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Income Tax Rates

INCOME TAX RATES - non-dividend income

2018/19

2017/18

Notes

Savings starting rate - 0%

£0-£5,000

£0-£5,000

Only available if non-savings income is less than this amount.

Basic rate band - 20%

£0-£34,500

£0-£33,500

The rates of tax are after your Personal Allowances - so in 2018/19, you start paying the 40% higher rate of tax when your income exceeds £34,500 + £11,850 = £46,350 (2017/18 - £45,000). The tax bands are increased by gross pension and gift aid payments, thus giving you tax relief at higher rates.

Higher rate band - 40%

£34,501 -£150,000

£33,501 -

£150,000

Additional rate band - 45%

> £150,000

> £150,000

INCOME TAX RATES - dividend income new rules from 6.4.2016

2018/19

2017/18

Notes

Starting rate

0% (to £2,000)

0% (to £5,000)

1. From 6.4.2016 the notional tax credit was abolished and new dividend tax rates announced. A dividend allowance of £5,000 taxed at 0% was introduced. Any dividend income over the allowance is treated as the highest part of a taxpayer’s income to determine which tax band it falls into for the purpose of calculating the tax on dividends.

2. From 6.4.2018 the dividend allowance will reduce by £3,000 to £2,000, so the potential impact will be £225 (£3,000 x 7.5%), or £975 (£3,000 x 32.5%), or £1,143 (£3,000 x 38.1%) increase in tax.

Dividends within basic rate band

7.5%

7.5%

Dividends at higher rate band

32.5%

32.5%

Dividend at additional rate band

38.1%

38.1%

SCOTTISH INCOME TAX RATES - non-dividend income

2018/19

2017/18

Notes

Savings starting rate - 0%

£0-£5,000

£0-£5,000

Only available if non-savings income is less than this amount.

Starter rate - 19%

£0-£2,000


The rates of tax are after your Personal Allowances.


The Scottish tax rates apply to income such as salaries, self employed profits, pensions and rental income.


Generally, those earning less than £26,000 will pay lower income tax in Scotland than in the rest of the UK, while those earning more than £26,000 will pay more tax in Scotland than in the rest of the UK.



Basic rate - 20%

£2,001-£12,150

£0-£31,500

Intermediate rate - 21%

£12,151 -£31,580


Higher rate band - 40%


£31,501 -

£150,000

Higher rate band - 41%

£31,581 -£150,000


Additional rate band - 45%


> £150,000

Top rate band - 46%

> £150,000


Scotland has different rates of income tax. You pay Scottish rates of income tax if you live in Scotland.