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Rates & Allowances Pages ► Income Tax Rates & AllowancesCapitlal Gains TaxPensions

Income after allowances 2017/18

Band of taxable income Rate Dividend rate
Starting rate for savings
up to £5,000 0%
Basic rate up to £33,500 20% 7.5%
Higher rate £33,501 - £150,000 40% 32.5%
Additional rate Over £150,000 45% 38.1%

Personal Allowance - The standard Personal Allowance is £11,500, which is the amount of income you don’t have to pay tax on.

Main Allowances
2017/18
Personal Allowance* - up to 10% of the PA can be transferred to a spouse or civil partner who is a basic rate taxpayer £11,500
Blind Person's Allowance £ 2,320
Dividend Tax Allowance - taxes the first £5,000 at nil £ 5,000
Personal Savings Allowance - Basic rate taxpayer £ 1,000
Personal Savings Allowance - Higher rate taxpayer £ 500
  •  Income Tax - Click for Detailed Table

    Tax bands and rates 2017/18 2016/17
    Basic rate band £33,500 £32,000
    Basic rate band - Scotland £31,500 £32,000
    Basic tax rate 20% 20%
    Dividend ordinary tax rate 7.5% 7.5%
    Savings starting rate band £5,000* £5,000*
    Savings starting rate - savings income 0% 0%
    Higher rate band £33,501 - £150,000 £32,001 - £150,000
    Higher rate band - Scotland £31,501 - £150,000 £32,001 - £150,000
    Higher tax rate 40% 40%
    Dividend upper tax rate 32.5% 32.5%
    Additional rate band over £150,000 £150,000
    Additional tax rate 45% 45%
    Dividend additional tax rate 38.1% 38.1%
    Personnal allowance £11,500 £11,000
    Trading allowance** £1,000 £0
    Property allowance** £1,000 £0
    Marriage allowance Transferable
    £1,150 £1,100
    Blind person's allowance £2,320 £2,290
    Married couple's allowance (MCA) Max amount £8,445 £8,355
    Tax redn at 10% £844.50 £835.50
    Applies after UK residence in 7 or
    more of the previous 9 tax years
    £30,000 £30,000
    Applies after UK residence in at
    12 of the previous 14 years
    £60,000 £60,000
    Applies after UK residence in at
    least 17 of the last 20 years
    n/a £90,000
    Enterprise investment scheme up to £1,000,000 £1,000,000
    Maximum amount for EIS carry back £50,000 £50,000
    Income tax relief rate 30% 30%
    Seed enterprise investment scheme
    £100,000 £100,000
    Income tax relief 50% 50%
    Venture capital trust (VCT) £200,000 £200,000
    Social investment relief £1,000,000 £1,000,000
    Income tax relief 30% 30%
    VCT tax relief rate 30% 30%
    Golden handshake maximum tax free £30,000 £30,000
    Rent a room - exempt annual rent up to £7,500 £7,500
    CIS - deduction rate
    Standard rate - registered 20% 20%
    Higher rate - not registered 30% 30%

    *Savings income falling into the first £5,000 may be taxed at 0% for certain low income earners.

     

    **When the gross income is £1,000 or less.

     

    2018 and beyond

     

    It is intended to increase the personal allowance to £12,500 and the higher rate threshold to £50,000, but no timetable for these increases has been announced. Once these limits have been attained they will, in future, be index linked by reference to the CPI (Consumer Prices Index).

     

    Termination payments over £30,000 which are subject to income tax after April 2018 will also be subject to employers national insurance contributions.

     

    Income tax will only be applied on the equivalent of an employee’s basic pay if the employee has not worked the notice period.