Income Tax Rates
|Starting rate limit (savings income)||2||*£5,000||*£5,000|
|Basic rate band - income up to||£32,000||£31,785|
|Dividend ordinary rate, otherwise taxable at basic rate||***7.5%||10% (0%**)|
|Higher rate - income over||£32,000||£31,785|
|Dividend upper rate, otherwise taxable at higher rate||***32.5%||32.5% (25%**)|
|Additional rate - income over||£150,000||£150,000|
|Dividend additional rate, otherwise taxable at additional rate||***38.1%||37.5% (30.6%**)|
For 2016/17 Scottish taxpayers are effectively subject to the same income tax rates as the rest of the UK.
* If an individual's taxable non-savings income exceeds the starting rate limit, then the starting rate will not be available for savings income
For 2016/17, £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free.
** Effective rate with tax credit
*** For 2016/17 the first £5,000 of dividends are tax-free
The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
|Personal Allowance (PA)|
|Born after 5 April 1938||3||£11,000||£10,600|
|Born before 6 April 1938||4||£11,000||£10,660|
|Income limit for PA||3||£100,000||£100,000|
|Income limit for PA (Born before 6 April 1938)||4||£27,700||£27,700|
|Blind person's allowance||£2,290||£2,290|
|Married couple's allowance (MCA)|
|Either partner born before 6 April 1935 (relief restricted to 10%)||5||£8,355||£8,355|
|Transferable tax allowance ('Marriage Allowance')|
|For certain married couples (relief 20%)||6||£1,100||£1,060|
|Venture Capital Trust (VCT) up to||£200,000||£200,000|
|Enterprise Investment Scheme (EIS) up to||£1,000,000||£1,000,000|
|Seed Enterprise Investment Scheme up to||£100,000||£100,000|
|Social Investment Tax Relief||£1,000,000||£1,000,000|
|Golden Handshake (max).||£30,000||£30,000|
- From 2016/17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individual’s date of birth.
- If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.
- The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that adjusted net income exceeds £100,000, regardless of the individual’s date of birth.
- Personal allowances for those born before 5 April 1938 are reduced by £1 for each £2 of excess income over £27,700 until the basic allowance is reached.
- Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £3,220. (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).
- Available to spouses/civil partners born after 5 April 1935. The allowance is 10% of the personal allowance for those born after 5 April 1938. It allows a spouse or civil partner who is not liable to income tax above the basic rate to transfer this amount of their personal allowance to their spouse/civil partner. The recipient must not be liable to tax above the basic rate. The recipient is eligible to a tax reduction at 20% of the transferred amount.