UK income tax 2026/27: personal allowance and bands
The bands, the personal allowance and its taper, and the one thing that catches people out — this guide describes rest-of-UK rates, and Scotland is different.
Earlier years. The same allowance and bands applied in 2024/25 and 2025/26: the thresholds are frozen, so a figure worked out for either of those years with these numbers is still right. Check HMRC's page for any later change.
What the rule is
Income tax is charged at the basic rate on income up to the basic rate limit, at the higher rate above that limit and up to the higher rate limit, and at the additional rate above the higher rate limit.
The personal allowance is deducted first. What remains is taxable income, and the bands apply to that figure rather than to gross income — which is the single most common arithmetic error in a hand calculation.
Who it applies to
Individuals resident in England, Wales or Northern Ireland. Scotland sets its own income tax bands, and a Scottish taxpayer on the same income pays a different amount. TaxOrch models rest-of-UK rates, so a Scottish computation is outside what this guide and the calculator describe.
How it is calculated
Deduct the personal allowance
£12,570, reduced by £1 for every £2 of income above £100,000. At £125,140 it is gone entirely.
Apply the basic rate
20% on the first £37,700 of taxable income.
Apply the higher rate
40% on taxable income between £37,700 and £125,140.
Apply the additional rate
45% above £125,140.
On £60,000 of employment income, that is £11,432 — an effective rate of 19.05% and a marginal rate of 40%. The bands are what make those two numbers different, and quoting one when someone asked for the other is a common source of confusion.
The deadlines
| What | When | Note |
|---|---|---|
| Online Self Assessment | 31 January | For the year ending 5 April |
| Paper Self Assessment | 31 October | Earlier than the online deadline |
| Balancing payment | 31 January | Same date as the online return |
Common mistakes
- Applying the bands to gross income. They apply to taxable income, after the allowance.
- Missing the taper. Between £100,000 and £125,140 each extra pound of income costs 40p in tax and removes 50p of allowance, taxed at 40% — an effective 60% on that slice.
- Assuming Scotland is the same. It is not, and the difference is material.
- Using last year's bands. Thresholds move. This guide is stated as at 6 April 2026; check the date at the top before relying on it.
What this rests on
- 1Income Tax Act 2007 — s.10UK Parliamentin force from 6 April 2007
- 2Income Tax rates and Personal Allowances — 2026 to 2027HMRCin force from 6 April 2026
Locators, not document titles. A citation naming the act without naming the section is not one anybody can check.
Where this fits
- The calculation engineWhere individual income tax is covered in depth
- Coverage for United KingdomIts disclosed limitation: Rest-of-UK rates. Scotland has different income tax bands.
- UK MTD quarterly update review checklist 2026Also about United Kingdom
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