Income tax is paid on earnings from employment and profits from self-employment during the tax year, which runs from 6 April to 5 April the following year.
It is also paid on some benefits, external and pensions, income from renting out property, and returns from savings, external and investments, external above certain limits.
The basic rate is 20% and is paid on annual earnings between £12,571 and £50,270.
The higher rate is 40%, and is paid on earnings between £50,271 and £125,140.
Once you earn more than £100,000, you also start losing the £12,570 tax-free personal allowance.
You lose £1 of your personal allowance for every £2 that your income goes above £100,000.
Anyone earning more than £125,140 a year no longer has any tax-free personal allowance.
The additional rate of income tax of 45% is paid on all earnings above £125,140 a year.
These rates apply in England, Wales and Northern Ireland.
Some income tax rates are different, external in Scotland, where a new 45% band took effect in April. The top rate also rose from 47% to 48%.
Source:
www.bbc.co.uk
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