How has the income tax burden on typical UK salaries changed over the past 16 years? Personal Allowance rises, the great freeze, NI rate cuts and the collapse of the CGT Annual Exempt Amount — all in one place.
England, Wales and Northern Ireland (rUK rates). Scotland has its own bands — see below.
Tax year
Personal Allowance
Tax on £30k
Tax on £40k
Tax on £50k
Notable change
2015/16
£10,600
£3,880
£5,880
£9,403
PA rises to £10,600
2016/17
£11,000
£3,800
£5,800
£9,200
PA rises to £11,000
2017/18
£11,500
£3,700
£5,700
£8,700
PA rises to £11,500; HRT to £45k
2018/19
£11,850
£3,630
£5,630
£8,360
PA rises to £11,850
2019/20
£12,500
£3,500
£5,500
£7,500
PA reaches £12,500 (target met)
2020/21
£12,500
£3,500
£5,500
£7,500
PA stays at £12,500
2021/22freeze starts
£12,570
£3,486
£5,486
£7,486
PA rises to £12,570; freeze begins
2022/23
£12,570frozen
£3,486
£5,486
£7,486
Thresholds frozen; NI briefly 13.25%
2023/24
£12,570frozen
£3,486
£5,486
£7,486
Add-rate threshold cut to £125,140
2024/25
£12,570frozen
£3,486
£5,486
£7,486
NI cut to 8% (Apr); thresholds frozen
2025/26
£12,570frozen
£3,486
£5,486
£7,486
Thresholds still frozen
2026/27
£12,570frozen
£3,486
£5,486
£7,486
PA frozen for 6th year running
Income tax only. NI, pension contributions and student loan repayments excluded. Calculations use rUK (England/Wales/NI) bands.
Fiscal Drag: The Frozen Personal Allowance Since 2021/22
Fiscal drag is the effect of keeping tax thresholds fixed while wages rise with inflation. No rate changes are needed — HMRC simply collects more as more income falls above a frozen threshold. The UK's Personal Allowance has been frozen at £12,570 since 2021/22 and is scheduled to remain there until at least April 2028.
£30,000 salary
Tax in 2021/22: £3,486
Tax in 2026/27: £3,486
£0 less
vs 2021/22, same nominal salary
£40,000 salary
Tax in 2021/22: £5,486
Tax in 2026/27: £5,486
£0 less
vs 2021/22, same nominal salary
£50,000 salary
Tax in 2021/22: £7,486
Tax in 2026/27: £7,486
£0 less
vs 2021/22, same nominal salary
Why do the numbers look small on a £30k salary? At £30,000 the income falls entirely in the basic band — the 20% rate has not changed. The drag here is less about extra rate and more about the PA being worth less in real terms. On a £50,000 salary the impact is larger because the frozen higher-rate threshold (£50,270) keeps pulling more income into the 40% band.
Personal Allowance History: Every Year Since 2010
Tax year
Personal Allowance
Higher-rate threshold
Change in PA
2010/11
£6,475
£43,875
—
2011/12
£7,475
£42,475
+£1,000
2012/13
£8,105
£42,475
+£630
2013/14
£9,440
£41,450
+£1,335
2014/15
£10,000
£41,865
+£560
2015/16
£10,600
£42,385
+£600
2016/17
£11,000
£43,000
+£400
2017/18
£11,500
£45,000
+£500
2018/19
£11,850
£46,350
+£350
2019/20
£12,500
£50,000
+£650
2020/21
£12,500
£50,000
frozen
2021/22
£12,570
£50,270
+£70
2022/23
£12,570
£50,270
frozen
2023/24
£12,570
£50,270
frozen
2024/25
£12,570
£50,270
frozen
2025/26
£12,570
£50,270
frozen
2026/27
£12,570
£50,270
frozen
Source: HMRC Income Tax rates and allowances. Higher-rate threshold shown as gross income.
National Insurance Employee Rate History
The employee main NI rate (Class 1, earnings between the Primary Threshold and the Upper Earnings Limit) has seen more movement in the last three years than in the previous decade. The table covers the main rate — there is a separate 2% rate above the UEL.
Period
Main rate
Lower limit (PT)
Upper limit (UEL)
What happened
2010/11–2011/12
11%
£5,715
£43,875
Pre-2011 rates
2011/12 (from Apr)
12%
£7,225
£42,475
Rate rose 1pp from 11% to 12%
2012/13–2022/23
12%
£8,164
£50,270
Stable at 12% for over a decade
2022/23 (Apr–Nov)
13.25%
£9,880
£50,270
Heath & Social Care Levy added 1.25pp
2022/23 (from Nov)
12%
£9,880
£50,270
HSCL reversed by Kwarteng mini-budget
2023/24
12%
£12,570
£50,270
Lower limit raised to match Personal Allowance
Jan 2024 (mid-year cut)
10%
£12,570
£50,270
Autumn Statement 2023 cut 2pp mid-year
2024/25 (from Apr)
8%
£12,570
£50,270
Spring Budget 2024 cut further 2pp
2025/26–2026/27
8%
£12,570
£50,270
Unchanged; employer rate rose to 15% from Apr 2025
Lower and upper limits shown are approximate typical values for the period. The 2% rate above the UEL is unchanged throughout. Employer rate (secondary) not shown.
CGT Annual Exempt Amount (AEA) — From £12,300 to £3,000
The Capital Gains Tax Annual Exempt Amount is the gain you can make each year before paying CGT. It rose steadily for a decade, peaked at £12,300, then was cut by 75% in just two years. This is one of the largest quiet tax rises on investors and second-property owners in recent memory.
Tax year
Annual Exempt Amount
Note
2010/11
£10,100
2011/12
£10,600
2012/13–2014/15
£10,900
2015/16
£11,100
2016/17
£11,100
2017/18
£11,300
2018/19
£11,700
2019/20
£12,000
2020/21–2022/23
£12,300
Peak annual exempt amount
2023/24
£6,000
Cut by 51% in one year
2024/25
£3,000
Cut again — down 75% from peak
2025/26+
£3,000
Frozen at £3,000
Source: HMRC Capital Gains Tax rates and allowances. The AEA applies to individuals. Trusts have a separate (lower) exempt amount.
Practical impact: A basic-rate taxpayer selling shares with a £12,000 gain in 2022/23 would have paid no CGT (gain below the £12,300 AEA). The same gain in 2024/25 generates a £9,000 taxable gain, costing £1,620 in CGT at the 18% residential or 18% basic-rate share rate. For higher-rate taxpayers the cost at 24% would be £2,160.
Frequently Asked Questions
Frequently Asked Questions
Has income tax gone up since 2010?
The headline rates have stayed the same — 20%, 40% and 45% — but most people pay more tax in real terms. The main driver is fiscal drag: wages have risen with inflation while the Personal Allowance and higher-rate threshold have been frozen since 2021/22. A £30,000 earner paid roughly £3,486 income tax in 2015/16 and pays roughly £3,486 in 2026/27 — the same. But in inflation-adjusted terms that £30k salary is worth considerably less, meaning the effective tax rate on real income has risen.
What is fiscal drag and how much does it cost?
Fiscal drag happens when tax thresholds stay fixed while wages rise. Even without changing any rate, HMRC collects more. The OBR estimated the 2021–2028 freeze on income tax and NI thresholds would raise around £40 billion per year by 2028/29 — the largest stealth tax rise in modern UK history. An extra 1.7 million people have been pulled into income tax, and over 4 million more now pay higher-rate tax, purely because of frozen thresholds.
When did National Insurance rates fall, and why?
The employee main NI rate was stable at 12% for over a decade (2011–2023), then rose briefly to 13.25% in April 2022 due to the Health & Social Care Levy before being reversed in November 2022. Chancellor Jeremy Hunt then cut the rate to 10% from January 2024 (mid-year, an unusual move) and further to 8% from April 2024. These cuts partially offset the fiscal drag from frozen income tax thresholds, but the employer NI rate rose from 13.8% to 15% in April 2025, increasing costs for businesses.
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Why has the CGT Annual Exempt Amount been cut so drastically?
The CGT Annual Exempt Amount (AEA) was kept broadly in line with inflation from 2010 to 2022/23, peaking at £12,300. In the Autumn Statement 2022, Chancellor Hunt announced it would be slashed to £6,000 in 2023/24 and then to £3,000 in 2024/25, where it has remained. The stated rationale was that a high AEA benefited wealthier investors disproportionately. In practice it means anyone selling shares, a second property or other assets now pays CGT on gains above £3,000 rather than £12,300.
How does the income tax burden compare to 2010?
On a £30,000 salary, the income tax bill has remained broadly similar in cash terms — around £3,500 — because the Personal Allowance nearly doubled from £6,475 in 2010/11 to £12,570 by 2021/22, offsetting the 20% basic rate. However, in real (inflation-adjusted) terms, take-home pay has fallen because wages have not kept pace with prices. For higher earners on £50,000+, the frozen higher-rate threshold since 2021/22 means progressively more of their income is taxed at 40%.
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