Tax Bands
The ranges of taxable income to which different income tax rates apply, creating the UK's progressive tax system. In England, Wales, and Northern Ireland for 2026/27 the main bands are: Personal Allowance (0%), Basic Rate (20%), Higher Rate (40%), and Additional Rate (45%). Scotland has a more granular set of bands: Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), Advanced (45%), and Top (48%).
How it works
Tax bands work by taxing only the slice of income that falls within each band, not your whole income at the highest rate you reach — a principle often described as marginal taxation. Your Personal Allowance is used first, covering the lowest slice of income at 0%, before the Basic Rate, Higher Rate, and Additional Rate bands apply in sequence to whatever income remains.
Scotland's bands diverge sharply from the rest of the UK because income tax rates, though not the Personal Allowance, National Insurance, or VAT, are devolved to the Scottish Parliament. Scottish taxpayers move through six bands instead of four, with narrower gaps between them, which means a Scottish taxpayer can reach a 42% marginal rate at a lower income than someone in England reaches 40%.
Where you fall in the bands also affects other entitlements — reaching the Higher Rate band changes your Dividend Allowance rate, your Capital Gains Tax rate on some assets, and your Marriage Allowance eligibility, so the bands are a reference point for far more than just your headline income tax bill.
Example: tax on a £60,000 salary (England, Wales, and Northern Ireland)
The first £12,570 of income falls within the Personal Allowance and is tax-free. The next £37,700 (from £12,570 to £50,270) falls in the Basic Rate band and is taxed at 20%: £37,700 × 20% = £7,540.
The remaining £9,730 (from £50,270 up to the £60,000 salary) falls in the Higher Rate band and is taxed at 40%: £9,730 × 40% = £3,892. Total income tax for the year is £7,540 + £3,892 = £11,432.
Frequently asked questions
Does moving into a higher tax band mean all my income is taxed at that rate?
No — only the portion of income that falls within the higher band is taxed at the higher rate; the income below that band continues to be taxed at the lower rates that applied before, which is why bands are described as marginal.
Why does Scotland have more tax bands than the rest of the UK?
The Scottish Parliament has the power to set its own income tax rates and bands, though not the Personal Allowance, and has chosen a more granular six-band structure with a Starter and Intermediate rate that don't exist in England, Wales, or Northern Ireland.
Do National Insurance and VAT have different bands for Scotland?
No — National Insurance and VAT are set UK-wide and don't vary by nation, so only income tax bands and rates differ for Scottish taxpayers.
Related Terms
Basic Rate
The standard income tax rate of 20% applied to taxable income between the Personal Allowance and the higher-rate threshold, currently £12,571 to £50,270 in England, Wales, and Northern Ireland.
Higher Rate
The income tax rate of 40% applied to taxable income above £50,270 up to £125,140 in England, Wales, and Northern Ireland.
Additional Rate
The highest income tax rate in England, Wales, and Northern Ireland, charged at 45% on taxable income above £125,140.
Personal Allowance
The amount of income you can earn in a tax year before paying income tax, currently £12,570 and frozen until April 2031 (the freeze was extended by three years at the Autumn Budget 2025).
Taxable Income
The portion of your total income that is actually subject to income tax after deducting the Personal Allowance and any other reliefs or deductions you are entitled to.
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