6 April 2018 sees increases to the basic and higher rate income tax bands for England, Wales and Northern Ireland. The income tax personal allowance will rise from £11,500 to £11,850. The income tax rates and bands applying from 6 April 2018 are outlined below:
|Band (£) ||Rate (%) |
|0 - 34,500 ||20 |
|34,501 - 150,000 ||40 |
|Over 150,000 ||45 |
|Starting rate for savings ||0% |
|Starting rate limit for savings ||£5,000 |
Not available if the taxable non-savings income exceeds the starting rate band. £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free.
|Dividend ordinary rate ||7.5% |
|Dividend upper rate ||32.5% |
|Dividend additional rate ||38.1% |
The first £2,000 of dividends are tax-free.
All change for Scotland
In the 2018/19 Scottish Draft Budget, Derek Mackay, Finance Secretary for Scotland, announced a series of changes to Scottish income tax, including new income tax rates, taking the possible income tax rates payable up to five. The new Scottish income tax rates and bands for 2018/19, applicable to non-savings and non-dividend income, are:
|Band (£) ||Band name ||Rate (%) |
|0 - 2,000 ||Starter ||19 |
|2,001 - 12,150 ||Basic ||20 |
|12,151 - 31,580 ||Intermediate ||21 |
|31,581 - 150,000 ||Higher ||41 |
|Over 150,000 ||Top ||46 |
From April 2019, the National Assembly for Wales has the right to vary the rates of income tax payable by taxpayers residing in Wales.