Income Tax rates and bands

		2009/10 Taxable Income	2010/11 Taxable Income
Starting rate	10%	0 - 2,440	0 – 2,440
Basic rate	20%	2,441 – 37,400	2,441 – 37,400
Higher rate on dividends	32.5%	(see note)	(see note)
Higher rate Additional rate on dividends Additional rate	40% 42.5% 50%	over 37,400 N/A N/A	over 37,401 - 150,000 (see note) over 150,001

Note: The rates available for dividends for the 2009-10 tax year is the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate. For the 2010-11 tax year, as well as these rates there is a new dividend additional rate of 42.5 per cent.

There is a 10% starting rate for savings income only, with a limit of £2,440. If an individual’s taxable non-savings income is above this limit then the 10% savings rate will not be applicable.

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