What Is UK Income Tax?
Income tax is a tax on your earnings, paid to HM Revenue & Customs (HMRC). In the UK, most employees pay income tax through the Pay As You Earn (PAYE) system, meaning it's deducted automatically from your salary before you receive it. You don't need to fill in a tax return unless you have additional income sources.
For the 2026/26 tax year (6 April 2026 – 5 April 2026), the key income tax thresholds and rates remain unchanged from 2024/25 due to the government's decision to freeze thresholds until 2028.
💡 Quick tip: Use our free UK salary calculator to instantly see how much income tax you'll pay on your specific salary, including a full band-by-band breakdown.
UK Income Tax Rates & Bands 2026/26
Income tax in England, Wales and Northern Ireland is charged at the following rates for 2026/26:
| Tax Band | Taxable Income | Tax 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 | Over £125,140 | 45% |
Source: HMRC – Income Tax rates and Personal Allowances
The Personal Allowance
The personal allowance is the amount of income you can earn before you start paying income tax. For 2026/26, this is £12,570. The personal allowance has been frozen at this level since April 2021 and will remain frozen until at least April 2028.
Tapered Personal Allowance
If you earn over £100,000, your personal allowance is gradually reduced. For every £2 you earn over £100,000, you lose £1 of your personal allowance. This means:
- At £100,000: full allowance of £12,570
- At £112,570: personal allowance reduced to £6,285
- At £125,140: personal allowance is £0 (completely withdrawn)
This creates an effective marginal tax rate of 60% on income between £100,000 and £125,140 – making pension contributions particularly valuable for those in this bracket.
How PAYE Works
Pay As You Earn (PAYE) is the system HMRC uses to collect income tax from employed workers. Your employer calculates and deducts tax from each pay packet using your tax code.
Your Tax Code
Your tax code tells your employer how much tax to deduct. The most common tax code is 1257L, which means you have a personal allowance of £12,570 (1257 × £10 = £12,570). The 'L' suffix indicates you're entitled to the standard personal allowance.
Income Tax Calculation Examples
Example 1: £30,000 Salary (England)
- Personal Allowance: £12,570 (0% tax)
- Taxable income: £30,000 − £12,570 = £17,430
- Income tax at 20%: £17,430 × 20% = £3,486
Example 2: £60,000 Salary (England)
- Basic rate (£12,571–£50,270): £37,700 × 20% = £7,540
- Higher rate (£50,271–£60,000): £9,730 × 40% = £3,892
- Total income tax: £11,432
🧮 Calculate your exact tax: For personalised results including National Insurance, pension and student loan, use our UK Salary Calculator — free and instant.
Income Tax for Scottish Taxpayers
If you live in Scotland, you pay Scottish income tax at different rates set by the Scottish Parliament. Scotland has more income tax bands than the rest of the UK. See our Scotland income tax guide for full details.
How to Reduce Your Income Tax
There are several legal ways to reduce the amount of income tax you pay:
- Pension contributions – workplace and personal pension contributions reduce your taxable income. Learn more about pension tax relief →
- Salary sacrifice – exchanging part of your salary for tax-free benefits like pension, childcare vouchers or a company bike. Read our salary sacrifice guide →
- Marriage Allowance – if your partner earns less than the personal allowance, you can transfer up to £1,260 of your allowance to them
- Gift Aid donations – charitable donations through Gift Aid are deducted from your taxable income
- Blind Person's Allowance – an extra tax-free allowance of £3,070 for registered blind people
Frequently Asked Questions
Do I need to file a tax return?
Most UK employees don't need to file a Self Assessment tax return if all their income is taxed through PAYE. You may need to file if you're self-employed, earn over £100,000, have untaxed income, or claim certain tax reliefs.
When does the 2026/26 tax year start?
The UK tax year runs from 6 April to 5 April the following year. The 2026/26 tax year runs from 6 April 2026 to 5 April 2026.
What is the emergency tax code?
The emergency tax code is 1257L W1/M1. This is applied when HMRC doesn't have enough information about your income, often when starting a new job. It means you're only given a weekly or monthly allowance rather than the full annual allowance.
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