Income Tax
Income Tax Rates
|
2019-2020
%
|
2018-2019
%
|
2020-2021
%
|
Starting rate for savings |
0
|
0
|
0
|
Basic tax rate |
20
|
20
|
20
|
Higher tax rate |
40
|
40
|
40
|
Additional tax rate |
45
|
45
|
45
|
Allowance for tax-free dividends |
£2,000
|
£2,000
|
£2,000
|
Tax on dividends at Basic Effective Rate |
7.5
|
7.5
|
7.5
|
Tax on dividends at Higher Effective Rate |
32.5
|
32.5
|
32.5
|
Tax on dividends at Additional Effective Rate |
38.1
|
38.1
|
38.1
|
Starting rate band for savings |
£0 –
£5,000 |
£0 –
£5,000 |
£0 –
£5,000 |
Basic rate band 20% |
£0 –
£37,500 |
£0 –
£34,500 |
£0 –
£37,500 |
Higher rate band 40% |
£37,501 to £150,000
|
£34,501 to £150,000
|
£37,500 to £150,000
|
Additional rate band 45% |
Over £150,001
|
Over £150,001
|
Over £150,001
|
When the personal allowance is taken into account an individual will start to pay tax at 40% when their total income exceeds £50,000 in 2020/21.
This threshold (and the 45% threshold) can be increased if the taxpayer pays personal pension contributions or makes gift aid donations.