UK Individual Tax
Earned Income
An individual is taxed on most sources of income if they are UK-resident or if the income is UK derived. Some exceptions exist, however, including some state benefits, dividends under £2,000 and some types of savings interest.
The table below shows the personal tax rates for the tax year ended 05 April 2021:
Band | Taxable income | Tax rate |
Personal Allowance | Up to £12,500 | 0% |
Basic rate | £12,501 to £50,000 | 20% |
Higher rate | £50,001 to £150,000 | 40% |
Additional rate | over £150,000 | 45% |
Personal Savings Allowance
You are entitled to up to £1000 of tax free interest income depending on your tax bracket:
Income Tax band | Tax-free savings income |
Basic rate | £1,000 |
Higher rate | £500 |
Additional rate | £0 |
Dividend Income
The first £2,000 of income not taxable. After that:
Band | Tax rate |
Basic rate | 7.5% |
Higher rate | 32.5% |
Additional rate | 38.1% |