Income Tax
| Income tax rates | 2017/18 | 2016/17 | |
|---|---|---|---|
| Starting rate limit (savings income) | *£5,000 | *£5,000 | |
| Starting rate | *0% | *0% | |
| Basic rate band - income up to | **£33,500 | £32,000 | |
| Basic rate | 20% | 20% | |
| Dividend ordinary rate | ***7.5% | ***7.5% | |
| Higher rate - income over | **£33,500 | £32,000 | |
| Higher rate | 40% | 40% | |
| Dividend upper rate | ***32.5% | ***32.5% | |
| Additional rate - income over | £150,000 | £150,000 | |
| Additional rate | 45% | 45% | |
| Dividend additional rate | ***38.1% | ***38.1% | |
* If an individual's taxable non-savings income exceeds the starting rate limit, then the starting rate will not be available for savings income. £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free. ** For Scottish taxpayers only the limit is £31,500. *** The first £5,000 of dividends are tax-free |
|||
| Personal allowance (PA) | |||
| Personal Allowance | 1 | £11,500 | £11,000 |
| Blind person's allowance | £2,320 | £2,290 | |
| Married couple's allowance (MCA) | |||
| Either partner born before 6 April 1935 (relief restricted to 10%) | 2 | £8,445 | £8,355 |
| Transferable tax allowance ('Marriage Allowance') | |||
| For certain married couples and civil partners born after 5 April 1935 (relief 20%) | 3 | £1,150 | £1,100 |
| Tax Shelters | |||
| Venture Capital Trust (VCT) up to | £200,000 | £200,000 | |
| Enterprise Investment Scheme (EIS) up to | £1,000,000 | £1,000,000 | |
| Seed Enterprise Investment Scheme up to | £100,000 | £100,000 | |
| Social Investment Tax Relief | £1,000,000 | £1,000,000 | |
Notes
- Where adjusted net income exceeds £100,000, PA is reduced in the same way until it is nil regardless of the individual's date of birth.
- Allowances are reduced by £1 for every £2 that adjusted net income exceeds £28,000 (£27,700 2016/17) to a minimum MCA of £3,260 (£3,220 2016/17).
- Available to spouses/civil partners born after 5 April 1935, the allowance is 10% of the standard personal allowance. It allows a spouse or civil partner who is not liable to income tax above the basic rate to transfer this amount of their personal allowance to their spouse/civil partner. The recipient must not be liable to tax above the basic rate. Relief is given as a tax reduction at 20% of the transferred amount.