IN PLAIN ENGLISH
A slice of income taxed at one rate — basic, higher or additional.
WHERE YOU MEET IT
Pick yours, or enter your income so it can be worked out, in the Tax Year widget's settings.
WATCH OUT FOR
Dividends and gains sit on top of your other income, so your salary decides which band they land in.
FULL DEFINITION
A slice of taxable income charged at one rate: basic, higher or additional.
EXAMPLE
In 2026/27, with a £45,000 salary, the first £5,270 of dividends fits in the basic-rate band; dividends above that are taxed at the higher dividend rate.
HOW IT'S CALCULATED
Picked on the widget, the band applies one set of rates to everything. Worked out from your other income, it's the band your total taxable income reaches: other income, plus interest, plus dividends, less the personal allowance. Dividends, interest and gains always use the UK bands, in Scotland too.
EXPLAINED IN
Educational content only. It is not personal financial advice.