Income tax — UK rates — Finance Wise Accounting

2026/27

Income tax — England, Wales, NI (non-savings/non-dividend)

Income tax — England, Wales, NI (non-savings/non-dividend) — bands and rates
Band	Rate	Notes
Up to £37,700	20%	Basic rate
£37,701 – £125,140	40%	Higher rate
Over £125,140	45%	Additional rate

Personal allowance£12,570 Tapered by £1 for every £2 over £100,000
Marriage allowance£1,260
Blind person's allowance£3,250
Savings allowance — basic rate£1,000
Savings allowance — higher rate£500
Dividend allowance£500

Income tax — Scotland (non-savings/non-dividend)

Income tax — Scotland (non-savings/non-dividend) — bands and rates
Band	Rate	Notes
Up to £3,967	19%	Starter
£3,968 – £16,956	20%	Basic
£16,957 – £31,092	21%	Intermediate
£31,093 – £62,430	42%	Higher
£62,431 – £125,140	45%	Advanced
Over £125,140	48%	Top

Scottish rates apply to non-savings, non-dividend income only.

2025/26

Income tax — England, Wales, NI

Income tax — England, Wales, NI — bands and rates
Band	Rate	Notes
Up to £37,700	20%	Basic rate
£37,701 – £125,140	40%	Higher rate
Over £125,140	45%	Additional rate

Personal allowance£12,570
Dividend allowance£500

Income tax — England & Wales

Income tax — England & Wales — bands and rates
Band	Rate	Notes
Up to £37,700	20%	Basic rate
£37,701 – £125,140	40%	Higher rate
Over £125,140	45%	Additional rate

Personal allowance£12,570 Tapered above £100k

Understanding UK income tax rates

Income tax is charged on most income — employment, self-employment, pensions, rental profits and savings above the allowances. Everyone has a tax-free personal allowance, then income is taxed in bands at the basic, higher and additional rates. The tables above show the current-year rates and thresholds for England, Wales and Northern Ireland; Scotland sets its own bands.

Careful use of allowances, pension contributions and the timing of income can keep you in a lower band. Our personal tax service handles this for individuals, directors and landlords.

The bands are not the whole story

Two things make the effective rate differ from the band you are in. The personal allowance is withdrawn above £100,000 at a rate of £1 for every £2 of income, which creates a stretch where each extra pound is taxed at an effective rate roughly double the headline one — and where a pension contribution or a salary sacrifice is worth far more than usual.

The second is that not all income is taxed the same way. Savings interest and dividends have their own allowances and their own rates, and they sit on top of your other income when deciding which band they fall in. Two people with identical total income can pay very different tax depending on what it is made of.

Scotland sets its own bands and rates for non-savings income, so a Scottish taxpayer reads a different table for salary but the same one for dividends and savings.

Frequently asked

What is the personal allowance?+

It is the amount of income you can receive tax-free each year. It tapers away once income exceeds £100,000, so effective rates can be higher in that band.

Do dividends and savings have different rates?+

Yes — dividends and savings income have their own allowances and rates. See our dividend tax page and speak to us for planning.

Why does earning more sometimes cost most of the extra?+

Between £100,000 and the point the personal allowance runs out, every £2 of extra income removes £1 of allowance, so the extra pound is taxed and it also exposes a pound that was previously tax-free. The effective rate in that band is roughly double the headline rate, which is why pension contributions are unusually efficient there.

Are dividends taxed before or after my salary?+

After. Dividends are treated as the top slice of income, so which dividend rate applies depends on how much other income you have. That is also why taking a little more salary can push dividends into a higher band.