The additional rate is the top band of Income Tax, charged on income above a high threshold. It applies to earnings, self-employment profits, and other income once total income passes this level.
The loss of the Personal Allowance
Before income reaches the additional rate threshold, the Personal Allowance is gradually withdrawn as income rises, which can create an effective marginal rate higher than the headline additional rate itself. Pension contributions are often used to manage income in this range.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.