Income Tax Calculator (London)
Here’s a comprehensive table summarizing the key aspects of income tax for London (UK) residents, as of the 2023/24 tax year:
| Category | Details |
|---|---|
| Tax Year | The UK tax year runs from 6 April to 5 April of the following year. |
| Personal Allowance | Most individuals receive a Personal Allowance of £12,570, meaning they don’t pay income tax on the first £12,570 of their income. (It may reduce if income exceeds £100,000.) |
| Income Tax Bands | Basic Rate (20%): £12,571 – £50,270 Higher Rate (40%): £50,271 – £125,140 Additional Rate (45%): Income over £125,140 |
| Marriage Allowance | A tax-free allowance for married couples or civil partners. One partner with income below £12,570 can transfer up to £1,260 of their allowance to the other partner. |
| Blind Person’s Allowance | Additional allowance of £2,870 for those registered blind. |
| National Insurance | Individuals must pay National Insurance if they earn more than £242 per week. Rates vary based on income: – Class 1 Employees: 12% on earnings above £242/week, 2% over £967/week – Self-employed (Class 4): 10.25% on profits £9,880-£50,270; 3.25% above £50,270 |
| Dividend Tax | Tax-Free Dividend Allowance: £1,000 – Basic Rate: 8.75% – Higher Rate: 33.75% – Additional Rate: 39.35% |
| Capital Gains Tax | Tax-Free Allowance: £6,000. Rate varies based on income: – Basic Rate Taxpayers: 10% (18% on residential property) – Higher Rate Taxpayers: 20% (28% on residential property) |
| Pension Contributions | Contributions are tax-deductible. Annual tax-free limit: £60,000 (can vary based on earnings). Lifetime allowance has been removed. |
| Student Loan Repayment | Plan 1: 9% of income over £22,015 Plan 2 & 4: 9% of income over £27,295 Postgraduate Loan: 6% of income over £21,000 |
| Child Benefit | Available based on income. Tax charge may apply if either parent’s income exceeds £50,000. |
| Tax-Free Savings | ISA Allowance: £20,000 per year (covers Cash, Stocks & Shares, Innovative Finance, and Lifetime ISAs) |
| Employment Benefits | Benefits like company cars and private medical insurance may be taxable. Rates vary based on the type of benefit. |
| Rental Income | Income from rental properties is subject to tax after deducting allowable expenses. Mortgage interest relief available as a 20% tax credit. |
This table reflects the main elements of UK income tax for London residents, although specific cases and changes may apply based on individual circumstances and any annual updates in tax policies. For precise calculations or detailed advice, consulting with a tax advisor is recommended.