4
Budget 2021
Income Tax and Personal Savings
The Chancellor announced the following income tax rates and allowances.
Income tax rates and bands
2021/22
2020/21
Band £
Rate %
Band £
Rate %
0 - 37,700
20
0 - 37,500
20
37,701 - 150,000
40
37,501 - 150,000
40
Over 150,000
45
Over 150,000
45
Income tax rates in Scotland and Wales on income other than savings and dividend income have been devolved.
Savings income
2021/22
2020/21
Savings allowance basic rate
£1,000
£1,000
Savings allowance higher rate
£500
£500
A starting rate for savings band of £5,000 at 0% may be available unless taxable non-savings income exceeds the starting rate band.
Dividend income
2021/22
2020/21
Dividend allowance
£2,000
£2,000
Dividend ordinary rate
7.5%
7.5%
Dividend upper rate
32.5%
32.5%
Dividend additional rate
38.1%
38.1%
Personal allowances
2021/22
2020/21
£12,570
£12,500
Personal allowance
£100,000
£100,000
Personal allowance income limit
Marriage allowance Transferable between certain spouses where neither pay tax above the basic rate Married couple’s allowance (relief given at 10%) Either partner born before 6 April 1935 − minimum amount − income limit
£1,260
£1,250
£9,075
£9,125
£3,510 £30,200
£3,530 £30,400
£2,520
£2,500
Blind person’s allowance
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