UK Tax Bands & Rates 2024/25
Understanding Income Tax brackets and rates across the UK
England, Wales & Northern Ireland
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Note: Your Personal Allowance reduces by £1 for every £2 earned over £100,000. It disappears completely at £125,140.
Scotland
Scotland has different Income Tax rates and bands. Scottish taxpayers are identified by the 'S' prefix in their tax code (e.g., S1257L).
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 to £14,876 | 19% |
| Basic Rate | £14,877 to £26,561 | 20% |
| Intermediate Rate | £26,562 to £43,662 | 21% |
| Higher Rate | £43,663 to £125,140 | 42% |
| Top Rate | Over £125,140 | 47% |
How Tax Bands Work
Tax bands are progressive, meaning you only pay each rate on the portion of income that falls within that band. You don't pay the higher rate on all your income when you enter a higher tax bracket.
Example: £35,000 salary in England
Personal Allowance Reduction
If you earn over £100,000, your Personal Allowance is reduced:
- You lose £1 of Personal Allowance for every £2 earned over £100,000
- At £125,140, you have no Personal Allowance left
- This creates an effective 60% tax rate between £100,000-£125,140
- You pay 40% Income Tax plus lose 20% allowance (20% of £2 = £1 allowance lost per £2 earned)
Marginal vs Effective Tax Rate
Marginal Rate
The rate you pay on your last pound of earnings. If you earn £35,000, your marginal rate is 20% (the rate on the Basic Rate band).
Effective Rate
Your average tax rate across all income. If you earn £35,000 and pay £4,486 tax, your effective rate is 12.8% (£4,486 ÷ £35,000).
When Do Tax Rates Change?
Tax rates and allowances are usually announced in the Budget and apply from the start of the new tax year (6 April). The government can also make changes mid-year in special circumstances.
Current rates: 2024/25 tax year (6 April 2024 to 5 April 2025)
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