Changing our Clients Lives

Home > > Tax rates and allowances > Income tax

Income tax


Tax bands and rates 2011/12 2010/11
Basic rate band £35,000 £37,400
Basic tax rate 20% 20%
Dividend ordinary rate 10% 10%
Savings rate band £2,560 £2,440
Savings rate 10% 10%
Higher rate band £35,001 - £150,000 £37,401 - £150,000
Higher tax rate  40% 40%
Dividend higher tax rate 32.5% 32.5%
Additional rate band Over £150,000 Over £150,000
Additional tax rate 50% 50%
Dividend additional tax rate 42.5% 42.5%
Allowances that reduce taxable income
Personal allowances under 65 £7,475 £6,475
  65 to 74 £9,940 £9,490
  75 and over £10,090 £9,640
Blind person's allowance   £1,980 £1,890
Age related allowances are reduced by £1 for each £2 of income above £24,000 (2010/11 £22,900), until the minimum of £7,475 (2010/11 £6,475) is reached.
The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 to £114,950.
Allowances that reduce tax
Married couple's allowance (MCA) 75 and over £7,295 £6,965
Tax reduction at 10%   £729.50 £696.50

The age for MCA is of the elder spouse or civil partner.
The loss of tax reduction is 10p for each £2 of income above £24,000 (2010/11 £22,900) until the minimum of £280 (2010/11 £267) is reached.
All ages as at 5 April 2012
Non domicile charge
Charge for adult non UK domiciliary - applies after UK residence in seven or
more of the previous tax years		 £30,000 £30,000
Tax shelters    

Enterprise Investment Scheme (EIS) up to

 £500,000 £500,000
Maximum amount for EIS carry back £50,000 £50,000
Income tax relief 30% 20%

Venture Capital Trust (VCT) up to

 £200,000 £200,000
Golden handshake max. £30,000 £30,000
Rent a room - exempt on gross annual rent up to £4,250 £4,250
Construction industry scheme - deduction rate    
Standard rate - registered 20% 20%
Higher rate - not registered 30% 30%

2012 & beyond

  1. The personal allowance for those under 65 will increase in 2012/13 by £630 to £8,105
  2. The non domicile charge is to increase from £30,000 to £50,000 from 6 April 2012
  3. Enterprise investment scheme investment limit increases to £1 million in April 2012

Did you know?

That the Goverment expect to receive £157.6bn from income tax in 2011/12 (2010/11 - £151.5bn)