Tax Rates
| Tax Band | 2023-24 | 2022-23 |
|---|---|---|
| Personal Allowance | Up to £12,570 (0%) | Up to £12,570 (0%) |
| Basic rate | £12,571 to £50,270 (20.0%) | £12,571 to £37,700 (20.0%) |
| Higher rate | £50,271 to £125,140 (40.0%) | £37,701 to £150,000 (40.0%) |
| Additional rate | Over £125,140 (45.0%) | Over £150,000 (45.0%) |
Personal Savings Allowance (PSA)
| Taxpayer Status | 2023-24 | 2022-23 |
|---|---|---|
| Basic rate | £1,000 | £1,000 |
| Higher rate | £500 | £500 |
Allowances
| Allowance | 2023-24 | 2022-23 |
|---|---|---|
| Dividend Allowance (DA) | £2,000 | £1,000 |
| Personal Allowance (PA) *(A) | £12,570 | £12,570 |
| Marriage Allowance *(B) | £1,260 | £1,260 |
| Blind Person’s Allowance | £2,870 | £2,600 |
| Rent a room relief *(C) | £7,500 | £7,500 |
| Trading Income *(C) | £1,000 | £1,000 |
| Property Income *(C) | £1,000 | £1,000 |
*(A) The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero.
*(B) The part of the PA that is transferable to a spouse or civil partner who is not a higher or additional rate taxpayer.
*(C) If gross income exceeds this, the limit may be deducted instead of actual expenses.
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
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 taxes 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 £2,000 of dividend income at nil, rather than the rate that would otherwise apply.
