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Income Tax and Personal Savings

The Chancellor announced the following income tax rates and allowances.

Income tax rates and bands

2020/21

2019/20

Band £

Rate %

Band £

Rate %

0 - 37,500

20

0 - 37,500

20

37,501 - 150,000

40

37,501 - 150,000

40

Over 150,000

45

Over 150,000

45

Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.

Savings income

 

2020/21

2019/20

Savings allowance basic rate

£1,000

£1,000

Savings allowance higher rate

£500

£500

A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band.

Dividend income

 

2020/21

2019/20

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 allowances

 

2020/21

2019/20

Personal allowance

£12,500

£12,500

Personal allowance income limit

£100,000

£100,000

Marriage allowance

Transferable between certain spouses where neither pay tax above the basic rate

£1,250

£1,250

Married couple's allowance (relief given at 10%)

Either partner born before 6 April 1935

  • minimum amount
  • income limit

£9,075

£3,510

£30,200

£8,915

£3,450

£29,600

Blind person's allowance

£2,500

£2,450

Scottish income tax rates and bands

Savings and dividend income are taxed using UK rates and bands.

2020/21

2019/20

Band £

Rate %

Band £

Rate %

0 - 2,085

19

0 - 2,049

19

2,086 - 12,658

20

2,050 - 12,444

20

12,659 - 30,930

21

12,445 - 30,930

21

30,931 - 150,000

41

30,931 - 150,000

41

Over 150,000

46

Over 150,000

46

Welsh income tax rates

Although income tax for Wales has been devolved, Welsh resident taxpayers continue to pay the same overall rates as taxpayers in England and Northern Ireland.