Income Tax Rates and Allowances

Income Tax

Rates

2020-21

2021-22

Starting rate of % on savings income up to (1)

£5,000

£5,000

Basic rate of 20% on income up to (2)

£37,500

£37,500

Higher rate of 40% on income (2)

£37,501-£150,000

£37,501-£150,000

Dividends:

Ordinary rate

7.5%

7.5%

Upper rate

32.5%

32.5%

Additional rate

38.1%

38.1%

Trusts: Standard rate band generally

£1,000

£1,000

Rate applicable to trusts

Dividends

38.1%

38.1%

Other income

45%

45%

  1. Not available if taxable non-savings income exceeds the starting rate band.
  2. Different rates and bands apply to non-savings, non-dividend income of Scottish taxpayers for 2019/20 and 2020/21. For 2019/20 and 2020/21, the Welsh rates are the same as for the rest of the UK (except Scotland).

High Income Child Benefit Charge

1% of benefit for each £100 of income between £50,000-£60,000

Main Personal Allowances and Reliefs

2020-21

2021-22

Personal allowance (1)

£12,500

£12,570

– Income limit

£100,000

£100,000

Transferable marriage allowance

£1,250

£1,260

Married couple’s allowance (1,2)

– Maximum

£9,075

£9,125

– Minimum

£3,510

£3,530

– Income limit

£30,200

£30,200

Trading allowance (3)

£1,000

£1,000

Property income allowance3

£1,000

£1,000

Dividend allowance (4)

£2,000

£2,000

Savings allowance (4)Basic rate taxpayers

£1,000

£1,000

Higher rate taxpayers

£500

£500

  1. £1 reduction for every £2 of additional income over the income limit.
  2. Relief at 10% if at least one f the couple was born before 6/4/35
  3. Profits are not charged to income tax where gross receipts do no exceed allowance. Where receipts exceed allowance, alternative calculation of profits is available by election.
  4. A 0% rate applied to income within the allowance

For more information, visit the HMRC website:

HMRC Income Tax Rates and Allowances

Reproduced under the Open Government License –

http://www.hmrc.gov.uk/copyright/

 

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