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Income Tax - Tax Rates
Other income taxed first, then savings income and finally dividend.
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2019-20 tax thresholds
Trade Allowance
Property Allowance
2018-19
2019-20
Basic Rate Threshold
Band (£) |
Other Income |
Savings |
Dividends |
£0 - £5,000 (note 1) |
- |
0% |
- |
£0 - £1,000 (note 2) |
- |
0% |
- |
£0 - £500 (note 3) |
- |
0% |
- |
£0 - £2,000 (note 4) |
- |
- |
0% |
£1,001 - £37,500 |
- |
20% |
- |
£501 - £37,500 |
- |
20% |
- |
£0 - £37,500 |
20% |
- |
- |
£2,001 - £37,500 |
- |
- |
7.5% |
£37,501 - £150,000 |
40% |
40% |
32.5% |
Over £150,000 |
45% |
45% |
38.1% |
Note
- Wales also has a separate table, but for 2019-20 it is identical to England/NI.
Scottish Basic Rate Threshold
Band (£) |
Other Income |
Savings |
Dividends |
£0 - £5,000 (note 1) |
- |
0% |
- |
£0 - £1,000 (note 2) |
- |
0% |
- |
£0 - £500 (note 3) |
- |
0% |
- |
£0 - £2,000 (note 4) |
- |
- |
0% |
£1,001 - £31,500 |
- |
20% |
- |
£501 - £31,500 |
- |
20% |
- |
£0 - £2,049 |
19% |
- |
- |
£2050 - £12,444 |
20% |
- |
7.5% |
£12,445 - £30,930 |
21% |
- |
7.5% |
£30,931 - £150,000 |
41% |
40% |
32.5% |
Over £150,000 |
46% |
45% |
38.1% |
Notes (2019-20)
- From 2008-09 there is a starting rule for savings income only of £5,000 with a starting rate of 0%.
If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.
- From April 2017, the new Personal Savings Allowance means that basic rate income tax payers will not have to pay tax on the first £1,000 of savings they receive.
- Higher rate tax payers will not have to pay tax on the first £500 of savings income.
- From 2016-17, dividends will no longer be grossed up to determine the taxable dividend. Also, the non-repayable tax credit equal to 10% of the grossed-up figure no longer applies. Instead the first £2,000 (£2,000 in 2018-19) of dividend income is taxed at 0%.
- The income bands are broadly used in the following order
- Non-savings income
- Savings income
- Dividends.
- Discretionary Trusts and Accumulation and Maintenance Trusts are entitled to a standard rate band of £1,000. Income in excess of this amount is subject to income tax at the top rate of income tax which is 45%. The rate of tax on dividend income received in excess of the standard rate band is 38.1%.
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Trade Allowance 2019-20
Income up to £1,000 |
Profits assessable as Nil do not have to be declared to HMRC |
Income over £1,000 |
Election to deduct £1,000 allowance from income instead of the actual expenses |
Notes
- Individuals with small amounts of trading income less than £1,000 will no longer have to tell HMRC about the income or pay tax on it.
- If trading income does exceed £1,000 the individual can elect to either calculate profit in the normal way (i.e. offset actual expenses) or simply elect to deduct the £1,000 allowance.
- This allowance does not apply to rent-a-room income.
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Property Allowance 2019-20
Income up to £1,000 |
Profits assessable as Nil do not have to be declared to HMRC |
Income over £1,000 |
Election to deduct £1,000 allowance from income instead of the actual expenses |
Notes
- Individuals with small amounts of property income less than £1,000 will no longer have to tell HMRC about the income or pay tax on it.
- If property income does exceed £1,000 the individual can elect to either calculate profit in the normal way (i.e. offset actual expenses) or simply elect to deduct the £1,000 allowance.
- This allowance does not apply to rent-a-room income.
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2018-19 - Basic Rate Threshold, Trade Allowance & Property Allowance
UK (excl. Scotland) Basic Rate Threshold
Band (£) |
Other Income |
Savings |
Dividends |
£0 - £5,000 (note 1) |
- |
0% |
- |
£0 - £1,000 (note 2) |
- |
0% |
- |
£0 - £500 (note 3) |
- |
0% |
- |
£0 - £2,000 (note 4) |
- |
- |
0% |
£1,001 - £34,500 |
- |
20% |
- |
£501 - £34,500 |
- |
20% |
- |
£0 - £34,500 |
20% |
- |
- |
£2,001 - £34,500 |
- |
- |
7.5% |
£34,501 - £150,000 |
40% |
40% |
32.5% |
Over £150,000 |
45% |
45% |
38.1% |
Scottish Basic Rate Threshold
Band (£) |
Other Income |
Savings |
Dividends |
£0 - £5,000 (note 1) |
- |
0% |
- |
£0 - £1,000 (note 2) |
- |
0% |
- |
£0 - £500 (note 3) |
- |
0% |
- |
£0 - £2,000 (note 4) |
- |
- |
0% |
£1,001 - £31,500 |
- |
20% |
- |
£501 - £31,500 |
- |
20% |
- |
£0 - £2,000 |
19% |
- |
- |
£2001 - £12,150 |
20% |
- |
7.5% |
£12,151 - £31,580 |
21% |
- |
7.5% |
£31,581 - £150,000 |
41% |
40% |
32.5% |
Over £150,000 |
46% |
45% |
38.1% |
Notes (2018-19)
- From 2008-09 there is a starting rule for savings income only of £5,000 with a starting rate of 0%.
If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.
- From April 2017, the new Personal Savings Allowance means that basic rate income tax payers will not have to pay tax on the first £1,000 of savings they receive.
- Higher rate tax payers will not have to pay tax on the first £500 of savings income.
- From 2016-17, dividends will no longer be grossed up to determine the taxable dividend. Also, the non-repayable tax credit equal to 10% of the grossed-up figure no longer applies. Instead the first £2,000 (£5,000 in 2017-18) of dividend income is taxed at 0%.
- The income bands are broadly used in the following order
- Non-savings income
- Savings income
- Dividends.
- Discretionary Trusts and Accumulation and Maintenance Trusts are entitled to a standard rate band of £1,000. Income in excess of this amount is subject to income tax at the top rate of income tax which is 45%. The rate of tax on dividend income received in excess of the standard rate band is 38.1%.
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Trade Allowance 2018-19
Income up to £1,000 |
Profits assessable as Nil do not have to be declared to HMRC |
Income over £1,000 |
Election to deduct £1,000 allowance from income instead of the actual expenses |
Notes
- Individuals with small amounts of trading income less than £1,000 will no longer have to tell HMRC about the income or pay tax on it.
- If trading income does exceed £1,000 the individual can elect to either calculate profit in the normal way (i.e. offset actual expenses) or simply elect to deduct the £1,000 allowance.
- This allowance does not apply to rent-a-room income.
Back to Top
Property Allowance 2018-19
Income up to £1,000 |
Profits assessable as Nil do not have to be declared to HMRC |
Income over £1,000 |
Election to deduct £1,000 allowance from income instead of the actual expenses |
Notes
- Individuals with small amounts of property income less than £1,000 will no longer have to tell HMRC about the income or pay tax on it.
- If property income does exceed £1,000 the individual can elect to either calculate profit in the normal way (i.e. offset actual expenses) or simply elect to deduct the £1,000 allowance.
- This allowance does not apply to rent-a-room income.
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