What Are the Current Tax Rates for Individuals and Businesses?

Understanding UK Tax Rates for 2024: A Guide for Individuals and Businesses

Tax rates are a cornerstone of financial planning, whether you’re an individual taxpayer or running a business. The UK tax system is structured to balance revenue collection with allowances and reliefs to support taxpayers. This guide explains the current tax rates for individuals and businesses in 2024, helping you navigate the fiscal landscape with confidence.

Income Tax Rates for Individuals in England, Wales, and Northern Ireland

For the 2024/25 tax year (6 April 2024 to 5 April 2025), the UK Income Tax bands for most taxpayers are:

• Personal Allowance: £12,570 (no tax is paid on this income)

• Basic Rate: 20% on income from £12,571 to £37,700

• Higher Rate: 40% on income from £37,701 to £125,140

• Additional Rate: 45% on income above £125,140

The tapering of the Personal Allowance applies to those earning over £100,000, with the allowance decreasing by £1 for every £2 over this threshold.

Corporation Tax Rates for Businesses

From April 2023, Corporation Tax rates changed to a tiered system:

• Small Profits Rate: 19% for companies with profits of £50,000 or less.

• Main Rate: 25% for companies with profits above £250,000.

• Marginal Relief: Applies to profits between £50,001 and £250,000.

VAT

The standard VAT rate remains at 20%. Businesses must register for VAT if their taxable turnover exceeds £85,000 annually.

To stay compliant, always refer to HMRC or consult an accountant.