Income tax rates and bands
England, Northern Ireland & Wales
|Tax bands and rates||2020/21||2019/20|
|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||Over £37,500 - £150,000||Over £37,500 - £150,000|
|Dividend upper tax rate||32.5%||32.5%|
|Additional-rate band over||Above £150,000||Above £150,000|
|Dividend additional tax rate||38.1%||38.1%|
|High income child benefit charge - 1% of adjusted net income of £50,000 to £60,000|
|Dividend allowance at 0% - all individuals||£2,000||£2,000|
|Marriage/civil partners transferable allowance*****||£1,250||£1,250|
|Blind person's allowance||£2,500||£2,450|
|Married couple's allowance (if at least one born before 6 April 1935)||Maximum amount||£9,075||£8,915|
|Tax reduction at 10%||£907.50||£891.50|
|Non-domiciled remittance basis charge|
|Applies after UK residence in seven or more of the previous nine tax years (unless unremitted income under £2,000)||£30,000||£30,000|
|Applies after UK residence in at least 12 of the previous 14 years (unless unremitted income under £2,000)||£60,000||£60,000|
Enterprise investment scheme (EIS)**** up to
|Maximum amount for EIS carry back||£50,000||£50,000|
|Income tax relief rate for EIS||30%||30%|
|Seed enterprise investment scheme (SEIS)||£100,000||£100,000|
|Income tax relief for SEIS||50%||50%|
|Venture capital trust (VCT)*****||£200,000||£200,000|
|VCT tax relief rate||30%||30%|
|Social investment tax relief (SITR)||£1m||£1m|
|Income tax relief rate for SITR||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|
* The starting rate does not apply if taxable income exceeds the starting rate limit.
** 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 to £2 million.
***** Personal allowance reduced by £1 for every £2 of adjusted net income over £100,000.
****** Any unused personal allowance may be transferred to a spouse or civil partner, where the recipient is not liable to higher or additional tax.
|Over £14,585 - £25,158||Basic||20%|
|Over £25,158 - £43,430||Intermediate||21%|
|Over £43,430 - £150,000**||Higher||41%|
* 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.
Devolution of income tax to Wales commenced in April 2019. Under this, the three rates applying in England and Northern Ireland are reduced by 10% each, and it is open to the Welsh Assembly to impose their own three rates in each of the basic, higher and additional-rate bands.
However, the Welsh Assembly has decided that the rates will all be 10%, leaving the Welsh rates unchanged from the rates in England and Northern Ireland.