The UK Personal Allowance and income tax bands for 2025/26

The UK Personal Allowance stays at £12,570 for the 2025/26 tax year, and the basic, higher and additional rate bands built on top of it are unchanged from 2024/25. Anyone earning over £100,000 loses part of that allowance under a taper that can push the effective marginal tax rate as high as 60% for a stretch of income — a detail that catches more people every year as pay rises while the thresholds themselves stay fixed.

The rates and bands for 2025/26

Four figures set how much income tax is due on a given salary or other taxable income:

None of the four figures moved from 2024/25 to 2025/26. The confirmed rates are published directly by HMRC on GOV.UK: Income Tax rates and Personal Allowances.

Who these rates apply to

The rates above apply to taxpayers in England, Wales and Northern Ireland. Scotland has set its own income tax rates and bands separately from the rest of the UK since 2017, with a larger number of bands and different thresholds, so a Scottish taxpayer's bill is not worked out the same way even though the UK-wide Personal Allowance still forms the starting point for both systems.

How the bands actually apply to a salary

Income tax is progressive: each band's rate applies only to the slice of income that falls inside it, not to the whole salary at once. Someone earning £60,000 a year, with the standard Personal Allowance and no other adjustments, works out like this:

Total income tax due comes to £11,432, leaving £48,568 before any National Insurance or pension deductions. Being pushed into the higher rate band does not mean the whole salary is taxed at 40% — only the portion above £50,270 is, which is a common point of confusion when someone gets a pay rise that crosses a band boundary. The income tax calculator runs this same slice-by-slice calculation for any income and shows the effective rate on the whole amount alongside it.

The Personal Allowance taper for higher earners

Once adjusted net income passes £100,000, the Personal Allowance itself starts shrinking. It falls by £1 for every £2 of income above that threshold, reaching zero once adjusted net income hits £125,140:

"Adjusted net income" is total taxable income after certain reliefs, not gross salary alone, so pension contributions and Gift Aid donations both reduce the figure the taper is measured against. The mechanics of the taper are set out on the same GOV.UK page covering income over £100,000.

Why this creates an effective 60% tax rate

Losing part of a tax-free allowance on top of paying tax at 40% compounds into a much higher effective rate on income earned inside the taper band. Take someone whose income moves from exactly £100,000 to £101,000, a rise of £1,000:

• The extra £1,000 is taxed at 40%, costing £400.
• Because income moved £1,000 over the £100,000 threshold, the Personal Allowance shrinks by £500 — and that £500, previously tax-free, is now taxed at 40% too, costing a further £200.
• Total tax on the £1,000 rise: £600 — an effective marginal rate of 60%.

That 60% rate applies to every pound earned between £100,000 and £125,140, before reverting to the standard 45% additional rate above that point once the allowance has fully disappeared. It is not a separate published tax band — it is simply what the 40% rate and the shrinking allowance add up to when combined.

Why the same figures keep coming up year after year

All four figures above have stayed fixed for several tax years running, rather than rising each April in line with inflation as they once did routinely. Holding a threshold still while wages continue to grow is sometimes called "fiscal drag": nobody's tax rate changes on paper, but more people cross into the higher or additional rate bands over time simply because their pay has risen while the boundary has not moved to keep pace. A worker whose salary tracks general pay growth each year can find themselves paying 40% on a slice of income that would have sat comfortably in the 20% band a few years earlier, without ever receiving what feels like a deliberate tax rise. Because the Personal Allowance is also frozen, the taper band between £100,000 and £125,140 does not move either, so more people drift into the 60% marginal rate over time for the same underlying reason.

Bringing adjusted net income back down

Because the taper is measured against adjusted net income rather than gross salary, contributions that reduce that figure — such as paying more into a workplace or personal pension, or making a Gift Aid donation — can pull someone's adjusted net income back under £100,000 and restore some or all of the allowance. This is a standard, HMRC-recognised way of calculating the figure the taper applies to, not a loophole, and the same GOV.UK guidance above explains exactly which reliefs count. Whether it makes sense for a particular person depends on their wider financial position, which is a question for a regulated financial adviser rather than a general rule. As a rough illustration, someone with a salary of £105,000 and no other adjustments would have £10,070 of Personal Allowance left after the taper; a £5,000 pension contribution would bring their adjusted net income back down to £100,000, restoring the full £12,570 allowance on top of whatever tax relief the contribution itself attracts.

Sources

• GOV.UK: Income Tax rates and Personal Allowances
• GOV.UK: Income Tax rates and Personal Allowances — Income over £100,000

This is general information, not tax advice. Everyone's adjusted net income and eligible reliefs are different. For a decision about your own tax position, check your figures against the current GOV.UK guidance or speak to a regulated tax adviser or accountant.