Income Tax Rates
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Income Tax Rates
If you are looking at Income Tax Rates and reviewing or planning your finances, please feel free to contact us. We can discuss your specific circumstances and tax efficient ways to legally minimise your Income Tax.
Income Tax rates for England and Wales (and Scotland prior to 2018/ 19)
| Rate | 2017-18 | 2018-19 | 2019-20 |
|---|---|---|---|
| Starting rate for Savings: 0% | £0 - £5,000 | £0 - £5,000 | £0 - £5,000 |
| Basic rate: 20% | £0 - £33,500** | £0 - £34,500** | £0-£37,500 |
| Higher rate: 40% | £33,501*** - £150,000 | £34,501*** - £150,000 | £37,501*** - £150,000 |
| Additional rate: 45% | Over £150,001 | Over £150,001 | Over £150,001 |
*Prior to 6th April 2015, this rate was 10% and applied to savings income only.
** Scottish Taxpayers only the limit is £31,500 for 2017-18
*** Scottish Taxpayers only, see separate table below for income tax rates on non-savings income. (see note 1)
For Scottish Taxpayers, the following proposed rates and bands will apply if the Scottish Budget for 2019-20 is approved by the Scottish Government.
| Name of band | Rate | 2018-19 | 2019-20 | 2020-21 |
|---|---|---|---|---|
| Starter rate | 19% | Over £11,850 Up to £13,850 | Over £12,500 Up to £14,549 | Over £12,500 Up to £14,585 |
| Basic rate | 20% | Over £13,850 Up to £24000 | Over £14,549 Up to £24,944 | Over £14,585 Up to £25,158 |
| Intermediate rate | 21% | Over £24,000 Up to £43,430 | Over £24,944 Up to £43,430 | Over £25,158 Up to £43,430 |
| Higher rate | 41% | Over £43,430 Up to £150,000 | Over £43,430 Up to £150,000 | Over £43,430 Up to £150,000 |
| Top rate | 46% | Above £150,000 | Above £150,000 | Above £150,000 |
Note 1. Scottish rates apply to Scottish taxpayers on all non-savings income which includes earned income from employment, self-employment or partnerships and property income, pension income and any other income that is not classed as savings or dividends.
If, after deducting your Personal Allowance from your total income liable to Income Tax, your nonsavings income is above this limit then the starting rate for savings will not apply. Nonsavings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.
2018/19 – Scottish Taxpayers
| Name of band | Rate | Band (of earned income) |
|---|---|---|
| Starter rate | 19% | £11,851 - £13,850 (£2,000) |
| Basic rate | 20% | £13,851 - £24,000 (£10,150) |
| Intermediate rate | 21% | £24,001 - £43,430 (£19,430) |
| Higher rate | 41% | £43,431 - £150,000 |
| Top rate | 46% | £150,001 and above |
If, after deducting your Personal Allowance from your total income liable to Income Tax, your nonsavings income is above this limit then the starting rate for savings will not apply. Nonsavings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.
| Details | 2017-18 | 2018-19 | 2019-20 |
|---|---|---|---|
| Dividend ordinary rate - for dividends otherwise taxable at the basic rate ( effective rate with tax credit) | 7.5%** | 7.5%*** | 7.5% |
| Dividend upper rate - for dividends otherwise taxable at the higher rate (effective rate with tax credit) | 32.5%** | 32.5%*** | 32.5% |
| Dividend additional rate - for dividends otherwise taxable at the additional rate (effective rate with tax credit) | 38.1 %** | 38.1 %*** | 38.1 % |
*With effect from 6th April 2016, the dividend tax credit has been abolished and replaced with a new £5,000 tax-free Dividend Allowance.
** 5,000 tax-free dividend allowance remains in place
*** The dividend allowance is reduced to £2,000 from 6 April 2018
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