Income tax rates in UK for tax year 2017/2018

For tax year 2017/2018 the UK basic income tax rate was 20%. This increases to 40% for your earnings above £45,000 and to 45% for earnings over £150,000.

Your earnings below £11,500 are tax free. This is called the personal allowance. However for every £2 you earn over £100,000 this allowance is reduced by £1.

UK income tax bands and rates (2017/2018)

Income Tax rate
Up to £11,500 0% Personal allowance
£11,501 to £45,000 20% Basic tax rate
£45,001 to £150,000 40% Higher tax rate
over £150,000 45% Additional tax rate

Example 1: Income tax on earning £35,000

  • The first £11,500 you earned is tax free
  • Remainder (£23,500) is taxed at 20%
  • Your tax bill: £4,700

Example 2: Income tax on earning £75,000

  • The first £11,500 you earned is tax free
  • The remainder up to £45,000 is taxed at 20% (£6,700)
  • What you earn above £45,000 is taxed at 40% (£12,700)
  • Your tax bill: £18,700 (£6,700 + £12,700)

If you need to quickly see how much tax you need to pay view our income tax calculator.

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