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 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.
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.
Frequently Asked Questions
What does basic rate (20%) mean?
The 20% income tax rate applied to taxable income between £12,571 and £50,270.
Why does basic rate (20%) matter?
Understanding basic rate (20%) 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 basic rate (20%) applies to your personal situation.
Where can I find more information about basic rate (20%)?
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.