Income Tax
| Income tax rates | Note | 2014/15 | 2013/14 |
|---|---|---|---|
| Basic rate band - income up to | £31,865 | £32,010 | |
| Starting rate for savings | *10% | *10% | |
| Basic rate | 20% | 20% | |
| Dividend ordinary rate | 10% | 10% | |
| Higher rate - income over | £31,865 | £32,010 | |
| Higher rate | 40% | 40% | |
| Dividend upper rate | 32.5% | 32.5% | |
| Additional rate - income over | £150,000 | £150,000 | |
| Additional rate | 45% | 45% | |
| Dividend additional rate | 37.5% | 37.5% | |
| * Starting rate is for savings income up to the starting rate limit of £2,880 (£2,790) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income. | |||
| Trusts | |||
| For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"): | |||
| dividend ordinary rate | 4 | 10% | 10% |
| savings income | 4 | 20% | 20% |
| other income | 4 | 20% | 20% |
| Income of other trusts above £1,000 is taxed at the special trust rates: | |||
| rate applicable to trusts | 45% | 45% | |
| dividend trust rate | 37.5% | 37.5% | |
| Personal allowance (PA) | |||
| Born after 5 April 1948 | 3 | £10,000 | £9,440 |
| Born after 5 April 1938 and before 6 April 1948 | 1,3 | £10,500 | £10,500 |
| Born before 6 April 1938 | 1,3 | £10,660 | £10,660 |
| Blind person's allowance | £2,230 | £2,160 | |
| Married couple's allowance (MCA) | |||
| Either partner born before 6 April 1935 (relief restricted to 10%) | 2,3 | £8,165 | £7,915 |
| Tax Shelters | |||
| 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 | |
| Golden Handshake max. | £30,000 | £30,000 | |
| Rent a Room - exempt on gross annual rent up to | £4,250 | £4,250 | |
| Construction Industry Scheme deduction rate: | |||
| Standard (registered) | 20% | 20% | |
| Higher (not registered) | 30% | 30% | |
Notes
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £27,000 (£26,100) 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 £3,040. (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).
- 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.
- Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.