Basic Tax Rate

The basic tax rate (BTR) is the rate of Income Tax that you pay when you earn between £12,571 and £50,270 in a year. This rate is accurate as of the 2023/2024 tax year. If you pay basic rate tax, you are obliged to pay 20% income tax in England and Wales. However, you are only accountable for tax for your taxable income – you have a tax-free Personal Allowance of £12,570.

There are multiple rates of income tax depending on your income, but you’ll be charged different rates of tax for each bracket of your income.

Take a look at the current rates of Income Tax:

Income Tax rate
Up to £12,570 0% Personal allowance
£12,571 to £50,270 20% Basic rate
£50,271 to £125,140 40% Higher rate
over £125,141 45% Additional rate

Frequently Asked Questions

  • What is the Personal Allowance?

    The Personal Allowance is a tax-exempt income amount. You are eligible for the Personal Allowance if you earn anything below £100,000, at which point you gradually start to lose your exemption, £1 at a time.

  • How should I be calculating my income tax obligations?

    Different brackets of your income will be taxed at different rates, so contact our accountants for more advice, or take a look at our guide to the tax implications of earning over £100,000 per year to learn more.

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