UK Income Tax Bands and Rates for 2026/27 Explained
Last updated 12 June 2026
For the 2026/27 tax year (6 April 2026 to 5 April 2027), taxpayers in England, Wales and Northern Ireland pay no Income Tax on the first £12,570 of income (the Personal Allowance), 20% on income from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% above £125,140. The system is marginal: each rate applies only to the slice of income inside that band. Above £100,000, the Personal Allowance shrinks by £1 for every £2 of income, creating an effective 60% rate up to £125,140.
- The standard Personal Allowance for 2026/27 is £12,570 — the same as in 2025/26.
- Basic rate: 20% on income from £12,571 to £50,270 (England, Wales and Northern Ireland).
- Higher rate: 40% on income from £50,271 to £125,140.
- Additional rate: 45% on income above £125,140.
- The Personal Allowance tapers away by £1 for every £2 of adjusted net income over £100,000, reaching nil at £125,140 — an effective 60% marginal rate in that window.
- Income Tax is marginal: earning £51,000 does not mean 40% tax on the whole £51,000, only on the £730 above the threshold.
- Scotland sets its own non-savings Income Tax bands; these rates apply to the rest of the UK.
What are the Income Tax bands for 2026/27?
There are three Income Tax rates in England, Wales and Northern Ireland for 2026/27 — 20%, 40% and 45% — sitting on top of a tax-free Personal Allowance of £12,570. The thresholds are unchanged from 2025/26, which means pay rises quietly pull more of your income into higher bands (so-called fiscal drag).
| Band | Income range (2026/27) | 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 bands apply to non-savings income such as wages, self-employment profit and rental income. Dividends use their own, separate rates — see our 2026/27 dividend tax guide, which matters this year because the basic and higher dividend rates rose by 2 percentage points to 10.75% and 35.75%.
How does the Personal Allowance work in 2026/27?
The Personal Allowance is the amount you can earn before any Income Tax is due: £12,570 for 2026/27. Most people receive it automatically through their tax code (1257L for a standard allowance) or through Self Assessment if they are self-employed.
Two wrinkles are worth knowing:
- It tapers above £100,000. Your allowance drops by £1 for every £2 of adjusted net income over £100,000, hitting zero at £125,140. More on this trap below.
- Part of it can be transferred. If you earn under the allowance and your spouse or civil partner is a basic-rate taxpayer, Marriage Allowance lets you shift a slice of it to them — see our Marriage Allowance guide.
Do you pay 40% on everything once you cross £50,270?
No — this is the most common misunderstanding about UK tax. The system is marginal: each rate applies only to the income that falls inside its band, so crossing a threshold never reduces your take-home pay. Here is the full calculation for someone earning £60,000 in 2026/27 (rest of UK):
| Slice of income | Amount | Rate | Tax |
|---|---|---|---|
| Up to £12,570 | £12,570 | 0% | £0 |
| £12,571 – £50,270 | £37,700 | 20% | £7,540 |
| £50,271 – £60,000 | £9,730 | 40% | £3,892 |
| Total Income Tax | £60,000 | — | £11,432 |
That works out at an average rate of roughly 19% — even though this person is a "higher-rate taxpayer". Note that Income Tax is only half the story for the self-employed: Class 4 National Insurance adds 6% on profit between £12,570 and £50,270 and 2% above that. Our sole trader tax calculator stacks both together for you, and our National Insurance classes guide explains which class applies to whom.
What is the £100k taper trap (the 60% effective rate)?
Between £100,000 and £125,140 of adjusted net income, every extra £1 you earn is taxed at 40% and strips away 50p of your tax-free Personal Allowance, which then gets taxed at 40% too. The combined effect is a 60% effective marginal Income Tax rate — higher than the 45% additional rate that the very highest earners pay.
A worked example. Compare income of £100,000 with £110,000 in 2026/27:
| Income £100,000 | Income £110,000 | |
|---|---|---|
| Personal Allowance | £12,570 | £7,570 (reduced by £5,000) |
| Tax at 20% (£37,700 band) | £7,540 | £7,540 |
| Tax at 40% | £19,892 | £25,892 |
| Total Income Tax | £27,432 | £33,432 |
The extra £10,000 of income triggers £6,000 of extra Income Tax — 60% — before National Insurance is counted (a self-employed earner would add 2% Class 4 on top, making it 62%).
The trap is based on adjusted net income, which is broadly total taxable income minus gross pension contributions and Gift Aid donations. That is also the escape route: a personal pension contribution that brings adjusted net income back below £100,000 restores the full allowance, so the contribution can attract an effective 60% saving. Our pension tax relief guide walks through the mechanics. Parents should also watch the separate High Income Child Benefit Charge, which claws back Child Benefit over its own income threshold.
Are the tax bands different in Scotland?
Yes. The Scottish Parliament sets its own rates and bands for non-savings, non-dividend income (wages, profits, rent), and uses more bands than the rest of the UK — including starter, intermediate, advanced and top rates alongside basic and higher. The figures on this page apply to England, Wales and Northern Ireland; if you live in Scotland, check the Scottish rates on gov.uk. The £12,570 Personal Allowance, and the UK-wide rules for savings and dividend income, apply across the whole UK.
How do the bands affect self-employed and side-hustle income?
If you are self-employed — whether full-time or driving for Uber or delivering for Deliveroo on the side — the same bands apply to your profit (income minus allowable expenses), added on top of any employment income. A few practical points for 2026/27:
- The £1,000 trading allowance means very small side incomes can be entirely tax-free.
- Employment income uses up your Personal Allowance and lower bands first, so side-hustle profit is often taxed at your highest marginal rate.
- Tax on 2026/27 self-employment profit is reported through Self Assessment, due by 31 January 2028 — or, if your gross self-employment and property income is over £50,000, through Making Tax Digital quarterly updates from April 2026. Check whether you are caught with our MTD qualifying income checker or read the full MTD guide.
To see your own numbers across all the bands, try any of our free UK tax calculators.
Frequently asked questions
What is the 40% tax threshold for 2026/27?
The higher-rate threshold is £50,270 in England, Wales and Northern Ireland. Income from £50,271 to £125,140 is taxed at 40% — but only the income above £50,270, not your whole salary. Scotland sets different thresholds.
Has the Personal Allowance changed for 2026/27?
No. The standard Personal Allowance remains £12,570, the same level as in 2025/26. Because the threshold has not risen with wages, more people drift into paying tax, and into higher bands, each year.
Do I pay 40% on all of my income if I earn £55,000?
No. On £55,000 in 2026/27 you pay 0% on the first £12,570, 20% on the next £37,700, and 40% only on the £4,730 above £50,270 — total Income Tax of £9,432 before National Insurance.
Why is there a 60% tax rate between £100,000 and £125,140?
It is not an official band, but losing £1 of Personal Allowance for every £2 earned over £100,000 means each extra £1 in that window suffers 40% tax directly plus 40% on the newly taxable 50p of allowance — 60% in total. The allowance is fully gone at £125,140, where the official 45% additional rate begins.
How can I avoid the £100k Personal Allowance taper?
The taper is measured on adjusted net income, so gross personal pension contributions and Gift Aid donations reduce it. A pension contribution that brings adjusted net income back to £100,000 restores the full £12,570 allowance, giving an effective saving of up to 60% on that contribution.
Do the Income Tax bands include National Insurance?
No — National Insurance is charged separately with its own thresholds. For the self-employed in 2026/27, Class 4 NI is 6% on profit between £12,570 and £50,270 and 2% above, while Class 2 costs nothing if profit is at least £7,105 (it is treated as paid).
Sources: Income Tax rates and Personal Allowances (gov.uk) and Income over £100,000 (gov.uk), verified 12 June 2026. Estimates for information only — not regulated tax advice.