UK Income Tax: how the bands and Personal Allowance work
Income Tax in the UK is charged on income above the Personal Allowance. The Personal Allowance is £12,570 for the 2026/27 tax year, and the rates above it are 20% (Basic), 40% (Higher) and 45% (Additional). Scotland sets its own rates.
On this page
- Tax year
- 6 April 2026 to 5 April 2027.
- Personal Allowance
- £12,570; tax is not charged on income below this. Reduced by £1 for every £2 of adjusted net income above £100,000; zero when income reaches £125,140.
- Basic rate
- 20% on income from £12,571 to £50,270 with the standard Personal Allowance of £12,570.
- Higher rate
- 40% on income from £50,271 to £125,140.
- Additional rate
- 45% on income over £125,140.
The Personal Allowance is an amount deducted from income before tax is charged
The standard Personal Allowance is £12,570 for the 2026/27 tax year (6 April 2026 to 5 April 2027). Taxable income is your total income minus the Personal Allowance; the remainder is the amount Income Tax is charged on. GOV.UK, Income Tax rates and Personal Allowances (opens in a new tab).
The Personal Allowance decreases by £1 for every £2 of adjusted net income above £100,000. At an income of £125,140 or above, the Personal Allowance is zero. GOV.UK, Income Tax rates and Personal Allowances (opens in a new tab).
Site-computed illustration: this means the effective marginal tax rate between £100,000 and £125,140 is 60% — the loss of the Personal Allowance on top of the Higher rate already applying. This uses the site’s 2026/27 Income Tax calculator for England, Wales and Northern Ireland and leaves out National Insurance, student loans and other allowances.
The progressive band structure means each rate applies to a slice, not the whole
Site-computed example: Income tax is not charged at a single rate on your entire income. Each band applies only to the portion of income that falls within it. On a salary of £35,000, the first £12,570 is taxed at 0%, the next £22,430 (£12,571 to £35,000) is taxed at 20%, and the total Income Tax is £4,486. The bands are applied sequentially, not at a flat rate. This uses the site’s 2026/27 Income Tax calculator for England, Wales and Northern Ireland and leaves out National Insurance, student loans, savings and dividend income, and other allowances.
The band boundaries are set by Parliament and administered by HMRC; they do not change with inflation during the tax year. A pay rise that moves income into a higher band does not affect the rate paid on income already below that band's threshold. The tax code on your payslip reflects the Personal Allowance HMRC estimates for your circumstances; it is not a prediction of your final tax position.
National Insurance contributions are charged separately from Income Tax and have their own thresholds and rates. Class 1 employee National Insurance is charged at 8% on earnings between £242 and £967 a week and at 2% above that, for the 2026/27 tax year. GOV.UK, National Insurance contributions (opens in a new tab).
Scotland sets its own income tax rates and bands for Scottish taxpayers
For Scottish taxpayers, the Scottish Parliament sets the income tax rates and bands that replace the UK Basic, Higher and Additional rates on non-savings, non-dividend income. The UK Parliament sets the Personal Allowance. If you live in Scotland, check the current Scottish income tax rates on the Scottish Government or HMRC pages; they differ from the UK-wide rates shown here. GOV.UK, Income Tax rates and Personal Allowances (opens in a new tab).
This page is an original explanation based on HMRC and GOV.UK pages under the Open Government Licence v3.0; the wording has been adapted and HMRC does not endorse this website. This page does not cover the Marriage Allowance, Blind Person's Allowance, tax relief on pension contributions or charitable donations, or the trading and property allowances. Use HMRC's Check your Income Tax service to see your current tax code and a projection of your position for the year.