Chartered Accountants and Business Advisers

Income Tax

	2017/18	2016/17
Basic rate band income up to	£33,500	£32,000
Starting rate for savings income	*0%	*0%
Basic rate	20%	20%
Dividend ordinary rate	**7.5%	**7.5%
Higher rate income over	£33,500	£32,000
Higher rate	40%	40%
Dividend upper rate	**32.5%	**32.5%
Additional rate income over	£150,000	£150,000
Additional rate	45%	45%
Dividend additional rate	**38.1%	**38.1%
Starting rate limit (savings income)	*£5,000	*£5,000
Personal Allowances
Basic	£11,500	£11,000
Married Couple's Allowance
Either partner born before 6 April 1935 (relief restricted to 10%)	#£8,445	#£8,355
Transferable Tax Allowance for certain married couples
(relief 20%)	£1,150	£1,100

For 2017/18 Scottish taxpayers are subject to different income tax bands to the rest of the UK. The basic rate band is £31,500, higher rate income is between £31,500 and £150,000 and additional rate income is over £150,000. The rates of tax are the same as the rest of the UK.

* If an individual's taxable non-savings income exceeds the starting rate limit, then the starting rate limit for savings will not be available for savings income. For 2016/17 and 2017/18, £1,000 of savings income for basic rate taxpayers (£500 higher rate) may be tax-free.

**For 2016/17 and 2017/18 the first £5,000 of dividends are tax-free.

#Age related allowances are reduced by £1 for every £2 that adjusted net income exceeds £27,700 in 2016/17 and £28,000 in 2017/18 to a minimum personal allowance of £11,000 in 2016/17 and £11,500 in 2017/18 and to a minimum married couple's allowance of £3,220 in 2016/17 and £3,260 in 2017/18. Where adjusted net income exceeds £100,000 for both years the basic personal allowance is reduced in the same way until it is reduced to Nil, regardless of the individual's date of birth.