Income tax and personal savings

The Chancellor announced the following income tax rates and allowances.

Income tax rates and bands

2021/22 2020/21
Band £ Rate % Band £ Rate %
0 - 37,700 20 0 - 37,500 20
37,701 - 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 2021/22 2020/21
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 2021/22 2020/21
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

  2021/22 2020/21
Personal allowance £12,570 £12,500
Personal allowance income limit £100,000 £100,000
Marriage allowance
Transferable between certain spouses where neither pay tax above the basic rate
£1,260 £1,250
Married couple's allowance (MCA) (relief given at 10%)
Either partner born before 6 April 1935
£9,125 £9,075
- minimum amount £3,530 £3,510
- income limit £30,400 £30,200
Blind person's allowance £2,520 £2,500

Scottish income tax rates and bands

Savings and dividend income are taxed using UK rates and bands.

2021/22 2020/21
Band £ Rate % Band £ Rate %
0 - 2,097 19 0 - 2,085 19
2,098 - 12,726 20 2,086 - 12,658 20
12,727 - 31,092 21 12,659 - 30,930 21
31,093 - 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.

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