Tax rates and allowances

Income tax

Personal allowances and reliefs

2018/19 2017/18
Personal
Allowance *
£11,850 £11,500
Transferable Tax
Allowance for married
couples and Civil
Partners
£1,185 £1,150

*Personal Allowance restricted by £1 for every £2 of income over
100,000.
For Individuals born before 6 April 1935 further allowances apply.
** Transferable allowance: in 2016/17 a spouse or civil partner who is not liable to income tax above the basic rate may transfer £1,100 (2015/16 £1,060) of their unused personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. Taxpayers have 4 years in which to make the election.




Income tax rates

Rate % 2018/19 2017/18
BASIC * 20% £0-34,500 £0-32,000
HIGHER ** 40% £34,501-150,000 £33,501-150,000
TOP 45% £150,001 + £150,000 +






Personal Savings Allowance


From 2016/17 basic rate taxpayers do not have to pay tax on the first £1,000 of their savings income.
From 2016/17 higher rate taxpayers do not have to pay tax on the first £500 of their savings income.
There is no personal savings allowance for upper rate taxpayers.
There are no changes to these allowances in 2017/18.
From April 2016 banks and building societies no longer deduct basic rate tax from interest.


Dividend tax 2016/17 onwards

  • The dividend tax credit is abolished

  • The first £2,000 of dividend received is tax free (£5,000 for 2016/17 and 2017/18)

  • Basic rate dividends taxed at 7.5%

  • Higher rate dividends taxed at 32.5%

  • Upper rate dividends taxed at 38.1%


Child benefit claimants


From 7 January 2013 the High Income Child Benefit Tax Charge provisions reduce Child Benefit payments when a claimant or their partner's income exceeds £50,000.