For a comprehensive overview of income tax, see our Income Tax guide.
The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. Here are all the income tax brackets you need to know.
Income tax is the largest single deduction from most employees’ pay, but many people don’t fully understand how the banded system works. A common misconception is that moving into a higher tax bracket means all your income is taxed at the higher rate — but that’s not how it works. Only the income above each threshold is taxed at the higher rate. A £55,000 earner doesn’t pay 40% on all their income; they pay 40% only on the £4,730 above the £50,270 threshold.
For 2026/27, the thresholds remain frozen for the fifth year running. The government has kept the Personal Allowance and higher-rate threshold unchanged since 2021, meaning that as wages rise with inflation, more workers are being pushed into higher tax bands each year. This process — known as fiscal drag — is effectively a stealth tax increase that doesn’t require a rate change.
Read more: See our Take Home Pay guide for a complete overview of this topic.
England, Wales & Northern Ireland — Tax Brackets 2026/27
| Tax Band | Taxable Income | Tax Rate |
|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Scotland — Tax Brackets 2026/27
Scotland sets its own income tax rates on earned income (employment, self-employment, pensions). Scottish residents pay:
| Tax Band | Taxable Income | Tax Rate |
|---|
| Personal Allowance | £0 – £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% |
Note: Scottish income tax only applies to earnings (salary, self-employment, pension income). Savings interest and dividends are taxed at UK rates.
Tax by Salary — Quick Lookup (England/Wales/NI)
| Gross Salary | Income Tax | NI | Total Deductions | Take-Home |
|---|
| £15,000 | £486 | £194 | £680 | £14,320 |
| £20,000 | £1,486 | £594 | £2,080 | £17,920 |
| £25,000 | £2,486 | £994 | £3,480 | £21,520 |
| £30,000 | £3,486 | £1,394 | £4,880 | £25,120 |
| £35,000 | £4,486 | £1,794 | £6,280 | £28,720 |
| £40,000 | £5,486 | £2,194 | £7,680 | £32,320 |
| £45,000 | £6,486 | £2,594 | £9,080 | £35,920 |
| £50,000 | £7,486 | £2,994 | £10,480 | £39,520 |
| £55,000 | £9,432 | £3,111 | £12,543 | £42,457 |
| £60,000 | £11,432 | £3,211 | £14,643 | £45,357 |
| £70,000 | £15,432 | £3,411 | £18,843 | £51,157 |
| £80,000 | £19,432 | £3,611 | £23,043 | £56,957 |
| £100,000 | £27,432 | £4,011 | £31,443 | £68,557 |
| £125,000 | £42,518 | £4,511 | £47,029 | £77,971 |
| £150,000 | £53,703 | £5,011 | £58,714 | £91,286 |
Tax by Salary — Quick Lookup (Scotland)
| Gross Salary | Income Tax | NI | Total Deductions | Take-Home |
|---|
| £15,000 | £462 | £194 | £656 | £14,344 |
| £20,000 | £1,462 | £594 | £2,056 | £17,944 |
| £25,000 | £2,490 | £994 | £3,484 | £21,516 |
| £30,000 | £3,636 | £1,394 | £5,030 | £24,970 |
| £35,000 | £4,836 | £1,794 | £6,630 | £28,370 |
| £40,000 | £6,036 | £2,194 | £8,230 | £31,770 |
| £45,000 | £7,320 | £2,594 | £9,914 | £35,086 |
| £50,000 | £9,420 | £2,994 | £12,414 | £37,586 |
| £55,000 | £11,520 | £3,111 | £14,631 | £40,369 |
| £60,000 | £13,620 | £3,211 | £16,831 | £43,169 |
| £70,000 | £17,820 | £3,411 | £21,231 | £48,769 |
| £80,000 | £22,320 | £3,611 | £25,931 | £54,069 |
| £100,000 | £32,320 | £4,011 | £36,331 | £63,669 |
How Tax Is Calculated
Income tax is charged on taxable income — your earnings after deducting your Personal Allowance. The tax is calculated band by band, not as a flat percentage of your total income. So a £60,000 earner doesn’t pay 40% on £60,000 — they pay 0% on the first £12,570, 20% on the next £37,700, and 40% only on the remaining £9,730.
Example: £45,000 Salary (England)
| Step | Calculation |
|---|
| Gross income | £45,000 |
| Minus Personal Allowance | £45,000 - £12,570 = £32,430 |
| Tax at 20% on £32,430 | £32,430 × 20% = £6,486 |
Example: £75,000 Salary (England)
| Step | Calculation |
|---|
| Gross income | £75,000 |
| Minus Personal Allowance | £75,000 - £12,570 = £62,430 taxable |
| Basic rate band | £50,270 - £12,570 = £37,700 at 20% = £7,540 |
| Higher rate band | £75,000 - £50,270 = £24,730 at 40% = £9,892 |
| Total tax | £17,432 |
The 60% Tax Trap (£100,000 – £125,140)
This is one of the most financially painful traps in the UK tax system — and one of the most fixable. Between £100,000 and £125,140, your Personal Allowance is withdrawn at a rate of £1 for every £2 earned. This means you’re effectively paying tax on your income as normal, plus paying 40% tax on the income that used to be covered by your allowance. The combined effect is a 60% marginal rate.
The solution is nearly always to make pension contributions or salary sacrifice arrangements to bring your adjusted net income below £100,000. Every £1 contributed to your pension saves you 60p in tax within this band — making pension contributions extraordinarily efficient at this income level.
Once you earn over £75,000, it’s worth taking professional advice to plan your income and contributions.
| Income | Personal Allowance | Effective Rate in Band |
|---|
| Up to £100,000 | £12,570 | 40% |
| £100,001 – £125,140 | Reduces by £1 per £2 | 60% |
| Over £125,140 | £0 | 45% |
How the 60% Trap Works
| Extra £1,000 Earned | Lost Allowance | Extra Tax |
|---|
| £100,000 → £101,000 | £500 | £400 (40%) + £200 (lost allowance) = £600 |
| £101,000 → £102,000 | £500 | £600 |
| £124,000 → £125,000 | £500 | £600 |
| £125,000 → £126,000 | £0 (already gone) | £450 (45%) |
How to Avoid the 60% Trap
| Strategy | How It Helps |
|---|
| Pension contributions | Reduce adjusted net income below £100,000 |
| Salary sacrifice | Same effect as pension |
| Gift Aid donations | Extend basic rate band |
| Spread income over tax years | Defer bonuses if possible |
Personal Allowance Rules
| Income Level | Personal Allowance |
|---|
| Up to £100,000 | £12,570 |
| £100,001 – £125,140 | Gradually reduced |
| Over £125,140 | £0 |
Who Gets a Different Personal Allowance?
| Situation | Personal Allowance |
|---|
| Standard | £12,570 |
| Born before 6 April 1948 (rare) | May be higher |
| Marriage Allowance transferred to spouse | £11,310 (gave away £1,260) |
| Marriage Allowance received from spouse | £13,830 (received £1,260) |
| Blind Person’s Allowance | £12,570 + £3,070 = £15,640 |
Dividend Tax Rates 2026/27
Dividends have their own tax rates (on top of the £500 dividend allowance):
| Tax Band | Dividend Rate |
|---|
| Basic rate taxpayer | 8.75% |
| Higher rate taxpayer | 33.75% |
| Additional rate taxpayer | 39.35% |
Savings Interest Tax Rates 2026/27
Savings interest over your Personal Savings Allowance:
| Tax Band | Savings Rate | Personal Savings Allowance |
|---|
| Basic rate | 20% | £1,000 |
| Higher rate | 40% | £500 |
| Additional rate | 45% | £0 |
Capital Gains Tax Rates 2026/27
Gains above the £3,000 annual exempt amount:
| Asset Type | Basic Rate | Higher/Additional Rate |
|---|
| Most assets | 18% | 24% |
| Residential property | 18% | 24% |
| Business assets (BADR) | 10% | 10% |
Key Dates for 2026/27 Tax Year
| Date | Event |
|---|
| 6 April 2026 | Tax year starts |
| 31 January 2027 | Self Assessment deadline (online) for 2025/26 |
| 5 April 2027 | Tax year ends |
| 31 January 2028 | Self Assessment deadline for 2026/27 |
Changes from 2025/26
| Item | 2025/26 | 2026/27 |
|---|
| Personal Allowance | £12,570 | £12,570 (frozen) |
| Basic rate threshold | £37,700 | £37,700 (frozen) |
| Higher rate threshold | £50,270 | £50,270 (frozen) |
| Additional rate threshold | £125,140 | £125,140 (frozen) |
| Dividend allowance | £500 | £500 (unchanged) |
| CGT annual exempt | £3,000 | £3,000 (unchanged) |
The freeze on thresholds (in place since 2021) continues. With wage inflation, more people are being pushed into higher tax brackets — this is called fiscal drag.
Marginal vs Average Tax Rate
| Term | Meaning |
|---|
| Marginal rate | Tax on your next £1 of income |
| Average rate | Total tax ÷ total income |
Example: £60,000 Salary
| Calculation | Amount |
|---|
| Total tax | £11,432 |
| Average rate | £11,432 ÷ £60,000 = 19.1% |
| Marginal rate | 40% (you’re in higher rate band) |
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