How much Income Tax you pay in each tax year depends on:
- how much of your income is above your Personal Allowance
- how much of your income falls within each tax band
The current tax year is from 6 April 2023 to 5 April 2024.
This guide is also available in Welsh (Cymraeg).
Your tax-free Personal Allowance
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.
Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.
Income Tax rates and bands
The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,570.
Income tax bands are different if you live in Scotland.
| Band | Taxable income | Tax rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | over £125,140 | 45% |
You can also see the rates and bands without the Personal Allowance. You do not get a Personal Allowance on taxable income over £125,140.
If you’re employed or get a pension
Check your Income Tax to see:
- your Personal Allowance and tax code
- how much tax you’ve paid in the current tax year
- how much you’re likely to pay for the rest of the year
Other allowances
You have tax-free allowances for:
- savings interest
- dividend income, if you own shares in a company
You may also have tax-free allowances for:
- your first £1,000 of income from self-employment - this is your ‘trading allowance’
- your first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)
Find out whether you’re eligible for the trading and property allowances.
You pay tax on any interest, dividends or income over your allowances.
Paying less Income Tax
You may be able to claim Income Tax reliefs if you’re eligible for them.
If you’re married or in a civil partnership
You may be able to claim Marriage Allowance to reduce your partner’s tax if your income is less than the standard Personal Allowance.
If you do not claim Marriage Allowance and you or your partner were born before 6 April 1935, you may be able to claim Married Couple’s Allowance.
As a tax expert with extensive knowledge and experience in taxation laws and regulations, I'll delve into the intricacies of the information provided.
The article you've shared primarily discusses the structure of Income Tax in the United Kingdom for the tax year spanning from April 6, 2023, to April 5, 2024. It elucidates the fundamental concepts and factors influencing the amount of Income Tax an individual pays.
Firstly, it establishes the significance of the Personal Allowance, which is the amount of income not subject to taxation. For the specified tax year, the standard Personal Allowance is set at £12,570. However, this allowance can vary based on specific circ*mstances. For instance, claiming Marriage Allowance or Blind Person’s Allowance might augment this allowance, while an income surpassing £100,000 can reduce it.
The Income Tax rates and bands in the UK are structured in tiers, delineating different rates applicable to distinct income brackets. For individuals with a standard Personal Allowance of £12,570, the tax rates and bands are:
- Personal Allowance: Up to £12,570 taxed at 0%
- Basic rate: £12,571 to £50,270 taxed at 20%
- Higher rate: £50,271 to £125,140 taxed at 40%
- Additional rate: Over £125,140 taxed at 45%
Notably, individuals don't benefit from the Personal Allowance on taxable income exceeding £125,140.
Moreover, the article mentions various tax-free allowances beyond the Personal Allowance, such as exemptions for savings interest and dividend income from company shares. It also highlights specific allowances for self-employment income (known as the 'trading allowance') and rental property income (unless utilizing the Rent a Room Scheme), each capped at £1,000.
For those aiming to minimize their Income Tax liability, the article outlines potential avenues for claiming Income Tax reliefs, subject to eligibility criteria. Individuals married or in civil partnerships might leverage the Marriage Allowance to decrease their partner's tax if one partner's income falls below the standard Personal Allowance. Additionally, for couples born before April 6, 1935, there's a possibility of claiming Married Couple’s Allowance if they opt not to claim Marriage Allowance.
Understanding these concepts and intricacies of the UK Income Tax system is crucial for individuals to manage their finances efficiently and ensure compliance with tax regulations.
