The UK uses a progressive income tax system with three main bands: 20% basic rate (£12,571-£50,270), 40% higher rate (£50,271-£125,140), and 45% additional rate (over £125,140). The £12,570 Personal Allowance is tax-free—but disappears between £100,000-£125,140 income, creating a brutal 60% effective rate in that band. On top of income tax, you pay National Insurance: 8% on earnings £12,570-£50,270, then 2% above (rate cut from 12% to 8% in April 2024). A £75,000 earner pays roughly £17,432 income tax + £3,511 NI = £20,943 total (~28%). Scotland has different rates—including a 42% higher band from £43,663. Use our calculator to estimate your UK tax liability.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
Source: HM Revenue & Customs
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UK income tax has three main bands for 2025/26: 20% basic rate on income £12,571-£50,270, 40% higher rate on £50,271-£125,140, and 45% additional rate on income over £125,140. The first £12,570 is your tax-free Personal Allowance. National Insurance adds 8% (then 2% above £50,270) on top of these rates—NI was cut from 12% to 8% in April 2024.
Between £100,000 and £125,140, you lose £1 of Personal Allowance for every £2 you earn. This means you're effectively paying 40% income tax PLUS losing £12,570 of tax-free allowance. The marginal rate in this band hits 60%. Pension contributions are the main way to avoid this trap—they reduce your adjusted net income.
Employees pay Class 1 NI: 8% on earnings between £12,570-£50,270 per year, then 2% on everything above (rate was cut from 12% to 10% in January 2024, then to 8% from April 2024). Self-employed pay Class 4 NI: 6% on profits £12,570-£50,270, then 2% above. A £75,000 employee pays roughly £3,511 in NI annually. NI funds your State Pension and certain benefits.
For the 2025/26 tax year (April 6, 2025 - April 5, 2026): paper returns are due by October 31, 2026; online Self Assessment returns are due by January 31, 2027. Most employees don't need to file—PAYE handles it automatically. Self-employed, landlords, and those earning over £150,000 must file.
Yes, Scotland sets its own income tax rates. For 2025/26: 19% starter rate (£12,571-£14,876), 20% basic (£14,877-£26,561), 21% intermediate (£26,562-£43,662), 42% higher (£43,663-£75,000), 45% advanced (£75,001-£125,140), and 48% top rate (over £125,140). Scottish rates are generally higher than rest of UK.
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Last Updated: April 2026