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The new tax year, effective from 6 April 2019, brings changes to income tax allowances and bands. The following updates now apply.

Rates of Tax

While the basic rate of tax will remain at 20%, the 2019/20 basic rate band – the threshold above which income is taxable at this rate – has increased by £3,000 from £34,500 to £37,500.

In addition, the threshold at which the 40% higher rate tax band applies reaches £50,000.

Individuals with taxable income over £150,000 will continue to pay income tax at an additional rate of 45% on their top slice of taxable income.

Personal Allowance

Interestingly, the personal allowance, previously £11,850, increased by £650 on the 6 April to £12,500. However, for individuals with an ‘adjusted net income’ of over £100,000, the personal allowance continues to be reduced by £1 for every £2 of income over £100,000 – until it tapers to nil as a person’s adjusted net income reaches £125,000.

Marriage Allowance

Where one part of a couple, who are either married or in a civil partnership, does not pay income tax – or has a taxable income below their personal allowance – they are entitled to transfer 10% of their unused personal allowance to their partner or spouse. This is provided that the recipient is no more than a basic rate taxpayer.

Welsh Income Tax Updates

From April 2019, the Welsh government now enjoys income tax rate-setting powers. For the 2019/20 tax year, it has been decided that Welsh Income Tax Rates will be kept at a level that leaves Welsh taxpayers in the same position as their English and Northern Irish counterparts.

Scottish Income Tax Rates

The rates of income tax in Scotland are different from the rest of the UK, as follows:

Scottish income tax: 2019-2020

BandsBand nameRate
Over £12,500 – £14,549Starter Rate19%
Over £14,549 – £24,944Scottish Basic Rate20%
Over £24,944 – £43,430Intermediate Rate21%
Over £43,430 – £150,000Higher Rate41%
Over £150,000Top Rate46%