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Tax rates 2024/25

Break down the tax you'll pay

Amy Roberts
Amy Roberts | Edited by Ben Slater
Updated 18 November 2024

Nothing's as certain as death and taxes. Yet while there's no doubt we'll all be taxed, the rates can change rapidly. This guide covers income tax thresholds, the personal allowance, national insurance and more for the 2024/25 tax year.

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In this guide

Free Income Tax Calculator

To check what your take-home pay should be, including pension contributions and student loan repayments, use our free Income Tax Calculator.

What's my personal tax allowance?

Each of us has a 'personal allowance'. This is the amount we can earn without paying any income tax and is therefore tax-free.

If you earn more than your personal allowance, you pay tax at the applicable income tax rate on all earnings above the personal allowance, which is your taxable income, but the allowance itself remains untaxed.

Married or in a civil partnership? Or earning interest on savings? Remember to read the extra information below.

What's my personal tax allowance?

EARNING BRACKET PERSONAL ALLOWANCE
Under £100,000 £12,570
£100,000 to £125,140 Reduced by £1 for every £2 earned between £100,000 and £125,140
Over £125,140 £0
Extra allowances
Are you blind? Your personal allowance + £3,070

  • Married or in a civil partnership?

    If you've answered yes, and you and your partner were born on or after 6 April 1935, then you may be entitled to the marriage tax allowance. This allows couples to transfer a proportion of their personal allowance between them.

    For the 2024/25 tax year, the marriage tax allowance is £1,260. This means a potential tax saving of £252.

    Alternatively, if one of you was born before 6 April 1935, you can get a different married couple's allowance, which is also available to civil partners. See the Government's married couple's allowance calculator to check your eligibility and see exactly what you'll get.

    10% of the married couple's allowance is subtracted from your annual income tax bill. If you were married before 5 December 2005, it is automatically worked out using the husband's salary. For couples married on or after 5 December 2005, it uses the highest earner's salary.

  • Forgotten about the personal savings allowance?

    Since April 2016, savings providers have paid you your interest tax-free, and the personal savings allowance (PSA) has come into play. The PSA means every basic-rate taxpayer can earn £1,000 interest a year without paying tax on it. Higher-rate payers get a £500 allowance, and additional-raters don't get an allowance.

    There's no change to savings allowances in 2024/25.

    If you're a low earner, there's another tax-free allowance you get called the starting rate for savings income. This allows you to earn another £5,000/year in savings interest tax-free if you earn less than £12,570 this tax year. For every pound you earn above this threshold, you lose a pound of savings allowance. For more on this, see our Tax-free savings guide.

How tax works... 

This is outside our expertise, but don’t worry, MSE’s founder & chair has got it covered, via his spin-off BBC Not The Martin Lewis Podcast, where he takes on subjects he doesn’t cover, by putting your questions to a team of specialists.

Listen to 'How tax works June 2024' for free via 
BBC Sounds | Apple | Spotify

It includes details on key topics, including… 

- Who needs to do a tax return 
- Crypto tax
- How tax codes work
- Tax breaks
- Hidden savings allowance
- Capital gains & more...

What income tax band am I in?

Once you know your personal tax-free allowance, anything extra earned above that will be taxable income and therefore subject to income tax. For the 2024/25 tax year, if you live in England, Wales or Northern Ireland, there are three marginal income tax bands which set the rate of tax you pay – the 20% basic rate, the 40% higher rate and the 45% additional rate (also remember your personal allowance starts to shrink once earnings hit £100,000).

Marginal bands mean you only pay the specified tax rate on that portion of salary. For example, if your salary puts you in the 40% tax bracket, then you only pay 40% tax on the segment of earnings in that income tax band. For the lower part of your earnings, you'll still pay the appropriate 20% or 0%.

If you live in Scotland, there are six marginal income tax bands – the starter rate of 19%, the 20% basic rate, the 21% intermediate rate, the 42% higher rate, the new 45% advance rate and the 48% top rate. 

I live in England, Wales or Northern Ireland – what's my income tax rate for 2024/25?

EARNINGS (IF YOU LIVE IN ENGLAND, WALES OR NORTHERN IRELAND) RATE
Under your personal allowance (PA)
For most, £12,570		 No income tax payable
Between PA and PA + £37,700 (basic rate)
For most, over £12,570 to £50,270		 20%
Between PA + £37,701 and £125,140 (higher rate)
For most, over £50,271 to £125,140		 40% (1)
Over £125,140 (additional rate) 45%

(1) Personal allowance drops by £1 for every £2 earned between £100,000 and £125,140.

I live in Scotland – what's my income tax rate for 2024/25?

EARNINGS (IF YOU LIVE IN SCOTLAND)  RATE
Under your personal allowance (PA)
For most, £12,570		 No income tax payable
Between PA and PA + £2,306 (starter rate)
For most, over £12,570 to £14,876		 19%
Between PA + £2,307 and PA + £13,991 (basic rate)
For most, over £14,877 to £26,561		 20%
Between PA + £13,992 and PA + £31,092 (intermediate rate)
For most, over £26,562 to £43,662		 21%
Between PA + £31,093 and £62,430 (higher rate)
For most, over £43,663 to £75,000 		 42% (1)
Between PA + £62,431 and £125,140 (advanced rate)
For most, over £75,001 to £125,140		 45%
Over £125,140 (top rate) 48%

(1) Personal allowance drops by £1 for every £2 earned between £100,000 and £125,140.

  • Do you submit self-assessment tax returns?

    The deadline for submitting your self-assessment tax return is normally 31 January. So for the 2023/4 tax year, which ends on 5 April 2024, the deadline is 31 January 2025.

    • What happens after I've filed my tax return?

    Once you've filed your return, you'll get your tax bill. If you did a paper return, you'll receive it by post.

    If you did an online return, you have two opportunities to view your bill:

    • Before you submit your return (in the 'View my calculation' section).
    • After you've submitted your return, in your final tax calculation. Be aware it can take up to 72 hours for this to show on your account.

    What you owe will be referred to as the 'balancing payment' on your bill. If you made any payments in a previous year towards the current year's bill, you'll need to deduct them from your balance to work out what you owe.

    • Can I get help to file my tax return?

    If you need help filling in your self-assessment return, you can:

    • Appoint someone to help you (such as an accountant or a friend).
    • Watch HM Revenue & Customs' (HMRC) videos on how to complete an online tax return.
    • Contact it for help online or by telephoning 0300 200 3310.

National insurance is separate from income tax

While your income tax rate is important, it's not the only thing to affect your take-home pay.

In addition to plain old income tax, most UK workers also have national insurance contributions deducted from their pay. These kick in based on your earnings from the age of 16, and you usually stop paying when you reach state pension age.

The table below shows the current national insurance rates you're paying.

What's my 2024/25 national insurance rate?

EARNINGS TABLE_CELL_STYLE

 NATIONAL INSURANCE RATE

(FOR EMPLOYED, NOT SELF-EMPLOYED)
A week Annual salary  
Under £242 Under £12,570 No national insurance payable.
£242 and £967 £12,570 to £50,270 8% on everything earned between £242 and £967 a week
Over £967 Over £50,270 8% on everything earned between £242 and £967 a week, 2% on everything above that

Some advanced national insurance rules are complicated. See the HMRC website for full rates.

If you're employed, class 1 national insurance will be collected through your usual payslip at the relevant level.

If you're self-employed, class 4 national insurance contributions will automatically be calculated when you file your self-assessment tax return for 2024/25.

  • What if I'm self-employed?

    The national insurance rules if you're self-employed are more complicated than those for employees. Previously you paid two sorts of national insurance contributions (NICs) – class 2 and class 4.

    But since April mandatory 'class 2' contributions – which were set at £3.45 a week – have been scrapped. However, those earning less than £6,725 a year can still choose to pay class 2 NICs to gain access to certain benefits, including the state pension. Those earning between £6,725 and £12,570 are entitled to the national insurance credits without having to pay the tax.

    NICs are paid on profits you make, which are calculated by deducting your expenses from your self-employment income, above a certain threshold. Most self-employed people pay national insurance through self-assessment.

    What are my 2024/25 class 4 NICs?

    PROFITS (A YEAR) CLASS 4 NIC RATE (FOR SELF-EMPLOYED, NOT EMPLOYED)
    Under £12,570
    		 No national insurance payable
    £12,570 to £50,270
    		 6% 
    Over £50,270
    		 6% on everything earned between £12,570 and £50,270, 2% on everything above that
    Some advanced NI rules are complicated. See HMRC for full rates.

  • Had spells of employment where you didn't pay national insurance?

    If you have gaps in your national insurance record, for example because you earned less than the national insurance threshold or were living abroad, it could mean that you don't qualify for the full state pension.

    If you want to plug these gaps, you may be able to pay voluntary class 3 NICs. For more information, see our national insurance contributions guide.

    What are my 2024/25 class 3 NICs?

    RATE A WEEK RATE A YEAR
     £17.45  £907.40
    Some advanced national insurance rules are complicated. See the HM Revenue & Customs website for full rates.

Capital gains tax

Capital gains tax (CGT) is one of the least common taxes on income, and for many it won't apply. However, if you sell or give away an asset worth more than £3,000, you could have to pay CGT. It doesn't apply for main homes, cars or lottery/pools winnings, among other things.

Each year, individuals have an 'annual exempt amount' that allows them to receive some gains tax-free. Above this, you pay CGT on all gains.

2024/25 capital gains tax

Annual exempt amount £3,000 for individuals
Standard CGT rate 18% on residential property and other assets 

(before 30 Oct 2024 it was 18% on residential property, 10% on other assets)
Higher CGT rate 24% on residential property and other assets

(before 30 Oct 2024 it was 24% on residential property, 20% on other assets)
Your rate of CGT will depend on your other taxable income. See Gov.uk for more on how to work this out, and for more on the increased annual exempt amount, see this Gov.uk webpage.

You have 60 days from the completion of the sale of your property to report and pay your capital gains tax to HMRC.

  • What if I give or sell assets to my spouse?

    If you give or sell assets to your spouse or civil partner, you won't have to pay CGT, unless:

    • You separated and didn't live together during that tax year.
    • The assets you gave them were sold on via their business.

    It's worth giving or selling your assets to your spouse or civil partner if you'll exceed 2024/25's exempt amount of £3,000 but your partner won't. That way, neither of you will need to pay CGT.

    If they later sell the asset...

    Your spouse or civil partner may have to pay tax on any gain if they later sell the asset.

Dividend tax

There are two ways you make money from investing. One is when the shares increase in value and then you reap a nice profit when you sell them. The other is when they pay dividends.

Dividends are a bit like interest on a savings account. If a company makes a profit, it gives some of it back to you – it could be on a regular basis or as a one-off. And just as you have a personal savings allowance for tax-free interest on savings, you also have a tax-free dividends allowance.

The allowance for tax-free dividends is halved to £500 for the 2024/25 tax year, but there's no change for dividend tax.

Any dividends received above this allowance are taxed at the rates shown below, unless your shares are held in a stocks & shares ISA (where dividends are always tax-free).

If you earn more than £500 a year in dividend income outside of a stocks & shares ISA, you'll need to inform HMRC.

Dividend tax in 2024/25

TAX BRACKET  RATE 
Basic rate 8.75%
Higher rate 33.75%
Additional rate 39.35%

Inheritance tax

Inheritance tax (IHT) is a tax on the 'estate' of someone who's passed away.

How much you'll pay will depends on the value of the deceased's estate – which is worked out based on their assets (cash in the bank, investments, property or business, vehicles, payouts from life insurance policies), minus any debts.

Importantly, there is normally no tax to pay if:

  • The value of your estate is below £325,000, OR
  • You leave everything over £325,000 to your spouse, civil partner, a charity or a community amateur sports club

If neither of the above applies, your estate will be taxed at 40% on anything above the £325,000 threshold when you die (or 36% if you leave at least 10% of the value after any deductions to a charity in your will).

However, this £325,000 tax-free threshold might be even higher depending on your circumstances – in some cases it can be as high as £500,000, or even £1 million. Our inheritance tax guide covers what you need to know in more detail.

 

Paying into a pension?

One of the key attractions of pensions is the tax breaks they give savers. Generally, when you put money into a pension, the state tops up your contribution with tax relief.

How much tax relief do I get on my pension contributions?

Basic-rate taxpayers receive 20% tax relief on their pension contributions. Higher-rate taxpayers can get up to 40% relief – or up to 45% for top-rate taxpayers – though they may need to claim the additional relief through their tax returns. Scottish taxpayers paying slightly higher rates of income tax (21%, 41% or 46%) than elsewhere in the UK also need to claim their extra tax through their tax returns.

If you're not a taxpayer – for example, you don't earn enough to pay income tax – but are contributing to a pension, you'll still have the tax saving added to your contributions up to a certain amount. You'll be given an extra £20 for every £80 you pay into a pension up until you've contributed £2,880. This means the state tops up your pension to £3,600.

Is there a limit on tax relief I can get?

Generally, you can put as much as you earn each tax year into your pension and receive tax relief, up to an annual contribution limit of £60,000.

This limit – called the annual allowance – includes the money you put into your pension, the basic-rate tax relief the state adds, and any contributions your employer makes.

However, for high earners with incomes over £260,000, the £60,000 annual allowance is reduced.

When does tax relief become tax charge?

The pension lifetime allowance has been completely abolished from 6 April 2024, meaning there is no cap on how much you can build up in pension benefits while continuing to get tax relief.

The separate 'lifetime allowance charge' was also scrapped from 6 April 2023. Despite this, the amount you can take as a tax-free lump sum is capped at £268,275. 

To check what your take-home pay should be, including pension contributions and student loan repayments, use our free Income Tax Calculator.

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