Income Tax

Income Tax Rates
Note
2013/14
2012/13
Basic rate band - income up to
£32,010
£34,370
  Starting rate for savings
*10%
*10%
  Basic rate
20%
20%
  Dividend ordinary rate
10%
10%
Higher rate - income over
£32,010
£34,370
  Higher rate
40%
40%
  Dividend upper rate
32.5%
32.5%
Additional rate - income over
£150,000
£150,000
Additional rate
45%
50%
Dividend additional rate
37.5%
42.5%
* Starting rate is for savings income up to the starting rate limit of £2,790 (£2,710) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.
Trusts
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):
 
 
dividend ordinary rate
5
10%
10%
savings income
5
20%
20%
other income
5
20%
20%
Income of other trusts above £1,000 is taxed at the special trust rates:
 
 
rate applicable to trusts  
45%
50%
dividend trust rate  
37.5%
42.5%
Personal allowance (PA)
  Born after 5 April 1948/ under 65+
1,4
£9,440
+£8,105
  Born after 5 April 1938 and before 6 April 1948/ 65 to 74+
1,2,4
£10,500
+£10,500
  Born before 6 April 1938/ 75 and over+
1,2,4
£10,660
+£10,660
  Blind person's allowance
 
£2,160
£2,100
Married couple's allowance (MCA)
Either partner born before 6 April 1935 (relief restricted to 10%)
1,3,4
£7,915
£7,705
Tax Shelters
Enterprise Investment Scheme (EIS) up to  
£1,000,000
£1,000,000
Seed Enterprise Investment Scheme up to
£100,000
£100,000
Venture Capital Trust (VCT) up to
£200,000
£200,000
Golden Handshake max.
£30,000
£30,000
Rent a Room - exempt on gross annual rent up to
£4,250
£4,250
Construction Industry Scheme deduction rate:
 
 
Standard (registered)
20%
20%
Higher (not registered)
30%
30%

Notes

  1. Ages are as the end of the tax year.
  2. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £26,100 (£25,400) until the basic allowance is reached.
  3. Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £3,040. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account.)
  4. The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
  5. Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.