2024/25
- Income tax applies to the amount of income after deduction of personal allowances.
- Income is taxed in a specific order with savings and dividend income taxed last.
- Dividend income and savings income falling within the dividend and savings allowances still form part of total income of an individual.
- The starting rate band is only applicable to savings income. The 0% rate is not available if the taxable amount of non-savings income exceeds the starting rate band.
- The Scottish Parliament set the rates of income tax and the limits at which these rates apply for Scottish residents on non-savings and non-dividend income.
- Income tax is devolved to Wales on non-savings and non-dividend income.
Income tax rates
| Band of taxable income | Rate | Rate if dividends | |
|---|---|---|---|
| £ | % | % | |
| 0 – 37,700 | Basic rate | 20 | 8.75 |
| 37,701 – 125,140 | Higher rate | 40 | 33.75 |
| Over 125,140 | Additional rate | 45 | 39.35 |
| Special rates for savings and dividend income falling into above bands of taxable income | |||
| Savings Allowance | |||
| Basic rate taxpayers | 1,000 | 0 | |
| Higher rate taxpayers | 500 | 0 | |
| Additional rate taxpayers | Nil | N/A | |
| Dividend Allowance | |||
| for all taxpayers | 500 | 0 | |
2023/24
- Income tax applies to the amount of income after deduction of personal allowances.
- Income is taxed in a specific order with savings and dividend income taxed last.
- Dividend income and savings income falling within the dividend and savings allowances still form part of total income of an individual.
- The starting rate band is only applicable to savings income. The 0% rate is not availab
- le if the taxable amount of non-savings income exceeds the starting rate band.
- The Scottish Parliament set the rates of income tax and the limits at which these rates apply for Scottish residents on non-savings and non-dividend income.
- Income tax is devolved to Wales on non-savings and non-dividend income.
Income tax rates
| Band of taxable income | Rate | Rate if dividends | |
|---|---|---|---|
| £ | % | % | |
| 0 – 37,700 | Basic rate | 20 | 8.75 |
| 37,701 – 125,140 | Higher rate | 40 | 33.75 |
| Over 125,140 | Additional rate | 45 | 39.35 |
| Special rates for savings and dividend income falling into above bands of taxable income | |||
| Savings Allowance | |||
| Basic rate taxpayers | 1,000 | 0 | |
| Higher rate taxpayers | 500 | 0 | |
| Additional rate taxpayers | Nil | N/A | |
| Dividend Allowance | |||
| for all taxpayers | 1,000 | 0 | |
Disclaimer
This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.