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11 Mar 2020

Budget 2020: what it means for your income tax bill

No changes to your tax-free personal allowance or tax thresholds

Most taxpayers can expect few changes to their income tax in April, as today's Budget has revealed.

The Chancellor Rishi Sunak's announcement means there won't be any changes to income tax rates, thresholds or allowances.

The increase in the amount you earn before paying National Insurance Contributions will increase your take-home pay, however.

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How much income tax will I pay from April?

  • Basic-rate taxpayers will continue to pay 20% tax on earnings between £12,501 to £50,000.
  • Higher-rate taxpayers will continue to pay 40% on income between £50,001 to £150,000.
  • Additional-rate taxpayers will continue to pay 45% on earnings over £150,000.

Using the dropdown options, our income tax calculator below can show you how much income tax you can expect to pay in the new tax year.

How the personal allowance compares

Since 2010, the government has raised the tax-free personal allowance by 90% from £6,475 in 2010 to £12,500 in 2019-20, as the chart below shows.

The Autumn Budget 2018 revealed that the threshold changes were being brought in a year ahead of what was promised in the Conservative manifesto, which is why they're sticking to £12,500 for 2020-21.

Personal allowances compared

In the last Budget in October 2018, the personal allowance was raised from £11,850 to the current amount of £12,500.

The then-Chancellor Philip Hammond announced this would remain until April 2021, when the allowance would increase in line with the Consumer Price Index (CPI) measure of inflation.

Income tax in Scotland and Wales

Today's announcement won't affect Scotland and Wales, which already announced their Budgets for the upcoming tax year.

Scotland: 2020-21 tax rates

Tax bandIncomeRates
Personal allowance£12,5000%
Starter rate£12,501 - £14,58519%
Basic rate£14,586 - £25,15820%
Intermediate rate£25,159 - £43,43021%
Higher rate£43,431 - £150,00041%
Top rateOver £150,00046%

Wales: 2020-21 tax rates

Tax bandEarningsRates
Basic rate£12,501 - £50,00020%
Higher rate£50,001 - £150,00040%
Additional rateOver £150,00045%