What is Higher Rate (40%)?
The 40% income tax rate applied to taxable income between £50,271 and £125,140.
Key Facts
- ✓ Rate: 40% on income from £50,271 to £125,140
- ✓ Applies in England, Wales, and Northern Ireland
- ✓ Scotland equivalent: Higher rate is 42%
- ✓ Higher rate taxpayers can claim extra pension tax relief
- ✓ Growing number of taxpayers due to frozen thresholds
Current Rates (2025/26)
- ▸ Higher rate: 40%
- ▸ Band: £50,271 - £125,140
Explanation
The higher rate is the second main band of UK income tax, charged at 40% on taxable income between £50,271 and £125,140 for the 2025/26 tax year. In England, Wales, and Northern Ireland, you become a higher rate taxpayer once your total income exceeds £50,270. Tax is only charged at 40% on income within this band — income below £50,270 is still taxed at the basic rate (20%) or covered by your Personal Allowance (0%). The number of higher rate taxpayers has grown significantly due to fiscal drag — frozen thresholds combined with rising wages. In 2021/22 the higher rate started at £50,271, and since the threshold has not moved, wage growth alone has pushed more people into this band. Higher rate taxpayers can claim additional pension tax relief and receive reduced rates on certain allowances.
Try the calculator: Use our free calculator to see how higher rate (40%) 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.
Basic Rate (20%)The 20% income tax rate applied to taxable income between £12,571 and £50,270.
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.