Tax Tables - Income Tax Rates For Tax Year 2020 (Scotland has its own Scottish Rates of Income Tax SRIT)
Income Tax Rates 06/04/2020 to 05/04/2021
The amount you can earn/pension income before tax is deducted i.e. no tax to pay. The current personal allowances are:
Note: Personal allowances may be lower if have income in excess of you have underpaid tax in the past or if you have adjustments for taxable benefits in kind such as private medical insurance and a company car. Personal allowances may even be higher if you claim for things like a uniform cleaning allowance.
Income above the above mentioned 'tax free' personal allowances is charged at the following rates:
Starting Rate Tax / Lower Income Taxation
(if you only have lower cash/bank interest and earned income or pension income)
Working Out The Tax - How it works - work out taxable income first
Basic Rate 20.00 % tax on taxable income below £37500.
Higher Rate 40.00 % tax on taxable income in excess of £37500
Additional Rate 45.00 % tax on taxable income above £150000.
Tax Rates for Discretionary Trusts and Accumulation and Maintenance Trusts:
Savings Income Tax Rates (i.e. Bank/Building Society Interest Received)
Working Tax Credit & Children’s Tax Credit: Means tested - amount will vary
Widows bereavement allowance: £2,000 (not taxable)
Registered Blind Persons Allowance: £2500
Age Allowance Income Limit - For people born before 6 April 1938 there is an extra personal allowance (known as age allowance) which is slightly larger than the £12500 normal personal allowance of £12500. This will be reduced by £1 for every £2 of income over £29600. The reduction will not take the personal allowance below the normal £12500 unless your income is over £100000.
Married Couples Allowance (for elderly couples) £9075. Relief for the married couples allowance and other linked allowances was abolished in April 2000. However for married couples and civil partners where one person was born before 6 April 1935, they are able to keep the entitlement and obtain tax relief at a rate of 10%. The reduction that applies for age allowance above where income exceeds £29600 also applies to Married Couples Allowance but this allowance cannot fall below a "minimum amount" which is £3510.
Gifts To Charity
You can make donations to charities (and receive tax relief on the payments) in the following ways:
Pension Contributions and Pension Tax Relief
Contributions up to this year's Annual Contribution Allowance are normally allowable but for higher earners this may not be the case: See New Pension Tax Relief Rules.
Personal Contributions - You can make pension contributions up to certain limits and qualify for tax relief on your payments. The contribution limits are based on the lower of your salary and the Annual Allowance figure set by Government each year.
You can make excess contributions but these will not attract tax relief and contributions in excess of the annual allowance will attract tax penalties.
Employer Contributions - Employers can make contributions up to the Annual Allowance figure with no check towards an employee’s salary and claim tax relief. Contributions in excess of the employee's salary may have tax relief withdrawn if deemed excessive by HM Revenue and Customs.
An employer can make excess contributions over the annual allowance but these may attract tax penalties for the employee as well as no tax relief for the employer. For large contributions, tax relief may be spread over a number of years.