Budget 2018 – Personal Tax Bands & Rates
2018/19 tax bands and rates
The basic rate of tax is currently 20%.
The band of income taxable at this rate is £34,500 so that the threshold at which the 40% band applies is £46,350 for those who are entitled to the full personal allowance.
Additional rate taxpayers pay tax at 45% on their income in excess of £150,000.
2019/20 tax bands and rates
The government has announced that for 2019/20 the basic rate band will be increased to £37,500 so that the threshold at which the 40% band applies is £50,000 for those who are entitled to the full personal allowance.
The additional rate of tax of 45% remains payable on taxable income above £150,000.
Tax on dividends
In 2018/19 the first £2,000 of dividends are chargeable to tax at 0% (the Dividend Allowance).
The Dividend Allowance will remain at £2,000 for 2019/20.
Dividends received above the allowance are taxed at the following rates:
- 7.5% for basic rate taxpayers
- 32.5% for higher rate taxpayers
- 38.1% for additional rate taxpayers.
If you wish to discuss your personal tax situation, please contact one of our Chartered Tax Advisers.