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Income tax rates and bands

England, Northern Ireland & Wales

Tax bands and rates 2020/21 2019/20
Basic-rate band £37,500 £37,500
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 £37,500 - £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 £12,500
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/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
Minimum amount £3,510 £3,450
Tax reduction £351 £345
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

£1m £1m
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.

Scotland

2020/21 Band Rate
Over £12,500*-£14,585 Starter 19%
Over £14,585 - £25,158 Basic 20%
Over £25,158 - £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.

Termination payments: England, Wales & Northern Ireland only

Termination payments over £30,000, which are subject to income tax, are also subject to employers NICs from 6 April 2020.

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