The UK Personal Allowance and income tax bands in 2026/27: frozen again, now until 2031
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Nothing about the personal allowance or the basic, higher and additional rate thresholds has changed for 2026/27 — but the freeze that keeps them still has, extended at the Autumn Budget 2025 for three more years.
The personal allowance is £12,570 in 2026/27, the basic rate band runs up to £50,270, and the additional rate starts above £125,140 — all three figures exactly where they have sat since 2021/22. What has changed is not the numbers but the calendar: at the Autumn Budget 2025, the government extended the freeze on these thresholds by a further three years, to 5 April 2031, having said only a year earlier that normal inflation-linked increases would resume from April 2028. For anyone doing payroll or personal tax planning, 2026/27 itself brings no new figures to learn — but it is now clear there is longer to wait before any do.
The rates and thresholds for 2026/27
For England, Wales and Northern Ireland, the standard bands published by HMRC for 2026/27 are:
| Band | Taxable income | 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 | Above £125,140 | 45% |
These are published directly by HMRC on GOV.UK's Income Tax rates and Personal Allowances page. Scotland runs its own set of bands, with six rates between 19% and 48% rather than four — a Scottish taxpayer on the same income can owe a noticeably different amount, and none of the figures above apply north of the border.
Between £100,000 and £125,140, the real rate is 60%
The personal allowance is not simply removed above a threshold; it is withdrawn gradually. HMRC's own guidance is precise: the allowance goes down by one pound for every two pounds of adjusted net income above £100,000, which means it reaches zero exactly at £125,140. Losing one pound of allowance for every two pounds earned means an extra pound of income in that band is taxed at 40% directly, and also pulls fifty pence of allowance into taxable income, which is itself taxed at 40% — 40% plus an extra 20 percentage points, for an effective marginal rate of 60% on income inside that band. It falls back to 45% immediately above £125,140, which is the one point in the system where earning more produces a lower marginal rate than earning slightly less. Pension contributions and Gift Aid donations both reduce adjusted net income and so can pull income back out of this band — worth checking specifically if a salary sits inside it.
To put a figure on how sharply that band bites: someone whose salary rises from £105,000 to £115,000 — a £10,000 pay rise — keeps only £4,000 of it after tax, because £6,000 is lost to the combined effect of higher-rate tax and the shrinking allowance on that slice. The same £10,000 rise taken entirely below £50,270 would have kept £8,000 after 20% basic-rate tax alone — a real difference in take-home pay for an identical size of rise, purely because of where it falls.
A freeze now in its second decade of extensions
The personal allowance and higher rate threshold were first frozen at their 2021/22 levels under legislation passed that year, originally due to last until April 2026. That freeze was extended once already, by the Finance Act 2023, to April 2028. At the Autumn Budget 2025, the government extended it again — this time by three more years, to 5 April 2031 — reversing what the same Chancellor had said in the previous year's Budget, when normal indexation was promised to resume from 2028. The relevant HMRC policy paper sets the Personal Allowance at £12,570 and the basic rate limit at £37,700 — which, added together, give the £50,270 higher rate threshold — for each of 2028/29, 2029/30 and 2030/31. The equivalent National Insurance thresholds stay aligned with it over the same period.
The same policy paper puts a number on what the extension raises. HMRC's own Exchequer impact table shows the newly extended years (2028/29 onward) bringing in an additional £3,365,000,000 in 2028/29, rising to £12,435,000,000 by 2030/31, and states the measure is expected to bring 700,000 more people into paying Income Tax by 2030/31 than if thresholds had instead risen with inflation from 2028/29. Because this extension only bites from 2028/29, it has no separate Exchequer effect in 2026/27 itself — that year was already covered by the earlier freeze.
Why a frozen threshold still raises your tax bill
A frozen threshold costs money even though the rate on the label never changes, through a mechanism usually called fiscal drag. If wages rise with inflation but the point at which higher-rate tax starts does not, more of an unchanged real income each year falls into the band taxed at 40% rather than 20%. Someone whose pay rises in cash terms without any real increase in what it buys can still cross the £50,270 threshold for the first time purely because the threshold stayed still while their payslip did not — with none of the change visible anywhere except a slightly smaller net pay rise than the payslip implied.
What the 2026/27 bands mean for two example salaries
On a salary of £60,000: the first £12,570 is tax-free, the next £37,700 (up to £50,270) is taxed at 20% for £7,540, and the remaining £9,730 is taxed at 40% for £3,892. Total tax: £11,432, leaving £48,568 net — an effective rate of 19.1%, despite a 40% marginal rate applying to the top slice.
On a salary of £110,000, the personal allowance taper applies: adjusted net income is £10,000 above the £100,000 start point, so the allowance falls by £5,000 to £7,570. Working through the bands gives total tax of £33,432 and net income of £76,568 — an effective rate of 30.4%, and a marginal rate of 60% on the last pound earned inside the taper band, well above the 45% additional rate that applies once income clears £125,140 entirely.
| Salary | Tax owed | Net income | Effective rate |
|---|---|---|---|
| £60,000 | £11,432 | £48,568 | 19.1% |
| £110,000 | £33,432 | £76,568 | 30.4% |
The income tax calculator runs this same progressive calculation for any salary, using the 2026/27 UK bands, and shows both the effective and marginal rate together.
What this does and doesn't cover
The figures above are the standard bands for England, Wales and Northern Ireland only, before National Insurance, student loan repayments, pension contributions or any tax code adjustment for benefits or underpayments from a previous year — all of which change the amount that actually leaves a payslip. They also assume the standard tax code and take no account of the Marriage Allowance, which lets a lower earner transfer part of their unused personal allowance to a spouse or civil partner. Anyone with income from dividends, savings interest or self-employment on top of a salary faces a different combination of allowances again, each with its own separate threshold.
Sources
- GOV.UK: Income Tax rates and Personal Allowances
- HMRC: Income Tax — maintaining the Personal Allowance and the basic rate limit until 5 April 2031
This is general information, not tax advice. It covers the standard England, Wales and Northern Ireland bands only — Scotland's rates differ, and individual circumstances such as pension contributions, benefits, student loans or a non-standard tax code all change the amount actually owed. For advice on your own position, speak to a regulated tax adviser or HMRC directly.