Income Tax Rates
| Income tax rates | Note | 2012/13 | 2011/12 | |
|---|---|---|---|---|
| Basic rate band – income up to | £34,370 | £35,000 | ||
| Starting rate for savings | *10% | *10% | ||
| Basic rate | 20% | 20% | ||
| Dividend ordinary rate | 10% | 10% | ||
| Higher rate – income over | £34,370 | £35,000 | ||
| Higher rate | 40% | 40% | ||
| Dividend upper rate | 32.5% | 32.5% | ||
| Additional rate – income over | £150,000 | £150,000 | ||
| Additional rate | 50% | 50% | ||
| Dividend additional rate | 42.5% | 42.5% | ||
| * Starting rate is for savings income up to the starting rate limit of £2,710 (£2,560) 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 | 5 | 10% | 10% | |
| savings income | 5 | 20% | 20% | |
| other income | 5 | 20% | 20% | |
| Income of other trusts above £1,000 is taxed at the special trust rates: | ||||
| rate applicable to trusts | 50% | 50% | ||
| dividend trust rate | 42.5% | 42.5% | ||
| Personal allowance (PA) | ||||
| under 65 | 1,4 | £8,105 | £7,475 | |
| 65 to 74* | 1,2,4 | £10,500 | £9,940 | |
| 75 and over* | 1,2,4 | £10,660 | £10,090 | |
| Blind person’s allowance | £2,100 | £1,980 | ||
| Married couple’s allowance (MCA) | ||||
| Either partner born before 6 April 1935 (relief restricted to 10%) | 1,3,4 | £7,705 | £7,295 | |
| Tax Shelters | ||||
| Enterprise Investment Scheme (EIS) up to | £1,000,000 | £500,000 | ||
| Venture Capital Trust (VCT) up to | £200,000 | £200,000 | ||
| 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
- Ages are as the end of the tax year. Ages for the MCA relate to the elder spouse or civil partner
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £25,400 (£24,000) 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 £2,960. (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 net adjusted income exceeds £100,000.
- 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.
