The UK tax rates and allowances for 2023/24 apply to income earned between 6 April 2023 and 5 April 2024.1GOV.UK. 2023 to 2024: Employer Further Guide to PAYE and National Insurance Contributions The Personal Allowance stays at £12,570, income tax bands are unchanged from the previous year, and employee National Insurance was cut from 12% to 10% part-way through the year. Allowances for dividends, capital gains, and pensions all moved, and the Lifetime Allowance charge on pensions was removed.
Income Tax Bands and the Personal Allowance
The standard Personal Allowance is £12,570, so you pay no income tax on the first £12,570 of income.2GOV.UK. Income Tax Rates and Allowances for Current and Previous Tax Years For a single job with no complications, this is applied through tax code 1257L and your employer deducts the right amount automatically.
Above the allowance, income is taxed in three bands in England, Wales, and Northern Ireland:3GOV.UK. Income Tax Rates and Personal Allowances
- Basic rate of 20% on income from £12,571 to £50,270
- Higher rate of 40% on income from £50,271 to £125,140
- Additional rate of 45% on income over £125,140
The Personal Allowance tapers once your adjusted net income passes £100,000, dropping by £1 for every £2 you earn above that figure and disappearing at £125,140.2GOV.UK. Income Tax Rates and Allowances for Current and Previous Tax Years Inside that £100,000 to £125,140 window the lost allowance combines with the 40% rate on the extra earnings to produce an effective tax rate of 60%.
These bands apply to non-savings, non-dividend income. Savings interest, dividends, and capital gains each have their own treatment, covered further down.
Scottish Income Tax Rates
If you live in Scotland, your non-savings, non-dividend income is taxed under five bands set by the Scottish Parliament:4Scottish Government. Scottish Income Tax 2023 to 2024
- Starter rate of 19% from £12,571 to £14,732
- Basic rate of 20% from £14,733 to £25,688
- Intermediate rate of 21% from £25,689 to £43,662
- Higher rate of 42% from £43,663 to £125,140
- Top rate of 47% on income over £125,140
Scottish taxpayers hit the higher rate at £43,663, roughly £6,600 earlier than the rest of the UK, and the top rate is two points above the rest-of-UK additional rate. Dividend tax, savings interest tax, and Capital Gains Tax remain UK-wide. HMRC adds an “S” prefix to your tax code (for example, S1257L) to show Scottish residency.
National Insurance for Employees
Employees pay Class 1 National Insurance on earnings between the Primary Threshold of £1,048 per month and the Upper Earnings Limit of £4,189 per month.5GOV.UK. Rates and Thresholds for Employers 2023 to 2024 The main rate was 12% from 6 April 2023 to 5 January 2024, then dropped to 10% from 6 January 2024 following the Autumn Statement 2023.6GOV.UK. Rates and Allowances: National Insurance Contributions Earnings above the Upper Earnings Limit of £50,270 per year are charged at 2%.
National Insurance for the Self-Employed
If you’re self-employed, you pay Class 2 at a flat £3.45 per week when your profits exceed the Small Profits Threshold of £6,725. Class 4 is charged at 9% on profits between £12,570 and £50,270, and 2% on profits above £50,270. The 1 percentage point cut to Class 4 and the removal of mandatory Class 2 contributions were announced for 2023/24 but took effect from 6 April 2024, so they do not apply to the 2023/24 year.7GOV.UK. A Reduction in the Main Rates of Primary Class 1 and Class 4 National Insurance Contributions
Dividend Allowance and Tax Rates
The tax-free dividend allowance was cut to £1,000 for 2023/24, half the previous year’s figure.8GOV.UK. Tax on Dividends Dividend income above that is taxed at:
- 8.75% for basic rate taxpayers
- 33.75% for higher rate taxpayers
- 39.35% for additional rate taxpayers
If you take income from your own limited company largely as dividends, the smaller allowance pulls more of that income into tax than in prior years.
Personal Savings Allowance
Interest from savings accounts, bonds, and similar deposits is covered by the Personal Savings Allowance, set by tax band:9GOV.UK. Tax on Savings Interest: How Much Tax You Pay
- £1,000 of interest tax-free for basic rate taxpayers
- £500 of interest tax-free for higher rate taxpayers
- No tax-free allowance for additional rate taxpayers
Banks report interest directly to HMRC, and any tax owed on interest above your allowance is usually collected through a tax code adjustment the following year.
Capital Gains Tax
The annual exempt amount dropped to £6,000 for individuals in 2023/24, down from £12,300.10GOV.UK. Capital Gains Tax Rates and Allowances Gains above that are taxed depending on what you sold and your income tax band:
- Residential property that isn’t your main home: 18% at basic rate, 28% at higher and additional rate
- Other assets, including shares and business assets: 10% at basic rate, 20% at higher and additional rate
Where a gain pushes you from the basic rate into the higher rate, the portion of the gain in each band is taxed at the matching rate.10GOV.UK. Capital Gains Tax Rates and Allowances
Selling a UK residential property that isn’t fully covered by Private Residence Relief triggers a separate reporting duty. You must report the gain and pay the tax within 60 days of completion using HMRC’s online CGT service, not through Self Assessment.11GOV.UK. Report and Pay Your Capital Gains Tax UK residents with total gains below the £6,000 exempt amount do not need to report. Non-UK residents must report all disposals of UK property by the deadline even when no tax is owed.
Pension Annual and Lifetime Allowances
The Annual Allowance, the maximum you can contribute to pensions with tax relief in a single year, rose from £40,000 to £60,000 for 2023/24.12GOV.UK. Pension Schemes Rates
The Lifetime Allowance figure stayed at £1,073,100 on paper, but legislation removed the tax charge on exceeding it from 6 April 2023.13GOV.UK. Abolition of the Lifetime Allowance The allowance itself was then abolished from 6 April 2024. For 2023/24 purposes, there is no Lifetime Allowance charge on pension savings above the old limit.
High Income Child Benefit Charge
If you or your partner earns over £50,000 and either of you claims Child Benefit, the higher earner pays the High Income Child Benefit Charge.14GOV.UK. High Income Child Benefit Charge The charge is 1% of the Child Benefit received for every £100 of income above £50,000, so by £60,000 the benefit is fully clawed back. The charge applies to the higher earner, not to combined household income, and must be declared through Self Assessment.
Many families cancel the claim to avoid the charge, but keeping the claim live protects National Insurance credits for a non-working parent, so claiming and repaying through the charge is often the better route.
Marriage Allowance
If you’re married or in a civil partnership and one of you earns less than £12,570, the lower earner can transfer £1,260 of their unused Personal Allowance to the other partner.15GOV.UK. Marriage Allowance: How It Works The recipient gets a tax reduction of up to £252 for the year. The higher-earning partner must be a basic rate taxpayer, with income between £12,571 and £50,270. In Scotland, the recipient must pay the starter, basic, or intermediate rate, so their income must be below £43,662. Claims can be backdated up to four years, which can bring the total recovered above £1,000 if you qualified in earlier years and never applied.