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

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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