6 April 2026
How UK tax bands work in 2026/27
A plain-English guide to how Income Tax bands, the Personal Allowance, and National Insurance thresholds fit together.
"Tax bands" is one of those phrases everyone's heard but few people can actually explain. The good news is the underlying idea is simple: UK Income Tax is progressive, which means different slices of your income are taxed at different rates — not your whole income at one rate.
A common misconception is that moving into a higher tax band means all of your income suddenly gets taxed at the higher rate. It doesn't. Only the portion of income that falls within that band is taxed at that band's rate. Everything below it is still taxed at the lower rates that applied to those slices.
The Personal Allowance
Before any bands come into play, everyone gets a Personal Allowance: £12,570 of income you can earn each tax year completely tax-free. It's been frozen at this level since April 2022 and is due to stay there until April 2031.
If your income goes above £100,000, the Personal Allowance starts shrinking — by £1 for every £2 you earn over that threshold. It disappears entirely once your income reaches £125,140. This is why earnings between £100,000 and £125,140 effectively get taxed at a higher rate than the 40% higher rate band suggests: you're paying tax on the income itself, and losing tax-free allowance at the same time.
Income Tax bands in England, Wales, and Northern Ireland
After the Personal Allowance, taxable income is split into three bands:
- Basic rate: 20% on taxable income up to £37,700 (so up to £50,270 of total income)
- Higher rate: 40% on taxable income from £37,700 to £112,570 (up to £125,140 of total income)
- Additional rate: 45% on taxable income above £112,570 (above £125,140 of total income)
Income Tax bands in Scotland
Income Tax is partly devolved, and Scotland sets its own bands and rates for anyone whose main home is there. For 2026/27 there are six bands instead of three:
- Starter rate: 19% up to £16,537 of total income
- Basic rate: 20% up to £29,526
- Intermediate rate: 21% up to £43,662
- Higher rate: 42% up to £75,000
- Advanced rate: 45% up to £125,140
- Top rate: 48% above £125,140
A worked example
Say you earn £60,000 a year in England, Wales, or Northern Ireland. The first £12,570 is tax-free. The next £37,700 (taking you to £50,270) is taxed at 20%, which comes to £7,540. The remaining £9,730 (from £50,270 to £60,000) falls in the higher rate band and is taxed at 40%, coming to £3,892.
Add those together and the total Income Tax bill is £11,432 — even though £60,000 sits well within the 40% band, you're not paying 40% on all of it.
Why your effective tax rate is lower than your top rate
In that example, £11,432 of tax on £60,000 of income works out at an effective rate of about 19.1% — nowhere near the 40% headline rate that applies to your top slice of income. This gap between your marginal rate (the rate on your next pound of income) and your effective rate (the average rate across everything you earn) is normal, and it's the whole point of a banded system.
If you want the exact numbers for your own income, our Income Tax Calculator and Salary Calculator apply these bands automatically, including the Personal Allowance taper and the Scotland/rest-of-UK split.