UK Income Tax Bands and Rates 2026/27: The Complete Guide
Llandora·Updated 2026-10-14
⚠️ Disclaimer: For general information only — not tax, financial, legal, or medical advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional (for health topics, a licensed healthcare provider). You use this information at your own risk.
The short answer
For the 2026/27 tax year (6 April 2026 to 5 April 2027), UK income tax starts after the £12,570 Personal Allowance: 20% basic rate on income up to £50,270, 40% higher rate to £125,140, and 45% additional rate above that. These rates apply in England, Wales, and Northern Ireland; Scotland sets its own bands and rates. Rates are marginal — you only pay each rate on the slice of income inside that band, never on your whole income.
The bands: England, Wales and Northern Ireland
Taxable income
Rate
Band
Up to £12,570
0%
Personal Allowance
£12,571 – £50,270
20%
Basic rate
£50,271 – £125,140
40%
Higher rate
Over £125,140
45%
Additional rate
The Personal Allowance (£12,570) and all thresholds are frozen until April 2028, so fiscal drag keeps pulling more people into higher bands each year. If your adjusted net income exceeds £100,000, the allowance shrinks by £1 for every £2 over £100,000 — disappearing entirely at £125,140. That creates an effective 60% marginal rate between £100,000 and £125,140, the UK's notorious "tax trap" zone.
Scotland is different
Scotland sets its own income tax on non-savings, non-dividend income. For 2026/27 the Scottish Budget confirmed:
Taxable income
Rate
Band
Up to £12,570
0%
Personal Allowance
£12,571 – £16,537
19%
Starter rate
£16,538 – £29,526
20%
Scottish basic rate
£29,527 – £43,662
21%
Intermediate rate
£43,663 – £75,000
42%
Higher rate
£75,001 – £125,140
45%
Advanced rate
Over £125,140
48%
Top rate
Scottish rates apply only to earnings, pensions, and rental income — savings interest and dividends are taxed at UK-wide rates wherever you live. Wales sets its own rates too, but has kept them aligned with England's (20/40/45%). Whether you are a Scottish taxpayer depends on where your main home is, not where you work.
Worked examples (England)
£30,000 salary: £0 on the first £12,570, then 20% × £17,430 = £3,486 total.
£60,000 salary: 20% × (£50,270 − £12,570) = £7,540, plus 40% × (£60,000 − £50,270) = £3,892, for £11,432 total — an effective rate of about 19%.
£130,000 salary: no Personal Allowance (fully tapered). 20% × £37,700 = £7,540; 40% × (£125,140 − £50,270) = £29,948; 45% × (£130,000 − £125,140) = £2,187. Total £39,675.
Savings and dividends are taxed differently
Savings: the Personal Savings Allowance gives basic-rate taxpayers £1,000 of interest tax-free (£500 for higher-rate, £0 for additional-rate). A 0% starting rate applies to up to £5,000 of savings income on top of the Personal Allowance.
Dividends: the first £500 is tax-free (dividend allowance), then 8.75% for basic-rate taxpayers, 33.75% for higher-rate, and 39.25% for additional-rate.
How the tax is collected
Employees pay through PAYE — your employer deducts tax each payday based on your tax code (1257L is the standard code for someone with the full Personal Allowance and one job). If you have multiple income sources or untaxed income, HMRC adjusts your code or asks you to file a Self Assessment return. Always check a new tax code on your first payslip: wrong codes are one of the most common reasons newcomers overpay.
Frequently asked questions
Is the 40% rate applied to my whole salary once I cross £50,270?
No — this is the most common misunderstanding. Only the slice above £50,270 is taxed at 40%. Someone earning £51,000 pays 40% on just £730, roughly £292 extra.
I moved from England to Scotland mid-year. Which rates apply?
Scottish taxpayer status is decided for the whole tax year based on where your main home was during the year. If you were a Scottish taxpayer for 2026/27, Scottish rates apply to the full year's non-savings income.
Does the Personal Allowance apply to everyone?
No. You lose £1 of allowance for every £2 of adjusted net income above £100,000, and non-domiciled individuals claiming the 4-year Foreign Income and Gains regime give up the allowance in claim years.
Are National Insurance thresholds the same?
No — National Insurance is separate. Employees pay 8% on earnings between £12,570 and £50,270 and 2% above that, with no equivalent of the 40/45% bands.
Sources
GOV.UK, Income Tax rates and allowances: https://www.gov.uk/income-tax-rates
GOV.UK, Scottish Income Tax: https://www.gov.uk/scottish-income-tax
mygov.scot, Scottish Income Tax: current rates (6 April 2026 – 5 April 2027): https://www.mygov.scot/scottish-income-tax/current-income-tax-rates
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