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Income tax and personal savings

The new income tax rates / personal allowances.

The Chancellor announced the following income tax rates and allowances.

Income tax rates and bands

2020/21 2019/20
Band £ Rate % Band £ Rate %
0 - 37,500 20 0 - 37,500 20
37,501 - 150,000 40 37,501 - 150,000 40
Over 150,000 45 Over 150,000 45

Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.

Savings income    

Savings Allowance 2020/21 2019/20
Basic rate £1,000 £1,000
Higher rate £500 £500

A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band.

Dividend income

Allowance/Rate 2020/21 2019/20
Dividend allowance £2,000 £2,000
Dividend ordinary rate 7.5% 7.5%
Dividend upper rate 32.5% 32.5%
Dividend additional rate 38.1% 38.1%

Personal allowances

  2020/21 2019/20
Personal allowance £12,500 £12,500
Personal allowance income limit £100,000 £100,000
Marriage allowance
Transferable between certain spouses where neither pay tax above the basic rate
£1,250 £1,250
Married couple's allowance (MCA) (relief given at 10%)
Either partner born before 6 April 1935
£9,075 £8,915
- minimum amount £3,510 £3,450
- income limit £30,200 £29,600
Blind person's allowance £2,500 £2,450

Scottish income tax rates and bands

Savings and dividend income are taxed using UK rates and bands.

2020/21 2019/20
Band £ Rate % Band £ Rate %
0 - 2,085 19 0 - 2,049 19
2,086 - 12,658 20 2,050 - 12,444 20
12,659 - 30,930 21 12,445 - 30,930 21
30,931 - 150,000 41 30,931 - 150,000 41
Over 150,000 46 Over 150,000 46

Welsh income tax rates

Although income tax for Wales has been devolved, Welsh resident taxpayers continue to pay the same overall rates as taxpayers in England and Northern Ireland.

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