UK Tax Rates at a Glance

Here is a summary of the most useful UK tax rates and allowances, more details can be found about these allowances on the site – use the search bar to find more info on each allowance.

Tax rates are often changed in the budget but are usually known well in advance. The current plan is to increase the UK personal allowance to £12,500 eventually.

Personal Tax Allowance:

Age 2014/15 2015/16 2016/17 2017/18
Under 65 £10,000 £10,600 £11,000 £11,500
Over 65 £10,500 £10,600 £11,000 £11,500
75 and Over £10,660 £10,660 £11,000 £11,500

 

Personal UK Tax Rate Bands
These are the bands at which the different levels of tax are paid. Tax rate bands also change each year in line with what is announced in the budget.

Year 0% 20% 40% 45%
2015/16 £10,600 £10,601-£42,385 £42,386-£150,000* £150,000+
2016/17 £11,000 £11,001-£43,000 £43,001-£150,000* £150,000+
2017/18 £11,500 £11,501-£45,000 £45,001-£150,000* £150,000+

The above bands assume that you are entitled to the full personal allowance.

*Tax rate bands become complex with earnings above £100,000 due to the withdrawal of the personal allowance starting at this level. Click here for more info.

ISA Allowance
ISAs are tax free savings vehicles into which you can make payments. Interest and earnings on ISAs are tax free so they can be useful for those paying tax at any rate. But there is a limit on how much you can pay in each year.

2014/15 2015/16 2016/17 2017/18
£15,000* £15,240 £15,240 £20,000

*ISAs changed to New ISAs from 1 July 2014, see here for more info.

Capital Gains Tax Allowance
The first portion of any capital gains in each year is tax free and the allowance for this is shown below:

  2014/15 2015/16 2016/17 2017/18
CGT Allowance £11,000 £11,100 £11,100 £11,300

 

Inheritance Tax
The first portion of inherited property, savings etc is tax free as below:

2014/15 2015/16 2016/17 2017/18
Inheritance Tax Allowance £325,000 £325,000 £325,000 £425,000*

*A property Inheritance Tax allowance will be added in 2017. See this article for more details.

Personal Savings Allowance
Recently some allowances have been introduced for savers so that the first portion of interest received on those savings has a special rate as per below:

2014/15 2015/16 2016/17 2017/18
Allowance £2,880 £5,000* £1,000/£500** £1,000/£500**
Rate 10% 0% 0% 0%

*The 0% rate on £5,000 only applies to those on low incomes. Click here for further information.

**£1,000 for lower rate tax payers and £500 for higher rate tax payers. Also the £5,000 for lower earners still applies. See this post for further information.

Property and Trading Allowances

From April 2017 two extra allowances will be brought in whereby any earnings from minor property or trading activity or services will not be taxed if it is less than £1,000.

Examples of the kind of activity are eBay sales and renting out a driveway.

2017/18
Property allowance £1,000
Trading allowance £1,000


Rent a Room Allowance

If you rent out a room in your house then any amount you receive up to the specified allowance is tax free. This amount was increased significantly for 2016/17.

  2015/16 2016/17 2017/18
Allowance £4,250 £7,500 £7,500

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