![]() ![]() The 2019 tax rates themselves are the same as the tax rates in effect for the 2018 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. For most taxpayers, that'll be your return for the 2019 tax year-which, by the way, will be due on April 15, 2020. If you’d be interested in using software that presents opportunities to potentially reduce tax liability, while staying abreast of all changing legislation, get started with GoSimpleTax today.It's never too early to start thinking about your next income tax return. We understand that every tax year presents new challenges, and our software is designed to help you every step of the way – logging income and expenditure and automatically calculating the amount of tax due. For taxpayers uncertain of changing responsibilities and tax commitments, our cloud-based software supports your journey into compliancy. It’s even possible you may now be in an entirely new band, impacting your overall take-home pay. Once you’ve identified said income, you can better trace the impact from the changes to Income Tax in 2019/20. Simply put, you should deduct all of the allowances mentioned above from your total earnings (savings and non-savings) in order to determine your final, taxable income. What’s important is that taxpayers firmly understand which tax band they fall into, in order to avoid being incorrectly taxed. ![]() Whether that’s dividends you receive, pensions or salaried wages, these sources of earnings are what form the bulk of your 2019/20 Income Tax. Of course, non-savings income is more likely to affect your tax band. Coupons from fixed-interest securities and any trust funds that you may receive additional income from are also protected. Personal Savings Allowances cover savings within your bank or building society. Those in the higher rate band will receive £500 and the additional rate earners will receive £0. For those on the recently changed basic rate, you can receive up to £1,000 of interest tax-free. Personal Savings Allowance – Depending on your tax bracket, you’re entitled to a certain level of savings interest tax-free. For example, if your wages or pension exceed £17,500, you aren’t entitled to the maximum £5,000. However, this is affected by earnings from other income such as wages and pensions. Your starting rate for savings – You can claim up to £5,000 of interest tax-free. Personal Allowances – The £12,500 you’re entitled to earn prior to being taxed can be used to prevent savings interest from being taxed. While most people may never be taxed on their interest, we nevertheless thought it would be useful to demonstrate the changes in light of the tax brackets for 2019/20 and how they could impact your savings income.Īll taxpayers have an allowance before paying tax on savings interest. It may come as a surprise to discover that your savings can produce taxable interest. In Scotland, the Income Tax 2019 bands are as follows: Band Please bear in mind that Scotland sets its own thresholds for Income Tax rates and they do not apply to the rest of the UK. Additionally, the basic tax rate band was extended from £46,350 to £50,000. In other words, you will now need to earn a minimum of £12,500 before paying Income Tax in the UK. The updated tax brackets for 2019/20 are as follows: Band What are the UK income tax rates and brackets for 2019/20? Specifically, taxable income is your gross income (income from all sources before tax) minus any deductions (including benefit or pension scheme contributions) and minus your Personal Allowance. Tax brackets for 2019/20 are determined by taxable income. This can vary should you claim Marriage or Blind Person’s Allowance, but it typically covers the majority of taxpayers. Currently, the standard for Personal Allowance is £12,500. Your Personal Allowance is the amount the government permits you to earn without paying tax on it. It does not include all form of earnings, however you generally pay tax on the following income once it has exceeded your Personal Allowance: Income Tax is (as you would imagine) the tax you pay on income. To help you get to grips with what could have resulted in a significant change to your take-home pay, we’ve provided this guide on tax brackets for 2019/20. In 2018, arguably the most significant changes to occur were the increase in the tax-free Personal Allowance threshold, the increase in the higher rate Income Tax threshold and changes to the National Insurance lower and higher earnings limits.Įffectively, as a result of the changes to Income Tax rates, a large portion of the population would now be entitled to a boost affecting the tax they pay. Every year, the government announces new financial plans in their Autumn Budget. ![]()
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