What are the UK tax brackets for 2025/26?

Personal Allowance (0%): £0-12,570. Basic Rate (20%): £12,571-50,270. Higher Rate (40%): £50,271-125,140. Additional Rate (45%): over £125,140. Scotland has different rates and bands.

How much can I earn before paying tax UK?

£12,570 for most people — this is your Personal Allowance. You pay 0% tax on this amount. Earnings above £12,570 are taxed at 20%, 40%, or 45% depending on how much you earn. The Personal Allowance reduces above £100,000 income.

What is the 40% tax threshold UK?

You pay 40% tax on income between £50,271 and £125,140 (2025/26). You don't pay 40% on all income — only the portion above £50,270. The first £12,570 is tax-free, the next band is taxed at 20%.

When does personal allowance start reducing?

When your income exceeds £100,000, your Personal Allowance reduces by £1 for every £2 over £100,000. It fully disappears at £125,140 income. This creates an effective 60% tax rate on income between £100,000 and £125,140.

UK Tax Brackets 2025/26 Quick Reference

A quick reference to UK income tax bands and rates for the 2025/26 tax year.

England, Wales & Northern Ireland

Tax Bands 2025/26

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%

Tax-Free Personal Allowance

Situation	Allowance
Standard	£12,570
Blind Person’s	+£3,070
Marriage Allowance	Transfer up to £1,260
Over £100k income	Reduced

Scotland

Scottish Tax Bands 2025/26

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%

Personal Allowance Reduction

Over £100,000 Income

Your Income	Personal Allowance
£100,000	£12,570
£110,000	£7,570
£120,000	£2,570
£125,140+	£0

How It Works

Calculator
Income over £100k	£
Divide by 2	= reduction
Max reduction	£12,570

The 60% Trap

Income Range	Effective Rate
£100,000 - £125,140	~60%
Why?	40% tax + lost allowance
Avoid	Pension contributions

Quick Tax Calculations

Tax on Different Salaries

Salary	Tax Paid	Effective Rate
£20,000	£1,486	7.4%
£30,000	£3,486	11.6%
£40,000	£5,486	13.7%
£50,000	£7,486	15.0%
£60,000	£11,486	19.1%
£70,000	£15,486	22.1%
£80,000	£19,486	24.4%
£100,000	£27,486	27.5%

Note: Tax only, excludes National Insurance

Understanding Marginal Rate

Concept	Explanation
Marginal rate	Tax on next £1 earned
Not average	Only on that portion
If earning £55,000	Marginal rate is 40%
But average	Much lower

Dividend Tax

Dividend Rates 2025/26

Band	Rate
Dividend Allowance	£500 tax-free
Basic Rate	8.75%
Higher Rate	33.75%
Additional Rate	39.35%

Which Band?

Your Total Income	Dividend Rate
Under £50,270	8.75%
£50,271 - £125,140	33.75%
Over £125,140	39.35%

Capital Gains Tax

CGT Rates 2025/26

Asset	Basic Rate	Higher Rate
Residential Property	18%	24%
Other Assets	10%	20%

Annual Exempt Amount

Year	Exemption
2025/26	£3,000
Previously	Higher
Now	Significantly reduced

Savings Tax

Personal Savings Allowance

Tax Band	PSA
Basic Rate	£1,000
Higher Rate	£500
Additional Rate	£0

Starting Rate for Savings

Condition	Rate
Non-savings income under £17,570	0% up to £5,000
On savings interest

Tax-Free Allowances Summary

Allowance	Amount 2025/26
Personal Allowance	£12,570
Personal Savings Allowance	£1,000/£500
Dividend Allowance	£500
Capital Gains Allowance	£3,000
ISA Allowance	£20,000

Key Dates

Date	Action
6 April	Tax year starts
5 April	Tax year ends
31 January	Self Assessment deadline
31 July	Payment on account due

Summary

Key Threshold	Amount
Tax-free earnings	£12,570
Basic rate ends	£50,270
Higher rate ends	£125,140
Personal Allowance lost	£125,140

Quick Lookup	2025/26
Personal Allowance	£12,570
Basic Rate	20%
Higher Rate	40%
Additional Rate	45%