Income Tax Rates and Bands

Income tax rates are to remain the same to 5 April 2016, with the exception of the savings rate. This will be cut to 0% from 6 April 2015. However, the savings rate only applies if individual's net non-savings taxable income does not exceed the savings rate limit.

The income tax rates and bands have been announced as:

  2015/16 2016/17 2017/18
Savings rate: 10%, 0% from 2015/16 0 - £5,000 0- £5,000 0- £5,000
Dividend Allowance: 20% NA 0 - £5,000 0 - £5,000
Basic rate: 20% 0 - £31,785 0 - £32,000 0 - £33,500
Higher rate: 40% £31,786 - £150,000 £32,001 - £150,000 £33,501 - £150,000
Additional rate: 45% Over £150,000 Over 150,000 Over 150,000

When the personal allowance is taken into account an individual will start to pay tax at 40% when their total income exceeds £43,000 in 2016/17 and £45,000 in 2017/18. This threshold (and the 45% threshold) can be increased if the taxpayer pays personal pension contributions or makes gift aid donations.

From 2017/18 the basic rate band on non-savings income for Scottish Taxpayers will be set at £43,000. For all other income types it will remain in line with the main UK band of £45,000.

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Income Tax Bands & Rates