PAYE - Income Tax Rates and Allowances For 2005/2006, the lower, basic and higher rates of income tax remain at 10%, 22% and 40% respectively. The starting rate band is increased by £70 to £2,090, and the basic rate band by £930 to £30,310 (so that the higher rate applies to taxable income in excess over £32,400). The special rates applicable to dividends and other savings income are unchanged. The rate applicable to discretionary and accumulation trusts remains at 40% (32.5% for dividend income). Such trusts will have a new basic rate band of £500. The basic personal allowance is increased by £150 to £4,895. For this and other reliefs, see the table here. |