Additional rate tax and the 45% band

The additional rate of income tax is 45 per cent and applies to taxable income above £125,140 in England, Wales and Northern Ireland in 2026/27. In Scotland the equivalent is the top rate of 48 per cent, which starts at the same point. Very few public sector salaries reach it on basic pay alone, but consultants, senior school leaders and some band 9 managers do, and others get there with extra sessions or other income.

Why the line is at £125,140

£125,140 is the income at which the Personal Allowance disappears. Your £12,570 allowance falls by £1 for every £2 of adjusted net income above £100,000, so by £125,140 there is nothing left. The additional rate threshold sits exactly where the taper ends.

That gives this pattern for someone with a 1257L code in England:

Income slice	Rate on that slice
£12,571 to £50,270	20%
£50,271 to £100,000	40%
£100,001 to £125,140	effectively 60% (40% plus lost allowance)
over £125,140	45%

Above £125,140 your allowance is already gone, so you lose nothing further and the marginal rate drops from an effective 60 per cent to 45 per cent. Add employee National Insurance of 2 per cent on earnings above £50,270 and the combined rate on salary above the threshold is 47 per cent. The £100,000 tax trap explains the 60 per cent zone in detail.

How the tax adds up

Say a consultant in England has £140,000 of taxable pay after pension contributions, no other income and no allowance left. Because the allowance is zero, the basic rate band covers the first £37,700 of income and the higher rate covers the rest up to £125,140:

• £37,700 at 20 per cent is £7,540
• £87,440 at 40 per cent (from £37,701 to £125,140) is £34,976
• £14,860 at 45 per cent is £6,687.

That totals £49,203 in income tax, of which only the final £14,860 was taxed at the additional rate.

Which public sector jobs reach it

On 2026/27 pay scales in England, basic salaries above £125,140 include:

• NHS band 9 at the top point, £129,783
• consultants on the 2003 contract further up the scale, which runs from £113,565 to £150,569
• the upper end of the teachers’ leadership group, which runs up to £148,829 outside London and £158,863 in inner London.

Pension contributions come off before tax, so a salary slightly above £125,140 often leaves taxable pay below it. A consultant on £135,645 paying 12.5 per cent into the NHS Pension Scheme contributes about £16,956, which brings taxable pay down to roughly £118,689. Private practice, extra sessions, clinical excellence awards, rental income or savings can then push the total back over. Doctors’ pay and NHS band 9 have the full scales.

Scotland: advanced and top rates

Scottish taxpayers meet a 45 per cent rate much earlier. The advanced rate of 45 per cent applies from £75,001 to £125,140, and the top rate of 48 per cent applies above £125,140. The Personal Allowance tapers in the same way, so a Scottish taxpayer between £100,000 and £125,140 pays an effective 67.5 per cent before NI. Gov.scot says the higher, advanced and top thresholds stay frozen until 2028-29. Savings and dividends are taxed at UK rates wherever you live.

Other rules that change at this level

• The Personal Savings Allowance is £0 for additional rate taxpayers, so all savings interest is taxable.
• Dividends above the £500 allowance are taxed at 39.35 per cent.
• A second job may be given a D1 code (SD3 in Scotland), which taxes all pay from it at 45 or 48 per cent.
• High earners in the NHS and other defined benefit schemes are more likely to run into the pension annual allowance and its tapered version; pension annual allowance explains how that works.

Tax codes and Self Assessment

When HMRC knows your income is above £125,140, it normally removes the allowance from your code, which often means 0T. If it does not know, for example because the extra income comes from private work, payroll will keep giving you an allowance you are not entitled to and the shortfall is collected later. HMRC may ask you to file a Self Assessment return so the full picture is taxed correctly. Do employees need to do Self Assessment? covers when that happens. Your HMRC personal tax account shows the income estimate behind your code, and updating it there is usually faster than waiting for a bill.