Taxable Income Bands in the UK
The amount of income tax you pay each year in the UK is worked out using different tax rates and a series of tax bands. The tax system is progressive, which means that tax rates increase as income increases.
If your taxable income exceeds the basic rate tax band, you have to pay tax at the basic rate on income up to the basic rate threshold, and at the higher rate on the amount of income that exceeds the basic rate tax threshold.
|Starting savings rate: 10%*||£0–£2,440||£0–£2,440|
|Basic rate: 20%||£0–£37,400||£0–£37,400|
|Higher rate: 40%||Over £37,400||£37,401–£150,000|
|Additional rate: 50%||Over £150,000|
*The 10% starting rate is for savings only. If non-savings taxable income exceeds the starting rate limit, the starting rate for savings will not be available for savings income.