For the 2025/26 tax year, running 6 April 2025 to 5 April 2026, the UK income tax thresholds for 2025/26 start with a Personal Allowance of £12,570. Above that, income is taxed at 20%, 40%, and 45% in England, Wales, and Northern Ireland. Scotland runs its own six-band system with rates from 19% to 48%. The Personal Allowance also tapers away once income passes £100,000, disappearing entirely at £125,140.
The Personal Allowance
You can earn up to £12,570 before paying any income tax. That figure has been frozen since April 2021, and legislation now keeps it at £12,570 through April 2031.1GOV.UK. Income Tax: Maintaining the Personal Allowance and the Basic Rate Limit for Income Tax Because wages tend to rise while the allowance stays flat, more income drifts into taxable bands each year.
Your tax code tells your employer how much of your pay to treat as tax-free under PAYE. Some people qualify for more: the Blind Person’s Allowance adds £3,130 on top of the standard figure.2GOV.UK. Blind Person’s Allowance
Rates and Bands in England, Wales, and Northern Ireland
Above the Personal Allowance, income is taxed in slices. Each rate applies only to the portion of income that falls within its band, not to your whole salary. For 2025/26:3GOV.UK. Income Tax Rates and Allowances for Current and Previous Tax Years
- Basic rate of 20% on taxable income up to £37,700, which covers total earnings of £12,571 to £50,270.
- Higher rate of 40% on taxable income from £37,701 to £125,140, covering total earnings of £50,271 to £125,140.
- Additional rate of 45% on taxable income above £125,140.
A worked example makes the slicing clear. On a £60,000 salary, the first £12,570 is tax-free, the next £37,700 is taxed at 20% (£7,540), and the remaining £9,730 is taxed at 40% (£3,892). Total income tax: £11,432. The 40% rate only bites the portion above £50,270.
Scottish Income Tax Bands
If you live in Scotland, the Scottish Parliament sets the rates and bands above the Personal Allowance under powers devolved by the Scotland Act 2016. The £12,570 allowance still applies, but everything above it runs through six bands rather than three:4GOV.UK. Income Tax in Scotland
- Starter rate of 19% on £12,571 to £15,397.
- Basic rate of 20% on £15,398 to £27,491.
- Intermediate rate of 21% on £27,492 to £43,662.
- Higher rate of 42% on £43,663 to £75,000.
- Advanced rate of 45% on £75,001 to £125,140.
- Top rate of 48% on income above £125,140.
Scottish taxpayers pay slightly less than those elsewhere in the UK at lower incomes because of the 19% starter rate. The gap reverses higher up: the 42% higher rate begins at £43,663 rather than £50,271, and the 48% top rate exceeds the 45% additional rate charged in the rest of the UK. Scottish tax codes carry an “S” prefix so payroll applies the right bands.
The £100,000 Taper
Once your adjusted net income passes £100,000, you lose £1 of Personal Allowance for every £2 of income above that mark.5GOV.UK. Income Tax Rates and Personal Allowances By £125,140, the whole £12,570 allowance is gone.
Inside that £100,000 to £125,140 band, the effect stings. You pay 40% on the earnings themselves and lose allowance worth another 20% on the same slice, producing an effective marginal rate of around 60%. A pay rise from £99,000 to £105,000 can look surprisingly thin once the tax comes off, and missing this is a common cause of unexpected Self Assessment bills.
The taper works the same way in Scotland, though income above £125,140 there is taxed at the 48% top rate rather than 45%.4GOV.UK. Income Tax in Scotland
Marriage Allowance
If you are married or in a civil partnership and one partner earns less than £12,570, the lower earner can transfer £1,260 of unused Personal Allowance to the other.6GOV.UK. Marriage Allowance The receiving partner must be a basic rate taxpayer in England, Wales, or Northern Ireland, or paying the starter, basic, or intermediate rate in Scotland. The saving is worth up to £252 a year, and a claim can be backdated up to four tax years.
Dividend and Savings Allowances
The Dividend Allowance for 2025/26 is £500. The first £500 of dividend income is tax-free regardless of your band; above that, rates depend on where your total income sits:7GOV.UK. Income Tax: Reducing the Dividend Allowance
- 8.75% for basic rate taxpayers.
- 33.75% for higher rate taxpayers.
- 39.35% for additional rate taxpayers.
This allowance was £2,000 until April 2023, dropped to £1,000, then halved again to £500 from April 2024. Modest share portfolios held outside an ISA can now produce taxable dividend income.
The Personal Savings Allowance is separate. Basic rate taxpayers can earn up to £1,000 in savings interest tax-free, higher rate taxpayers get £500, and additional rate taxpayers get nothing.8GOV.UK. Tax on Savings Interest: How Much Tax You Pay With interest rates well above their recent lows, more savers are exceeding these limits.
National Insurance Thresholds
National Insurance is a separate deduction, but its thresholds line up closely enough with income tax that most people meet both at once. For employees in 2025/26, contributions start at the primary threshold of £242 a week, or £12,570 a year. The rate is 8% on earnings between the primary threshold and the upper earnings limit of £967 a week (£50,270 a year), then 2% above that.9GOV.UK. National Insurance Rates and Categories: Contribution Rates
Employer National Insurance changed in April 2025. The employer rate rose to 15% from 13.8%, and the secondary threshold dropped to £96 a week, roughly £5,000 a year. That does not come out of your pay directly, but it affects hiring costs and may feed through into pay decisions.