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Income tax — Rates
UK Rate of Income Tax
| 2024/25 | 2023/24 | |||
|---|---|---|---|---|
| Tax payer | Rate | Income | Rate | Income |
| Basic 1 | 20% | £12,571 to £50,270 | 20% | £12,571 to £50,270 |
| Higher 2 | 40% | £50,271 to £125,140 | 40% | £50,271 to £125,140 |
| Additional 3 | 45% | Above £125,140 | 45% | Above £125,140 |
These are the main rates which apply to earnings from employment, self-employment, pensions, foreign income, taxable benefits and income from property. Different rates may apply to unearned income, such as interest on savings and dividend income.
- The personal allowance will remain frozen at £12,570 until April 2028.
- The higher rate tax threshold will remain frozen at £50,270 until April 2028.
- The additional rate threshold will remain frozen until April 2028.
Scottish Rate of Income Tax
Income tax is a partially devolved tax. For non-savings and non-dividend income the Scottish Parliament has the power to set all income tax thresholds, except the personal allowance, as well as the Scottish Rate of Income Tax (SRIT) for Scottish taxpayers.
The income tax rates and bands for Scottish taxpayers are set out below.
| Tax payer | 2024/25 | 2023/24 | ||
|---|---|---|---|---|
| Rate | Income | Rate | Income | |
| Starter 1 | 19% | £12,571 to £14,876 | 19% | £12,571 to £14,732 |
| Basic | 20% | £14,877 to £26,561 | 20% | £14,733 to £25,688 |
| Intermediate | 21% | £26,562 to £43,662 | 21% | £25,689 to £43,662 |
| Higher | 42% | £43,663 to £75,000 | 42% | £43,663 to £125,140 |
| Advanced | 45% | Above £75,000 | N/A | N/A |
| Top | 48% | Above £125,140 | 47% | Above £125,140 |
- The personal allowance will remain frozen at £12,570 until April 2028.
The definition of a Scottish tax payer is based on where an individual resides not where they work, so if an individual works in England but resides in Scotland the employer is obliged to apply the SRIT. HMRC informs employers when they need to apply the SRIT by issuing a Scottish tax code and appropriate tax tables.
Welsh Rate of Income Tax
As income tax has been partially devolved, the Welsh Assembly has the power to set the Welsh Rate of Income Tax (WRIT) on non-savings, non-dividend income for Welsh taxpayers.
The UK government has reduced the rates of UK income tax paid in Wales by 10% but as the Welsh Assembly has determined that the WRIT will be set at 10% a Welsh taxpayer will continue to pay the same rates of income tax as taxpayers in England and Northern Ireland.
The income tax rates and bands for Welsh taxpayers for 2024/25 are set out below.
| UK rate for England & Northern Ireland | Taxable income | UK rate paid in Wales | Welsh rate | Total rate for Welsh taxpayers | |
|---|---|---|---|---|---|
| Basic rate | 20% | £12,571 to £50,270 | 10% | 10% | 20% |
| Higher rate | 40% | £50,271 to £125,140 | 30% | 10% | 40% |
| Additional rate | 45% | Above £125,140 | 35% | 10% | 45% |
The definition of a Welsh tax payer is based on where an individual resides not where they work, so if an individual works in England but resides in Wales the employer is obliged to apply the WRIT. HMRC informs employers when they need to apply the WRIT by issuing a Welsh tax code and appropriate tax tables.
The UK Treasury will retain control of personal allowances and reliefs, and the taxation of savings and dividend income.