BVS Accounting - The real-time accounting specialists
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UK Personal income tax rates
Income tax on earned income is charged at three rates: the basic rate, the higher rate and the additional rate.
Income tax is charged at graduated rates, with higher rates of income tax applying to higher bands of income. Tax is charged on total income (from all earned and investment sources) less certain deductions and allowances.
The main allowance is a tax free amount known as the personal allowance, which is GBP 12,570 in 2023/24. Most individuals can claim a personal allowance, unless they are claiming the remittance basis (see below) or their income is over GBP 125,140. (If your income is over GBP 100,000, your personal allowance will be reduced by GBP 1 for every GBP 2 that your income exceeds GBP 100,000.
The net amount after allowances is usually referred to as an individual's taxable income. The graduated rates of income tax vary slightly depending on whether the income is from earnings or investments.
National Insurance contributions
Between 6 April 2023 and 5 January 2024, the rate of National Insurance contributions (NICs) for employees was set at 12% on all earnings between the primary threshold and the upper earnings limit. From 6 January 2024, the main rate is cut to 10%. Earnings above the upper earnings limit are charged at a 2% rate. For employers, the rate of NICs is set at 13.8% on earnings above the secondary threshold. The employer rate is unchanged from 2022/23.
The primary threshold is set at £242 per week for 2023/24. The secondary threshold is set at £175 per week for 2023/24. The upper earnings limit is set at £967 per week for 2023/24, so that it remains aligned with the income tax higher rate threshold. All three thresholds are unchanged from 2022/23.
14 окт 2024
