Tinker is right about the £30k being tax free.
Above that, the income is subject to income tax.
But, I don't think it is all taxed at your highest rate, rather it is treated as normal income and goes towards the normal income brackets.
Hence, if you are a normal rate payer, the amount up to the higher rate threshold will be taxed at normal rate, then any amount over the higher rate threshold will be taxed at the higher rate.
This is all from memory when my old man was made redundant 10 years or so ago, so it is not a recent change!