UK income tax is confusing and most people do not realise just how much tax they are paying on their income. Watch this video to see the UK tax system explained and EXPOSED in less than 10 minutes!

When people ask how much tax do I pay in the UK, they are often referring to income tax, however, they often forget about National Insurance.

UK employees also pay National Insurance tax, this is currently 13.5% for basic rate income and drops down to 3.5% for all earnings above the upper earnings limit.

Income tax explained is a popular search term as UK tax isn't as straightforward as it first seems.

The UK income tax rates are as follows:
Basic Income Tax 20%
Higher Rate Income Tax 40%
Additional Rate Income Tax 45%

There is also a marginal tax rate known as the 60% tax trap, this applies to earnings between £100,000 and £125,000.

For every £2 earned above £100,000, employees lose £1 of their personal tax allowance they are effectively taxed at 60% on this part of their salary.

The personal allowance in the UK is £12570 and this is the amount that you can earn tax free.