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Income tax


Tax bands and rates 2010/11 2009/10
Basic rate band £37,400 £37,400
Basic tax rate 20% 20%
Dividend ordinary rate 10% 10%
Savings rate band £2,440 £2,440
Savings rate 10% 10%
Higher rate band £37,401 - £150,000 Over £37,400
Higher tax rate  40% 40%
Dividend higher tax rate 32.5% 32.5%
Additional rate band Over £150,000 N/A
Additional tax rate 50% N/A
Dividend additional tax rate 42.5% N/A
Allowances that reduce taxable income
Personal allowances under 65  £6,475 £6,475
  65 to 74 £9,490 £9,490
  75 and over £9,640 £9,640
Blind person's allowance   £1,890 £1,890
Age related allowances are reduced by £1 for each £2 of income above £22,900 (2009/10 £22,900), until the minimum of £6,475 (2009/10 £6,475) is reached.
The minimum personal allowance is reduced, by £1 for each £2 of income from £100,000 to £112,950.
Allowances that reduce tax
Married couple's allowance (MCA) 75 and over £6,965 £6,965
Tax reduction at 10%   £696.50 £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 £22,900 (2009/10 £22,900) until the minimum of £267 (2009/10 £267) is reached.
All ages as at 5 April 2011
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

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%

Did you know?

The revenue the Government are budgeting to generate from income tax this tax year amounts to £144 billion (2009/10 - £140 billion).

2011 and beyond

The personal allowance is to increase by £1,000 in April 2011.