What is the higher rate tax threshold?

The higher rate tax threshold is the income level at which you start paying 40% income tax. In England, Wales and Northern Ireland it is £50,270 for 2026/27. It is made up of the £12,570 personal allowance plus the £37,700 basic rate band, and is frozen until April 2031.

Income tax works in bands. You pay nothing on the first £12,570, then 20% up to £50,270. Above that, you pay 40% up to £125,140, and 45% beyond. Only the income above each threshold is taxed at the higher rate. Someone earning £55,000 pays 40% only on the last £4,730. The personal allowance is also withdrawn between £100,000 and £125,140, creating an effective 60% rate.

Scotland sets its own bands. In 2026/27 Scottish taxpayers pay a 42% higher rate from £43,663, with further 45% and 48% rates on higher incomes. National Insurance also changes at £50,270, dropping from 8% to 2%. That means a higher rate taxpayer in England pays 42% in total on extra earnings. Higher rate taxpayers can claim extra relief on pension contributions and charity donations.

The threshold has been frozen at £50,270 since April 2021 and will stay there until April 2031. With wages rising, millions more people have been pulled into the higher rate, including many teachers, nurses and police officers. Higher rate taxpayers also lose some benefits, such as part of the personal savings allowance and, if income tops £60,000, Child Benefit. Many plan around it.

Who it affects: About 7 million higher and additional rate payers