UK income tax (FY 2025-26)
The UK tax year runs 6 April to 5 April. Income tax is set by Westminster for England, Wales, and Northern Ireland (rUK) but separately by the Scottish Parliament for Scotland — giving two parallel rate structures.
Bands for England, Wales, and Northern Ireland
| Income | Rate |
|---|---|
| £0 – £12,570 (Personal Allowance) | 0% |
| £12,571 – £50,270 (Basic rate) | 20% |
| £50,271 – £125,140 (Higher rate) | 40% |
| £125,141+ (Additional rate) | 45% |
Bands for Scotland
| Income | Rate |
|---|---|
| £0 – £12,570 (Personal Allowance) | 0% |
| £12,571 – £15,397 (Starter) | 19% |
| £15,398 – £27,491 (Basic) | 20% |
| £27,492 – £43,662 (Intermediate) | 21% |
| £43,663 – £75,000 (Higher) | 42% |
| £75,001 – £125,140 (Advanced) | 45% |
| £125,141+ (Top) | 48% |
The 60% marginal rate trap (£100k–£125,140)
Your Personal Allowance is reduced by £1 for every £2 of income above £100,000, and fully lost at £125,140. Within this band, you pay 40% on each extra £1 PLUS 40% on the £0.50 of PA you just lost — an effective marginal rate of 60% (62% including 2% NIC). In Scotland it's 63% (or 65% with NIC). Pension salary sacrifice is the standard way to push income below the £100k threshold and recover the lost PA.
National Insurance (Class 1 employee)
NIC was restructured in 2024 — the main rate dropped from 12% to 8%. Current rates for FY 2025-26:
- Below £12,570: 0% (Primary Threshold matches PA)
- £12,571 – £50,270: 8% (main rate)
- Above £50,270: 2% (Upper Earnings Limit)
Workplace pension auto-enrolment
Most employed workers are auto-enrolled into a workplace pension. Statutory minimum contributions:
- Employee: 5% of qualifying earnings
- Employer: 3% of qualifying earnings
- Combined: 8% (legally mandated minimum)
"Qualifying earnings" = salary between £6,240 and £50,270 (FY 2025-26 thresholds). Employee contributions usually reduce taxable income ("net pay arrangement"), saving income tax at your marginal rate.
Student loan repayments
The UK has five student loan plans. All charge a flat marginal rate above their threshold:
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 (pre-2012 England/Wales; all NI) | £26,065 | 9% |
| Plan 2 (Sept 2012 – July 2023 E/W) | £28,470 | 9% |
| Plan 4 (Scotland) | £32,745 | 9% |
| Plan 5 (Aug 2023+ England) | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
Repayments are deducted via PAYE alongside income tax + NIC. Multiple loans (e.g., undergraduate + postgraduate) repay separately.
VAT
Standard rate: 20%. Reduced rate (5%) on some categories like domestic fuel; zero rate (0%) on most food, books, children's clothing.
Sources
- GOV.UK — Income tax rates and allowances
- GOV.SCOT — Scottish income tax rates and bands
- HMRC — Rates and thresholds for employers 2025-26
- GOV.UK — Student loan repayment plans
- The Pensions Regulator — Workplace pension auto-enrolment
Calculator is provided for estimation only and does not constitute tax advice. Consult an accountant or HMRC for filing.
Related tools
- UK Salary Calculator — per-paycheck view with pension
- UK Student Loan Calculator — all 5 plans
- UK VAT Calculator — 20% add or remove