Income Tax

Income tax rates Note 2012/13 2011/12
Basic rate band - income up to £34,370 £35,000
  Starting rate for savings *10% *10%
  Basic rate 20% 20%
  Dividend ordinary rate 10% 10%
Higher rate - income over £34,370 £35,000
  Higher rate 40% 40%
  Dividend upper rate 32.5% 32.5%
Additional rate - income over £150,000 £150,000
  Additional rate 50% 50%
  Dividend additional rate 42.5% 42.5%
* Starting rate is for savings income up to the starting rate limit of £2,710 (£2,560) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.    
Trusts    
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):    
dividend ordinary rate 5 10% 10%
savings income 5 20% 20%
other income 5 20% 20%
Income of other trusts above £1,000 is taxed at the special trust rates:    
rate applicable to trusts   50% 50%
dividend trust rate   42.5% 42.5%
Personal allowance (PA)    
  under 65 1,4 £8,105 £7,475
  65 to 74* 1,2,4 £10,500 £9,940
  75 and over* 1,2,4 £10,660 £10,090
  Blind person's allowance   £2,100 £1,980
Married couple's allowance (MCA)    
Either partner born before 6 April 1935 (relief restricted to 10%)   1,3,4 £7,705 £7,295
Tax Shelters    
Enterprise Investment Scheme (EIS) up to £1,000,000 £500,000
Venture Capital Trust (VCT) up to £200,000 £200,000
Golden Handshake max. £30,000 £30,000
Rent a Room - exempt on gross annual rent up to £4,250 £4,250
Construction Industry Scheme deduction rate:    
Standard (registered) 20% 20%
Higher (not registered) 30% 30%

Notes

  1. Ages are as the end of the tax year. Ages for the MCA relate to the elder spouse or civil partner
  2. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £25,400 (£24,000) until the basic allowance is reached.
  3. Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £2,960. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
  4. The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
  5. Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.