How Higher Rate Tax Works in Practice
At the 40% higher rate, you pay significantly more tax on each pound above £50,270. For example, a £60,000 salary means £9,730 is taxed at 40% (£3,892) on top of the basic rate tax on the first £37,700 of taxable income.
Approximately 5.5 million UK taxpayers pay higher rate tax, a number that has grown substantially due to frozen tax thresholds. Many workers who would have been basic rate taxpayers a decade ago now find themselves in this band.
Key strategies for higher rate taxpayers include maximising pension contributions (40% relief), using your full £20,000 ISA allowance, and considering Gift Aid donations which provide additional tax relief. Use our calculator to see your exact breakdown.
See your full tax breakdown
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