UK Tax Bands 2025/26: Complete Guide to Income Tax Rates
UK Tax Bands 2025/26: Complete Guide to Income Tax Rates
Understanding UK tax bands is essential for financial planning. This guide covers everything you need to know about income tax rates for the 2025/26 tax year.
Personal Allowance 2025/26
Everyone in the UK gets a Personal Allowance of £12,570 - this is the amount you can earn before paying any income tax.
High Earners Personal Allowance Reduction
If you earn over £100,000, your Personal Allowance reduces by £1 for every £2 you earn above £100,000. This means:
- At £125,140, your Personal Allowance is completely eliminated
- Between £100,000 and £125,140, you effectively pay 60% tax on this band
Income Tax Bands 2025/26
| Tax Band | Rate | Income Range |
|---|---|---|
| Personal Allowance | 0% | £0 - £12,570 |
| Basic Rate | 20% | £12,571 - £50,270 |
| Higher Rate | 40% | £50,271 - £125,140 |
| Additional Rate | 45% | Over £125,140 |
Example Calculations
£30,000 Salary
- Personal Allowance: £12,570 (tax-free)
- Taxable income: £17,430
- Tax at 20%: £3,486
- Total tax: £3,486
£60,000 Salary
- Personal Allowance: £12,570 (tax-free)
- Basic rate (20%): £37,700 × 20% = £7,540
- Higher rate (40%): £9,730 × 40% = £3,892
- Total tax: £11,432
£150,000 Salary
- Personal Allowance: £0 (eliminated)
- Basic rate (20%): £37,700 × 20% = £7,540
- Higher rate (40%): £74,870 × 40% = £29,948
- Additional rate (45%): £37,430 × 45% = £16,843.50
- Total tax: £54,331.50
National Insurance Contributions
National Insurance is calculated separately from income tax:
| Band | Rate | Income Range |
|---|---|---|
| Lower Earnings Limit | 0% | Up to £6,396/year |
| Primary Threshold | 0% | £6,396 - £12,570/year |
| Standard Rate | 8% | £12,570 - £50,270/year |
| Additional Rate | 2% | Over £50,270/year |
Monthly NI Calculation
- Lower threshold: £242.01/month
- Upper threshold: £967/week (£4,189/month)
- 8% on earnings between thresholds
- 2% on earnings above upper threshold
Scottish Tax Rates
Scotland has different tax bands:
| Band | Rate | Income Range |
|---|---|---|
| Personal Allowance | 0% | £0 - £12,570 |
| Starter Rate | 19% | £12,571 - £14,732 |
| Basic Rate | 20% | £14,733 - £25,688 |
| Intermediate Rate | 21% | £25,689 - £43,662 |
| Higher Rate | 42% | £43,663 - £125,140 |
| Top Rate | 47% | Over £125,140 |
Tax Planning Tips
1. Pension Contributions
- Contributions reduce your taxable income
- Basic rate taxpayers get 20% tax relief automatically
- Higher rate taxpayers can claim additional 20% relief
- Additional rate taxpayers can claim additional 25% relief
2. Salary Sacrifice Schemes
- Pension contributions
- Cycle to work schemes
- Electric vehicle schemes
- Childcare vouchers
3. Tax-Free Allowances
- ISA allowance: £20,000/year
- Personal Savings Allowance: £1,000 (basic rate), £500 (higher rate)
- Dividend Allowance: £500/year
- Capital Gains Tax allowance: £3,000/year
Common Tax Code Meanings
- 1257L: Standard tax code (full Personal Allowance)
- BR: Basic Rate - all income taxed at 20%
- D0: Higher Rate - all income taxed at 40%
- NT: No Tax
- K: Emergency tax code (used when tax code is unknown)
Tax Year Dates
The UK tax year runs from 6 April to 5 April the following year.
- 2025/26 tax year: 6 April 2025 - 5 April 2026
- 2024/25 tax year: 6 April 2024 - 5 April 2025
Self-Assessment
You may need to complete Self Assessment if you:
- Earn over £100,000
- Are self-employed
- Have rental income over £2,500
- Have capital gains over the allowance
- Receive foreign income
Getting Help
- Use our UK Salary Calculator to calculate your take-home pay
- Check your tax code on your payslip
- Contact HMRC for tax code queries
- Consult a tax advisor for complex situations
Important: Tax rates and thresholds can change. Always check the latest HMRC guidance for the most up-to-date information.