The basic tax rate (BTR) is the rate of Income Tax that you pay when you earn between £12,571 and £50,270 in a year. This rate is accurate as of the 2023/2024 tax year. If you pay basic rate tax, you are obliged to pay 20% income tax in England and Wales. However, you are only accountable for tax for your taxable income – you have a tax-free Personal Allowance of £12,570.
There are multiple rates of income tax depending on your income, but you’ll be charged different rates of tax for each bracket of your income.
Take a look at the current rates of Income Tax:
|Up to £12,570
|£12,571 to £50,270
|£50,271 to £125,140
The Personal Allowance is a tax-exempt income amount. You are eligible for the Personal Allowance if you earn anything below £100,000, at which point you gradually start to lose your exemption, £1 at a time.
Different brackets of your income will be taxed at different rates, so contact our accountants for more advice, or take a look at our guide to the tax implications of earning over £100,000 per year to learn more.