Complete Guide to UK Tax Rates 2024/25
All Current Tax Rates, Allowances, and Thresholds for the 2024/25 Tax Year
📊 Quick Reference: Key Tax Rates 2024/25
Personal Allowance
Tax-free income for most people
Basic Rate Income Tax
On income £12,571-£50,270
Higher Rate Income Tax
On income £50,271-£125,140
Corporation Tax Small Rate
On profits up to £50,000
Corporation Tax Main Rate
On profits over £250,000
CGT Allowance
Tax-free capital gains
💰 Income Tax Rates & Bands 2024/25
| Income Band | Rate | Tax on Band | Cumulative Tax | Net Income After Tax |
|---|---|---|---|---|
| £0 - £12,570 | 0% | £0 | £0 | £12,570 |
| £12,571 - £50,270 | 20% | £7,540 | £7,540 | £42,730 |
| £50,271 - £125,140 | 40% | £29,948 | £37,488 | £87,652 |
| Above £125,140 | 45% | Variable | Variable | Variable |
💡 Real Examples: How Much Tax You Pay
£30,000 Salary
Taxable Income: £30,000 - £12,570 = £17,430
Income Tax: £17,430 × 20% = £3,486
National Insurance: £17,430 × 12% = £2,092
Take Home: £24,422
£60,000 Salary
Basic Rate: £37,700 × 20% = £7,540
Higher Rate: £9,730 × 40% = £3,892
Total Income Tax: £11,432
National Insurance: £4,876
Take Home: £43,692
£100,000 Salary
Income Tax: £27,432
National Insurance: £5,872
Take Home: £66,696
Note: No personal allowance taper yet
⚠️ The 60% Tax Trap
Income between £100,000 and £125,140 faces an effective 60% tax rate because the personal allowance reduces by £1 for every £2 earned above £100,000.
Example: At £110,000 income, you lose £5,000 of personal allowance, creating £2,000 extra tax (40% of £5,000) plus 40% on the extra £10,000 = £6,000 total extra tax on £10,000 income = 60% effective rate.
🏢 Corporation Tax Rates 2024/25
Small Profits Rate
On profits up to £50,000
Marginal Rate
On profits £50,001 - £250,000
Main Rate
On profits over £250,000
Corporation Tax Calculation Examples
| Annual Profit | Corporation Tax | Effective Rate | Net Profit After Tax |
|---|---|---|---|
| £25,000 | £4,750 | 19% | £20,250 |
| £100,000 | £22,250 | 22.25% | £77,750 |
| £500,000 | £125,000 | 25% | £375,000 |
💼 National Insurance Contributions 2024/25
Employee NICs (Class 1)
- Primary Threshold: £12,570
- Rate: 12% on earnings £12,571-£50,270
- Additional Rate: 2% on earnings above £50,270
Employer NICs (Class 1)
- Secondary Threshold: £9,100
- Rate: 13.8% on all earnings above £9,100
- Employment Allowance: Up to £5,000 reduction available
Self-Employed NICs
- Class 4: 9% on profits £12,571-£50,270
- Class 4 Additional: 2% on profits above £50,270
- Class 2: £3.45/week if profits over £6,515
📈 Capital Gains Tax 2024/25
Annual Exempt Amount
Tax-free capital gains per year
| Asset Type | Basic Rate Taxpayers | Higher/Additional Rate |
|---|---|---|
| General Assets | 10% | 20% |
| Residential Property | 18% | 28% |
| Business Assets (BAD Relief) | 10% | 20% |
CGT Calculation Example
Scenario: Higher rate taxpayer sells shares
Purchase Price: £20,000
Sale Price: £35,000
Gain: £15,000
Less Annual Allowance: £3,000
Taxable Gain: £12,000
CGT Due: £12,000 × 20% = £2,400
💵 Dividend Tax 2024/25
Dividend Allowance
Tax-free dividends per year
(Reduced from £1,000 in previous years)| Tax Band | Income Range | Dividend Tax Rate |
|---|---|---|
| Basic Rate | Up to £50,270 | 8.75% |
| Higher Rate | £50,271 - £125,140 | 33.75% |
| Additional Rate | Above £125,140 | 39.35% |
Why Dividends Can Be Tax Efficient
£10,000 as Salary
Income Tax: £10,000 × 20% = £2,000
Employee NICs: £10,000 × 12% = £1,200
Employer NICs: £10,000 × 13.8% = £1,380
Total Cost: £4,580
Net to Individual: £6,800
£10,000 as Dividends
Corporation Tax (19%): £1,900
Dividend Tax (8.75%): £831
NICs: £0
Total Cost: £2,731
Net to Individual: £8,269
Potential Annual Saving: £1,849
🎯 Other Key Tax Allowances 2024/25
ISA Allowance
Tax-free savings and investments
Pension Annual Allowance
Maximum tax-relieved contributions
Personal Savings Allowance
Tax-free interest (basic rate taxpayers)
£500 for higher rate, £0 for additional rateMarriage Allowance
Transferable between spouses
Saves up to £252 per yearTrading Allowance
Tax-free trading income
Property Allowance
Tax-free rental income
💡 Tax Planning Opportunities
Maximize ISA Contributions
Use your full £20,000 ISA allowance for completely tax-free growth. A £20,000 ISA growing at 5% for 10 years saves you £1,200-£2,400 in CGT.
Pension Tax Relief
Higher rate taxpayers get 40% relief on pension contributions. A £10,000 contribution only costs £6,000 after tax relief.
Avoid the 60% Tax Trap
If earning £100,000-£125,140, use pension contributions to reduce taxable income below £100,000 and keep your personal allowance.
Income Splitting
Transfer assets to a lower-earning spouse to utilize their personal allowances and lower tax rates.
CGT Planning
Use your £3,000 CGT allowance each year. Consider timing asset disposals across tax years to maximize allowances.
Limited Company Benefits
For profits above £50,000, limited companies can be more tax-efficient than sole trader status, especially when extracting profits as dividends.
Calculate Your Tax Savings
Use our free calculators to see how these rates affect your specific situation and identify potential savings: