Understanding how UK Income Tax is calculated is essential for every taxpayer. The UK uses a progressive tax system, meaning the more you earn, the higher your tax rate. In this comprehensive guide, we walk you through the tax bands, thresholds, and allowances for the 2026/27 tax year.
UK Income Tax Bands & Rates (2026/27)
For the 2026/27 tax year, the standard tax-free Personal Allowance remains capped at £12,570. Any income above this threshold is divided into progressive taxable bands:
| Tax Band | Taxable Income Range | Income Tax 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% |
To calculate your precise take-home pay based on these thresholds and custom pension deductions, use our interactive Income Tax Calculator.
Frequently Asked Questions (FAQ)
Q: What is the Personal Allowance for 2026/27?
A: The standard Personal Allowance is £12,570. This is the amount of income you can earn before paying any Income Tax.
Q: How does the higher rate threshold work?
A: You pay 40% tax on the portion of your earnings that falls between £50,271 and £125,140. You do not pay 40% on your entire salary.
Q: Does my Personal Allowance taper down?
A: Yes, if your adjusted net income exceeds £100,000, your Personal Allowance decreases by £1 for every £2 earned above £100,000. It disappears completely at £125,140.
Q: Do these bands apply to Scotland?
A: No, Scotland has separate income tax bands and rates, ranging from 19% to 48%. Our calculator supports Scottish tax code checks.
Q: How is rental income taxed?
A: Rental income is added to your non-savings income and taxed according to your marginal tax bands. Expenses can be offset subject to Section 24 restrictions.