Individual Tax Rate 2025 – UK Band , Allowance & Calculator
Understanding how much income tax you will pay in the 2025/26 tax year starts with knowing the rates, bands, and allowances that apply. For most people in England, Wales, and Northern Ireland, the system remains straightforward: a tax-free personal allowance followed by three progressive rates. In Scotland, the structure is more nuanced, with six bands that increase gradually from a starter rate of 19% to a top rate of 48%. This guide breaks down each element using official figures so you can see exactly where you stand.
The 2025/26 tax year runs from 6 April 2025 to 5 April 2026. Rates and thresholds were confirmed by HM Treasury and HMRC, and they are largely unchanged from the previous year. This continues a period of frozen allowances and bands that began in April 2021, a policy designed to raise revenue without increasing headline rates. For individual taxpayers, the implications depend on income level, location, and whether certain reliefs or deductions apply.
What are the UK income tax rates for 2025/26?
For residents of England, Wales, and Northern Ireland, three main rates apply after the personal allowance. The basic rate of 20%, the higher rate of 40%, and the additional rate of 45% are levied on taxable income above £12,570. These bands are set by the UK government and apply to employment income, pensions, rental income, and most savings and dividends above separate allowances.
Basic 20%, Higher 40%, Additional 45% on income above the personal allowance.
£12,570 – tax-free zone; reduces by £1 for every £2 over £100,000.
Step-by-step method to compute your liability for the 2025/26 tax year.
Rates have remained unchanged since 2023/24 with frozen allowances extended through 2027/28.
Key insights for 2025/26
- Personal allowance remains frozen at £12,570 for 2025/26, extended through 2027/28.
- Basic, higher, and additional rate bands unchanged from 2024/25.
- Additional rate starts at £125,140 – income above that threshold is taxed at 45%.
- Taxpayers earning over £100,000 lose £1 of allowance per £2 of income above that threshold.
- Scottish residents face different bands; the starter, basic, intermediate, higher, and top rates differ from UK-wide rates.
- No major tax rate changes have been announced for 2025/26, continuing a period of fiscal drag.
Snapshot of rates and allowances
| Item | Value |
|---|---|
| Personal Allowance | £12,570 (0% tax) |
| Basic Rate (20%) | £12,571 – £50,270 |
| Higher Rate (40%) | £50,271 – £125,140 |
| Additional Rate (45%) | Over £125,140 |
| Personal Allowance Taper | Loss of £1 for every £2 above £100,000 |
| Scottish Starter Rate (19%) | £12,571 – £16,537 |
| Scottish Basic Rate (20%) | £16,538 – £29,526 |
| Scottish Intermediate Rate (21%) | £29,527 – £43,662 |
| Scottish Higher Rate (42%) | £43,663 – £75,000 |
| Scottish Top Rate (48%) | Over £125,140 |
These figures are published on GOV.UK and in other 2025/26 tax references. The Scottish bands shown are widely cited; note that one published source presents slightly different thresholds when rounded, but the rate structure is consistent across official and advisory materials.
What is the personal tax allowance for 2025/26?
The standard Personal Allowance is £12,570. This is the amount of income on which no income tax is payable. It applies to all taxpayers regardless of region, though the allowance can be reduced or eliminated for high earners.
For every £2 of adjusted net income above £100,000, the allowance is reduced by £1. This means that at £125,140 of income, the personal allowance reaches zero. Taxpayers with income between £100,000 and £125,140 therefore face an effective marginal rate of 60% on that portion, because they lose the allowance at the same time as paying higher or additional rate tax.
The personal allowance taper creates a 60% effective marginal tax rate on income between £100,000 and £125,140. This happens because every £2 of extra income not only attracts 40% or 45% tax but also removes £1 of the tax-free allowance, adding an extra 20% tax on that £2. The result is a steep rise in the actual tax rate for this income range.
The allowance and taper rules are detailed in HMRC’s rates and thresholds for employers and in advisory guidance from St. James’s Place. These sources confirm the £12,570 figure and the taper mechanism.
How to calculate individual tax for 2025?
Calculating your income tax liability for 2025/26 requires a few clear steps. The process differs slightly depending on whether you are a Scottish taxpayer for non-savings, non-dividend income, or a taxpayer in England, Wales, or Northern Ireland.
Step 1: Determine your total taxable income
Add up all income subject to tax: salary, self-employment profits, pensions, rental income, and savings or dividends above the relevant allowances. Do not deduct the personal allowance at this stage.
Step 2: Subtract the personal allowance
If your adjusted net income is £100,000 or less, deduct the full £12,570. If it is between £100,001 and £125,139, reduce the allowance by £1 for every £2 above £100,000. If it is £125,140 or more, the personal allowance is zero.
Step 3: Apply the appropriate band rates
For taxpayers in England, Wales, and Northern Ireland, the remaining taxable income is taxed at 20% up to £50,270, 40% from £50,271 to £125,140, and 45% above that. For Scottish taxpayers, use the six-band structure shown in the table above. A simple comparison is: England, Wales, and Northern Ireland use three rates (20%, 40%, 45%), while Scotland uses six (19%, 20%, 21%, 42%, 45%, 48%).
If you live in Scotland, your non-savings, non-dividend income is taxed using Scottish bands and rates. The starter rate of 19% applies to the first slice above the personal allowance, and the top rate of 48% applies to income above £125,140. Savings and dividends continue to be taxed at UK-wide rates.
HMRC provides an official tax calculator that can handle these calculations automatically. It accounts for personal allowance, your location, and other variables such as Marriage Allowance or Blind Person’s Allowance.
What were the UK income tax rates for 2023/24 and 2024/25?
Income tax rates for the two previous tax years were identical to those for 2025/26. The personal allowance stood at £12,570 in both 2023/24 and 2024/25, and the basic, higher, and additional rate bands remained constant. The additional rate threshold was cut from £150,000 to £125,140 from April 2023, which is why it starts at that level in 2025/26.
The freeze on personal allowance and higher rate threshold was originally due to end in April 2026 but was extended until April 2028. This was confirmed in the Autumn Statement 2022 and subsequent fiscal events. The decision means that as wages rise over time, more people enter higher tax brackets without any deliberate change to the rates themselves.
Because thresholds are frozen while earnings tend to increase, a growing number of taxpayers are paying higher rates each year. This phenomenon, known as fiscal drag, effectively raises revenue for the government without increasing tax rates. It particularly affects those whose incomes cross the £50,270 or £100,000 thresholds during the freeze period.
According to analysis from Deloitte’s TaxScape, the freeze on personal allowance and higher rate threshold extended until April 2028, meaning no automatic uprating for inflation or earnings growth for at least seven years.
What are the UK income tax rates for 2026/27?
Official rates for 2026/27 have not yet been confirmed by HM Treasury or HMRC. The current expectation, based on the extended freeze announced in 2022, is that the personal allowance will remain at £12,570 and the main rate bands will stay unchanged through to April 2028. The additional rate threshold is also expected to remain at £125,140.
However, future fiscal events such as the Autumn Budget could alter these projections. The Scottish government also sets its own bands annually through the Scottish Budget, so Scottish rates for 2026/27 will be confirmed separately, typically in December 2025 or early 2026.
- 2023/24: Personal allowance frozen at £12,570; additional rate remained 45%.
- 2024/25: No changes to rates – thresholds unchanged.
- 2025/26: Rates and allowances remain frozen (confirmed in Spring Budget 2025).
- 2026/27: Projected continuation of freeze; official rates not yet confirmed.
How certain are the 2025/26 tax rates and allowances?
| Established information | Information that remains unclear |
|---|---|
| 2025/26 tax rates and allowances are confirmed by HM Treasury and HMRC. | 2026/27 rates are not yet officially set; current projections assume extension of freeze. |
| Personal allowance is £12,570; basic, higher, and additional rates are 20%, 40%, and 45%. | Scottish rates for 2025/26 are still provisional until the Scottish Budget is approved. |
| The taper reduces allowance by £1 for every £2 above £100,000, reaching zero at £125,140. | Future changes to the taper or allowance levels after 2027/28 have not been announced. |
The confirmed rates for 2025/26 are published on GOV.UK and supported by multiple advisory sources including MoneySavingExpert. The Scottish figures are consistent across official and professional references, though one source presents slightly different numerical thresholds when rounded.
What does the freeze on tax thresholds mean for UK taxpayers?
The extended freeze on personal allowance and tax bands pushes more taxpayers into higher brackets as wages rise. This policy, known as fiscal drag, increases government revenue without raising rates explicitly. For a taxpayer whose salary increases from £50,000 to £55,000, the entire rise is taxed at 40% rather than 20%, because the basic rate band is frozen at £50,270.
High earners face a particularly steep marginal rate. On income between £100,000 and £125,140, the combination of personal allowance withdrawal and higher rate tax produces an effective rate of 60%. Above £125,140, the additional rate of 45% applies, but the allowance has already been fully withdrawn.
Scottish taxpayers pay more income tax on average than those in the rest of the UK. The intermediate rate of 21% and the higher rate of 42% apply at lower income levels, and the top rate of 48% is three percentage points above the UK-wide additional rate. This means a Scottish earner on £50,000 pays more than an English earner on the same salary.
For broader personal finance context, readers may find the guide on Student Scholarship Opportunities – Complete UK Guide useful, as well as information on Unfair Dismissal Claim – 2-Year Rule to 6 Months in 2027, which cover related UK-specific financial and employment topics.
Where can I find official UK government information about individual tax rates for 2025?
The most authoritative source is GOV.UK’s income tax rates page, which provides the official rates, allowances, and guidance for all regions. The House of Commons Library also publishes a detailed research briefing, Direct taxes: Rates and allowances for 2025/26, which includes policy background and historical context.
“For 2025/26 the basic rate will remain at 20%, the higher rate at 40%, and the additional rate at 45%.”
– HM Government, Income Tax rates and Personal Allowances
“The personal allowance for 2025/26 is unchanged at £12,570. All main rates are frozen.”
– House of Commons Library, Direct taxes: Rates and allowances for 2025/26
For Scottish-specific rates, the Scottish Government publishes its income tax bands on gov.scot. Professional advisory sites such as St. James’s Place and MoneySavingExpert also provide clear summaries of the rates and allowances.
What should taxpayers know about the 2025/26 tax year?
The main takeaway is that rates and allowances are unchanged from the previous year, continuing a period of frozen thresholds that began in April 2021. Taxpayers should check whether their income has crossed any band boundaries due to salary increases, and high earners should be particularly aware of the personal allowance taper between £100,000 and £125,140. For those in Scotland, the six-band structure means a higher overall tax burden compared to the rest of the UK.
Frequently asked questions about UK income tax rates 2025/26
What is the difference between UK and Scottish income tax rates?
The UK-wide rates for England, Wales, and Northern Ireland are 20%, 40%, and 45%. Scotland uses six bands: 19%, 20%, 21%, 42%, 45%, and 48%, with lower thresholds for the higher rates.
How does the personal allowance taper work in practice?
For every £2 of income above £100,000, you lose £1 of your tax-free allowance. At £125,140 the allowance reaches zero, creating an effective 60% marginal tax rate on that income range.
What is fiscal drag and how does it affect me?
Fiscal drag occurs when tax thresholds are frozen while incomes rise. More people move into higher tax bands without any change to the rates, increasing the total tax they pay.
Are there any changes to National Insurance for 2025/26?
National Insurance rates and thresholds are separate from income tax. The article focuses on income tax only; NI rates for 2025/26 are set by separate legislation and are not covered here.
Do I need to file a self assessment tax return for 2025/26?
Most employees with straightforward tax affairs do not need to file a return. You may need to if you are self-employed, have income over £100,000, or owe tax on savings or dividends above the allowances.
What happens if I earn between £100,000 and £125,140?
You lose part of your personal allowance, meaning you pay 40% or 45% on most of your income plus an extra 20% effective rate from the allowance reduction. The combined marginal rate is 60%.
Can I transfer my personal allowance to my spouse?
Yes, through the Marriage Allowance. If you earn less than £12,570 and your spouse earns less than £50,270, you can transfer up to £1,260 of your unused allowance to them, reducing their tax bill.
Are the Scottish tax rates for 2025/26 final?
Scottish rates are confirmed by the Scottish Government but are still provisional until the Scottish Budget receives parliamentary approval. Current figures are based on published government statements.
What should I do if my income changes during the tax year?
If your income increases or decreases significantly, you can ask HMRC to adjust your tax code. This ensures the right amount of tax is collected through PAYE rather than requiring a lump sum later.
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