Income Tax rates and bands

Rate Bands   

                                                                                                 2012/13                                            2011/12

Basic rate band (BRB)                                                       £34,370                                             £35,000

Higher rate band (HRB)                                            £34,371-£150,000                         £35,001-£150,000

Additional rate                                                              over £150,000                                  over £150,000

BRB and HRB extended by Gift Aid donations and pension contributions up to permitted limit.

Tax rates

Rates differ for General/Savings/Dividends
                                                                                                              2012/13 and 2011/12
                                                                                                              G                 S               D

Basic rate                                                                                         20%            20%           10%
Higher rate                                                                                      40%           40%           32.5%
Additional rate                                                                               50%           50%           42.5%

General income (salary, pension, profit, rent) uses lower rate bands first, then savings (interest), then dividends. UK dividends received are 90% of taxable amount with 10% tax credit.

If taxable general income is less than £2,710 (2011/12: £2,560), savings income is taxed at a ‘starting rate’ of 10% until total taxable income exceeds that limit. This ‘starting rate band’ is part of the BRB.