Higher Rate of Income Tax Print
For the year 2018/19, the basic rate band has been increased to £34,500 and the higher rate of income tax of 40% (32.5% for dividends) is charged on taxable income between £34,501, and £150,000. For 2019/20 the basic rate band is increasing to £37,500 and the higher rate of income tax of 40% (32.5% for dividends) is charged on taxable income between £37,501, and £150,000. As a result of the increase in the personal allowance combined with the increase to the basic rate band, an individual whose income for 2018/19 is between £46,350 and £100,000 is better off by £340 for this year. Individuals whose income is over £123,700 for 2018/19 do not benefit from the increase in the personal allowance, but do benefit from the increase to the basic rate band, and the tax saving for the year is £200.
For 2019/20 the tax reduction for an individual whose income is between £50,000 and £100,000 is £860. Where income is over £125,000 the tax saving will be £600.