What are the Income Tax Bands?

Income tax - taxable bands

The starting rate of Income Tax has been abolished and the basic rate has been cut from 22% to 20% creating a simpler structure of two rates .The tax bands have increased in line with indexation.

2007-08	£ per year	2008-09	£ per year 08/09	£ per year 09/10
Starting rate: 10%	£0-£2,230	Abolished	-	-
Basic rate: 22%	£2,231-£34,600	Basic rate: 20%	£0-£34,800*	£0-£37,400
Higher rate: 40%	Over £34,600	Higher rate: 40%	Over £34,800*	Over £37,400

Figures marked with an asterisk (*) were changed on 17 September 2008.

From 2008-09 there is a 10 per cent starting rate for savings income only

The rates available for dividends are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate.

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