Personal Income Tax Rates and Bands 2024/25
| Income tax rates England, Wales and Northern Ireland: | 2024/25 | 2023/24 |
| 0% starting rate for savings only | Up to £5,000 | Up to £5,000 |
| 0% on personal allowance (subject to any clawback of PA) | £0 - £12,570 | £0 - £23,570 |
| 20% basic rate tax | £12,571 -£50,270 | £12,571 - £50,270 |
| 40% higher rate tax | £50,271 - £125,140 | £50,271 - £125,140 |
| 45% additional rate tax | Above £125,140 | Above £125,140 |
* The Welsh Government has made a commitment not to raise Welsh rates of income tax. Therefore, Welsh taxpayers will continue to pay the same rates as their English and Northern Irish counterparts. The income tax bands will remain frozen until tax year 2027-28.
| Income tax rates (dividend income) | 2024/25 | 2023/24 |
| Dividend allowance | £500 | £1,000 |
| Dividend ordinary rate (for dividends within basic rate band) | 8.75% | 8.75% |
| Dividend upper rate (for dividends within higher rate band) | 33.75% | 33.75% |
| Dividend additional rate (for dividends above higher rate band) | 39.35% | 39.35% |
| Child benefit/guardian’s allowance rates* | 2024/25 | 2023/24 |
| Higher rate (eldest or only child) (per week) | £25.60 | £24.00 |
| Other children | £16.95 | £15.90 |
| Guardian’s allowance per week | £21.75 | £20.40 |
*An income tax charge (High Income Child Benefit Charge or HICBC) will apply to taxpayers with ‘adjusted net income’ exceeding £50,000 in a tax year, when child benefit is also received by them or their partner. The charge will reduce the financial benefit of receiving child benefit for those with income between £50,000 and £60,000. The benefit will be removed completely for taxpayers with income above £60,000.
From April 2024, the threshold for HICBC to apply will be raised to £60,000 with the taper band extended to £80,000. Therefore, the charge will reduce the financial benefit of receiving child benefit for those with income between £60,000 and £80,000. The benefit will be removed completely for taxpayers with income above £80,000.
From January 2021, no child benefit payments are made in respect of children living overseas. This will apply to EEA migrants arriving in the UK under the new immigration system.
| Personal allowances | 2024/25 | 2023/24 |
| Personal allowance | £12,570 | £12,570 |
| Dividend allowance | £5,00 | £1,000 |
| Maximum married couple’s allowance for those born before 6 April 1935* | £11,080 | £10,375 |
| Married couple’s allowance – minimum amount | £4,280 | £4,010 |
| Micro entrepreneur’s allowance (property or trading income) | £1,000 each | £1,000 each |
| Income limit for personal allowance* | £100,000 | £100,000 |
| Income limit for married couple’s allowance: born before 6 April 1935 | £37,000 | £34,600 |
| Blind person’s allowance | £3,070 | £2,870 |
| Rent-a-room relief | £7,500 | £7,500 |
| Transferable/shareable tax allowance for married couples and civil partners* | £1,260 | £1,260 |
| Personal savings allowance for basic rate taxpayers | £1,000 | £1,000 |
| Personal savings allowance for higher rate taxpayers | £500 | £500 |
| Personal savings allowance for additional rate taxpayers | £0 | £0 |
* From 2016/17 onwards, all individuals are entitled to the same personal allowance, regardless of the individual’s date of birth. .
* this allowance is reduced by £1 for every £2 of income in excess of the income limit, but married couple’s allowance will not reduce below £4,280 for 24/25 and £4,010 for 23/24.
* personal allowances are subject to the £100,000 income limit, which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit, down to zero.
* this allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax, or not liable at the higher or additional rates, can transfer this amount of their unused personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rates.
If the couple marry or register a civil partnership, they will get the allowance on a pro-rata basis for the rest of that tax year. If one of them dies or there is a divorce or separation, the allowance continues until the end of the tax year.
| National insurance | 2024/25 | 2023/24 |
| Lower earnings limit, primary class 1 (per week) | £123 | £123 |
| Upper earnings limit, primary class 1 (per week) | £967 | £967 |
| Apprentice upper secondary threshold (AUST) for under 21s/25s | £967 | £967 |
| Primary threshold (per week) | £242 | £242 |
| Secondary threshold (per week) | £175 | £175 |
| Employment allowance (per year/employer) | £5,000 | £5,000 |
| Employee’s primary class 1 rate between primary threshold and upper earnings limit* From 6 April 2023 to 5 January 2024 From 6 January 2024 to 5 April 2024 | 8% | 12% 10% |
| Employee’s primary class 1 rate above upper earnings limit | 2% | 2% |
| Married woman’s reduced rate between primary threshold and upper earnings limit From 6 April 2023 to 5 January 2024 From 6 January 2024 to 5 April 2024 | 1.85% | 5.85% 3.85% |
| Married woman’s rate above upper earnings limit | 2% | 2% |
| Employer's secondary class 1 rate above secondary threshold* | 13.8% | 13.8% |
| Class 2 small profits threshold (per year) | £6,725 | £6,725 |
| Class 2 lower profits threshold (per year) | n/a | £12,750 |
| Class 2 small profits threshold (voluntary per week) | £3.45 | £3.45 |
| Class 2 rate (per week where profits are above lower profits limit threshold) | £0 | £3.45 |
| Class 3 voluntary rate (per week) | £17.45 | £17.45 |
| Class 4 lower profits limit | £12,570 | £12,570 |
| Class 4 upper profits limit | £50,270 | £50,270 |
| Class 4 rate between lower profits limit and upper profits limit | 6% | 9% |
| Class 4 rate above upper profits limit | 2% | 2% |
| Class 1A/1B NIC | 13.8% | 13.8% |
| Pensions | 2024/25 | 2023/2024 |
| Annual allowance* | £60,000 | £60,000 |
| Lifetime allowance* | n/a | n/a |
| Money purchase annual allowance | £10,000 | £10,000 |
| Lump sum allowance* | £268,275 | n/a |
| Lump sum and death benefit allowance* | £1,073,100 | n/a |
| Overseas transfer allowance* | £1,073,100 | n/a |
* the annual allowance is a limit to the total amount of contributions that can be paid to a defined contribution pension scheme and the total amount of benefits that you can build up in a defined benefit pension scheme each year, for tax relief purposes. The annual allowance was increased from £40,000 to £60,000 from April 2023.
Since 6 April 2016, individuals with a high income have had a tapered annual allowance, where for every £2 of adjusted income over a threshold, an individual’s annual allowance is reduced by £1. From 6 April 2020, the tapered annual allowance applies for individuals with ‘threshold income’ of over £200,000, and ‘adjusted income’ of over £260,000. From April 2023, the annual allowance will be £10,000 (increased from £4,000) for individuals with total adjusted income (including pension accrual) over £360,000
* A new lump sum allowance is introduced from April 2024 for £268,275.
* Previous lifetime allowance charge of £1,073,100 is removed from April 2023 and the allowance is abolished entirely from April 2024. However, a new lump sum and death benefit allowance and overseas transfer allowance is set for the same amount..
| Reliefs and incentives | 2024/25 | 2024/25 |
| Enterprise Investment Scheme (EIS) – maximum* | £1,000,000 | £1,000,000 |
| Venture Capital Trust (VCT) – maximum | £200,000 | £200,000 |
* from 6 April 2018, the annual limit is doubled to £2m, provided that any amount over £1m is invested in one or more knowledge-intensive companies.
| Reliefs and incentives | 2024/25 | 2023/24 |
| Seed Enterprise Investment Scheme (SEIS) – maximum* | £200,000 | £200,000 |
| Enterprise Management Incentive Scheme (EMI) – employee limit up to the value of £250,000 in a three-year period | £250,000 | £250,000 |
| Social Investment Tax Relief (SITR) – maximum | n/a | n/a |
| Income tax relief on EIS schemes | 30% | 30% |
| Income tax relief on VCT schemes | 30% | 30% |
| Income tax relief on SEIS schemes | 50% | 50% |
| Income tax relief on SITR schemes (relief expires on 5 April 2023) | n/a | 30% |
* Capital gains tax reinvestment relief may also be available for investments made up to 50% of the amount invested.
| Individual Savings Account (ISA) | 2024/25 | 2023/24 |
| ISA (NISA) annual limit | £20,000 | £20,000 |
| Junior ISA investment annual limit – under 18, living in the UK | £9,000 | £9,000 |
| Child Trust Fund annual limit | £9,000 | £9,000 |
| Lifetime ISA annual limit* | £4,000 | £4,000 |
* to open a Lifetime ISA, you must be 18 or over but under 40. Contributions can be made until the age of 50. The government will add a 25% bonus to the savings, up to a maximum of £1,000 per year. The lifetime ISA limit of £4,000 counts towards the annual ISA limit.
| Capital gains tax | 2024/25 | 2023/24 |
| Basic rate tax payer | 10% | 10% |
| Higher rate tax payer / Main rate for trustees and personal representatives | 20% | 20% |
| Rate on sale of residential property and carried interest - basic rate tax payer | 18% | 18% |
| Rate on sale of residential property – higher rate tax payer, trustees and personal representatives | 24% | 28% |
| Rate on gains on carried interest - higher rate tax payer, trustees and personal representatives | 28% | 28% |
| Annual exemption – individuals, personal representatives and trusts for disabled persons | £3,000 | £6,000 |
| Annual exemption – other trusts | £1,500 | £3,000 |
| Business Assets Disposal Relief lifetime limit | £1,000,000 | £1,000,000 |
| Investors’ Relief lifetime limit | £10,000,000 | £10,000,000 |
| Business Assets Disposal Relief / Investors’ rate | 10% | 10% |
| Chattels exemption | £6,000 | £6,000 |
| Inheritance tax | 2024/25 | 2023/2 |
| Single person’s nil-rate band | £325,000 | £325,000 |
| Single person’s 40% band | over £325,000 | over £325,000 |
| Residence nil-rate band (RNRB) – maximum* | £175,000 | £175,000 |
| Reduced rate* | 36% | 36% |
| IHT rate (for chargeable lifetime transfers) | 20% | 20% |
| Married couples or civil partnerships allowance nil-rate band | £650,000 | £650,000 |
| Gifts to charities | Exempt | Exempt |
| Small gifts to same person | £250 | £250 |
| General gifts – annual exemption | £3,000 | £3,000 |
| Wedding gifts to children | £5,000 | £5,000 |
| Wedding gifts to grandchildren | £2,500 | £2,500 |
| Wedding gifts to any other person | £1,000 | £1,000 |
* the RNRB is available in respect of a main residence given away to children (including adopted, foster or stepchildren). Any unused nil-rate band transfers to the deceased’s spouse or civil partner, even where death predates the availability of the additional threshold. It applies in addition to the existing nil-rate band (NRB) or threshold (currently £325,000) if the individual and estate meet the qualifying conditions. Inheritance tax nil-rate band and residence nil-rate band – thresholds are maintained at the current level until April 2028.
* the estate can pay inheritance tax at a reduced rate of 36% on some assets if you leave 10% or more of the net value to charity in your will.
| Business property relief | 2024/25 | 2023/24 |
| Business or interest in a business and transfers of unquoted shareholdings | 100% | 100% |
| Taxation of trusts | 2024/25 | 2023/24 |
| Accumulation or discretionary trusts: | ||
| Trust income up to £1,000 – dividend type income* | 8.75% | 8.75% |
| Taxation of trusts | 2024/25 | 2023/24 |
| Trust income up to £1,000 – all other income | 20% | 20% |
| Trust income over £1,000 – dividend type income* | 39.35% | 39.35% |
| Trust income over £1,000 – all other income | 45% | 45% |
| Interest in possession trusts: | ||
| Dividend-type income | 8.75% | 8.75% |
| All other income | 20% | 20% |
* trustees do not qualify for the dividend allowance. This means trustees pay tax on all dividends depending on the tax band they fall within.
ACCA LEGAL NOTICE - This is a basic guide prepared by ACCA UK's Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary.