Income tax and personal savings
The Chancellor announced the following income tax rates and allowances.
Income tax rates and bands
2020/21 | 2019/20 |
Band £ | Rate % | Band £ | Rate % |
0 - 37,500 | 20 | 0 - 37,500 | 20 |
37,501 - 150,000 | 40 | 37,501 - 150,000 | 40 |
Over 150,000 | 45 | Over 150,000 | 45 |
Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.
Savings income
Savings Allowance | 2020/21 | 2019/20 |
Basic rate | £1,000 | £1,000 |
Higher rate | £500 | £500 |
A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band.
Dividend income
Allowance/Rate | 2020/21 | 2019/20 |
Dividend allowance | £2,000 | £2,000 |
Dividend ordinary rate | 7.5% | 7.5% |
Dividend upper rate | 32.5% | 32.5% |
Dividend additional rate | 38.1% | 38.1% |
Personal allowances
| 2020/21 | 2019/20 |
Personal allowance | £12,500 | £12,500 |
Personal allowance income limit | £100,000 | £100,000 |
Marriage allowance Transferable between certain spouses where neither pay tax above the basic rate | £1,250 | £1,250 |
Married couple's allowance (MCA) (relief given at 10%) Either partner born before 6 April 1935 | £9,075 | £8,915 |
- minimum amount | £3,510 | £3,450 |
- income limit | £30,200 | £29,600 |
Blind person's allowance | £2,500 | £2,450 |
Scottish income tax rates and bands
Savings and dividend income are taxed using UK rates and bands.
2020/21 | 2019/20 |
Band £ | Rate % | Band £ | Rate % |
0 - 2,085 | 19 | 0 - 2,049 | 19 |
2,086 - 12,658 | 20 | 2,050 - 12,444 | 20 |
12,659 - 30,930 | 21 | 12,445 - 30,930 | 21 |
30,931 - 150,000 | 41 | 30,931 - 150,000 | 41 |
Over 150,000 | 46 | Over 150,000 | 46 |
Welsh income tax rates
Although income tax for Wales has been devolved, Welsh resident taxpayers continue to pay the same overall rates as taxpayers in England and Northern Ireland.