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    Income tax rates and bands

    How UK income tax is structured — the principle, not the year-by-year numbers.

    By the Happy Wallets team·Updated June 2026·4 min read

    How it works

    You pay no tax on income up to your personal allowance, then a basic rate, then higher and additional rates on income above each threshold. Only the income within each band is taxed at that band’s rate.

    Things that change it

    • A high income can taper away your personal allowance.
    • Scotland has its own income tax bands and rates.
    • Dividends and savings have their own rules.

    Frequently asked questions

    Where are the current figures?+
    Rates and thresholds change at Budgets — always check the current bands on GOV.UK. The take-home pay calculator uses current-year estimates.
    Accounts are coming soon — the site is in build