What frozen tax bands cost you
Your tax-free allowance has been stuck at £12,570 since 2021 while prices rose. See how much more tax you pay this year than if it had kept up with inflation.
Your answer
Enter your salary to see what the frozen thresholds cost you.
About this calculator
For anyone paid through payroll who wants to know what the freeze on the tax-free allowance and the 40% threshold means for them in pounds.
The thresholds are frozen until 2030/31, so as pay rises with prices, more of it is taxed, and more of it at 40%.
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How it’s worked out
We start from the 2021/22 tax-free allowance (£12,570) and basic rate band (£37,700), the last year they went up. We raise them each year by the inflation figure the law uses (the consumer prices index for September before the tax year), rounding up as the law says: the allowance's rise to the next £10, the basic rate band to the next £100. That gives an allowance of £16,080 this year and a 40% rate starting at £64,480.
We work out this year's income tax and National Insurance twice, with the real thresholds and with the inflation-linked ones, moving the National Insurance limits in line. The difference is what the freeze costs you. In Scotland only the allowance and National Insurance limits move, because the Scottish Parliament sets the bands above the allowance. We also give a rough total since 2022/23, if your pay had risen with inflation, on this year's rates.
Worked example
The frozen thresholds cost you about £983 this year in extra income tax and National Insurance.
2026/27 tax year · salary £30,000 · UK income tax rates · thresholds up by September CPI each year since 2021/22
| Your tax-free allowance in 2021/22, the last year it went up | £12,570 |
|---|---|
| 2022/23: up by inflation of 3.1% (CPI, September 2021), rounded up to the next £10 | £12,960 |
| 2023/24: up by inflation of 10.1% (CPI, September 2022), rounded up to the next £10 | £14,270 |
| 2024/25: up by inflation of 6.7% (CPI, September 2023), rounded up to the next £10 | £15,230 |
| 2025/26: up by inflation of 1.7% (CPI, September 2024), rounded up to the next £10 | £15,490 |
| 2026/27: up by inflation of 3.8% (CPI, September 2025), rounded up to the next £10 | £16,080 |
| The basic rate band would be £48,400 (not £37,700), rounded up to the next £100 each year | £48,400 |
| So the 40% rate would start at £64,480, not £50,270 | £64,480 |
| Income tax this year, with the allowance frozen at £12,570 | £3,486 |
| Income tax if it had gone up with inflation to £16,080 | £2,784 |
| Extra income tax because of the freeze | £702 |
| National Insurance this year (8% from £12,570 to £50,270, 2% above) | £1,394 |
| National Insurance with the limits moved in line (8% from £16,080 to £64,480) | £1,114 |
| Extra National Insurance because of the freeze | £281 |
| The freeze costs you this year | £983 |
| Rough guide: the freeze's cost over 2022/23 to 2026/27, if your pay rose with inflation, on this year's rates | £3,130 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Why can National Insurance go down when thresholds are frozen?
National Insurance is 8% on pay between the two limits and 2% above. If the upper limit had risen, more of your pay would be charged at 8% instead of 2%. For higher earners, that part of the freeze saves a little, but the income tax side costs much more.
How long will the thresholds stay frozen?
The tax-free allowance, the 40% threshold and the National Insurance limits are set to stay the same until April 2031, the end of the 2030/31 tax year.
Can I do anything about it?
Paying more into a pension from pay before tax, or through salary sacrifice, lowers the income that's taxed. It can bring you back under £50,270 or £100,000. Talk to us before you change anything.
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