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ACCA Strategic Professional · Advanced Taxation (UK) · Tax administration and the UK tax system

Which statement about the income tax bands and rates in the ATX-UK exam (Finance Act 2025) is correct?

The 45% additional rate applies to income of £125,141 and over, and the higher rate band runs from £37,701 to £125,140. The basic rate band is £1 to £37,700, and the additional dividend rate is 39.35%, not 45%.

  1. AThe additional rate of 45% applies to income of £125,141 and over, and the higher rate band runs from £37,701 to £125,140Correct
  2. BThe additional rate of 45% applies to income over £150,000, and the higher rate band ends at £150,000
  3. CThe basic rate band is £1 to £50,270 and is taxed at 20%
  4. DThe additional dividend rate is 45% and applies from £125,141

Explanation

The provided tables show the basic rate band as £1 to £37,700 at 20%, the higher rate band as £37,701 to £125,140 at 40%, and the additional rate of 45% from £125,141. The additional dividend rate is 39.35%, not 45%. The £150,000 and £50,270 figures are not the bands in the exam tables.

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