Income Tax

This information has been updated for the 2012/13 tax year.

Tax rates	2012/13	2011/12
Starting rate band* (see note)	£2,710	£2,560
Basic rate band	£34,370	£35,000
Higher rate on taxable income over	£34,371-£150,000	£35,001-£150,000
Additional rate on taxable income	over £150,000	over £150,000

Basic rate and higher rate bands extended by Gift Aid donations and pension contributions up to permitted limit.

There is a 10% starting rate for savings income only. If general taxable income exceeds the starting rate band the 10% rate is not available. This starting rate band is part of the basic rate band.

Rates differ for General (G) / Savings (S) / Dividends (D)

General/Savings/Dividends	2011/12 & 2010/11
	G	S	D
Starting rate	N/A	10%	N/A
Basic rate	20%	20%	10%
Higher rate	40%	40%	32.5%
Additional rate	50%	50%	42.5%

General income (salary, pension, profit, rent) uses lower rate bands first, then savings income (interest), then dividends. UK dividends received are 90% of the taxable amount with 10% tax credit.

Allowed at top rate of tax	2012/13	2011/12
Personal Allowance	£8,105	£7,475
Personal Allowance (65 - 74)*	£10,500	£9,940
Personal Allowance (75 and over)*	£10,660	£10,090
Blind Person's Allowance	£2,100	£1,980

Allowed only at 10%	2012/13	2011/12
Married Couple's Allowance*	£7,705	£7,295
(only available if born before 6/4/1935)
Income limit for age-related allowances	£25,400	£24,000

* Age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowanced is reduced to the normal allowance. Personal allowance is reduced before married couple's allowance. MCA is reduced to a minimum of £2,960 (2011/12: £2,800).

Personal allowances are withdrawn at every £1 for every £2 by which total income exceeds £100,000, to nil for income >£116,210 (2011/12: >£114,950).

You are advised to consult us before acting on any information contained herein.