Income tax in the UK is charged in bands. You do not pay the same rate on all of your income — you pay different rates on different portions. This guide explains what each band means for the 2026/27 tax year (6 April 2026 to 5 April 2027) for residents of England, Wales and Northern Ireland.
The four income tax bands
For 2026/27, UK income tax is divided into four bands. The first £12,570 of income is covered by the Personal Allowance and is tax-free. Above that, you pay 20% Basic Rate, then 40% Higher Rate, and finally 45% Additional Rate on the highest earners.
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571–£50,270 | 20% |
| Higher Rate | £50,271–£125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
How tax bands work in practice
A common misconception is that moving into a higher band means all your income is taxed at the new rate. That is not how it works. You only pay the higher rate on the portion of your income that falls within that band. For example, if you earn £60,000, you pay 0% on the first £12,570, 20% on the next £37,700 (£12,571 to £50,270), and 40% on the remaining £9,730. Your average effective tax rate is much lower than 40%.
You can use our free income tax calculator to see exactly how your salary is split across each band with a visual breakdown.
The Personal Allowance and the £100K taper
Everyone gets a Personal Allowance — an amount of income they can earn tax-free. For 2026/27, this is £12,570. However, if your adjusted net income exceeds £100,000, the Personal Allowance reduces by £1 for every £2 you earn above that threshold. At £125,140 it reaches zero entirely. This creates an effective 60% marginal tax rate in that range — sometimes called the £100K tax trap.
Income tax vs National Insurance
Income tax and National Insurance are separate deductions. National Insurance (NI) is charged at 8% on earnings between £12,576 and £50,268, and 2% above that. It is not affected by which income tax band you are in, and Scottish income tax rates do not change your NI liability. When people refer to their overall tax burden, they usually mean income tax plus NI combined — which is why the effective rate at the top of the Basic Rate band is closer to 28% than 20%.
Frozen bands and fiscal drag
The Personal Allowance and income tax band thresholds have been frozen since 2021/22 and are set to remain frozen through to 2027/28. This means that as wages rise with inflation, more people are pulled into higher tax bands — a process known as fiscal drag. In real terms, the tax-free allowance is worth less each year than it was when it was set.
Use the income tax calculator to model your take-home pay for 2026/27, or read our guide on how to reduce your tax bill.