The UK’s 40 tax bracket stands for the point at which income tax rate increases. Anyone who earns over £50,270 and no more than £125,140 each year is taxed 40% on the income they receive during this time. You do not need to include the personal allowance (normally £12,570) in this bracket and only if your income is greater than £125,140 is the allowance taken away. You are only taxed on the eligible parts of your balance not on all of it.