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Tax rates for 2019/20 – what the taxman gets

April already - how did that happen! As we enter the new tax year, here’s a look at the revised income tax rates and allowances for 2019/20 and how these changes may affect your tax bill.

UK income tax rates for 2019/20

The most significant changes to income tax announced in the 2018 Autumn Budget, to take effect from 6th April 2019, were:

  • A higher tax-free Personal Allowance
  • An increase to the “higher rate” income tax threshold
  • Changes to the National Insurance Insurance lower and higher earning limits.

Tax rates if you live in England, Wales or Northern Ireland

What does this mean?

For the majority of taxpayers, these changes mean that:

  • You’ll be getting an additional £650 a year, tax-free
  • You’ll pay the basic rate of tax, 20%, on an additional, on an additional £3,000 a year before you go into the higher rate tax band.

The government originally planned to make these increases in 2020/21 but decided to bring them forward by a year. They estimate that 32 million people will have a lower tax bill as a result.

Having said that, the downside is the thresholds will stay the same in 2020/21, with the next revisions planned for 2021/22.

Tax rates if you live in Scotland

The main difference between Scotland’s income tax rates and those in England, Wales and Northern Ireland, is that Scotland has five tax bands as opposed to three in the rest of the UK.

National Insurance rates

Here’s a look at how the National Insurances rates for employees and the self-employed (including CIS) are changing from 6th April 2019.

Employees NI

Self-employed NI

Free download - 2019/20 Tax Cards

Click here to download our 2019/20 tax cards - a handy reference guide covering all the main rates and allowances for the year.