Higher Rate Tax

The Higher Rate tax band is the rate through which you pay a portion of your Income Tax if your income is between £50,270 to £125,140 per annum. The tax rate is 40% for this portion of your taxable income. The tax rates and bands are listed below (as of the 2023/2024 tax year):

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

When you earn less than £12,570 every year, this income is tax-free. It’s known as the Personal Allowance. Any income that you earn above this is taxed at the above rates. But it’s important to remember that the rate that you’re taxed is segmented.

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