The tax thresholds haven’t moved since 2021. Prices have.
The personal allowance has been and the higher-rate line since April 2021, and both stay put until April 2031. Enter your salary to see your take-home pay if they had risen with inflation instead.
If the thresholds had risen with inflation since 2021, you would take home
| Item | Frozen | Indexed | Difference |
|---|---|---|---|
| Pay before tax | |||
| Income tax | |||
| National Insurance | |||
| Take-home pay | |||
| Tax and NI as a share of pay |
Keep going: see which tax lines you cross, see the cost at every salary, compare an old salary with today’s prices, or see what happens above £100,000.
Where your pay crosses the lines
Each bar shows the income tax rate on every extra pound you earn. In the indexed version the allowance and the 40% line sit further to the right, so more of your pay is taxed at the lower rates.
Between £100,000 and the point where it runs out, the personal allowance shrinks by £1 for every £2 earned. That makes each extra pound cost 60p in income tax. National Insurance is not shown here.
- Tax-free allowance
- frozen indexed
- Where 40% starts
- frozen indexed
- Your next £100 of pay
- – kept now, after tax and NI– kept if indexed
What the freeze costs at every salary
Extra take-home pay per year, by salary before tax
Show the numbers as a table
| Salary | Frozen take-home | Indexed take-home | Extra take-home |
|---|
How the lines would have moved
Each April the allowance and the higher-rate line would have risen by the previous September’s CPI inflation. Frozen, they stayed at and every year.
| Tax year | Inflation used | Allowance if indexed | Higher-rate line if indexed | Extra take-home at your salary |
|---|
The tax thresholds, in plain words
The personal allowance, which is the amount you can earn before paying income tax, has been £12,570 since April 2021. The 40% rate has started at £50,270 for just as long. Both are frozen until April 2031. Over the same years prices and wages have risen, so more of your pay falls above each line.
That effect is often called fiscal drag. Thresholds stay still while pay rises, so a growing share of income is taxed, or taxed at a higher rate, without any change to the rates themselves.
The calculator compares two versions of the 2026/27 tax year. Frozen is the real system. Indexed is the same system with the personal allowance and the basic-rate band raised each April by inflation since 2021. That would make the allowance £16,080 and the 40% line £64,480. On a salary of £30,000 the difference is about £700 a year. On £55,000 it is about £1,650. On £100,000 it is about £3,540, and on £150,000 about £2,140.
Common questions
What is fiscal drag?
Fiscal drag is what happens when tax thresholds stay the same while pay and prices rise. More of your income ends up taxed, or taxed at a higher rate, even though the rates have not changed.
Are UK income tax thresholds frozen?
Yes. The personal allowance is frozen at £12,570 and the higher-rate threshold at £50,270 until April 2031. The additional-rate threshold stays at £125,140, after being cut from £150,000 in April 2023. The personal allowance and higher-rate threshold have not changed since April 2021.
How much more take-home pay would I have if the thresholds had risen with inflation?
It depends on your salary. The difference is about £700 a year on £30,000, £1,650 on £55,000 and £3,540 on £100,000. It narrows at very high pay, to about £2,140 on £150,000, because the personal allowance is withdrawn above £100,000. Enter your own salary in the calculator for your figure.
Does the calculator work for Scotland?
No. It covers employees in England, Wales and Northern Ireland with a standard tax code. Scotland sets its own income tax rates and bands.
Is this tax advice?
No. It gives estimates for illustration. Check your own position with HMRC or a qualified adviser.