Higher Rate Threshold
The UK income level above which earnings are taxed at 40% — £50,270 in 2026 for England, Wales and Northern Ireland (Scotland uses a different band structure).
The higher rate threshold is the income point at which UK income tax steps up from 20% (basic rate) to 40% (higher rate). For 2026 it sits at £50,270 — the same level it has been frozen at since 2021, with the freeze currently extended through 2028. Scotland uses its own band system with extra intermediate rates and a lower higher-rate threshold.
For most PAYE workers in England, Wales and NI the income tax stack looks like:
- £0 – £12,570: 0% (personal allowance)
- £12,571 – £50,270: 20% basic rate
- £50,271 – £125,140: 40% higher rate
- Above £125,140: 45% additional rate
National Insurance overlays this at different rates and bands — the combined marginal rate at the higher-rate threshold is well over 40% once NI is included.
Pension contributions and gift-aid donations extend the basic-rate band: a £1,000 gross pension contribution by a higher-rate taxpayer pushes £1,000 of income that would have been taxed at 40% back into the 20% band. That’s where the headline “40% pension tax relief” comes from — you claim the extra 20% via self-assessment, or it’s done automatically in a net-pay workplace scheme.
Use the UK pension contribution calculator to size higher-rate relief, or the PAYE calculator to see when income crosses the threshold.
Published 10 May 2026