Tax Lab

Model year and geography. Tax year 2026/27 (6 April 2026 to 5 April 2027). Rates and thresholds were checked against GOV.UK on 4 October 2026. The three Income Tax sliders are the rates for England, Wales and Northern Ireland. Scotland sets its own rates and bands for earnings, so the “Me” view does not give a result for Scottish taxpayers.

The “Me” view. Works out Income Tax and employee National Insurance on one salary: Personal Allowance £12,570, reduced by £1 for every £2 of salary above £100,000 and gone at £125,140; the basic rate on the next £37,700 of taxable income; the higher rate on taxable income up to £125,140; the additional rate above that. Worked example: on a £120,000 salary the allowance is £2,570, taxable income is £117,430 and £79,730 of it is taxed at the higher rate, so raising the higher rate from 40% to 41% (1 percentage point) adds £797.30 a year.

What the “Me” view leaves out.Pension contributions, other income (savings, dividends, property, self-employment), benefits in kind, student loan repayments, Marriage Allowance, Blind Person’s Allowance and other reliefs. National Insurance is worked out on the yearly salary for an employee under State Pension age. Cards show changes from today’s rates, with the totals beside them. The “Income Tax on your next £1” card is Income Tax only; National Insurance is stated separately. It is a policy illustration, not a tax calculation for you.

UK mode.Uses HMRC’s own published “Direct effects of illustrative tax changes” ready-reckoner directly — the same figures HMRC uses in Budget scorecards — rather than grossing up the personal calculation, which would need a full income-distribution microsimulation this simulator doesn’t have. HMRC states these “account for taxpayers’ behavioural responses”, not a static costing. Scaling beyond 1 percentage point is a disclosed linear extrapolation of HMRC’s own per-point figure.

Employer National Insurance. Never affects your personal take-home pay directly — but who ultimately bears an employer NI change (wages, prices, or profits) is a genuinely contested economic question, deliberately left unquantified rather than assumed.

Wealth tax.A hypothetical ONE-OFF tax — assessed once on wealth at a fixed date, paid in 5 annual instalments — modelled directly on the Wealth Tax Commission’s own six published threshold/revenue scenarios (a flat 5% cumulative rate, net of their own 10% non-compliance deduction). The Commission explicitly recommends a one-off tax over an annual one: efficiency, avoidance resistance, administration. Values between two published thresholds are our own disclosed linear interpolation, never an extrapolation beyond their published £250,000–£10,000,000 range.

Corporation Tax.The revenue figure uses HMRC’s ready-reckoner directly — a single combined figure for the main rate (25%) and small profits rate (19%, on profits under £50,000), since HMRC does not publish them separately. The business-investment effect is NOT scaled from that figure — it quotes OBR’s own published assessment of the 2023 19%→25% rise directly, a single historical case study rather than a per-percentage-point elasticity, and is explicitly weaker (“our own inference”, not an OBR finding) for a rate cut than for the rise OBR actually studied.

Behavioural response (Income Tax & NI, UK mode).HMRC’s ready-reckoner figures are NOT a naive, no-behaviour calculation — they already assume people’s taxable income responds to the rate they face. Click “Follow this consequence” on the revenue card for four separate unintended-consequence channels — the taxable-income elasticity itself, incorporation/ dividend-shifting, migration, and forestalling — each quoting named primary studies directly, never rescaling a historical figure to your chosen rate. Where the evidence genuinely disputes the size of an effect (it often does, even between specialists), this simulator says so rather than picking a number.

“Zero the bottom, surcharge the top” exemplar. HMRC publishes Income Tax percentile shares only at 1%, 5%, 10%, 25% and 50% — there is no published top-2% point. We tested two interpolation methods against a real intermediate HMRC data point (additional-rate payers, ≈top 2.43%, actual liability share 37.6%): linear interpolation was off by 3.1pp, a Pareto-tail (log-log) interpolation — the standard method for extrapolating fine top-income percentiles — was off by only 0.5pp. Pareto is used as the central estimate; linear is disclosed as the more conservative alternative. The bottom-10% side needs no interpolation — HMRC publishes that share directly (0.4% of total liability, ≈£1.1bn). Every static figure is this site’s own derived estimate, never presented as an HMRC or OBR costing — the behavioural-context card sets it directly alongside HMRC’s own post-behavioural analogue and a published high-response bound from IFS, rather than picking one number.