After the Personal Allowance, income tax is charged in slices. In England, Wales and Northern Ireland for 2026/27: the basic rate of 20% applies to the first £37,700 of taxable income (up to £50,270 of total income), the higher rate of 40% runs to £125,140, and the additional rate of 45% applies above that. Only the income inside each band is taxed at that band's rate.
Scotland sets its own bands and has six rates for 2026/27, from a 19% starter rate to a 48% top rate, so Scottish taxpayers on middle and higher incomes pay more than their counterparts elsewhere. Compare both systems side by side with the Income Tax Calculator.
On £60,000 outside Scotland, £12,570 is tax-free, £37,700 is taxed at 20% (£7,540) and the remaining £9,730 at 40% (£3,892), a total of £11,432. Your average rate is only 19%, even though your marginal rate is 40%: the bands only ever tax the slice inside them.
