The basic rate is the first band of Income Tax charged above the Personal Allowance. Most employees and self-employed people with modest earnings pay tax at this rate on the portion of their income that falls within the band.
How the band applies
Dividend income and savings interest are taxed at their own basic rates, which are different from the rate applied to earned income. Once total income exceeds the basic rate band, further income is taxed at the higher rate.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.