Learning aim
Pupils can explain what income tax is, why government collects it, and how the UK's band system means people on different incomes pay different rates.
National Curriculum links
- PSHE Association KS3 L24: about the role money plays in their own lives
- Citizenship KS3: the role of government in raising and managing public money
- Citizenship KS3: how taxes are used to provide public services
- Maths KS3: solve problems involving percentage change including financial contexts
What you'll need
- "Where does our tax money go?" infographic (NHS, education, roads, defence, etc.)
- UK Income Tax bands 2026/27 visual aid
- Tax calculator worksheet
- Mini-whiteboards
- Calculators
Lesson structure (50 minutes)
HOOK
TEACH
GUIDED
CHALLENGE
PLENARY
Adapting for all learners
Support (working below ARE)
Calculate tax on simple incomes only (£15k, £20k, £25k). Provide a tax-band table on a sheet. Calculator allowed. Focus on understanding what each band means rather than fast calculation.
Stretch (working above ARE)
Calculate tax on £55,000 and £130,000 (crossing into higher and then additional rate). Pupils explain in writing why a country might use a "progressive" tax system. Stretch question: "What would happen if everyone paid the same flat rate?"
SEND adaptations
For pupils with dyscalculia: pre-fill the band calculation template so pupils only do the final percentage step. For pupils with autism: provide a clear flowchart "is your income below £12,570? If yes → £0 tax. If no → calculate tax on the slice above £12,570 at 20%."
EAL support
Vocabulary: "income tax", "Personal Allowance", "band", "rate", "marginal", "progressive". Sentence frames: "If you earn £___, you pay £___ in tax." "The first £12,570 you earn is ___ because of the Personal Allowance."
Assessment criteria
Pupils can: (1) define income tax in one sentence; (2) name the four UK Income Tax bands and rates; (3) calculate the income tax on a £25,000 income; (4) explain in their own words why earning more never reduces overall take-home pay.
Homework pack
Four activities to consolidate UK income tax mechanics. ~30 minutes.
Band calculation
What pupils do: For each gross salary, calculate the UK income tax (England/Wales/NI 2026/27 rates): (a) £15,000, (b) £30,000, (c) £55,000, (d) £85,000. Show the band split for each.
Expected output: 4 calculations with band-by-band working.
Marking guidance: 2 marks per accurate total (8 marks). Bonus 4 marks for correct band splits.
Personal Allowance research
What pupils do: What is the Personal Allowance? Why does it exist? Who loses it (the taper rule)?
Expected output: A 3-question short-answer response.
Marking guidance: 2 marks per accurate answer. 6 marks total.
Public spending
What pupils do: Find 5 different things UK income tax pays for. Order them by approximate share of government spending (biggest first).
Expected output: A ranked list of 5 spending categories.
Marking guidance: 1 mark per category, 1 mark per correct relative ranking. 8 marks total (e.g. NHS, pensions, education, defence, welfare).
Extension (optional)
What pupils do: Compare England, Scotland, and Wales income tax for someone earning £50,000. Which nation pays the most? Why?
Expected output: A 3-nation comparison table plus 2-sentence explanation.
Marking guidance: Up to 6 marks for accurate research and conclusion (Scotland pays more above ~£28k).
Family discussion prompt (safeguarding-aware)
Ask a working adult: "Name three things you think our tax money pays for." Compare their answers to what you learned in class.
Classroom safeguarding
Answer key & differentiation
Answer guide
- Guided (England/Wales/NI 2026/27): £15,000 → £2,430 × 20% = £486; £25,000 → £2,486; £35,000 → £4,486 (£20,000 → £1,486 modelled). Lower salaries pay proportionally less because the £12,570 allowance covers a larger share.
- Challenge: the friend is wrong — only the slice above £50,270 is taxed at 40%, so a rise (almost) always increases take-home. Marginal rate at £40,000 = 20%.
- Homework band calculations: £15,000 → £486; £30,000 → £3,486; £55,000 → £7,540 + £1,892 = £9,432; £85,000 → £7,540 + £13,892 = £21,432.
- Personal Allowance research: £12,570 tax-free; it exists so low earners keep essential income; it tapers away by £1 for every £2 earned over £100,000, gone entirely at £125,140.
- Extension: Scotland's rates mean higher tax than England/Wales above roughly £28,000 at £50,000, as the marking note says.
Support (scaffold)
- Draw the "band wall": stack the salary as bricks (allowance brick, basic brick) so the slice idea is visual before any percentages.
- Two fixed calculator steps: salary − 12,570, then × 0.2 — written down between steps.
- Anchor phrase with a hand gesture: "slice, not cliff."
Stretch (challenge)
- Effective vs marginal: on £55,000 the average rate is £9,432 ÷ £55,000 ≈ 17%, while the marginal rate is 40% — explain the gap to a Year 7.
- Flat-tax debate: pick a rate that raises the same total from the class's four homework salaries and identify who wins and who loses.
- Investigate the £100,000 taper: what is the effective marginal rate on the £100,000–£125,140 slice once lost allowance is counted? (60%.)
Related lesson plans
- Understanding your first payslip (KS3 · Year 7 / Year 8)
- National Insurance — what it is, who pays it (KS3 · Year 8)
- Tax codes and emergency tax — decoding the letters and numbers (KS3 · Year 8 / Year 9)
- All lesson plans (KS1 · KS2 · KS3 · KS4) →