Income Tax Rates and Allowances

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Income Tax Rates and Allowances

Main allowances
2022/23
2021/22
Personal Allowance*†
£12,570
£12,570
Blind Person’s Allowance
2,600
2,520
Allowed only at 10%
Married Couple’s Allowance (born before 6/4/35) **
9,415
9,125
Income limit for age-related allowances
31,400
30,400
Dividend and Savings Allowances
Dividend Tax Allowance (DTA) §
2,000
2,000
Personal Savings Allowance (basic rate taxpayer)
1,000
1,000
Personal Savings Allowance (higher rate taxpayer)
500
500

*Personal Allowance (PA) will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000.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 £125,000 (2021/22: £125,000) or more.

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†Up to 10% of the PA (2022/23: £1,260; 2021/22: £1,260) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer.

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**Married Couple’s Allowance is reduced by £1 for every £2 by which adjusted income exceeds the income limit, down to a minimum of £3,640 (2021/22 £3,530)

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§The DTA taxes the first £2,000 of dividend income at nil rather than the rate that would otherwise apply – see rates below. The Personal Savings Allowance (PSA) operates as a nil rate band for interest income.

Rate bands
2022/23
2021/22
Basic
37,500
37,000
Higher
37,501-150,000
37,501-150,000
Additional
over 150,000
over 150,000
2023/24 and  2022/23 Rates for General, Savings and Dividend income within each band:
Rate bands
G
S
D
Basic
20%
20%
8.75%
Higher
40%
40%
33.75%
Additional
45%
45%
39.35%

The dividend rates were 7.5%, 32.5% and 38.1% in 2021/22.

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General income (salary, pensions, business profits, rent) uses Personal Allowance, basic rate and higher rate bands before savings income (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 (see above) will tax interest at nil where it would otherwise be taxable at 20% or 40%.

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Dividends are taxed as the ‘top slice’ of income.

High Income Child Benefit Charge

1% of child benefit for each £100 of net income between £50,000 and £60,000.

Remittance Basis

Remittance basis charge
2022/23
2021/22
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 domiciled
Deemed domiciled