UK Income Tax Brackets 2025–26 Explained
Last updated: June 2025
UK income tax is charged in bands, and the rate you pay depends on which slice of your income falls into each band. Understanding how these brackets work helps you predict your take-home pay, plan a pay rise, and avoid nasty surprises at higher income levels.
The Personal Allowance
Everyone gets a tax-free Personal Allowance of £12,570 for the 2025–26 tax year. You pay no income tax on the first £12,570 you earn. This allowance is reduced by £1 for every £2 you earn above £100,000, which means it disappears entirely once your income reaches £125,140.
The income tax bands (England, Wales & NI)
Above the Personal Allowance, income is taxed in three bands:
- Basic rate (20%): on income from £12,571 to £50,270
- Higher rate (40%): on income from £50,271 to £125,140
- Additional rate (45%): on income above £125,140
Only the income within each band is taxed at that band’s rate — a common misconception is that crossing into the higher rate taxes your whole salary at 40%, which is not the case.
The 60% effective tax trap
Between £100,000 and £125,140, the gradual loss of your Personal Allowance combined with the 40% higher rate creates an effective marginal tax rate of 60%. Many people in this band use pension contributions to bring their adjusted income back below £100,000 and reclaim the allowance.
Scotland is different
Scotland sets its own income tax bands, with six rates ranging from a 19% starter rate to a 48% top rate. If you live in Scotland, your income tax is calculated using these bands instead, though National Insurance remains the same UK-wide.
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