Income Tax
| Allowances | 2024/25 | 2023/24 |
|---|---|---|
| Personal Allowance (PA)* | £12,570 | £12,570 |
| Marriage Allowance† | 1,260 | 1,260 |
| Blind Person's Allowance | 3,070 | 2,870 |
| Rent a room relief** | 7,500 | 7,500 |
| Trading income** | 1,000 | 1,000 |
| Property income** | 1,000 | 1,000 |
*PA is withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There is no allowance given above £125,140.
†The part of the PA that is transferable to a spouse or civil partner who is not a higher or additional rate taxpayer.
** If gross income exceeds this, the limit may be deducted instead of actual expenses.
| Rate bands | 2024/25 | 2023/24 |
|---|---|---|
| Basic Rate Band (BRB) | £37,700 | £37,700 |
| Higher Rate Band (HRB) | 37,701 – 125,140 | 37,701 – 125,140 |
| Additional rate | over 125,140 | over 125,140 |
| Personal Savings Allowance (PSA) | ||
| – Basic rate taxpayer | 1,000 | 1,000 |
| – Higher rate taxpayer | 500 | 500 |
| Dividend Allowance (DA) | 500 | 1,000 |
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
| Tax rates | 2024/25 | 2023/24 | ||||
|---|---|---|---|---|---|---|
| Rates differ for General/Savings/Dividend income | ||||||
| G | S | D | G | S | D | |
| Basic rate % | 20 | 20 | 8.75 | 20 | 20 | 8.75 |
| Higher rate % | 40 | 40 | 33.75 | 40 | 40 | 33.75 |
| Additional rate % | 45 | 45 | 39.35 | 45 | 45 | 39.35 |
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (mainly interest). Scottish taxpayers are taxed at different rates on general income (see below).
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 £500 (2023/24 £1,000) of dividend income at nil, rather than the rate that would otherwise apply.
| Income tax – Scotland | 2024/25 | 2023/24 | |
|---|---|---|---|
| Starter rate | 19%(19%) | £2,306 | £2,162 |
| Basic rate | 20%(20%) | 2,307 – 13,991 | 2,163 – 13,118 |
| Intermediate rate | 21%(21%) | 13,992 – 31,092 | 13,119 – 31,092 |
| Higher rate | 42%(42%) | 31,093 – 62,430 | 31,093 – 125,140 |
| Advanced rate | 45%(N/A) | 62,431 – 125,140 | N/A |
| Top rate | 48%(47%) | over 125,140 | 125,140 |
Savings and dividend income are taxed at normal UK rates.
High Income Child Benefit Charge (HICBC)
1% of child benefit for each £200 (2023/24: £100) of adjusted net income between £60,000 and £80,000 (2023/24: £50,000 and £60,000).
| Remittance basis charge | 2024/25 | 2023/24 |
|---|---|---|
| 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 to be UK domiciled | |