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Tax Rates & Allowances

Income Tax

Not all income is taxable and you're only taxed on 'taxable income' above a certain level. Even then, there are other reliefs and allowances that can reduce your Income Tax bill - and in some cases mean you've no tax to pay. 

Income Tax Rates     2013-14  2014 -15
10% starting rate for savings* £2,790 £2,880
 20% on 'taxable' income up to £32,010 £31,865
40% on 'taxable' income over  £32,010 £31,865
 45% on 'taxable' income over £150,000 £150,000

*The 10 per cent starting rate applies to savings income only. If, after deducting your Personal Allowance from your total income liable to Income Tax, your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply. Non-savings income includes income from employment, profits from self-employment, pensions, income from property and taxable benefits.

Income Tax Personal & Age Related Allowances

Nearly everyone who lives in the UK is entitled to an Income Tax Personal Allowance. This is the amount of income you can receive each year without having to pay tax on it. Depending on your circumstances, you may also be able to claim certain other allowances. the amount of your Personal Allowance depends upon your date of birth and your total income in the tax year (includes income from all taxable sources e.g. savings interest, pensions etc). 

Allowances (per year)      2013-14       2014-15
Personal allowance (For people born after 5th April 1948)
£9,440 £10,000
Personal allowance (For people born between 6 April 1938 and 5 April 1948)
£10,500 £10,500
Personal allowance (For people born before 6 April 1938)
£10,660 £10,660
Married couple's allowance - minimum amount £3,040 £3,140
Married couple's allowance (For people born before 5th April 1935) £7,915 £8,165
Income limit for personal allowance
£100,000 £100,000

Income limit for age-related allowances for those born before 6 April 1948

£26,100 £27,000
Blind person's allowance £2,160 £2,230

 1 Thepersonal allowance reduces where the individual’s income is above this limit by £1 for every £2 above the limit. This applies regardless of age or date of birth

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