Income Tax Bands UK Explained

Income Tax Bands UK Explained

Understanding how much income tax you pay in the UK doesn’t need to be complicated. This guide breaks down the 2025/26 income tax bands, the personal allowance, and how tax is calculated at each rate — with practical examples so you can see exactly what you’ll owe.

What Is the Personal Allowance?

Every UK resident is entitled to a Personal Allowance — the amount of income you can earn each tax year before paying any income tax. For 2025/26, the Personal Allowance is £12,570.

This allowance has been frozen since April 2021 and is currently set to remain frozen until April 2028. This “fiscal drag” means that as wages rise with inflation, more of your income is pushed into higher tax bands — effectively a stealth tax increase.

The Personal Allowance shrinks if you earn over £100,000. For every £2 you earn above £100,000, your allowance is reduced by £1. This means it disappears entirely at £125,140, creating an effective tax rate of 60% in that income range.

Income Tax Bands for 2025/26 (England, Wales, Northern Ireland)

Band	Taxable Income	Tax Rate
Personal Allowance	Up to £12,570	0% (no tax)
Basic rate	£12,571 – £50,270	20%
Higher rate	£50,271 – £125,140	40%
Additional rate	Over £125,140	45%

Note: Scotland uses different income tax bands and rates. See the Scottish income tax section below.

How Income Tax Is Calculated: Examples

Example 1: Earning £30,000

Personal Allowance: £12,570 (tax-free)
Taxable at basic rate (20%): £17,430
Annual income tax: £3,486 (£290 per month)

Example 2: Earning £60,000

Personal Allowance: £12,570 (tax-free)
Basic rate (20%) on £37,700: £7,540
Higher rate (40%) on £9,730: £3,892
Annual income tax: £11,432 (£953 per month)

Example 3: Earning £150,000

Personal Allowance: £0 (fully withdrawn)
Basic rate (20%) on £37,700: £7,540
Higher rate (40%) on £87,440: £34,976
Additional rate (45%) on £12,860: £5,787
Annual income tax: £48,303 (£4,025 per month)

Scottish Income Tax Bands

Scotland sets its own income tax rates and bands (excluding the Personal Allowance, which remains UK-wide). For 2025/26:

Band	Taxable Income	Tax Rate
Personal Allowance	Up to £12,570	0%
Starter rate	£12,571 – £14,876	19%
Basic rate	£14,877 – £26,561	20%
Intermediate rate	£26,562 – £43,662	21%
Higher rate	£43,663 – £75,000	42%
Advanced rate	£75,001 – £125,140	45%
Top rate	Over £125,140	48%

National Insurance vs Income Tax

Income tax and National Insurance are separate deductions. For 2025/26, employees pay both:

Income tax: 20% / 40% / 45% depending on band
National Insurance: 8% on earnings between £12,570 and £50,270, then 2% above

Combined, a basic-rate employee earning £30,000 pays roughly £3,486 income tax plus approximately £1,394 NI — a total of about £4,880, or 16.3% of gross income. See our National Insurance explained guide for full NI rates.

Frequently Asked Questions

“What is the income tax personal allowance for 2025/26?” | “The Personal Allowance for 2025/26 is £12,570. This is the amount you can earn tax-free each year. It has been frozen since 2021 and will remain frozen until at least April 2028.” “How much tax do I pay on £50,000 in the UK?” | “On £50,000, you pay 20% (basic rate) on everything above the £12,570 Personal Allowance, which is £7,486 in income tax. You also pay National Insurance at 8% on earnings between £12,570 and £50,270.” “What is the higher rate tax threshold?” | “The higher rate (40%) threshold starts at £50,271 for 2025/26 in England, Wales, and Northern Ireland. In Scotland, the 42% higher rate starts at £43,663.” “What is the additional rate of income tax?” | “The additional rate is 45% on income above £125,140. In Scotland, the equivalent top rate is 48%.”

Conclusion

UK income tax bands for 2025/26 remain unchanged from previous years due to the Personal Allowance freeze. Key takeaways:

Personal Allowance: £12,570 tax-free
Basic rate: 20% up to £50,270
Higher rate: 40% up to £125,140
Additional rate: 45% above £125,140
Scotland has six bands with rates from 19% to 48%

The freeze on thresholds means more people are pulled into higher bands each year. To check your exact liability, use the GOV.UK income tax calculator or consult a qualified tax advisor.