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 At this income level, the Personal Allowance has been fully withdrawn (it tapers to zero between £100,000 and £125,140).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.
Try the calculator: Use our free calculator to see how additional rate (45%) affects your finances.
Full Tax Bands Reference →Other Glossary Terms
The system HMRC uses to collect income tax and National Insurance directly from employee 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.
Frequently Asked Questions
What does additional rate (45%) mean?
The 45% income tax rate applied to taxable income above £125,140.
Why does additional rate (45%) matter?
Understanding additional rate (45%) helps you make informed financial decisions and ensure you pay the correct amount of tax. Getting it wrong could mean overpaying or underpaying HMRC, which may result in penalties or missed savings. Use our calculators to see how additional rate (45%) applies to your personal situation.
Where can I find more information about additional rate (45%)?
HMRC publishes official guidance on GOV.UK for all UK tax topics. For a quick overview, our glossary entries are written in plain English and updated each tax year. You can also use our free online calculators to model different scenarios and understand how changes to your income, deductions, or allowances affect your overall tax position.