UK Income Tax Explained (2025/26 Tax Year)
UK income tax is administered by HM Revenue and Customs (HMRC). The tax year runs from 6 April to 5 April. Most employees pay through Pay As You Earn (PAYE), where tax is deducted automatically from salary.
2025/26 Tax Bands — England, Wales & Northern Ireland
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Above £125,140 | 45% |
Personal Allowance Taper
If your adjusted net income exceeds £100,000, your personal allowance is reduced by £1 for every £2 over the threshold. At £125,140, the personal allowance is completely eliminated. This creates an effective 60% marginal rate on income between £100,000 and £125,140.
Example: On £110,000 income, your personal allowance drops by £5,000 (half of £10,000 over £100k), leaving £7,570 allowance instead of £12,570.
National Insurance (Not Included)
Employees also pay National Insurance contributions on earnings above £12,570. For 2024/25, the main rate is 8% on earnings up to £50,270 and 2% above that. Self-employed individuals pay Class 2 and Class 4 NI at different rates.
Key Dates — 2025/26 Tax Year
- Tax year: 6 April 2025 – 5 April 2026
- Self Assessment deadline: 31 January 2027 (online)
- Payment on account: 31 January and 31 July