Income Tax rates and allowances

Click here for National Insurance rates

Income tax 

Personal allowances and reliefs

 

2019/20

2018/19

2017/18

2016/17

2015/16

2014/15

2013/14

2012/13

Personal allowance

£

£

 £

£

 £

£

 £

£

Aged under 65*

12,500

11,850

11,500

11,000

10,600

10,000

9,440

8,105

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

Aged 75 & over

 

-

-

 -

-

-

-

10,660

Born before 6 April 1938

 

-

-

-

10,660

10,660

10,660

 

Blind person's allowance

2,450

2,390

2,320

 2,290

2,290

 2,230

2,160

2,100

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

1,250

1,190

1,150

 1,100

1,060

-

-

-

Married couples allowance (MCA)

Born before 6 April 1935

Max

Min

 

8,915

3,450

 

8,695

3,360

 

8,445

3,260

 

8,355

3,220

 

8,355

3,220

 

8,165

3,140

7,915

7.705

Age allowance limit

MCA reduced by £1 for every £2 exceeding limit

29,600

28,900

28,000

 27,700

 27,700

 27,000

26,100

25,400

Rent a room relief

7,500

7,500

7,500 

 7,500

 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

%

2019/20

2018/19

2017/18

2016/17

2015/16

 2014/15

2013/14

2012/13

Basic

20%

£0-37,500

£0-£34,500

£0 -£33,500

£0 -£32,000

£0 - £31,785

£0 to £31,865

£0 to £32,010

£0 to £34,370

Higher

40%

£37,501
to
£150,00

£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

Top

45%

£150,001+

£150,001+

£150,001 +

£150,001 +

£150,001 +

£150,001 +

£150,001 +

-

Top

50%

 

-

   

-

-

-

£150,000 +

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

a starting rate applies to savings income up to:

  • £5,000 2018/19  & 2019/20 - 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.


Scottish income tax see 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.

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. 

Welsh Income tax, see Welsh Income Tax

  • 2019/20 Rates as UK
  • C suffix for PAYE

Personal Savings Allowance

  • From 2016/17 on 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 2019/20

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

£40,000

£50,000

£215,000

Tapered Annual Allowance with income over

£150,000

£150,000

£150,000

n/a

n/a

n/a

Minimum tapered allowance

£10,000

£10,000

£10,000

n/a

n/a

n/a

Lifetime allowance

£1,055,000

£1,030,000

£1 million

£1.25 million

£1.5 million

£1.8 million

see Pensions: tax rules and planning

Do you like our webservice? Join hundreds of firms of accountants and Sign Up Now for FREE Nichola's SME tax-updates

tax dog

Do you need Virtual Tax Partner® support?

Paying too much tax? Need assistance in preparing your tax return? Advice on a tax efficient pay package? Create a family investment company?

Any other tax problem? Contact Virtual Tax Partner ® support.

Comments (0)

Rated 0 out of 5 based on 0 voters
There are no comments posted here yet

Leave your comments

  1. Posting comment as a guest.
Rate this post:
Attachments (0 / 3)
Share Your Location