Income Tax in the UK for 2024/25
The UK income tax system for the 2024/25 tax year (6 April 2024 to 5 April 2025) continues to use a progressive structure where higher earners pay higher rates on their income above certain thresholds.
Personal Allowance
The Personal Allowance remains frozen at £12,570 for 2024/25. This is the amount you can earn before paying any income tax.
Important: Your Personal Allowance is reduced by £1 for every £2 of income above £100,000, meaning it reaches zero when your income hits £125,140.
Tax Bands and Rates
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | £0 - £12,570 | 0% |
| Basic Rate | £12,571 - £50,270 | 20% |
| Higher Rate | £50,271 - £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Key Changes for 2024/25
-
Thresholds remain frozen - The government has continued the freeze on income tax thresholds until 2028, meaning more people will be pulled into higher tax bands through "fiscal drag"
-
National Insurance reduction - While not income tax, the NI rate reduction from 10% to 8% means more take-home pay for employees
-
Dividend allowance cut - Reduced from £1,000 to £500, affecting those with investment income
Example Calculations
Salary of £35,000:
- Personal Allowance: £12,570 at 0% = £0
- Basic Rate: £22,430 at 20% = £4,486
- Total Income Tax: £4,486
Salary of £60,000:
- Personal Allowance: £12,570 at 0% = £0
- Basic Rate: £37,700 at 20% = £7,540
- Higher Rate: £9,730 at 40% = £3,892
- Total Income Tax: £11,432
Tax-Efficient Strategies
- Pension contributions - Reduce your taxable income and get tax relief
- ISAs - Interest and gains are tax-free
- Salary sacrifice - For pensions or benefits to reduce taxable income
- Marriage allowance - Transfer £1,260 to a basic rate taxpayer spouse
Using Our Calculator
Our Take-Home Pay Calculator automatically applies all 2024/25 rates to show you exactly what you'll receive after tax and National Insurance.