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Income tax and personal savings

The Chancellor announced a bringing forward of the planned increases in the personal allowance and the higher rate threshold for income tax.

Income Tax rates and bands

2019/20 2018/19
Band £ Rate % Band £ Rate %
0 – 37,500 20 0 – 34,500 20
37,501 – 150,000 40 34,501 – 150,000 40
Over 150,000 45 Over 150,000 45

Savings income

2019/20 2018/19
Savings allowance basic rate £1,000 £1,000
Savings allowance 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

2019/20 2018/19
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

2019/20 2018/19
Personal allowance £12,500 £11,850
Personal allowance income limit £100,000 £100,000
Marriage allowance

Transferable between certain spouses where neither pay tax above the basic rate

£1,250 £1,190
Married couple’s allowance (relief given at 10%) Either partner born before 6 April 1935  

£8,950

 

£8,695

  • minimum amount
 

£3,450

 

£3,360

  • income limit
 

£29,600

 

£28,900

Blind person’s allowance £2,450 £2,390

Scottish income tax rates and bands

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

2019/20 2018/19
Rates and bands for 2019/20 will be announced in the Scottish Budget Band £ Rate %
0 – 2,000 19
2,001 – 12,150 20
12,151 – 31,580 21
31,581 – 150,000 41
Over 150,000 46

Welsh income tax rates

From 6 April 2019, the UK government will reduce the basic, higher and additional rates of income tax paid by Welsh taxpayers by 10%, and three Welsh rates of income tax will then be added to the reduced UK rates. The Welsh government proposes to set the first Welsh rates at 10%.

 

Individual Savings Accounts (ISAs)

Individuals can invest in any combination of cash or stocks and shares up to the overall annual ISA subscription limit. However, a saver may only pay into a maximum of one Cash ISA, one Stocks and Shares ISA, one Innovative Finance ISA and one Lifetime ISA. The overall investment limit for 2019/20 is £20,000 (£4,368 for junior accounts).