What is the additional rate tax rate for savings income?

The additional tax rate for savings income is indeed 38.1%. This rate applies to taxpayers who are classified as higher-rate or additional-rate taxpayers, particularly in the context of income generated from savings such as interest from bank accounts or dividends from shares.

In the UK tax system, savings income is treated differently than other forms of income. Taxpayers receive a personal savings allowance that permits them to earn a certain amount of savings interest tax-free. However, once this allowance is exceeded, especially for those in the higher tax brackets, the applicable additional tax rate on the excess becomes relevant.

Understanding the context of tax brackets is essential here. Individuals in the basic rate tax band—who earn less than a specific threshold—have different rates applicable to them compared to those who breach higher income levels. While lower rates may apply at lower income levels, the 38.1% rate captures those who are on the higher incomes, aligning with current tax policies on additional earnings from savings.

As for the other rates mentioned, while they may apply to various income levels, they do not pertain specifically to the additional tax on savings income, which is defined clearly as 38.1%.