The new financial year is in full swing, and it’s when the new rates and regulations kick in. Your personal allowance has changed along with other vital thresholds that take effect when it comes to completing your tax return.


Personal Allowance

The new year brings the new personal allowance at £12,500 for the year. So, what is your personal allowance? Personal allowance is the amount of income in which you do not have to pay tax on. You will pay tax on anything over the £12,500, the table below will display what percentage of tax you pay in each band.


Tax Rate

Taxable Income



£0 - £12,500

Personal Allowance


£12,501 - £50,000

Basic Rate


£50,001 - £150,000

Higher Rate


£150,000 +

Additional Rate


You do not get a personal allowance on taxable income over £125,000. Any income above this threshold and tax will be due on all amounts to the respective band.


Dividend Allowance

As well as the personal allowance, the dividend rate has also changed. Just like a personal allowance, you also have a dividend allowance. Dividends that fall in within your personal allowance do not count towards your dividend allowance.


The tax you pay depends on which Income Tax band you’re in.


Tax Rate



Dividend Allowance of £2,000


Basic Rate


Higher Rate


Additional Rate



Say you were to get £4,000 in dividends in the 2019 to 2020 tax year. The dividend allowance is £2,000, so this means you pay tax on £2,000 (£4,000 minus £2,000) of your dividends. Your other taxable income is £30,000. Add this to your dividends of £4,000 and your total taxable income is £34,000. You pay a rate of 7.5% on £2,000 of dividends because your total taxable income is within the basic tax band.


National Minimum Wage

If you employ staff, then you are probably aware that the National Minimum Wage rate has also changed. It is a legal requirement to pay the NMW as an employer.



25 +

21 to 24

18 to 20

Under 18


1st April 2019







For all the rates mentioned, they usually change every year, typically in April. You must be aware of these rates to make the most out of completing your tax return and to fulfil your legal obligation. There are many other allowances and rates, but the ones mentioned are the usual ones that affect everyone. If you are worried about whether you are in the right tax band or not sure if you’ve used up all of your allowance, please visit our website on or call us on 02920 653 995 where a member of staff can assist. We are always happy to help.

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