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Tax Rates

Income Tax rates and Personal Allowances

 

Current rates and allowances

 

How much Income Tax you pay in each tax year depends on:

 

how much of your income is above your Personal Allowance
how much of your income falls within each tax band

The current tax year is from 6 April 2018 to 5 April 2019.

Your tax-free Personal Allowance
The standard Personal Allowance is £11,850, which is the amount of income you don’t have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

Income Tax rates and bands
The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £11,850.

Income tax bands are different if you live in Scotland.

Band Taxable income Tax rate
Personal Allowance Up to £11,850 0%
Basic rate £11,851 to £46,350 20%
Higher rate £46,351 to £150,000 40%
The additional rate over £150,000 45%

You can also see the rates and bands without the Personal Allowance. You don’t get a Personal Allowance on taxable income over £123,700.

If you’re employed or get a pension
Check your Income Tax to see:

your Personal Allowance and tax code
how much tax you’ve paid in the current tax year
how much you’re likely to pay for the rest of the year
Other allowances
You have tax-free allowances for:

savings interest
dividends, if you own shares in a company
You may also have tax-free allowances for:

your first £1,000 of income from self-employment – this is your ‘trading allowance’
your first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)
Find out whether you’re eligible for the trading and property allowances.

You pay tax on any interest, dividends or income over your allowances.

Paying less Income Tax
You may be able to claim Income Tax reliefs if you’re eligible for them.

If you’re married or in a civil partnership
You may be able to claim Marriage Allowance to reduce your partner’s tax if your income is less than the standard Personal Allowance.

If you don’t claim Marriage Allowance and you or your partner were born before 6 April 1935, you may be able to claim Married Couple’s Allowance.

 

Previous tax years

 

The standard Personal Allowance from 6 April 2017 to 5 April 2018 was £11,500.

Tax rateTaxable income above your Personal Allowance for 2017 to 2018
Basic rate 20%£0 to £33,500
People with the standard Personal Allowance started paying this rate on income over £11,500
Higher rate 40%£33,501 to £150,000
People with the standard Personal Allowance started paying this rate on income over £45,000
Additional rate 45%Over £150,000

ExampleYou had £35,000 of taxable income and you got the standard Personal Allowance of £11,500. You paid basic rate tax at 20% on £23,500 (£35,000 minus £11,500).

Your Personal Allowance would have been smaller if your income was over £100,000, or bigger if you got Marriage Allowance or Blind Person’s Allowance.

 

Income over £100,000

 

Your Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £123,700 or above.

You’ll also need to do a Self Assessment tax return.

If you don’t usually send a tax return, you need to register by 5 October following the tax year you had the income.