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New Tax Year

Saturday (6 April 2019) was the start of the new 2019/20 tax year, bringing into effect changes to income tax bands and allowances.

The personal allowance is now £12,500, up £650 from £11,850 in 2018/19. However, there remains a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. For 2019/20 this means there is no personal allowance available where an individual’s adjusted net income exceeds £125,000.

The tax on income is different for Scottish resident taxpayers compared to taxpayers resident elsewhere in the UK (except for savings and dividend income which are taxed at normal UK bands and rates). The Scottish income tax rates and bands apply to income such as employment income, self-employed trade profits and property income.

In 2019/20 there are five Scottish income tax rates, with the following band applying for a Scottish resident individual entitled to a full personal allowance:

Band nameBandRate
Starter RateOver £12,500-£14,54919%
Scottish Basic RateOver £14,549-£24,94420%
Intermediate RateOver £24,944-£43,43021%
Higher RateOver £43,430-£150,00041%
Top RateAbove £150,00046%

For taxpayers elsewhere in the UK, the basic rate of tax is 20% (7.5% for dividends). For 2019/20 the basic rate band increases to £37,500 (up from £34,500) so that the threshold at which the 40% higher rate band (32.5% for dividends) applies is £50,000 for those who are entitled to the full personal allowance (up from £46,350). Individuals pay tax at 45% (38.1% for dividends) on their income over £150,000.

From April 2019, the Welsh Government has the right to vary the rates of income tax payable by Welsh taxpayers. The UK government has reduced the rates of income tax paid by Welsh taxpayers by 10 pence. However, the Welsh Government has set the Welsh rate of income tax at 10 pence which is added to the reduced rates, meaning the tax payable by Welsh taxpayers continues to be the same as that payable by English and Northern Irish taxpayers.

We have put together a tax card with all the tax rates for 2019/2020. You can download this as a PDF or you can request for an EQ Tax Card here.

If you would like to discuss your own circumstances, require support or further information on income tax bands and allowances, please speak to our EQ Taxperts.

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