UK Income Tax Rates & Personal Allowance 2026/27 Explained

Chandraketu Tripathi

Finance Editor, Kaeltripton

Published 5 Apr 2026

Last reviewed 4 May 2026

✓ Fact-checked

By Chandraketu Tripathi | Updated April 2026

The Personal Allowance for 2026/27 is £12,570 — the amount you can earn before paying any income tax. This has been frozen since April 2021 and is fixed at £12,570 until at least April 2028. As wages rise but the threshold stays fixed, more people are paying income tax and being pushed into higher rate brackets — a process called fiscal drag. This guide explains the current UK income tax rates, bands, and how to calculate your tax bill for 2026/27.

Key Facts 2026

Personal Allowance 2026/27: £12,570 (frozen until April 2028) | Basic rate: 20% (£12,571-£50,270) | Higher rate: 40% (£50,271-£125,140) | Additional rate: 45% (above £125,140) | Effective 60% rate: £100,000-£125,140

UK Income Tax Rates and Bands 2026/27 — England, Wales & Northern Ireland

Tax Band	Taxable Income Range	Rate	Notes
Personal Allowance	Up to £12,570	0%	Frozen until April 2028
Basic rate	£12,571 to £50,270	20%	Most employees fall partly or wholly in this band
Higher rate	£50,271 to £125,140	40%	Every pound between these levels taxed at 40%
Additional rate	Over £125,140	45%	No Personal Allowance above £125,140
Personal Allowance taper	£100,000 to £125,140	Effective 60% marginal rate	£1 allowance lost for every £2 earned over £100,000 — creates 60% effective rate

UK Income Tax Worked Examples 2026/27

Annual Gross Salary	Income Tax	National Insurance (Employee)	Take-Home Pay (approx)
£15,000	£486	£287	~£14,227
£20,000	£1,486	£924	~£17,590
£30,000	£3,486	£2,124	~£24,390
£35,000	£4,486	£2,724	~£27,790
£50,000	£7,486	£4,924	~£37,590
£60,000	£11,432	£5,324	~£43,244
£80,000	£19,432	£5,724	~£54,844
£100,000	£27,432	£5,924	~£66,644
£125,140	£42,475	£6,077	~£76,588 (all Personal Allowance gone)

Scottish Income Tax Rates 2026/27

Scottish taxpayers pay Scottish Income Tax rates set by the Scottish Parliament, rather than the UK rates. Scottish rates differ significantly from England, Wales, and Northern Ireland. Scottish taxpayers still pay UK NI rates and UK rates on savings and dividend income. Only earned income and pension income is subject to Scottish Income Tax.

Scottish Tax Band	Rate	Income Range
Starter rate	19%	£12,571 to £14,876
Scottish basic rate	20%	£14,877 to £26,561
Intermediate rate	21%	£26,562 to £43,662
Higher rate	42%	£43,663 to £75,000
Advanced rate	45%	£75,001 to £125,140
Top rate	48%	Over £125,140

The £100,000 Income Tax Trap — Effective 60% Marginal Rate UK

One of the most important — and least understood — features of the UK income tax system is the effective 60% marginal rate on income between £100,000 and £125,140. For every £2 earned above £100,000, you lose £1 of your Personal Allowance. This means you pay: 40% income tax on the extra pound earned; plus 40% tax on the pound of allowance lost (effectively taxed again). Combined: 60% effective marginal rate. Salary of £100,000 vs £101,000: the extra £1,000 costs £600 in tax. Legal ways to reduce this: increase pension contributions to bring your adjusted net income below £100,000; give more to charity via Gift Aid; claim allowable deductions.

How to Pay Less Income Tax Legally UK 2026

Use your ISA allowance (£20,000) — gains, dividends, and interest inside an ISA are completely tax-free
Maximise pension contributions — pension contributions reduce your adjusted net income; key for those earning £100,000-£125,140 to recover Personal Allowance
Marriage allowance — if one partner earns under £12,570 and the other pays basic rate tax, transfer £1,260 of allowance; saving up to £252/year
Salary sacrifice — employer schemes allow you to sacrifice salary for pension contributions or other benefits, reducing both income tax and National Insurance
Gift Aid on charitable donations — basic rate relief is added to the charity's income; higher rate taxpayers reclaim the difference via Self-Assessment
Claim all allowable work expenses — HMRC allows claims for work-related equipment, professional subscriptions, and home working allowance (£6/week)

Frequently Asked Questions

What is the UK Personal Allowance 2026/27?

The Personal Allowance for 2026/27 is £12,570 — the amount you can earn before paying any income tax. This has been frozen at £12,570 since April 2021 and is confirmed frozen until at least April 2028. The freeze means that as wages increase, more people pay income tax and more earnings are subject to higher rates — a process called fiscal drag.

What are the UK income tax bands for 2026/27?

For England, Wales, and Northern Ireland in 2026/27: Personal Allowance (0%): up to £12,570; Basic rate (20%): £12,571-£50,270; Higher rate (40%): £50,271-£125,140; Additional rate (45%): over £125,140. Scottish taxpayers pay different rates set by the Scottish Parliament. National Insurance is charged separately and is not part of income tax.

Why is the 60% marginal tax rate a trap UK?

Between £100,000 and £125,140, every £2 of additional income causes the loss of £1 of Personal Allowance. This creates an effective 60% marginal rate on income in this range: 40% tax on the income earned, plus 40% tax on the lost allowance. The best way to avoid this is to make additional pension contributions that reduce your 'adjusted net income' below £100,000.

How do I avoid paying higher rate tax UK?

To avoid the higher rate (40%) on income over £50,270: make pension contributions above your employer's default (each £1 of pension contribution reduces adjusted net income by £1); use salary sacrifice schemes; maximise ISA contributions (ISA income/gains not counted towards the threshold); ensure you are claiming all allowable work expenses and professional subscriptions.

Related Guides

Sources: HMRC, GOV.UK income tax rates, Scottish Parliament, HM Treasury, MoneyHelper. Tax rates confirmed for 2026/27.. Always compare before buying. April 2026.