Income tax and personal savings

The new income tax rates / personal allowances.

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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