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. In Scotland, the equivalent income spans three separate bands: Higher (42%) from £43,662, Advanced (45%) from £75,000, and Top (48%) from £125,140. Reaching the higher-rate threshold has implications for pension relief, Marriage Allowance eligibility, and the tax treatment of savings and dividend income.
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.
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).
Tax Bands
The ranges of taxable income to which different income tax rates apply, creating the UK's progressive tax system.
Marginal Rate
The rate of tax paid on the next pound of income you earn, which determines the tax cost or saving of earning slightly more or less.
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