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Income Tax Rate & Allowances - 2018/19

Income Tax Rate & Allowances - 2018/19

As per the announcements of the Autumn Budget 2017, there will be changes to the Personal Allowances and Income Tax rates for the year 2018/19. Personal Allowance is supposed to increase from £11,500 to £11,850. Similarly, the bands of taxable incomes are also supposed to increase in the year 2018/19.

Tax Year 2018/19 Tax Year 2017/18
Personal allowance
Personal allowance £11,850 £11,500
Income limit for personal allowance £100,000 £100,000
Income limit for Married couple’s allowance £28,900 £28,000
Marriage allowance £1,190 £1,150
Married couple’s allowance for those born before 6 April 1935
Maximum amount of married couple’s allowance £8,695 £8,445
Maximum amount of married couple’s allowance £3,360 £3,260
Blind person’s allowance £2,390 £2,320
Dividend allowance £2,000 £5,000
Personal savings allowance for basic rate taxpayers £1,000 £1,000
Personal savings allowance for higher rate taxpayers £500 £500

Income Tax Bands

Tax year 2018/19 Tax year 2017/18 Tax Rate (for 2017/18 & 2018/19)
Personal Allowance £11,500 £11,850 0%
Basic rate £1 - £34,500 £1 - £33,500 20%
Higher rate £34,501 - £150,000 £33,501 - £150,000 40%
Additional rate Over £150,000 Over £150,000 45%

Tax on Saving Interests and Dividend Rates

As per the announcements, there will be no changes on Saving Interests and Dividend Rates. However, the annual tax-free dividend allowance is reduced to £2000 from April-2018 (£5000 in 2017-18)

Tax on Saving Interests

Tax year 2018/19 Tax year 2017/18
Starting rate for savings 0% 0%
Savings basic rate 20% 20%
Savings higher rate 40% 40%
Savings additional rate 45% 45%

Tax on Dividend Rates

Tax year 2018/19 Tax year 2017/18
Dividend ordinary rate - for dividends otherwise taxable at the basic rate 7.50% 7.50%
Dividend upper rate - for dividends otherwise taxable at the higher rate 32.50% 32.50%
Dividend additional rate - for dividends otherwise taxable at the additional rate 38.10% 38.10%

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