Tax Brackets

A tax bracket is a tax band that dictates the tax rate for an individual or company. In the case of English income tax, for example, individuals have a tax bracket relative to income after all allowable deductions (including the personal allowance of £12,750) as follows: no income tax is payable on income earned below the personal allowance; 20% is payable on income on the next £37,700 (i.e. up to £50,270); 40% on the portion up to £150,000; and 45% above that.