What are the current income tax rates?

Income tax rates show the percentage of your income you will pay as tax.

To determine your correct tax band, you must first identify your Personal Allowance rate using the table below. You then deduct this amount from your salary to work out your taxable income.

The income tax percentage rate is applied after any tax free allowances have been taken into account and is not applicable on any non taxable income.

Income tax bands and rates 2018/2019

Taxable income (England, Wales & Northern Ireland)Rate of tax
£0 – £11,8500%
£11,851 – £46,35020% (basic rate)
£46,351 – £150,00040% (higher rate)
Over £150,00045% (additional rate

The income tax rates are produced by the tax office and usually announced in the Budget and normally change each tax year.

Scottish Income tax bands and Rates 2018/2019

From 2017/18 tax year, the Scottish Parliament will decide the income tax rates in Scotland. If you live in Scotland you will pay income tax as set out by the Scottish Parliament and will pay tax to the Scottish Government.

income Band (Scotland)Rate of tax
£0 – £11,8500%
£11,850 – £13,85019% (starter)
£13,850 – £24,00020% (basic rate)
£24,000 – £44,27321% (intermediate rate)
£44,273 – £150,00041% (higher rate)
Over £150,00046% (additional rate)

Basic rate tax

In England, Wales and Northern Ireland tax is payable at the basic rate of 20 per cent on taxable income up to £45,000. In Scotland tax is payable at the basic rate of 20 percent on taxable income up to £43,000.

Higher rate tax

If you live in England, Wales or Northern Ireland and you have taxable income of more than £45,001, you will have to pay the higher rate of 40 per cent tax on the amount above £45,001 up to £150,000. If you live in Scotland you will have to pay the higher rate of 40 per cent tax on the amount above £43,001 up to £150,000.

Additional rate tax

If you have taxable income of more than £150,001, you will have to pay the additional rate of 45 per cent tax on the amount above this level.

Personal Savings Allowance

From 6 April 2018, most people can earn some income from the savings without paying tax. If you’re a basic rate taxpayer you can earn up to £1,000 in savings tax-free. Higher rate taxpayers will be able to earn up to £500. This is called the Personal Savings Allowance.

Income tax bands and rates for previous tax years

Tax year 2017/2018

Taxable income
(England, Wales & Northern Ireland)
Taxable income
(Scotland)
Rate of tax
£0 – £11,500£0 – £11,5000%
£11,501 – £45,000£11,501 – £43,00020% (basic rate)
£45,001 – £150,000£43,001 – £150,00040% (higher rate)
Over £150,000Over £150,00045% (additional rate)

Tax year 2016/2017

Taxable incomeRate of tax
£0 – £11,0000%
£11,001 – £43,00020% (basic rate)
£43,001 – £150,00040% (higher rate)
Over £150,00045% (additional rate)

Tax year 2015/2016

Taxable incomeRate of tax
£0 – £5,0000% (starting rate for savings only)
£0 – £31,78520% (basic rate)
£31,786 – £150,00040% (higher rate)
Over £150,00045% (additional rate)

Tax year 2014/2015

Taxable incomeRate of tax
£0 – £2,88010% (starting rate for savings only)
£0 – £31,86520% (basic rate)
£31,866 – £150,00040% (higher rate)
Over £150,00045% (additional rate)

Income tax rates example

Tax year: 2013/14    Your earnings: £33,000    Your Personal Allowance: £9,440

Deduct Personal Allowance from total earnings: £33,000 – £9,440 = £23,560

You pay 20% basic rate tax on the £23,560

Why are tax rates important?

Knowing what tax bracket you fall into let’s you know how much income tax you will be paying, which can help you with your own financial budget.

If you start earning more it’s possible you could start paying tax at a higher rate meaning that you will pay more tax. In a similar way if you start earning less or there is an increase in your personal allowance you can start paying less.

Check them yourself

It’s a good idea to check them each tax year (or if you have a change in income) to make sure you know how much more or less income tax will be deducted from your salary. Your tax code is directly linked to your personal allowance so it’s wise to check that your tax code is accurate as part of this process.

Tax rates and tax rebates

Your tax free personal allowance and the rate at which you pay tax is only part of your tax position. It’s a real possibility that you could be overpaying tax for a host of different reasons. We offer a free tax review to find out what you could be entitled to and a service to help you claim it back. Fill in our contact form below to get started or call us on 01228 520477.



More Income Tax Rebates and Tax Refunds:

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