Understanding UK tax brackets is essential for employees, self-employed individuals, company directors, and anyone earning income in the United Kingdom. The amount of income tax you pay depends on how much you earn, where you live in the UK, and which tax band your income falls into.
The UK uses a progressive income tax system, meaning higher levels of income are taxed at higher rates. However, not all of your earnings are taxed at the same rate because your income is divided into different tax bands.
This guide explains:
- How UK tax brackets work
- The current UK income tax rates and bands
- The difference between tax brackets and tax rates
- Personal Allowance rules
- Income tax differences between England, Wales, Northern Ireland, and Scotland
- How tax bands affect your take-home pay
What Are UK Tax Brackets?
UK tax brackets (also known as UK tax bands) determine the rate of income tax you pay on different portions of your earnings.
Everyone receives a tax-free amount called the Personal Allowance. Once your income exceeds this threshold, the remaining taxable income is charged at different rates depending on your earnings.
For most taxpayers across England, Wales, and Northern Ireland, income tax is divided into:
- Personal Allowance (tax-free income)
- Basic Rate tax band
- Higher Rate tax band
- Additional Rate tax band
Scotland has a separate income tax system with additional bands and different rates.
Your tax is normally collected through the PAYE (Pay As You Earn) system if you are employed, while self-employed individuals usually pay income tax through a Self Assessment tax return.
UK Income Tax Brackets and Rates for 2026/27
The following income tax bands apply to England, Wales, and Northern Ireland.
| Income Tax Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
These UK tax rates apply only to taxable income after your Personal Allowance has been deducted.
For example, if you earn £40,000 a year, you do not pay 20% tax on the entire amount. The first £12,570 is tax-free, and the remaining taxable income falls within the Basic Rate tax band.
How Does the Personal Allowance Work?
The Personal Allowance is the amount you can earn before paying income tax.
For the 2026/27 tax year:
- You can earn up to £12,570 before paying income tax.
- Income above this amount is taxed according to the relevant UK tax bracket.
However, higher earners may lose some or all of their Personal Allowance.
If your adjusted net income is above £100,000:
- Your Personal Allowance reduces by £1 for every £2 earned above £100,000.
- Once your income reaches £125,140, your Personal Allowance becomes £0.
This means some taxpayers experience a higher effective tax rate because they lose their tax-free allowance as their income increases.
UK Tax Bands for Scotland
Scotland uses different income tax brackets from England, Wales, and Northern Ireland.
For Scottish taxpayers, income tax is divided into six bands:
| Scottish Tax Band | Income Range | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 to £15,397 | 19% |
| Basic Rate | £15,398 to £27,491 | 20% |
| Intermediate Rate | £27,492 to £43,662 | 21% |
| Higher Rate | £43,663 to £75,000 | 42% |
| Advanced Rate | £75,001 to £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
Scottish income tax rates are set by the Scottish Government and apply to Scottish taxpayers based on their main residence.
What Is the Difference Between Tax Brackets and Tax Rates?
Although people often use the terms interchangeably, tax brackets and tax rates have different meanings.
Tax Bracket
A tax bracket is the income range where a particular tax rate applies.
Example:
- £12,571 to £50,270 is the Basic Rate tax band in England, Wales, and Northern Ireland.
Tax Rate
A tax rate is the percentage of tax charged within that band.
Example:
- The Basic Rate tax band is charged at 20%.
Your total income tax bill is calculated by applying the correct rate to each portion of your taxable income.
Talk to one of our intelligent and clever professionals to get your further queries about tax brackets in the UK. We will ensure to come up with the best possible solution.
What are the Three Rates on Which Income Tax is Charged?
The three rates on which income tax is charged in the UK are the basic rate, the higher rate, and the additional rate. The basic rate of income tax in the UK is currently 20% and applies to taxable income up to £50,270 for the tax year 2026/27. The higher rate of income tax is currently 40% and applies to taxable income between £50,271 and £150,000.
The additional rate of income tax is currently 45% and applies to taxable income above £150,000. However, these rates have a tendency to slightly change in every tax year. So the best practice is to keep the awareness of tax rates updated when a new tax year begins.
What is the Basic Tax Rate of Personal Allowance?
The personal allowance is the amount of income you can earn before you start paying income tax. For the tax year 2026/27, the personal allowance is £12,570. This means that you can earn up to £12,570 before you start paying income tax. The basic rate of income tax in the UK is currently 20%, which applies to taxable income between £12,571 and £50,270.
Normally the amount of personal allowance is tax-free as many of you might already receive and be aware of the related facts. However, once you start to earn more than a certain tax-free amount, the basic rate of tax will be applied to the income.
What are the Basic Tax Rate for Marriage Allowance?
Marriage Allowance is a tax relief in the UK that allows a person to transfer 10% of their personal allowance to their spouse or civil partner. This can reduce the amount of income tax the recipient has to pay. The person transferring the allowance must earn less than their personal allowance, and the recipient must be a basic rate taxpayer.
The tax rate on Marriage Allowance is 0%, as it is a tax relief that reduces the amount of income tax you have to pay. This will help several people to take the benefit of the reduced tax bills.
What are the Tax Rates of National Insurance Contributions?
National Insurance Contributions (NICs) are payments made by employees, employers, and the self-employed in the UK to fund state benefits such as the State Pension and the National Health Service (NHS). The amount of NICs you pay depends on your earnings and whether you are employed or self-employed.
For the tax year 2026/27, the rate of NICs for employees is 12% on earnings between £9,568 and £50,270, and 2% on earnings over £50,270. For the self-employed, the rate of NICs is 9% on profits between £9,568 and £50,270, and 2% on profits over £50,270. Employers also pay NICs on their employees’ earnings, with the rate varying depending on the employee’s earnings and employment status.
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The Bottom Line
Understanding UK tax brackets helps you manage your income, plan your finances, and understand how much tax you may need to pay.
The UK income tax system is based on different tax bands, meaning only the portion of income within each band is taxed at the relevant rate. Knowing your Personal Allowance, tax band, and applicable rates can help you better understand your payslip and overall tax position.
For the most accurate information, always check the latest guidance from HMRC, as tax rates and allowances can change between tax years.
Disclaimer: All the information provided in this article on tax brackets in the UK includes all the texts and graphics. It does not intend to disregard any of the professional advice.
