What is Additional Rate (45%)?
The 45% income tax rate applied to taxable income above £125,140.
Key Facts
- ✓ Rate: 45% on income above £125,140
- ✓ Threshold reduced from £150,000 in April 2023
- ✓ Personal Allowance is zero at this income level
- ✓ Scotland equivalent: Top rate is 48%
- ✓ Dividend tax rate: 39.35% at this level
Current Rates (2025/26)
- ▸ Additional rate: 45%
- ▸ Threshold: above £125,140
Explanation
The additional rate is the highest band of UK income tax, charged at 45% on all taxable income above £125,140 for the 2025/26 tax year. This threshold was reduced from £150,000 to £125,140 in April 2023, bringing more taxpayers into the top rate. At this income level, the Personal Allowance has been fully withdrawn (it tapers to zero between £100,000 and £125,140). The additional rate applies in England, Wales, and Northern Ireland. Scotland has its own top rate of 48% on income above £125,140. Additional rate taxpayers pay the highest rates on dividends (39.35%) and capital gains (20% or 24% for property). They also face restrictions on pension tax relief through the tapered annual allowance if their adjusted income exceeds £260,000.
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Full Tax Bands Reference →Other Glossary Terms
The system HMRC uses to collect income tax and National Insurance directly from employees' wages.
National InsuranceA UK tax on earnings and self-employed profits that funds the state pension, NHS, and benefits.
Personal AllowanceThe amount of income you can earn each year before paying income tax — currently £12,570.
Basic Rate (20%)The 20% income tax rate applied to taxable income between £12,571 and £50,270.
Higher Rate (40%)The 40% income tax rate applied to taxable income between £50,271 and £125,140.
Stamp Duty Land Tax (SDLT)A tax paid when buying property or land in England and Northern Ireland.