Income Tax Rates and Allowances
Income Tax Rates and Allowances (Table A)
| Main allowances | 2023/24 | 2022/23 |
|---|---|---|
| Personal Allowance (PA)*† | £12,570 | £12,570 |
| Blind Person's Allowance | 2,870 | 2,600 |
| Rent a room relief § | 7,500 | 7,500 |
| Trading income § | 1,000 | 1,000 |
| Property income § | 1,000 | 1,000 |
*PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £125,140 or more.
†£1,260 of the PA can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer, where both spouses were born after 5 April 1935.
§ If gross income exceeds this, the limit may be deducted instead of actual expenses.
| Rate Bands | 2023/24 | 2022/23 |
|---|---|---|
| Basic Rate Band (BRB) | £37,700 | £37,700 |
| Higher Rate Band (HRB) | 37,701-125,140 | 37,701-150,000 |
| Additional rate | over 125,140 | over 150,000 |
| Personal Savings Allowance (PSA) | ||
| – Basic rate taxpayer | 1,000 | 1,000 |
| – Higher rate taxpayer | 500 | 500 |
| Dividend Allowance (DA) | 1,000 | 2,000 |
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
| Rate Bands | 2023/24 | 2022/23 | ||||
|---|---|---|---|---|---|---|
| Rates differ for General, Savings and Dividend income within each band: | ||||||
| G % |
S % |
D % |
G % |
S % |
D % |
|
| Basic | 20 | 20 | 8.75 | 20 | 20 | 8.75 |
| Higher | 40 | 40 | 33.75 | 40 | 40 | 33.75 |
| Additional | 45 | 45 | 39.35 | 45 | 45 | 39.35 |
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (mainly interest). To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
The PSA will tax interest at nil, where it would otherwise be taxable at 20% or 40%.
Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £1,000 (2022/23 £2,000) of dividend income at nil, rather than the rate that would otherwise apply.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
| Income tax – Scotland | Rate | 2023/24 | 2022/23 |
|---|---|---|---|
| Starter rate | 19%(19%) | £2,162 | £2,162 |
| Basic rate | 20%(20%) | 2,163 – 13,118 | 2,163 – 13,118 |
| Intermediate rate | 21%(21%) | 13,119 – 31,092 | 13,119 – 31,092 |
| Higher rate | 42%(41%) | 31,093 – 125,140 | 31,093 – 150,000 |
| Top rate | 47%(46%) | over 125,140 | 150,000 |
The Scottish rates and bands do not apply for savings and dividend income, which are taxed at normal UK rates.
| Remittance basis charge | 2023/24 | 2022/23 |
|---|---|---|
| For non-UK domiciled individuals who have been UK resident in at least: | ||
| 7 of the preceding 9 tax years | £30,000 | £30,000 |
| 12 of the preceding 14 tax years | 60,000 | 60,000 |
| 15 of the preceding 20 tax years | Deemed to be UK domiciled for tax purposes | |
Registered Pensions (Table B)
| Registered Pensions | 2023/24 | 2022/23 |
|---|---|---|
| Annual Allowance (AA)* | £60,000 | £40,000 |
| Lifetime Allowance (LTA) | 1,073,100 | 1,073,100 |
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
The AA is usually reduced by £1 for every £2 by which relevant income exceeds £260,000 (2022/23: £240,000), down to a minimum AA of £10,000 (2022/23: £4,000).
The AA can also be reduced to £10,000 (2022/23: £4,000), where certain pension drawings have been made.
In 2023/24 there is no LTA charge on excess pensions savings. The maximum tax-free pension lump sum is £268,275 (25% of LTA), unless a higher amount is “protected”.
Car and Fuel Benefits (Table C)
Cars
Taxable benefit: List price multiplied by chargeable percentage.
| 2023/24 and 2022/23 | ||
| CO2 emissions g/km |
Electric range Miles |
All cars % |
|---|---|---|
| 0 | N/A | 2 |
| 1-50 | >130 | 2 |
| 1-50 | 70 - 129 | 5 |
| 1-50 | 40 - 69 | 8 |
| 1-50 | 30 - 39 | 12 |
| 1-50 | <30 | 14 |
| 51-54 | N/A | 15 |
Then a further 1% for each 5g/km CO2 emissions, up to a maximum of 37%.
Diesel cars that are not RDE2 standard suffer a 4% supplement on the above figures but are still capped at 37%.
Car Fuel
Where employer provides fuel for private motoring in an employer-owned car, CO2-based percentage from above table multiplied by £27,800 (2022/23: £25,300).