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Income Tax Rates

INCOME TAX RATES - ENGLAND, WALES & NI - non-dividend income

Tax rate

2021/22

2020/21

Notes

Savings starting rate

0%

£0-£5,000

£0-£5,000

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

Basic rate  

20%

£0-£37,700

£0-£37,500

The rates of tax are after your Personal Allowances - so in 2021/22, you start paying the 40% higher rate of tax when your income exceeds £37,700 + £12,570 = £50,270 (2020/21 - £50,000). The tax bands are increased by gross pension and gift aid payments, thus giving you tax relief at higher rates.


Higher rate  

40%

£37,701-£150,000

£37,501-

£150,000

Additional rate

45%

> £150,000

> £150,000

INCOME TAX RATES - dividend income new rules from 6.4.2016

2021/22

2020/21

Notes

Starting rate

0% (to £2,000)

0% (to £2,000)

From 6.4.2016 the notional tax credit was abolished and new dividend tax rates announced.  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.


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

Tax rate

2021/22

2020/21

Notes

Starter rate

19%

£1-£2,097

£0-£2,085

The rates of tax are after personal allowances.


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


Scottish taxpayers pay the same tax on dividends and savings interest as the rest of the UK.


Basic rate

20%

£2,098-£12,726

£2,086-£12,658

Intermediate rate

21%

£12,727-£31,092

£12,659-£30,930

Higher rate

41%

£31,093-£150,000

£30,931-

£150,000

Additional rate band

46%

> £150,000

> £150,000

REMITTANCE BASIS CHARGE - for non UK domiciled persons resident in the UK

2021/22

2020/21

Notes

For 7 of the preceding 9 tax years

£30,000

£30,000

If a person is not UK domiciled their income/capital gains arising outside the UK will be taxed in the UK on an arising basis. If you want to be taxed on the remittance basis, then you pay the RBC based on the number of years resident in the UK.

For 12 of the preceding 14 tax years

£60,000

£60,000

For 15 of the preceding 20 tax years

Deemed UK domiciled

Deemed UK domiciled