UK 45% Additional Rate Tax Bracket (2026/27)
The 45% Additional Rate of Income Tax starts at £125,140 of gross income for 2026/27. Combined with 2% NI, the effective marginal rate above this threshold is 47% - actually lower than the 62% effective rate inside the £100k-£125,140 Personal Allowance taper band. The threshold dropped from £150,000 to £125,140 on 6 April 2023.
Take-home above the threshold
| Gross salary | Annual take-home | Monthly |
|---|---|---|
| £125,140 | £78,111 | £6,509 |
| £140,000 | £85,986 | £7,166 |
| £150,000 | £91,286 | £7,607 |
| £175,000 | £104,536 | £8,711 |
| £200,000 | £117,786 | £9,816 |
| £250,000 | £144,286 | £12,024 |
Frequently asked questions
- When does the 45% additional-rate tax bracket start?
- The 45% Additional Rate of Income Tax starts at £125,140 of gross income for 2026/27. Above that threshold every additional pound is taxed at 45% Income Tax plus 2% Class 1 NI - a combined 47% marginal rate. The threshold was lowered from £150,000 to £125,140 with effect from 6 April 2023.
- Why £125,140 specifically?
- The figure £125,140 is set so it aligns with where the £12,570 Personal Allowance is fully tapered away. The PA taper reduces the allowance by £1 for every £2 of income above £100,000 - so by £125,140 the £12,570 allowance is zero. Setting the additional-rate threshold at the same point means no taxpayer gets a partial PA above the additional-rate line.
- Is the 45% threshold different in Scotland?
- Yes. Scotland has its own income tax bands and uses an Advanced Rate of 45% from £75,001 to £125,140, then a Top Rate of 48% above £125,140 (raised from 47% in April 2024). So Scottish additional-rate taxpayers pay 48% Income Tax + 2% NI = 50% combined marginal above £125,140 - the highest marginal rate in the UK.
- Why is 47% lower than the 62% PA-taper rate?
- Counter-intuitively, earning above £125,140 produces a LOWER effective marginal rate (47%) than earning between £100,000 and £125,140 (62%). That is because the PA-taper effect has already happened in the £100k-£125k band - by £125,140 the allowance is fully gone and there is nothing left to taper. So earning £150,000 of gross actually costs less marginal tax per pound than earning £120,000 of gross.
- Can I avoid the 45% rate?
- Salary sacrifice into pension reduces taxable income pound for pound and avoids 47% combined marginal. At very high incomes the pension annual allowance becomes a constraint (£60,000 standard, tapered to £10,000 for adjusted income above £360,000). Carry-forward of unused allowance from up to 3 prior years can extend the room. Gift Aid donations also reduce taxable income at the additional-rate band, giving relief at the 25% gross-up rate.