Tax System Overview
The UK Income Tax system is managed by **HM Revenue and Customs (HMRC)** and applies to all earnings above the Personal Allowance. The tax year runs from **6 April to 5 April**. The rates below apply to England, Wales, and Northern Ireland (Scottish rates are different).
⚠️ **Official Tax Advice Disclaimer:** This guide provides estimates and educational information only. Tax law is complex, and we strongly advise consulting a qualified UK tax advisor or the official HMRC documentation for final guidance.
2025/2026 Income Tax Rates (England, Wales, N. Ireland)
Your **taxable income** is your income after deducting your Personal Allowance (and any other tax reliefs you may be entitled to).
| Tax Rate | Taxable Income Band (GBP) |
|---|
Source: HMRC rates for the 2025/2026 tax year.
Key Allowances and National Insurance
- Standard Personal Allowance: ... (The amount of income you can earn before paying any tax).
- Allowance Taper: The Personal Allowance is reduced by £1 for every £2 of income over £100,000, meaning it is **£0** if your income is £125,140 or more.
- National Insurance (NI): This is a separate mandatory contribution (like Social Security in the US) paid by employees, employers, and the self-employed to qualify for certain state benefits. It is a key factor in calculating net income.
Consumption Tax: Value Added Tax (VAT)
The main consumption tax in the UK is VAT, which is applied at different rates to most goods and services:
- Standard Rate: **20%** (Applies to the majority of goods and services).
- Reduced Rate: 5% (Applies to some items like domestic fuel and power).
- Zero Rate: 0% (Applies to essential items like most food, books, and children's clothes).
Official HMRC Resources
For the most current and official information, please refer to the UK Government website: