Additional Rate Tax

Definition

Additional Rate Tax (45%) applies to income over £125,140 in England, Wales, and Northern Ireland for 2026/27. At this income level, your Personal Allowance is fully tapered away. Scotland has a separate 48% top rate. This is the highest rUK statutory Income Tax rate for that tax year.

Why it matters

• At this level, every additional £1 earned is taxed at 45% in rUK for 2026/27, while pension contributions and other reliefs may affect the final result.
• Your Personal Allowance is fully gone by this income level, so the effective rate on the first £25k above £100k is 60%.

Common use cases

• High earner tax planning
• Pension contribution decisions for senior executives
• Evaluating non-dom and investment structures