Tax Rates

2023-24 Tax Rates and Allowances Card in UK: Key Information and Explanations

Tax Rates and Allowances Card in the UK:

Navigating the UK tax system can be intricate, but it’s crucial to understand the key rates and allowances for calculating your tax liability accurately. This article serves as a concise reference for the 2023-24 tax year in the UK, providing essential information and simple explanations.

Income Tax:

  • Taxable income: Refers to your income after deducting tax-free allowances.
  • Personal allowance: The standard personal allowance for the 2023-24 tax year is £12,570. It may be higher if you claim a Marriage Allowance or a Blind Person’s Allowance and gradually reduces if your income exceeds £100,000.
  • Tax bands and rates: Income is taxed at different rates based on the band it falls into:
  • Basic rate: Applies to income up to £37,700 at 20%.
  • Higher rate: This applies to income between £37,701 and £125,140 at 40%.
  • Additional rate: This applies to income exceeding £125,140 at 45%.

National Insurance:

  • National Insurance Contributions (NICs): Paid alongside income tax for state benefits and the NHS.
  • Classes of NICs: Different classes apply to different types of income, with rates varying based on income and class.

Other Key Allowances:

  • Dividend tax allowance: £2,000 tax-free allowance for dividend income annually.
  • Savings interest allowance: £1,000 tax-free allowance for savings interest annually.
  • Capital Gains Tax (CGT) allowance: £12,300 annual exemption for capital gains.

Important Dates and Deadlines:

  • Tax year: Runs from 6th April to 5th April the following year.
  • Self Assessment tax return: Must be submitted by 31st October following the end of the tax year if you have untaxed income.
  • Payment of tax: Usually done through your salary, with additional payments needed for other sources of income.

Additional Information:

  • Consult with a qualified tax advisor for personalized advice.
  • Detailed information on tax rates and allowances is available on the government website.
  • Devolved taxes: Tax rates and allowances may differ in Scotland, Wales, and Northern Ireland.

Explanation of Key Terms:

  • Taxable income, Tax bands, National Insurance Contributions (NICs), Dividend tax, Savings interest allowance, and Capital Gains Tax (CGT).

Remember: This information is specific to the 2023-24 tax year, and rates and allowances may change in future years.

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