Definition
The rates of income tax payable on taxable income. For the tax year 2005-2006, the brackets are:The rate is applied to each individual's taxable income which is calculated as:
Taxable income = Income - Reliefs - Allowances
The main reliefs are pension contributions and donations to charity. The main allowances are the 'personal allowance' which every individual has (£4,895 for people under 65 in 2005-2006) and the Married Couples Allowance for couples where one spouse is 65 or over.