Tax bands and rates 2015/16 2014/15
Basic rate band £31,785 £31,865
Basic tax rate 20% 20%
Dividend ordinary tax rate 10% 10%
Savings rate band £5,000* £2,880
Savings rate 0% 10%
Higher rate band £31,786 - £150,000 £31,866 - £150,000
Higher tax rate 40% 40%
Dividend higher tax rate 32.5% 32.5%
Additional rate band over £150,000  £150,000
Additional tax rate 45% 45%
Dividend additional tax rate 37.5% 37.5%
Allowances that reduce taxable income
Personal allowances Those born after 5 April 1948 £10,600 £10,000
  Those born after 5 April 1938 and before 6 April 1948 £10,600 £10,500
  Those born before 6 April 1938  £10,660 £10,660
Married couples/civil partners Transferable allowance £1,060 N/A
Blind person's allowance   £2,290 £2,230

Age related allowances are reduced by £1 for each £2 of income above £27,700 (2014/15 £27,000), until the minimum of £10,600 (2014/15 £10,000) is reached.

The minimum personal allowance is reduced by £1 for each £2 of income from £100,000 (2014/15 - £100,000) to £121,200 (2014/15 - £120,000).

Allowances that reduce tax
Married couple's allowance (MCA) Maximum amount £8,355 £8,165
Tax reduction at 10% £816.50 £791.50
Non domicile charge
Applies after UK residence in 7 or
more of the previous 9 tax years
£30,000 £30,000
Applies after UK residence in at least 12 of the previous 14 years £60,000  £50,000 
Applies after UK residence in at least 17 of the last 20 years £90,000  N/A 
Investment tax shelters  

Enterprise investment scheme (EIS) up to

£1,000,000 £1,000,000
Maximum amount for EIS carry back £50,000 £50,000
Income tax relief rate 30% 30%
Seed enterprise investment scheme (SEIS) £100,000 £100,000
Income tax relief  50%  50%
Venture capital trust (VCT) £200,000 £200,000
VCT tax relief rate 30% 30%
Golden handshake maximum tax free £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%

*Savings income falling into the first £5,000 may be taxed at 0% for certain low income earners.

2016 and beyond

the personal allowance for 2016/17 is £11,000 and £11,200 for 2017/18. The basic rate limit is to be increased to £32,000 for 2016/17 and to £32,400 for 2017/18. The higher rate threshold will increase to £43,000 in 2016/17 and to £43,600 in 2017/18.

Rent-a-room 

From 6 April 2016 the amount that is exempt increases to £7,000 from £4,250.

Did you know?

The Treasury is expecting to raise £170.2 billion from income tax (2014/15 - £163.7 billion).