In the Autumn Budget announced in November 2023 there was an update on tax rates for 2024/25 which will impact on individuals and businesses. This article covers Income Tax Rates and Dividends.

Income tax rates

The government has stated that the basic rate will remain at 20%, the higher rate at 40% and the additional rate at 45% for 2024/25.

The government reduced the point at which individuals pay the additional rate of 45% from £150,000 to £125,140 for the current tax year and this will continue for 2024/25.

Income tax allowances

The income tax personal allowance and basic rate limit are fixed at their current levels until April 2028. They are £12,570 and £37,700 respectively. For those entitled to a full personal allowance, the point at which they will pay income tax at the higher rate will continue at £50,270.

Dividends

The government has also confirmed that, from 6 April 2024, the rates of taxation on dividend income will remain as follows:

• the dividend ordinary rate - 8.75%
• the dividend upper rate - 33.75%
• the dividend additional rate - 39.35%.

The Scottish and Welsh governments will make their announcements on the devolved elements of taxation policy in due course.

Comment: It is estimated that the reduction in the Dividend Allowance will affect £4.4 million individuals in 2024/25 with the average loss to those affected being around £155.

If you would like to find out more about how the changes in tax rates 2024/25 will affect you, please do contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.