Abacus Income Tax

Income Tax

Bands	2021-22	2020-21
Savings starting rate – 0%*	£1 – £5,000	£1 – £5,000
Basic rate 20%	£1 – £37,700	£1 – £37,500
Higher rate 40%	£37,701 – £150,000	£37,501 – £150,000
Additional rate 45%	Over £150,000	Over £150,000

Scottish rates
Starter rate 19%	£1 – £2,097	£1 – £2,085
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 – 46%	Over £150,000	Over £150,000

Welsh rates
Starter rate 0%*	£1 – £5,000	£1 – £5,000
Basic rate 20%	£1 – £37,700	£1 – £37,500
Higher rate – 40%	£37,701 – £150,000	£37,501 – £150,000
Additional rate – 45%	Over £150,000	Over £150,000

* The savings starting rate does not apply if non-savings income exceeds £5,000.

Income tax in Scotland and Wales is payable on non-savings and non-dividend income.

Dividend allowance	£2,000	£2,000
Dividend ordinary rate	7.5%	7.5%
Dividend upper rate	32.5%	32.5%
Dividend additional rate	38.1%	38.1%
Personal savings allowance
– basic rate taxpayers	£1,000	£1,000
– higher rate taxpayers	£500	£500
Reliefs	2021-22	2020-21
Personal allowance	£12,570	£12,500
Registered blind person’s allowance	£2,520	£2,500
Income limit for personal allowance*	£100,000	£100,000

* The personal allowance is gradually withdrawn by £1 for every £2 of income over £100,000.

Married couple allowance – tax relief given at 10%
– Born before 6 April 1935	£9,125	£9,075
– Minimum amount*	£3,530	£3,510
– Income limit	£30,400	£30,200
– Marriage allowance*	£1,260	£1,250

*A tax payer can transfer up to £1,260 (2020-21: £1,250) of their unused personal allowance to a spouse or civil partner who is not a higher rate taxpayer.

High Income Child Benefit Charge* on income over

£50,000

* The tax charge is levied at the rate of 1% of the full child benefit award for each £100 that income exceeds £50,000, up to a maximum of 100% of the child benefit claimed.

Taxpayers can choose whether to continue receiving child benefit and pay the tax charge or may opt out of receiving the child benefit.

There is a cap on certain Income Tax reliefs of the greater of £50,000 or 25% of income.

Disclaimer

In preparing and maintaining this section of our website every effort has been made to ensure the content is up to date and accurate. However, the law and regulations change continually, and unintentional errors can occur, and the information may be neither up to date nor accurate. We make no representation or warranty (including liability towards third parties), express or implied, as to the accuracy, reliability or completeness of the information on the website. Please don’t act directly on anything you read – contact us first for advice on how it may affect your individual circumstances.

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