Income tax thresholds frozen until April 2031
The personal allowance and the higher and additional rate thresholds won't rise with inflation until 2031 — so more of your income will be taxed as pay rises.
The main income tax thresholds are now frozen until the end of the 2030/31 tax year, three years longer than previously planned.
The frozen figures
- Personal allowance: £12,570
- Higher rate starts at: £50,270
- Additional rate starts at: £125,140
Why it matters
When thresholds stay still but pay rises, more of your income falls into the higher bands. This is often called fiscal drag. A pay rise that takes you over £50,270 means part of it is taxed at 40% rather than 20%.
The personal allowance is also still reduced by £1 for every £2 of income over £100,000, so income between £100,000 and £125,140 is taxed at an effective rate of around 60%.
What you can do
- Pension contributions can bring your taxable income back below a threshold
- Directors can plan their salary and dividend mix each year
- Couples may be able to share income more efficiently
Use our take-home pay calculator to see where you sit — then talk to us about planning.