Income Tax Rates and Bands: Current UK Guide

UK income tax rates work on a banded system — you pay each rate only on the portion of income that falls within that band, not on everything you earn.

UK income tax rates are not applied to everything you earn. You pay different rates on different portions of your income, depending on which tax band each portion falls into.

Understanding the UK income tax rates for 2026/2027 means you can check whether the right amount is being deducted from your pay.

UK income tax rates are set by HMRC and apply to income above your personal allowance. The personal tax free allowance for 2026/2027 is £12,570 — the amount you can earn before paying any income tax at all.

This guide covers the current UK income tax rates and bands for England, Wales, Northern Ireland, and Scotland.

It explains how each rate is applied, how the rates differ for employees, the self-employed, and landlords, and what to check if you think you are on the wrong rate.

Current UK Income Tax Rates and Bands for 2026/2027

The table below shows the income tax rates for England, Wales, and Northern Ireland for the 2026/2027 tax year. Scotland sets its own rates, which are covered in the next section.

• Personal Allowance: £0 to £12,570 — 0%
• Basic Rate: £12,571 to £50,270 — 20%
• Higher Rate: £50,271 to £125,140 — 40%
• Additional Rate: Above £125,140 — 45%

These are the UK tax thresholds that apply to most taxpayers in England, Wales, and Northern Ireland. The rates shown are applied only to income within each band — not to your total earnings.

For example, if you earn £60,000, you do not pay 40% on all of it. You pay 0% on the first £12,570, 20% on income between £12,571 and £50,270, and 40% only on the remaining £9,730.

These UK income tax bands 2026/2027 reflect the figures confirmed by HMRC. The personal allowance and basic rate threshold remain frozen under current government policy.

Wales has devolved income tax powers through the Senedd and sets its own rates. Welsh rates have mirrored England in every tax year to date.

Scottish Income Tax Rates and Bands for 2026/2027

If you live in Scotland, you pay income tax at the rates set by the Scottish Parliament rather than those set by Westminster.

Scottish income tax rates have more bands than those for the rest of the UK.

• Personal Allowance: £0 to £12,570 — 0%
• Starter Rate: £12,571 to £16,537 — 19%
• Basic Rate: £16,538 to £29,526 — 20%
• Intermediate Rate: £29,527 to £43,662 — 21%
• Higher Rate: £43,663 to £75,000 — 42%
• Advanced Rate: £75,001 to £125,140 — 45%
• Top Rate: Above £125,140 — 48%

Your tax code reflects the Scottish rates if you are a Scottish taxpayer. HMRC uses an S prefix on Scottish tax codes, for example S1257L, to indicate that Scottish income tax rates apply to your income.

National Insurance contributions use UK-wide rates regardless of where you live — Scottish income tax rates affect income tax only.

How UK Income Tax Rates Are Applied to Your Income

A common misconception about tax brackets UK is that moving into a higher band means paying that higher rate on all your income. That is not how the system works.

Each UK income tax rate applies only to the slice of income that falls within that band. This is called a marginal tax system.

The rate at which your top pound of income is taxed is your marginal rate — not the rate you pay on everything.

Here is a worked example for a basic rate taxpayer in England for 2026/2027:

• Annual earnings: £33,000
• Personal allowance: £12,570 (taxed at 0%)
• Taxable income: £33,000 minus £12,570 = £20,430
• Tax due: 20% of £20,430 = £4,086
• Effective tax rate: approximately 12.4% of total earnings

Your effective tax rate — the percentage of your total earnings paid as tax — is lower than your marginal rate because your personal allowance and lower-band income are taxed at a lower rate or not at all.

UK Income Tax Rates: Basic, Higher, and Additional Rate Explained

Each of the three main UK income tax rates applies to a different slice of your income. Here is what each rate means in practice for taxpayers in England, Wales, and Northern Ireland.

Basic Rate Tax — 20%

The basic rate of income tax is 20%. It applies to taxable income between £12,571 and £50,270 for taxpayers in England, Wales, and Northern Ireland in 2026/2027.

Most employees pay tax at the basic rate. If your total income is below £50,270 and above the personal allowance, you are a basic rate taxpayer.

Your tax code reflects this, and HMRC instructs your employer to deduct the correct amount through PAYE.

Basic rate taxpayers can earn up to £1,000 in savings interest before paying tax on it. This is the personal savings allowance for basic rate taxpayers.

Higher Rate Tax — 40%

The higher rate of income tax is 40%. It applies to taxable income above £50,270 and up to £125,140 for taxpayers in England, Wales, and Northern Ireland.

If your income exceeds £50,270, you become a higher rate taxpayer on the portion above that threshold. You continue to pay 20% on the basic rate band — only the income above £50,270 is taxed at 40%.

Higher rate taxpayers have a reduced personal savings allowance of £500 on savings interest.

Additional Rate Tax — 45%

The additional rate of income tax is 45%. It applies to taxable income above £125,140.

Additional rate taxpayers lose their personal allowance entirely. The personal allowance tapers to zero for income between £100,000 and £125,140, which creates an effective marginal rate of 60% on income in that range.

For every £2 earned above £100,000, £1 of personal allowance is withdrawn.

Additional rate taxpayers are not entitled to any personal savings allowance on savings interest.

Self-Employed Tax Rates and Landlord Tax Rates UK

Self-employed individuals and landlords pay income tax using the same UK rate bands as employees. The difference lies in how tax is reported and collected, not in the rates themselves.

Self-Employed Income Tax Rates

Self-employed tax rates UK follow the same income tax band structure as employment income. If you are self-employed, you pay income tax at 20%, 40%, or 45% depending on your taxable profits — exactly the same rates as employees.

The key difference for the self-employed is how tax is collected. Rather than PAYE, you report your income through Self Assessment and pay tax in two payments on account each year, plus a balancing payment in January.

Self-employed individuals also pay National Insurance contributions. Class 4 NICs apply to profits above the lower profits limit and are paid alongside income tax through Self Assessment.

Landlord Income Tax Rates

Landlord tax rates UK also follow the standard income tax band structure. Rental income is added to your other income and taxed at the rate appropriate to your total income.

This means that if employment income already takes you into the higher rate band, rental income above that point is taxed at 40%.

Landlords cannot deduct mortgage interest directly from rental income in the way they once could. Instead, a 20% tax credit applies on finance costs.

Both self-employed individuals and landlords benefit from the personal allowance in the same way as employees, provided they have not already used it against other income.

How the Personal Allowance Affects Your UK Tax Thresholds

The personal allowance is the amount of income you can earn each year before paying income tax. For 2026/2027 the personal allowance is £12,570 for most UK residents.

Not everyone receives the full personal allowance. If your income exceeds £100,000, the allowance begins to reduce. For every £2 of income above £100,000, you lose £1 of personal allowance.

By the time income reaches £125,140, the personal allowance has been reduced to zero.

This withdrawal creates an effective marginal rate of 60% on income between £100,000 and £125,140 — a significant consideration for higher earners.

Reducing your adjusted net income through salary sacrifice, pension contributions or charitable giving can help protect some or all of your allowance if your income falls in this range.

Taking professional or HMRC advice is recommended before making changes solely for this reason.

Your personal allowance is reflected in your tax code. The standard tax code for most employees in 2026/2027 is 1257L, which represents the £12,570 personal allowance. If your tax code is different, it may indicate that your allowance has been adjusted.

The personal allowance 2026/27 guide on this site covers all of these scenarios in detail, including how tapering works and what to do if you think your allowance has been applied incorrectly.

HMRC Tax Rates, Tax Codes, and Checking What You Pay

Your tax code is the mechanism through which HMRC tax rates are applied to your pay.

Understanding how it works — and how to check it — helps you catch errors before they become costly.

How Your Tax Code Works

HMRC tax rates are applied to your income through your tax code if you are employed or receive a pension.

Your tax code tells your employer or pension provider how much income tax to deduct from each payment.

Your tax code is calculated based on your personal allowance, any taxable benefits you receive, and any underpaid or overpaid tax from previous years. An incorrect tax code means too much or too little tax is deducted.

The tax code 2026/27 guide on this site explains how 1257L works, what other code letters mean, and how to identify whether your code is correct.

How to Check Your Tax Code

You can check your current tax code through your HMRC personal tax account online. If your code appears wrong — for example, if it does not reflect the standard 1257L and you think it should — you contact HMRC to query it.

Common reasons for an incorrect tax code include starting a new job, receiving company benefits, having multiple income sources, or HMRC holding out-of-date income estimates.

Checking your tax code at the start of each tax year takes only a few minutes and can prevent underpayments building up.

Overpaid Tax and Rebates

If you have overpaid income tax in any tax year going back four years, you may be entitled to a tax rebate from HMRC.

Overpayments happen for a variety of reasons including emergency tax codes, leaving a job mid-year, or incorrect benefit-in-kind values.

Income from dividends is taxed at separate dividend tax rates rather than the standard income tax rates covered in this article.

If you receive dividend income — for example as a company director or investor — you can find the current rates in the dividend tax rates guide on this site.

Understanding UK income tax rates helps you check whether the right amount of tax is being taken from your income.

The rates for 2026/2027 remain structured around four main bands for England, Wales, and Northern Ireland, with Scotland operating a seven-band system.

Your personal allowance sets the point at which income tax begins, and your tax code is the mechanism through which HMRC tax rates are applied to your pay.

If your tax code looks wrong, or if you think you have paid too much tax in a previous year, it is worth checking your position.

The income tax guides on this site cover tax refunds, allowances, and how to check whether you have overpaid.

UK Income Tax Rates 2026/2027: Key Points to Remember

• The personal allowance for 2026/2027 is £12,570 — income up to this amount is not subject to income tax for most UK residents.
• UK income tax rates for England, Wales, and Northern Ireland are 20% (basic), 40% (higher), and 45% (additional), each applied only to the income falling within that band.
• Scotland uses a seven-band system with rates ranging from 19% (starter rate) to 48% (top rate), set by the Scottish Parliament.
• Self-employed individuals and landlords pay income tax at the same UK income tax rates as employees, but collect and pay tax through Self Assessment rather than PAYE.
• The personal allowance tapers to zero for income between £100,000 and £125,140, creating an effective marginal rate of 60% on income in that range.
• Checking your tax code each year confirms that the correct personal allowance and HMRC tax rates are being applied to your income.

Common Questions About UK Income Tax Rates

The following Q&As are provided for FAQ schema use. They are not part of the article body.

What are the UK income tax rates for 2026/2027?

For England, Wales, and Northern Ireland, the basic rate is 20% on taxable income up to £37,700 above the personal allowance, the higher rate is 40% on income from £37,701 to £112,570 above the allowance, and the additional rate is 45% on income above £125,140. The personal allowance for 2026/2027 is £12,570. Scotland operates separate rates set by the Scottish Parliament.

What is the personal allowance for the 2026/2027 tax year?

The standard personal allowance for 2026/2027 is £12,570. This is the amount you can earn before paying any income tax. The allowance begins to reduce if your income exceeds £100,000, and reaches zero at £125,140.

What are the income tax rates in Scotland for 2026/2027?

Scottish income tax rates for 2026/2027 run from 19% at the starter rate up to 48% at the top rate, with six bands in between. If you live in Scotland your tax code carries an S prefix, and your employer deducts tax using the Scottish rates rather than the UK-wide rates.

Do self-employed people pay the same income tax rates as employees?

Yes. Self-employed tax rates UK follow the same band structure as employment income — 20%, 40%, and 45% depending on taxable profit. The difference is that self-employed individuals pay tax through Self Assessment rather than PAYE, and also pay Class 4 National Insurance contributions on their profits.

What happens to the personal allowance if I earn over £100,000?

If your adjusted net income exceeds £100,000, your personal allowance reduces by £1 for every £2 of income above that level. At £125,140 the personal allowance reaches zero. This withdrawal creates an effective marginal rate of 60% on income between £100,000 and £125,140, making pension contributions an important planning consideration for higher earners.