Income Tax rates and bands

Personal Taxation


Allowed at top rate of tax2010/112009/10
Personal Allowance£6.475£6,475
Personal Allowance (65-74)*9,4909,490
Personal Allowance (75 and over)*9,6409,640
Personal allowances in 2010/11 are withdrawn at £1 for every £2 by which total income exceeds £100,000.
Allowed only at 10%
Married Couple’s Allowance*6,9656,965
Income Limit for age-related allowances22,90022,900
* Age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowance is reduced to the normal allowance. Personal allowance is reduced before married couple’s allowance. MCA is reduced to a minimum of £2,670 (2009/10: £2,670).
Starting rate on band **                                            2,4402,440
Basic rate band37,40037,400
Higher rate band37,401-150,000over 37,400
Additional rateover 150,000
** Starting rate band is within basic rate band and applies to savings income only; if taxable general income exceeds the band, the 10% rate is not available.
Tax rates
Rates differ for General/Savings/Dividends
Starting rateN/A10%10%N/A10%10%
Basic rate20%20%10%20%20%10%
Higher rate40%40%32.5%40%40%32.5%
Additional rate50%50%42.5%
General income (salary, pension, profit, rent) uses lower rate bands first, then savings (interest), then dividends. Discretionary trusts: basic rate as above applies to the first £1,000 of income, then highest rate.