Higher-rate tax band (40%)
The 40% higher rate of income tax applies to taxable income between £50,270 and £125,140 in 2026/27 (England, Wales and Northern Ireland)1. The £50,270 threshold has been frozen since April 2021 and is now frozen to April 203130.
Where the 40% rate sits
Taxable income above £50,270 falls into the higher-rate band. With the £12,570 personal allowance untouched, the gross salary at which 40% first applies is £50,270 in 2026/27, the same level as 2025/26 and 2024/25.
Crossing into higher rate
The marginal tax on a £100 pay rise from £50,170 to £50,270 is £20. The marginal tax on a £100 rise from £50,270 to £50,370 is £40 in income tax, plus 2% National Insurance: £42 total. The cliff is the rate, not a one-off.
Dividend and savings income
Dividend income above the £500 dividend allowance is taxed at the higher dividend rate (35.75% from 6 April 2026) once total income crosses the higher-rate threshold6. Savings interest above the Personal Savings Allowance also slides into higher-rate income at that threshold7.
Scotland is different
Scotland's higher rate is 42%, and it kicks in at £43,662, not £50,27014. The gap with rUK matters for cross-border moves: see Scottish higher rate and Scotland vs rUK.