to date

2013/14 to 2015/16 

Top tax rate

45%

45%

Dividend rate

38.1%

37.5%

Effective rate

na

30.55%

Higher tax rate

40%

40%

Dividend rate

32.5%

32.5%

Effective rate

n/a

25%

Basic rate  7.5% 10%*

 

* Dividend received net of 10% tax. The amount received needs to be grossed up for higher rate taxpayers 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

Dividend rate: within the first £1,000

7.5%

-

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

Up to 20% depending on type of income

Trust rate: all other income

45%

45%

Dividend trust rate

38.1%

37.5%


Pensions - higher rate restrictions

Contribution limits

From 2020/21

From 2019/20

From 2018/19

From 2016/17 

2014/15 to 2015/16

Annual allowance

£40,000

£40,000

£40,000

£40,000

£40,000

Tapered Annual Allowance with income over

£240,000

£150,000

£150,000

£150,000

n/a

 

See Pensions: tax rules and planning

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