Current UK personal tax rate and personal allowance

For information only - please contact us if you have a question.

Personal Tax 2023/24

Income Tax rates and bands. The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,500.

Income tax bands are different if you live in Scotland.

Band                                       Taxable income                                       Tax rate
Personal Allowance                Up to £12,570                                         0%
Basic rate band                       £37,700                                                  20%
Higher rate                             £37,701 to £125,140                              40%
Additional rate                       over £125,141                                         45%

Tax free Personal Allowance

Your tax-free Personal Allowance

The standard Personal Allowance is £12,500, which is the amount of income you don’t have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance however it’s smaller if your income is over £100,000. 

Personal allowance drops by £1 for every £2 earned over £100,000

Other Allowance

your first £1,000 of income from self-employment - this is your ‘trading allowance’

your first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)

You must tell HMRC if you have: gross property income over £1,000 up to £2,500 - contact HMRC, property income over £2,500 - register for Self Assessment

Personal Tax on Dividends

You only have to pay tax if your dividends go above your dividend allowance in the tax year.

Tax year                                        Dividend allowance

  • 6 April 2021 to 5 April 2023        £1,000
  • 6 April 2021 to 5 April 2022        £2,000
  • 6 April 2020 to 5 April 2021        £2,000
  • 6 April 2019 to 5 April 2020        £2,000
  • 6 April 2018 to 5 April 2019        £2,000
  • 6 April 2017 to 5 April 2018        £5,000

Above this allowance the tax you pay depends on which Income Tax band you’re in. Add your income from dividends to your other taxable income when working this out. You may pay tax at more than one rate.

Tax band                      Tax rate on dividends over your allowance
Basic rate                     8.75%
Higher rate                  33.75%
Additional rate            39.35%

HM Revenue and Customs (HMRC) have examples of how your tax is worked out if you’re over the dividend allowance.

You don’t pay tax on dividends from shares in an ISA.

Dividends that fall within your Personal Allowance do not count towards your dividend allowance.

How you pay tax on dividends
If you need to pay tax, how you pay depends on the amount of dividend income you got in the tax year. Up to £10,000 tell HMRC by contacting the helpline asking HMRC to change your tax code or by putting it on your Self Assessment tax return, if you already fill one in. once over £10,000 you’ll need to fill in a Self Assessment tax return. If you don’t usually send a tax return, you need to register by 5 October following the tax year you had the income.