Current UK personal tax rate and personal allowance

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

Personal Tax

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 £12,500                                         0%
Basic rate                                £12,501 to £50,000                                20%
Higher rate                             £50,001 to £150,000                              40%
Additional rate                       over £150,000                                         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.

The rules are different for dividends before 6 April 2016.

Tax year                                        Dividend allowance

  • 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
  • 6 April 2016 to 5 April 2017        £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                     7.5%
Higher rate                  32.5%
Additional rate            38.1%
HM Revenue and Customs (HMRC) has 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.