The 2026/27 bands (England, Wales and Northern Ireland)
| Band | Taxable income | 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% |
Note the distinction that confuses payslips: the bands above are gross income bands with the standard allowance. Expressed as taxable income after the allowance, the basic-rate band is £37,700 wide and the higher-rate band £87,440 wide — the same tax, measured from a different starting line.
Two worked examples
£30,000 salary: taxable income is £30,000 − £12,570 = £17,430, all at 20%, giving £3,486 of Income Tax for the year. £60,000 salary: the first £37,700 of taxable income is taxed at 20% (£7,540) and the remaining £9,730 at 40% (£3,892), totalling £11,432. National Insurance is separate and is not reduced by the Personal Allowance — that is why take-home pay is always lower than the Income Tax figure alone suggests.
The taper trap between £100,000 and £125,140
Earn £110,000 and your allowance falls by £5,000 (half of the £10,000 above £100,000), leaving £7,570 tax-free. That £5,000 of lost allowance is itself taxed at 40%, adding £2,000 of tax on top of the 40% on the income — an effective 60% marginal rate across the taper zone. Pension contributions and Gift Aid donations reduce adjusted net income and can restore allowance, which is why the taper zone is where pension advice pays for itself. At £125,140 the allowance hits zero and the marginal rate falls back to 40% (then 45% above £125,140 of taxable income).
The freeze, and why it matters more every year
The allowance was £12,500 in 2020/21, rose to £12,570 in 2021/22, and has not moved since. With wages rising and the threshold frozen, more income is dragged into tax each year — fiscal drag — and more people cross into the higher-rate band without any real-terms pay rise. The freeze has been extended to April 2031, so the £12,570 figure is worth planning around rather than waiting to change. For your own after-tax figure, run the take-home pay calculator with your salary and pension contribution.