Income tax bands stay put as £12,570 allowance tapers above £100,000
The standard Personal Allowance is £12,570 for 2026 to 2027, with 20%, 40% and 45% bands, and it tapers to zero at £125,140.
In this article 8 sections
- What are the income tax bands in England, Wales and Northern Ireland?
- How does the Personal Allowance taper?
- What does a basic worked example look like?
- How are dividends, savings and side income treated?
- Who is left out of these bands?
- What was the rule before?
- How can taxpayers check their position?
- When do the property income rates change?
Correct as at 8 November 2026.
The standard Personal Allowance is £12,570 in the 2026 to 2027 tax year, and Budget 2026 rates tables show the same income tax bands carrying into 2027 to 2028.
What are the income tax bands in England, Wales and Northern Ireland?
The current tax year runs from 6 April 2026 to 5 April 2027, and income up to £12,570 is taxed at 0%.
Basic rate tax of 20% applies to income from £12,571 to £50,270, HMRC guidance says, for people with the standard allowance.
The higher rate of 40% covers income from £50,271 to £125,140, and the additional rate of 45% applies to income above £125,140.
The Treasury’s rates and allowances annex states the same bands as taxable income after the allowance: £1 to £37,700 at basic rate, then £37,701 to £125,140 at higher rate.
That annex gives identical bands for 2026 to 2027 and 2027 to 2028, and keeps the income limit for the Personal Allowance at £100,000 in both years.
How does the Personal Allowance taper?
HMRC says the allowance falls by £1 for every £2 of adjusted net income above £100,000, and is zero at £125,140 or more.
The Treasury annex adds that this reduction applies irrespective of date of birth, so older taxpayers are not treated differently.
Take income of £110,000: it is £10,000 over the limit, so the allowance falls by £5,000 to £7,570.
At £125,140, income is £25,140 over the limit, so the full £12,570 is withdrawn and no allowance remains.
What does a basic worked example look like?
HMRC’s previous-year example has £35,000 of income with the standard £12,570 allowance, leaving £22,430 taxed at 20%.
The same arithmetic applies in 2026 to 2027, because the allowance and basic rate are unchanged: 20% of £22,430 is £4,486.
How are dividends, savings and side income treated?
HMRC’s dividend guidance sets a £500 dividend allowance, with rates above it of 10.75% for basic, 35.75% for higher and 39.35% for additional rate taxpayers.
In its example, someone with £3,000 of dividends and £29,570 of wages pays 20% on £17,000 of wages and nothing on the first £500 of dividends.
The remaining £2,500 of dividends in that example is taxed at 10.75%, because the taxable income of £20,000 falls in the basic rate band.
Dividends inside the Personal Allowance are not taxed, and nor are dividends from shares held in an ISA, HMRC says.
The Treasury annex says basic rate taxpayers pay no tax on the first £1,000 of savings income, and higher rate taxpayers on the first £500.
Separate trading and property allowances of up to £1,000 each are available, and someone with both types of income gets £1,000 for each.
HMRC says the trading allowance does not apply to income from a partnership, and the property allowance cannot be used on Rent a Room Scheme income.
Anyone using either allowance must keep a record of their income, HMRC said.
Who is left out of these bands?
Scotland sets its own bands, and the Scottish rates for 2026 to 2027 apply to wages, pensions and most other taxable income.
- Starter rate 19%: £12,571 to £16,537
- Basic rate 20%: £16,538 to £29,526
- Intermediate rate 21%: £29,527 to £43,662
- Higher rate 42%: £43,663 to £75,000
- Advanced rate 45%: £75,001 to £125,140
- Top rate 48%: over £125,140
Dividends and savings interest in Scotland are taxed at the same rates as in the rest of the UK, HMRC says.
No Personal Allowance is given on income over £125,140, whether in Scotland or elsewhere in the UK.
Some people get a larger allowance: Blind Person’s Allowance is added to the Personal Allowance, HMRC said.
Marriage Allowance can reduce a partner’s tax where income is below the standard Personal Allowance, and Married Couple’s Allowance may apply if either partner was born before 6 April 1935.
The income limit for Married Couple’s Allowance is £39,200 for 2026 to 2027, rising to £40,600 for 2027 to 2028, the Treasury annex shows.
What was the rule before?
For 6 April 2025 to 5 April 2026 the standard Personal Allowance was also £12,570, and the basic rate band ran to £50,270.
The higher rate of 40% covered income up to £125,140 in that year, and the allowance was smaller where income topped £100,000.
How can taxpayers check their position?
HMRC says employed people and pensioners can check their Income Tax online to see their Personal Allowance and tax code.
The same service shows how much tax has been paid in the current year and how much is likely to be paid by the year end.
For the trading and property allowances, HMRC says anyone unsure whether they can use them should contact the Income Tax helpline.
When do the property income rates change?
The 2026 to 2027 tax year ends on 5 April 2027, and the 2027 to 2028 year begins on 6 April 2027 with the bands unchanged.
From April 2027, the Treasury annex says, property rates of income tax will be separated from the main rates.
Until then, for 2026 to 2027, property income is charged at the main rates of income tax.
