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Income tax rates and bands

England, Nothern Ireland & Wales

Tax bands and rates 2019/20 2018/19
Basic-rate band £37,500 £34,500
Basic-rate tax 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 Over £37,500 - £150,000 Over £34,500 - £150,000
Higher-rate tax 40% 40%
Dividend upper tax rate 32.5% 32.5%
Additional-rate band over Above £150,000 Above £150,000
Additional-rate tax 45% 45%
Dividend additional tax rate 38.1% 38.1%
Personal allowance** £12,500 £11,850
High income child benefit charge - 1% of adjusted net income of £50,000 to £60,000
Trading allowance*** £1,000 £1,000
Dividend allowance at 0% - all individuals £2,000 £2,000
Property allowance*** £1,000 £1,000
Savings allowance**** £1,000 £1,000
Marriage allowance £1,250 £1,190
Blind person's allowance £2,450 £2,390
Married couple's allowance (if at least one born before 6 April 1935) Maximum amount £8,915 £8,695
Tax reduction at 10% £891.50 £869.50
Minimum amount £3,450 £3,360
Tax reduction £345 £336
Non-domiciled remittance basis charge
Applies after UK residence in seven or more of the previous nine 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.

** Personal allowance reduced by £1 for every £2 of adjusted net income over £100,000.

*** 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 £0 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 increases 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

2019/20 Band Rate
Over £12,500*-£14,550 Starter 19%
Over £14,550 - £24,944 Basic 20%
Over £24,944 - £43,430 Intermediate 21%
Over £43,430 - £150,000** Higher 41%
Above £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.

Wales

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 until after the next Wel;sh Assembly elections in May 2021.

2019 and beyond: England, Wales & Northern Ireland only

Termination payments over £30,000, which are subject to income tax, are also subject to employers NICs. Although this was expected to commence in 2018, it was delayed until 2019.

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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