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.