What is Basic Rate (20%)?
The 20% income tax rate applied to taxable income between £12,571 and £50,270.
Key Facts
- ✓ Rate: 20% on income from £12,571 to £50,270
- ✓ Band width: £37,700
- ✓ Frozen since 2021/22
- ✓ Applies in England, Wales, and Northern Ireland
- ✓ Scotland has its own basic rate band (20%)
Current Rates (2025/26)
- ▸ Basic rate: 20%
- ▸ Band: £12,571 - £50,270
- ▸ Band width: £37,700
Explanation
The basic rate is the first band of UK income tax, charged at 20% on taxable income between £12,571 and £50,270 for the 2025/26 tax year. This means the basic rate band width is £37,700. The basic rate applies in England, Wales, and Northern Ireland. Scotland has its own basic rate band with different thresholds. Income tax is progressive, so you only pay 20% on the portion of income that falls within this band — not on your entire income. The basic rate band has been frozen at £37,700 since 2021/22 as part of the government's fiscal drag strategy. Most UK taxpayers are basic rate taxpayers. If you earn above £50,270, the portion above that threshold is taxed at the higher rate of 40%.
Try the calculator: Use our free calculator to see how basic rate (20%) affects your finances.
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.
Higher Rate (40%)The 40% income tax rate applied to taxable income between £50,271 and £125,140.
Additional Rate (45%)The 45% income tax rate applied to taxable income above £125,140.
Stamp Duty Land Tax (SDLT)A tax paid when buying property or land in England and Northern Ireland.