Additional Rate Taxpayer
UK tax glossary · Last reviewed: April 2026
The additional rate of 45% applies to taxable income above £125,140 (2026/27). At this income level, the Personal Allowance has been fully withdrawn, so the effective marginal rate between £100,000 and £125,140 is 60% before settling to 45% above £125,140.
Additional-rate taxpayers have no Personal Savings Allowance — all savings interest is taxable. The dividend tax rate is 39.35%, and CGT is charged at 24% on investments (28% on residential property). VCTs and EIS become particularly attractive at this income level.
In Scotland, the top rate is 48% above the Scottish top-rate threshold, and the advanced rate is 45%. Scottish high earners can face even higher marginal rates than their counterparts in England.
Common questions
Is there any way to reduce tax at the additional rate?
Pension contributions are highly effective — each £1 contributed saves 45p in tax. Gift Aid, ISAs, EIS, and VCTs all help. For those with business income, reviewing salary/dividend structures is also important.
Do additional-rate taxpayers get pension tax relief at 45%?
Relief at source schemes add basic-rate (20%) relief automatically; you claim the additional 25% through Self Assessment. Net pay schemes provide full relief at your marginal rate automatically.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.