Income tax rates and bands
England, Nothern Ireland & Wales
| Tax bands and rates | 2018/19 | 2017/18 | |
| Basic rate band | £34,500 | £33,500 | |
| Basic tax rate | 20% | 20% | |
| Dividend ordinary tax rate | 7.5% | 7.5% | |
| Savings starting rate band limit | £5,000* | £5,000* | |
| Savings starting rate - savings income | 0% | 0% | |
| Higher rate band | £34,501 - £150,000 | £33,501 - £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% | |
| Personal allowance | £11,850 | £11,500 | |
| Trading allowance** | £1,000 | £1,000 | |
| Dividend allowance at 0% - all individuals | £2,000 | £5,000 | |
| Property allowance** | £1,000 | £1,000 | |
| Savings allowance*** | £1,000 | £1,000 | |
| Marriage allowance | Transferable allowance | £1,185 | £1,150 |
| Blind person's allowance | £2,390 | £2,320 | |
| Married couple's allowance (those born before 6 April 1935) | Maximum amount | £8,695 | £8,445 |
| Tax reduction at 10% | £869.50 | £844.50 | |
| Applies after UK residence in 7 or more of the previous 9 tax years |
£30,000 | £30,000 | |
| Applies after UK residence in at least 12 of the previous 14 years | £60,000 | £60,000 | |
|
Enterprise investment scheme (EIS) up to |
£1m**** | £1m | |
| Maximum amount for EIS carry back | £50,000 | £50,000 | |
| Income tax relief rate | 30% | 30% | |
| Seed enterprise investment scheme (SEIS) | £100,000 | £100,000 | |
| Income tax relief | 50% | 50% | |
| Venture capital trust (VCT) | £200,000**** | £200,000 | |
| Social investment relief | £1m | £1m | |
| Income tax relief | 30% | 30% | |
| VCT tax relief rate | 30% | 30% | |
| Golden handshake maximum tax-free | £30,000 | £30,000 | |
| Rent-a-room (exempt on gross annual rent up to) | £7,500 | £7,500 | |
| Construction industry scheme - deduction rate | |||
| Standard rate - registered | 20% | 20% | |
| Higher rate - not registered | 30% | 30% | |
| Child benefit charge - 1% of benefit per £100 of income between £50,000 and £60,000 | |||
* 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. May alternatively be deducted from gross income instead of the actual expenses.
*** £500 for higher rate and £nil for additional rate taxpayers.
**** Investment limit increases for investment in knowledge-intensive companies receiving investments under the EIS and VCTs rules. The annual limit for individuals investing in knowledge-intensive companies under the EIS will be increased to £2 million, provided that anything above £1 million is invested in knowledge-intensive companies. The annual EIS and VCT limit on the amount of
tax-advantaged investments a knowledge-intensive company may receive is increased to £10 million.
Scotland
| 2018/19 | Band | Rate |
| £11,850*-£13,850 | Starter | 19% |
| £13,851-£24,000 | Basic | 20% |
| £24,001-£44,430 | Intermediate | 21% |
| £44,431-£150,000** | Higher | 41% |
| Over £150,000 | Top | 46% |
* Assumes individuals are in receipt of the personal allowance.
** Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 earned over £100,000.
2019 and beyond - England, Wales & Northern Ireland only
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 consumer prices index (CPI).
From 6 April 2019, a Welsh rate of income tax is to be introduced. This tax will continue to be collected by HMRC.
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.
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