If you’re earning in the UK — whether in London, Edinburgh, or anywhere in between — knowing exactly how much of your income gets taxed matters. With the 2025/26 tax‑year numbers now confirmed, it’s important to understand the latest thresholds and what they mean for take‑home pay. This guide walks you through 2025/26 UK tax brackets, breaks down the differences between England/Wales/Northern Ireland and Scotland, shows how allowances work, and helps you calculate roughly what you’ll pay. By the end, you’ll have a clear “cheat‑sheet” for 2025/26 — and be better equipped to plan income, savings, or dividends.
Basics: What is Personal Allowance + How UK income tax works
- Every UK taxpayer (in England, Wales, Northern Ireland, and most in Scotland) gets a Personal Allowance: a portion of income that is tax‑free.
- For tax year 2025/26, the Personal Allowance remains £12,570.
- This allowance gradually reduces if your adjusted net income exceeds £100,000 — every extra £2 earned reduces allowance by £1.
- Once above the allowance, income becomes “taxable”, and the amount of tax depends on which bracket(s) your income falls into.
For most UK residents (outside Scotland), tax is simpler: a few broad brackets. But in Scotland, it works differently.
England, Wales & Northern Ireland — 2025/26 Tax Bands
Here’s how income tax applies outside Scotland for 2025/26.
| Tax Band | Taxable Income Range (above allowance) | Rate |
|---|---|---|
| Basic rate | Up to £37,700 | 20% |
| Higher rate | £37,701 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Key notes:
- The first £12,570 is tax-free (Personal Allowance).
- “Taxable income” = total income (salary, pension, rental, etc.) minus any allowances.
- Earnings between £37,701 and £125,140 are taxed at 40%; above that at 45%.
Example (non‑Scottish resident): If your gross salary is £50,000:
- £12,570 — tax-free
- £37,700 taxed at 20% → £7,540
The remaining £(50,000 − 12,570 − 37,700) = negative → none taxed at 40%.
So you pay ~ £7,540 income tax (before NI, deductions, allowances).
Scotland — 2025/26 Tax Bands (Different Rates & More Bands)
Scotland uses a more granular tax‑band system for non‑savings, non‑dividend income (salary, pension, self‑employment).
| Band Name | Taxable Income Range (above allowance) | Rate |
|---|---|---|
| Starter | £12,571 – £15,397 | 19% |
| Scottish Basic | £15,398 – £27,491 | 20% |
| Intermediate | £27,492 – £43,662 | 21% |
| Higher | £43,663 – £75,000 | 42% |
| Advanced | £75,001 – £125,140 | 45% |
| Top | Over £125,140 | 48% |
Standard Personal Allowance (£12,570) still applies — incomes up to that are tax-free.
For those earning over £100,000, allowance starts tapering: every £2 over £100k reduces allowance by £1.
What this means:
- In Scotland, smaller first bands are taxed at lower rates (19%–21%) compared with the rest of the UK’s flat 20% up to £37,700.
- But above certain thresholds, rates jump — e.g., “Higher” at 42%, and “Top” at 48%.
Illustration: If a Scot earns £30,000:
- £12,570 — tax-free
- £2,827 (to reach £15,397) taxed at 19% → ~£538
- Next £12,094 (15,398 → 27,491) taxed at 20% → ~£2,419
- Remaining ~£2,509 taxed at 21% → ~£526
- Total ~£3,483 income tax
This makes Scotland’s system more progressive (for many middle earners), but could be heavier for high earners relative to the rest of the UK. To avoid surprises on your paycheck, check your Scottish tax code now.
Other Important 2025/26 Allowances & Tax Considerations
Beyond the basic “salary tax”, there are additional rules for different kinds of income: savings, dividends, pensions, etc. For 2025/26:
- Savings income: there is a starting rate for savings (0%) on up to a certain amount, then taxed based on your income band.
- Dividend income: Dividend rates for 2025/26: ordinary, upper, additional — apply when you receive dividends above the dividend allowance.
- Personal Allowance reduction: If adjusted net income goes above £100,000, allowance reduces — meaning more income becomes taxable.
- Self-employed & small business: same bands apply, but you may face additional self‑assessment and National Insurance contributions.
Why 2025/26 Matters — What’s New & What’s Frozen
- The Personal Allowance remains frozen at £12,570 for 2025/26.
- For Scotland: the 2025 budget has updated some thresholds (Starter + Basic bands widened) — more households benefit from lower‑rate bands.
- The thresholds for Higher, Advanced, and Top rates remain frozen in cash terms until at least 2026/27.
- That means unless personal income grows a lot, many will stay in the same bracket — but inflation or wage rises can push them into higher bands (a phenomenon sometimes called “fiscal drag”).
Scotland vs Rest of UK (2025/26)
| Scenario / Income level | Likely better — Scotland or the Rest of the UK? |
|---|---|
| Lower income (just above allowance, ~£15–25k) | Scotland — lower starter/basic/intermediate bands (19–21%) vs UK 20% on first £37,700 |
| Mid income (~£30–40k) | Scotland or UK — depends on exact income; Scotland’s lower bands may help slightly, but UK’s simpler 20% up to £37.7k may be similar |
| Upper‑mid (~£50–75k) | Often UK becomes slightly cheaper — 40% on remaining vs 42%+ in Scotland |
| High income (above £125,140) | UK might be slightly better (45%) vs Scotland (48%) |
Hence, depending on income and location, you might pay significantly different amounts — always worth computing both ways.
Common Pitfalls & Mistakes People Make
- Forgetting the Personal Allowance taper — once income > £100,000, allowance reduces, which can jump your effective rate.
- Treating Scotland as the same as the rest of the UK — many overlook that Scotland has different bands & rates.
- Mixing income types — salary, dividends, savings, and pensions are taxed differently.
- Ignoring inflation / frozen thresholds — when inflation rises, but thresholds are frozen, “bracket creep” silently increases taxes.
- Not updating tax‑code or allowances — e.g., when getting a second job, or pension — many end up taxed at emergency rates.
Simple Take‑Home Pay Calculator
- Add up all income (salary, pension, etc.) for the year.
- Subtract £12,570 (Personal Allowance).
- If income exceeds £100,000, reduce the allowance accordingly (see the taper rule).
- Split remaining income across relevant bands (based on whether you’re in Scotland or not).
- Apply the corresponding tax rates per band and sum; this gives a rough estimate of income tax owed (before NI and deductions).
Use this method to guesstimate take‑home pay, or as a quick sanity check when salary changes.
FAQs
Q: What is the tax‑free allowance in the UK for 2025/26?
A: It’s £12,570 — meaning your first £12,570 of income is tax‑free, provided you’re eligible. GOV.UK+1
Q: Do Scottish residents pay the same tax as the rest of the UK?
A: No — Scotland has its own tax bands and rates for non‑savings, non‑dividend income (starter, basic, intermediate, higher, advanced, top), ranging from 19%–48%.
Q: What happens if I earn more than £100,000?
A: For every £2 above £100,000, your Personal Allowance reduces by £1 — increasing taxable income.
Q: Are savings and dividends taxed the same as salary?
A: No — savings income and dividend income have separate rates/allowances. The standard income‑tax bands apply only to non-savings, non-dividend income.
Q: Does 2025/26 change anything from 2024/25?
A: Personal Allowance stays the same. For Scotland, some thresholds (starter/basic bands) are adjusted upward for 2025/26 — a benefit for many lower‑to‑mid earners.
Conclusion & What to Do Next
Understanding where you sit in the 2025/26 UK tax brackets helps you anticipate your take‑home pay, plan savings, and avoid nasty surprises. If you want, try running your own numbers using the calculate method above. If you want to go deeper, consider:
- Including other income (dividends, savings, rental, pension)
- Factoring in deductions, allowances (blind person’s allowance, marriage allowance, etc.)
- Considering National Insurance & other taxes
With 2025/26’s confirmed brackets + this guide’s clarity, you can stay tax‑smart without the guesswork.
Related: British Tax Codes Explained: Avoid Costly Mistakes in 2025
