Tax history · Year on year
UK Income Tax History: Bands, Allowances and Rates 2020/21 Onwards
UK income tax thresholds have been largely frozen since April 2021 — a deliberate fiscal drag policy. The Personal Allowance has been stuck at £12,570 for five tax years in a row, and the higher-rate threshold at £125,140. The 45% additional-rate threshold was actually cut from £150,000 to £125,140 in April 2023, pulling more people into the top band. Scottish bands move every year and now feature six tiers, including a new Advanced rate introduced in April 2024. This page traces every change to UK income tax — rUK and Scottish — year by year from 2020/21 through 2025/26, so you can see exactly how much of your pay rise has been quietly absorbed by the Treasury.
- Personal Allowance frozen at £12,570 since 2022/23 — effectively a stealth tax rise as wages grow.
- Higher-rate threshold frozen at £50,270 over the same period.
- Additional-rate threshold cut from £150,000 to £125,140 in 2023/24 (announced Autumn 2022).
- All these freezes run until April 2028 under current legislation.
UK Income Tax (rest of UK) — year by year
The table below shows the Personal Allowance, the top of the 20% basic-rate band (also known as the higher-rate threshold), the top of the 40% higher-rate band (where the additional rate begins) and the additional-rate percentage, for every tax year from 2020/21 to 2025/26. All figures are gross-income thresholds.
| Tax year | Personal Allowance | Basic-rate (20%) ends | Higher-rate (40%) ends | Additional rate |
|---|---|---|---|---|
| 2020/21 | £12,500 | £50,000 | £150,000 | 45% |
| 2021/22 | £12,570 | £50,270 | £150,000 | 45% |
| 2022/23 | £12,570 | £50,270 | £150,000 | 45% |
| 2023/24 | £12,570 | £50,270 | £125,140 | 45% |
| 2024/25 | £12,570 | £50,270 | £125,140 | 45% |
| 2025/26 | £12,570 | £50,270 | £125,140 | 45% |
Two visible changes in six years: the small £70 PA uplift in April 2021 (the last inflation-linked rise), and the £24,860 cut to the additional-rate threshold in April 2023. Everything else has been deliberately held still while average earnings rose by more than 25%. The basic rate is unchanged at 20%, the higher rate at 40%, and the additional rate at 45% — only the thresholds have moved.
Scottish Income Tax — year by year
Scotland has set its own income-tax bands since April 2017. There are far more changes here: rates and thresholds move almost every year, an Advanced rate was added in April 2024, and the Top rate was raised from 46% to 47% in April 2023 and then to 48% in April 2024. Thresholds below are gross-income figures (Personal Allowance is set by the UK Government and applies to Scottish taxpayers too).
| Tax year | Starter (19%) ends | Basic (20%) ends | Intermediate (21%) ends | Higher ends | Advanced | Top rate |
|---|---|---|---|---|---|---|
| 2020/21 | £14,585 | £25,158 | £43,430 | £150,000 @ 41% | — (not yet introduced) | 46% |
| 2021/22 | £14,667 | £25,296 | £43,662 | £150,000 @ 41% | — (not yet introduced) | 46% |
| 2022/23 | £14,732 | £25,688 | £43,662 | £150,000 @ 41% | — (not yet introduced) | 46% |
| 2023/24 | £14,732 | £25,688 | £43,662 | £125,140 @ 42% | — (not yet introduced) | 47% |
| 2024/25 | £14,876 | £26,561 | £43,662 | £75,000 @ 42% | £125,140 @ 45% | 48% |
| 2025/26 | £15,397 | £27,491 | £43,662 | £75,000 @ 42% | £137,710 @ 45% | 48% |
From 2020/21 to 2022/23 the higher rate stayed at 41% and the top rate at 46%. In April 2023 both rose by 1 percentage point (to 42% and 47%). April 2024 brought the biggest shake-up: a new Advanced rate of 45% on income between roughly £75,000 and £125,140, and the Top rate was raised again to 48%. The result is that a Scottish earner on £125,000 now pays around £1,500 more in income tax than someone on the same salary in England — and that gap is widening.
What this means for take-home: 2020/21 vs 2022/23 vs 2025/26
The table below shows the income tax bill only(no National Insurance, no student loan) for four salary levels across three reference years. The 2020/21 column applies the historic thresholds; 2022/23 is the first year of the full freeze; 2025/26 uses the current rates. Note how the tax bill rises on a fixed salary purely because the additional-rate threshold was cut and PA didn't keep pace with inflation.
| Gross salary | Tax 2020/21 | Tax 2022/23 | Tax 2025/26 | Change 2020 → 2025 |
|---|---|---|---|---|
| £30,000 | £3,500 | £3,486 | £3,486 | ↓ £14 |
| £50,000 | £7,500 | £7,486 | £7,486 | ↓ £14 |
| £80,000 | £19,500 | £19,432 | £19,432 | ↓ £68 |
| £120,000 | £37,500 | £37,432 | £37,432 | ↓ £68 |
On a £30,000 salary the income-tax bill is virtually unchanged year-on-year — but that's only because we've held the salary fixed. If wages had risen with inflation, a 2020 £30k earner would be on roughly £37,500 today and would pay around £1,500 more in tax, with the same real spending power. The £120,000 row shows the additional-rate-threshold cut at work: the marginal rate above £125,140 was 40% in 2020/21 but is 45% (plus loss of PA) today.
Fiscal drag in real-terms numbers
Cumulative CPI inflation from April 2020 to April 2025 is roughly 25%. If the Personal Allowance had risen with inflation since 2020/21 it would now be around £15,500 — but it is still £12,570. That means each basic-rate taxpayer has lost roughly £2,930 of real-terms tax-free income, equivalent to a stealth tax rise of about £586 per year (20% of £2,930) for a typical earner.
The higher-rate threshold tells the same story. £50,270 in 2021/22 prices would be roughly £62,000 today. So someone on £55,000 has been pulled into the higher-rate band purely by inflation — they pay an extra 20p in the pound on every pound between £50,270 and £55,000, costing around £945a year they wouldn't have paid under indexation.
For the additional rate, the freeze is even more aggressive: the threshold was actively cut from £150,000 to £125,140. Combined with the PA taper above £100,000, anyone earning between £100,000 and £125,140 already faces a 60% effective marginal rate — and now they hit the 45% rate sooner. The OBR estimates around 232,000 more people pay the additional rate than would have under the old threshold.
Employee National Insurance — main-rate history
For context, the Class 1 employee main NI rate has moved more than income tax in this period — a useful reminder that NI is a tax in all but name.
| Period | Main rate | Notes |
|---|---|---|
| Apr 2020 – Apr 2022 | 12% | Long-standing main rate. |
| Apr 2022 – Nov 2022 | 13.25% | Health & Social Care Levy added. |
| Nov 2022 – Jan 2024 | 12% | Levy reversed by Kwarteng/Hunt. |
| Jan 2024 – Apr 2024 | 10% | Mid-year cut in Autumn Statement 2023. |
| Apr 2024 onwards | 8% | Further cut in March 2024 Budget; frozen since. |
The headline 4-percentage-point cut to employee NI (12% → 8%) since November 2022 is one of the few visible giveaways in this period — but it has been largely offset for many workers by frozen income-tax thresholds.
Why were the bands frozen?
The freeze was originally announced in the March 2021 Budget by then- Chancellor Rishi Sunak. It was sold as a five-year measure (2022/23 through 2025/26) to help pay down COVID-related public debt. Then in the Autumn Statement of November 2022, Chancellor Jeremy Hunt extended the freeze by a further two years to April 2028, and in the same statement cut the additional-rate threshold from £150,000 to £125,140.
The OBR estimates this freeze will pull roughly 1.7 million additional people into paying income tax for the first time, and around 4 million additional people into the higher-rate band, over the freeze period. Total revenue from threshold freezes is expected to reach more than £40 billion a year by 2028/29 — equivalent to a 6p rise in the basic rate of tax, achieved without a single headline rate change.
Freezing thresholds is politically attractive because it is invisible: no MP has to vote for a rate rise, and most taxpayers never see a line on their payslip that says "tax went up". They just see more of their pay rise disappear.
What happens in April 2028?
Under current legislation, the freeze ends on 5 April 2028. From 2028/29 onwards, the Personal Allowance and the higher-rate threshold should resume indexation in line with CPI inflation, just as they did before 2022. If inflation runs at around 2% a year from now until then, that would mean a PA of roughly £13,300 and a higher-rate threshold of about £53,000 in April 2028.
However, future Chancellors can — and probably will — be tempted to extend the freeze further. Each additional year of frozen thresholds is worth around £8–10 billion to the Treasury and requires no parliamentary rate vote. The freeze has already been extended once. Don't assume the legislated end date is the final word.
Frequently Asked Questions
When will the income tax freeze end?
Under current legislation the freeze on the Personal Allowance and the higher-rate threshold ends in April 2028. From 2028/29 onwards, both thresholds are due to resume indexation in line with CPI inflation. However, a future Chancellor could extend the freeze again — it has already been extended once, from a 5-year to a 7-year freeze, in the Autumn Statement of November 2022.
What is fiscal drag?
Fiscal drag is when tax thresholds stay still while wages rise. Without a single rate change, more people end up paying tax (or paying higher-rate tax) each year. The OBR estimates the income-tax and NI threshold freezes alone will raise around £40 billion a year by 2028/29 — making this the single largest stealth tax rise in recent UK history. Around 1.7 million additional people are now paying income tax, and more than 4 million additional people pay higher-rate tax, purely because of the freeze.
Did the additional-rate threshold really get cut?
Yes. In the Autumn Statement of November 2022, Chancellor Jeremy Hunt cut the threshold for the 45% additional rate from £150,000 to £125,140 with effect from 6 April 2023. This is one of the very few headline UK tax-rate changes in the last decade. It aligns the start of the additional rate with the point where the Personal Allowance is fully tapered away, creating a uniform effective marginal rate above £125,140.
Are these the same in Scotland?
No. The Personal Allowance is set by Westminster and applies UK-wide, but Scottish taxpayers pay Scottish income tax on their non-savings, non-dividend income. Scotland has six bands (Starter, Basic, Intermediate, Higher, Advanced, Top) where the rest of the UK has three. Scottish rates and thresholds change almost every April — far more often than rUK rates. The Scottish higher rate (currently 42%) starts well below the rUK higher-rate threshold of £50,270.
What about Wales?
Wales has Welsh Rates of Income Tax, but the Welsh Government has so far chosen to keep them identical to the rest of the UK (rUK). For practical purposes Welsh taxpayers pay the same income tax as English and Northern Irish taxpayers. Wales does, however, set its own Land Transaction Tax (LTT) instead of Stamp Duty.