The tax-free earnings threshold was confirmed in the budget as £11,850. Each person can earn this much without paying any tax.
The Higher Rate (40%) threshold has increased to £46,350.
The additional rate of tax of 45% remains payable on taxable income above £150,000.
Don’t forget that if your income in the tax year exceeds £100,000 you will automatically loose some of your personal allowance – for each £2 over you will loose £1 of allowance.
In the current year you can receive £5,000 of dividend income at 0%, known as the Dividend Allowance. However, in the Budget it was confirmed that the Dividend allowance amount will fall to £2,000.
Any Dividend income in excess of the allowance will be taxed at:
Basic rate: 7.5%
Higher rate: 32.5%
Additional rate: 38.1%
You can also receive £5,000 of interest income at 0%, known as the starting rate.