2020/21

2019/20

  • 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 – 5,000

Starting rate for savings

0

N/A

0 – 37,500

Basic rate

20

7.5

37,501 – 150,000

Higher rate

40

32.5

Over 150,000

Additional rate

45

38.1

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

2,000

 

0