Additional-rate tax band (45%)
The 45% additional rate of income tax applies to taxable income above £125,140 in 2026/271. The threshold was reduced from £150,000 to £125,140 on 6 April 2023, deliberately lined up with the income level at which the personal allowance is fully withdrawn5.
Why £125,140?
The personal allowance is withdrawn at £1 for every £2 over £100,000. £12,570 of allowance is fully gone by £125,140 (100,000 + 12,570 × 2). Setting the additional-rate threshold at the same point closes the discontinuity between the 60% trap and the 45% band.
How dividends and savings work at this band
Dividends above £125,140 are taxed at the additional dividend rate of 39.35%, unchanged in 2026/276. Savings interest at this band sits in the additional-rate income band and has no Personal Savings Allowance7.
Compared to Scotland
Scotland charges 48% above £125,140 – its Top rate – three percentage points more than rUK14.