What are the new income tax bands for 2024/2025?

What's changed for the new tax year?

written by
Andy Hagues, ATT
April 19, 2024

The world of earnings and the tax bands can be a daunting one, but hopefully this quick guide to what's changed can help!

The main rate of Employee National Insurance contributions will be reduced by a further 2% in the 2024/25 tax year, in addition to the 2% reduction we saw in January. The economic outlook is brighter, but it’s still vital to ensure you’re using all the allowances and exemptions you’re entitled to.

At a glance:

Once you surpass the £12,570 threshold, the following income tax rates apply:
A basic rate of 20% on earnings between £12,571 and £50,270.
A higher rate of 40% on earnings between £50,271 and £125,139.
An additional rate of 45% on earnings exceeding £125,140.
The Personal Allowance goes down by £1 for every £2 that the adjusted net income is above £100,000. This means that the allowance is zero if the income is £125,140 or above.

These rates will be frozen until 2028.

In Scotland, there may be variations in income tax bands.

Scotland implements different tax rates and bands, which are subject to change. For the tax year 2024/2025, these rates and bands are as follows:

The Starter Rate of 19% applies to income between£12,571 and £14,732.
The Basic Rate of 20% applies to income between £14,733 and £25,688.
The Intermediate Rate of 21% applies to income between £25,689 and £43,662.
The Higher Rate of 41% applies to income between £43,663 and £150,000.
The Top Rate of 46% applies to income over £150,000.

To check if any recent changes to National Insurance, ISAs, or Capital Gains Tax will affect you, get in touch!