Home / UK Tax Rates 2024/25: Complete Guide to Threshold, Allowance, and Tax Rates and Bands

UK Tax Rates 2024/25: Complete Guide to Threshold, Allowance, and Tax Rates and Bands

Updated on : 06-Jan-2025   04:58 PM GMT | 4 min read

Categories

Income Tax rates and allowances for the year 2024-25

Income Tax Rates and Bands for 2024/25 (England, Wales, Northern Ireland)

Band £ Rate %
0 - 37,700 20
37,701 - 150,000 40
Over 150,000 45
  • Personal Allowance: The standard personal allowance for 2024/25 remains at £12,570, gradually reducing for those earning over £100,000
  • Additional Rate: The income tax rate of 45% applies to earnings over £150,000.

 

Income Tax Personal Allowance and the basic rate limit, and certain National Insurance contributions thresholds from 6 April 2026 to 5 April 2028

The Personal Allowance (£12,570) and basic rate limit (£37,700) will remain fixed until the 2027/28 tax year. This also sets the higher rate threshold at £50,270.

For the same period, the following thresholds will remain aligned:

  • Primary Threshold (PT) for Class 1 NICs
  • Lower Profits Threshold (LPT) for Class 2 NICs
  • Lower Profits Limit (LPL) for Class 4 NICs
  • Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) aligned with the higher rate threshold at £50,270.

 

These rates will apply until 5 April 2028.

The Personal Allowance and Income Tax thresholds for the 2024/25 tax year are as follows:

Allowances 2024 to 2025 2023 to 2024 2022 to 2023 2021 to 2022
Personal Allowance £12,570 £12,570 £12,570 £12,570
Income limit for Personal Allowance £100,000 £100,000 £100,000 £100,000

For the 2024/25 tax years, the Savings Income Allowances remain unchanged

Savings Income 2024/25
Savings allowance basic rate £1,000
Savings allowance higher rate £500
  • A starting rate of 0% may be available unless taxable non-savings income exceeds.

For the 2024/25 tax year, the UK government has implemented changes to dividend taxation:

  • Dividend Allowance: £2,000: The first £2,000 of dividend income is tax-free.
  • Dividend Tax Rates:
    • Ordinary Rate (Basic Rate): 8.75%
    • Upper Rate (Higher Rate): 33.75%
    • Additional Rate: 39.35%

Tax Bands and Dividend Income Rates

Band £ Dividend Tax Rate %
Up to £2,000 0
£2,001 to £37,700 8.75
£37,701 to £150,000 33.75
Over £150,000 39.35

Dividend Allowance: The first £2,000 of dividend income is not taxed.

Tax Rates:

  • 8.75% applies on dividends falling within the basic income tax band.
  • 33.75% applies to dividends within the higher rate income tax band.
  • 39.35% applies to dividends falling within the additional rate band.

These updated rates reflect changes for the 2024/25 tax year, including adjustments for inflation.

Income Tax Reliefs for the 2024/25 tax year:

  2024/25 Amount (£)
Personal allowance £12,570
Personal allowance income limit £125,140
Marriage allowance £1,260
Married couple’s allowance £9,390
- minimum amount £3,530
- income limit £30,400
Blind person’s allowance £2,870

Individual Savings Accounts (ISA) Limits for 2024/25

Account Type Investment Limit (£)
Overall Adult ISA Limit £20,000
Junior ISA Limit £9,000

Devolved Income Tax Rates and Bands for 2024/25

Scotland Devolved Income Tax Rates and Bands for 2024/25

In Scotland, the devolved income tax rates apply, and the bands for the 2024/25 tax year are as follows:

  • Personal Allowance: £12,570 (subject to reduction for incomes over £100,000)
  • Income Limit for Higher Rate: The higher rate of 41% applies from £31,093 to £150,000.
  • The additional rate of 46% applies to income over £150,000.

Wales Devolved Income Tax Rates and Bands for 2024/25: Wales continues to align with the rest of the UK for its income tax bands but with slight devolved modifications for the 2024/25 tax year:

Band £ Rate %
0 - 37,700 20
37,701 - 150,000 40
Over 150,000 45
  • Personal Allowance: £12,570 (subject to reduction for incomes over £100,000)
  • Wales follows the standard UK-wide 20%, 40%, and 45% tax rates for individuals outside Scotland.

Capital Gains Tax (CGT) rates and allowances for the 2024/25 tax year

As of December 31, 2024, the UK government has announced the following Capital Gains Tax (CGT) rates and allowances for the 2024/25 tax year:

Individuals:

Exemption Standard Rate Higher/Additional Rate
£3,000 18% 24%

The annual exemption for individuals has been reduced from £12,300 in 2022/23 to £3,000 for the 2024/25 tax years.

Trusts:

Exemption Rate
£3,000 24%

Trustees are subject to a higher CGT rate compared to individuals.

Additionally, from 6 April 2025, the CGT rate on carried interest will increase to 32%.

As of December 31, 2024, the UK Government's Inheritance Tax (IHT) rates and thresholds for the 2024/25 tax year are as follows:

Inheritance Tax Rates and Thresholds for 2024/25

Chargeable transfers Death rate Lifetime rate
0 - £325,000 (nil rate band) Nil Nil
Over £325,000 40% 20%

Key Points for Inheritance Tax (IHT) 2024/25:

  • Nil Rate Band: £325,000 – No IHT on estates up to this amount.
  • Residence Nil Rate Band: £175,000 – Applies for residences passed to direct descendants.
  • Taper Threshold: Estates over £2 million reduce the residence nil rate band by £1 for every £2 excess.
  • Spouse/Civil Partner Exemption: Transfers between spouses or civil partners are IHT-exempt.
  • Charitable Donations: Gifts to charities are tax-free; leaving 10% of the estate to charity lowers the IHT rate on the remainder to 36%.

Car, Van and Fuel Benefits 2024/25

The car benefit is applied when an employer provides an employee with the use of a car. The tax is calculated based on the CO2 emissions and the list price of the car when new.

Company Cars:

CO2 Emissions (g/km) Benefit Percentage
0 - 50 2%
51 - 75 5%
76 - 100 9%
101 - 110 12%
111 - 120 14%
121 - 130 16%
131 - 140 18%
141 - 150 20%
151 - 160 22%
161 - 170 24%
171 - 180 26%
181 - 190 28%
191 - 200 30%
201 - 210 32%
211 - 220 34%
221 - 230 36%
Over 230 37%

Car, Van, and Fuel Benefits for 2024/25:

Benefit Type Value (£) Details
Car Benefit Charge Based on emissions Percentage based on CO2 emissions and list price.
Fuel Benefit Charge (Car) £26,100 x % based on CO2 emissions Fixed amount for fuel provided.
Van Benefit Charge £3,960 Standard charge for van use.
Fuel Benefit Charge (Van) £715 Additional charge if fuel is provided for private use.

National Insurance Contribution (NIC) Rates and Thresholds for 2024/25

Category Details
Class 1 (Employed) Rates
Employee Earnings per Week (£) Employee NIC Rate (%)
Up to £242 Nil
£242.01 and above 8%
Note Employer NIC rate increased from 13.8% to 15% for 2024/25.
Class 1A and 1B (Employers) Rates
Class 1A NICs on Expenses and Benefits 15%
Class 1A NICs on Termination Awards 15%
Class 1B NICs on PAYE Settlement Agreements 15%
Note Rates apply to taxable benefits provided to employees.
Class 2 (Self-Employed) Rates
Flat Rate per Week £3.45
Small Profits Threshold £6,725 per annum
Note Required for earnings above the small profits threshold.
Class 3 (Voluntary) Rates
Flat Rate per Week £17.45

Selected Rates for 2024/25

Category 2024/25 Weekly Benefit (£)
Basic State Pension £156.20
New State Pension £203.85
Statutory Pay Standard Rates - average weekly earnings £142 or over
Sick Pay £109.40 per week
Maternity/Adoption Pay £172.48 per week
Shared Parental Pay £172.48 per week
Paternity Pay £172.48 per week

National Living Wage (NLW) and National Minimum Wage (NMW) for 2024/25

Age Group NLW 21-22 18-20 16-17 Apprentices
From April 2024 £11.10 £10.50 £7.95 £5.28 £5.28
  • NLW applies to those aged 23 and over.
  • Apprentice rate applies to apprentices under 19 or aged 19 and over in the first year of apprenticeship.

Tax Reliefs for Individuals: 2024/25

Scheme Enterprise Investment Scheme (EIS) Seed Enterprise Investment Scheme (SEIS) Venture Capital Trusts (VCTs)
Investment Limit Up to £1,500,000 per annum (£2,500,000 for knowledge-intensive companies) Up to £200,000 per annum Up to £250,000 per annum
Income Tax Relief 30% on qualifying investments 50% on qualifying investments 30% on qualifying investments
Capital Gains Tax Relief Exemption on disposal of EIS shares Exemption on disposal of SEIS shares up to £100,000 per annum Exemption on disposal of VCT shares
Capital Gains Deferral/Exemption Unlimited deferral on gains from disposal of other assets by investing in EIS Exemption up to £75,000 per annum by investing in SEIS shares Dividends received from VCTs may be income-tax exempt
Additional Notes Reliefs are subject to detailed qualifying conditions being met. Reliefs are subject to detailed qualifying conditions being met. Reliefs are subject to detailed qualifying conditions being met.

Notes:

The investment limits and relief rates for 2024/25 reflect increases designed to encourage investment in small and growing businesses.

The SEIS and EIS schemes are highly beneficial for individuals looking to reduce their income and capital gains tax liabilities.

Corporation Tax Rates for 2024/25

  Rate %
Year to 31 March 2025 25
Year to 31 March 2024 25
  • The Corporation Tax rate for most companies is now set at 25%.
  • A lower rate of 19% applies to companies with profits of £50,000 or less (referred to as the "small profits rate").
  • For profits between £50,001 and £250,000, companies will pay a marginal rate of tax.
  • Different rates still apply for ring-fenced (broadly oil industry) profits.

Capital Allowances for 2024/25

First Year Allowance (FYA)
On certain energy-efficient plant, machinery and cars up to 50g/km		 100%
Annual Investment Allowance (AIA) £1,000,000 (permanent limit)
Writing Down Allowance  
Long-life assets, integral features of buildings, cars   over 110g/km. 6% (8%)
Other plant and machinery 18%
Structures and Buildings Allowance From 1 April 2020, straight-line basis: 3% per annum (increased from 2%)
  • The FYA continues to encourage investment in energy-efficient equipment and low-emission vehicles.
  • The AIA limit remains at £1,000,000 to support significant business investments.
  • The Structures and Buildings Allowance has been increased to 3%, reflecting the government's ongoing focus on infrastructure and construction investment.

Pensions Limits for 2024-25

Category 2024/25 Limit
Lifetime Allowance (LTA) Unlimited (The LTA has been abolished for the 2024/25 tax year).
Annual Allowance (AA) £60,000 (Up from £40,000 in previous years).
Money Purchase Annual Allowance (MPAA) £10,000 (Increased from £4,000).

Value Added Tax (VAT) Rates and Limits: 2024-25

Category 2024/25 Rate/Limit
Standard Rate 20%
Reduced Rate 5%
Annual Registration Limit £85,000
Annual Deregistration Limit £83,000

Stamp Duty Land Tax (SDLT) Rates for England and Northern Ireland

Property Price Band (£) Standard Rate (%) Additional Property Surcharge (%) Total Rate (%)
0 – 250,000 0 3 3
250,001 – 925,000 5 3 8
925,001 – 1,500,000 10 3 13
Over 1,500,000 12 3 15
  • The additional 3% surcharge applies to purchases of additional properties, such as buy-to-let investments or second homes.

First-Time Buyer Relief:

First-time buyers purchasing a property for £425,000 or less are eligible for relief, which reduces the SDLT liability. For properties priced between £425,001 and £625,000, a reduced rate applies.

Capital Gains Tax (CGT) Rates:

For the 2024/25 tax year, the CGT rates on gains from the sale of residential property are:

Taxpayer Status CGT Rate (%)
Basic Rate Taxpayer 18
Higher Rate Taxpayer 24

These rates apply to gains made between 6 April 2024 and 29 October 2024. From 30 October 2024 onwards, the rates increase to 20% for basic rate taxpayers and 28% for higher rate taxpayers.

Enveloped Properties: Purchases of residential properties by companies for over £500,000 are subject to a 15% SDLT rate

Overseas Buyers: A 2% surcharge applies to overseas buyers in addition to the standard SDLT rates.