UK Tax Rates, Thresholds and Allowances for 2025/26
UK Tax Rates, Thresholds & Allowances 2026/27
A practical guide to the main UK tax rates, thresholds and allowances for 2026/27, including Income Tax, National Insurance, dividends, Corporation Tax, VAT, Capital Gains Tax, pensions and ISAs.
This guide summarises the main UK tax rates, thresholds and allowances for 2026/27, including Income Tax, National Insurance, dividend tax, Capital Gains Tax, Corporation Tax, VAT, pensions, ISAs and Inheritance Tax. The 2026/27 tax year runs from 6 April 2026 to 5 April 2027.
UK Tax Rates 2026/27: Quick Answer
For most taxpayers in England, Wales and Northern Ireland, the 2026/27 Personal Allowance is £12,570. The basic Income Tax rate is 20%, the higher rate is 40% and the additional rate is 45%.
Employees generally pay National Insurance at 8% between the primary threshold and upper earnings limit and 2% above it. The Corporation Tax small profits rate is 19% and the main rate is 25%. The VAT registration threshold remains £90,000.
*For a taxpayer entitled to the full £12,570 Personal Allowance in England, Wales or Northern Ireland. Scotland has different Income Tax bands for non-savings, non-dividend income.
UK Income Tax Rates and Thresholds 2026/27
Income Tax is charged on taxable income including employment income, pension income, rental profits and self-employed profits. Different rules apply to dividend and savings income, while Scotland has separate rates and bands for non-savings, non-dividend income.
England, Wales and Northern Ireland
| Band | 2026/27 Rate | Total Income* |
|---|---|---|
| Personal Allowance | 0% | Up to £12,570 |
| Basic Rate | 20% | £12,571 to £50,270 |
| Higher Rate | 40% | £50,271 to £125,140 |
| Additional Rate | 45% | Over £125,140 |
*Assumes the taxpayer is entitled to the standard £12,570 Personal Allowance. The Personal Allowance is reduced once adjusted net income exceeds £100,000.
Personal Allowance 2026/27
The standard UK Personal Allowance for 2026/27 is £12,570. This is normally the amount of income an individual can receive before Income Tax becomes payable.
The £100,000 Personal Allowance Tax Trap
Once adjusted net income exceeds £100,000, the Personal Allowance is reduced by £1 for every £2 of excess income. At adjusted net income of £125,140, the standard Personal Allowance is completely lost.
This creates a particularly high effective marginal tax rate on income falling between £100,000 and £125,140. Pension contributions and Gift Aid donations can sometimes affect adjusted net income, so tax planning can be particularly important around this level.
Scottish Income Tax Rates 2026/27
Scottish taxpayers have different Income Tax rates and bands for non-savings and non-dividend income, such as employment, pension, rental and self-employment income.
| Scottish Band | Rate | Taxable Income After Allowances |
|---|---|---|
| Starter Rate | 19% | Up to £3,967 |
| Basic Rate | 20% | £3,968 to £16,956 |
| Intermediate Rate | 21% | £16,957 to £31,092 |
| Higher Rate | 42% | £31,093 to £62,430 |
| Advanced Rate | 45% | £62,431 to £125,140 |
| Top Rate | 48% | Over £125,140 |
These bands are shown as taxable income after allowances. UK-wide rules generally continue to apply to savings and dividend income.
Dividend Tax Rates and Allowance 2026/27
Dividend tax is particularly important for shareholders and owner-managed limited companies. The Dividend Allowance is £500 for 2026/27. Dividend income above the allowance is taxed according to the taxpayer's applicable tax band.
| Income Tax Band | 2026/27 Dividend Tax Rate |
|---|---|
| Basic Rate | 10.75% |
| Higher Rate | 35.75% |
| Additional Rate | 39.35% |
Company directors: the most tax-efficient combination of salary, dividends and pension contributions depends on both the company's circumstances and the director's other income. Dividend tax should therefore not be considered in isolation.
Personal Savings Allowance 2026/27
The Personal Savings Allowance can allow some savings interest to be received without paying Income Tax. The allowance depends on the taxpayer's Income Tax band.
| Taxpayer | Personal Savings Allowance |
|---|---|
| Basic-rate taxpayer | £1,000 |
| Higher-rate taxpayer | £500 |
| Additional-rate taxpayer | £0 |
A separate 0% starting rate for savings can apply to up to £5,000 of savings income for people with sufficiently low levels of other income. The available starting-rate band reduces as other income increases.
National Insurance Rates and Thresholds 2026/27
Employees generally pay Class 1 National Insurance through PAYE. Employers pay separate employer National Insurance contributions.
Employee National Insurance
| Annual Earnings | Employee NI Rate* |
|---|---|
| Up to £12,570 | 0% |
| £12,570 to £50,270 | 8% |
| Above £50,270 | 2% |
*Standard Category A employee rates. Different rates can apply to certain National Insurance categories.
Employer National Insurance
| 2026/27 Employer NI | Amount |
|---|---|
| Secondary Threshold | £5,000 per year |
| Standard Employer NI Rate | 15% |
For a standard employee, employer National Insurance is generally charged at 15% on earnings above the employer Secondary Threshold. Special rules and thresholds can apply to apprentices, employees under 21, veterans, Freeports and Investment Zones.
Self-Employed National Insurance 2026/27
Self-employed individuals mainly need to consider Class 4 National Insurance. Class 2 is no longer generally collected as a compulsory charge in the same way as it was historically, although voluntary Class 2 contributions can remain relevant in some circumstances.
| Class 4 Profit Band | 2026/27 Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570 to £50,270 | 6% |
| Above £50,270 | 2% |
The 2026/27 Small Profits Threshold is £7,105. Where the relevant conditions are met, self-employed people with profits at or above this level can receive National Insurance credits without paying Class 2 contributions. The voluntary Class 2 rate for 2026/27 is £3.65 per week.
Capital Gains Tax Rates and Allowance 2026/27
Capital Gains Tax (CGT) can arise when an individual sells or disposes of an asset for more than its allowable cost. Examples can include shares, investment property and business assets.
| CGT 2026/27 | Rate / Allowance |
|---|---|
| Annual Exempt Amount – Individuals | £3,000 |
| Annual Exempt Amount – Most Trustees | £1,500 |
| Basic Rate Band CGT Rate | 18% |
| Higher Rate CGT Rate | 24% |
The rate actually payable depends on the individual's taxable income and the amount and nature of the gain. Reliefs may also be available in particular circumstances.
Read our detailed guide to Capital Gains Tax on property.
Corporation Tax Rates 2026
UK limited companies pay Corporation Tax on taxable profits. The main rate is 25%, although companies with lower profits can qualify for the 19% small profits rate or Marginal Relief.
| Taxable Profits | Corporation Tax Treatment |
|---|---|
| £50,000 or less | 19% Small Profits Rate* |
| £50,001 to £250,000 | Marginal Relief may apply |
| Over £250,000 | 25% Main Rate |
*Subject to the applicable rules. The £50,000 and £250,000 thresholds can be reduced where a company has associated companies and for short accounting periods.
Important for company owners: the Corporation Tax thresholds are not always £50,000 and £250,000 for every company. Associated companies can significantly reduce the thresholds available to each company.
See our guide explaining when Corporation Tax is due and our guide on how to reduce Corporation Tax.
VAT Rates and Registration Threshold 2026/27
The UK VAT registration threshold is based on taxable turnover rather than profit. Businesses should monitor taxable turnover on a rolling 12-month basis, rather than simply checking turnover for their accounting year.
| VAT Rate / Threshold | 2026/27 |
|---|---|
| Standard VAT Rate | 20% |
| Reduced VAT Rate | 5% |
| Zero Rate | 0% |
| VAT Registration Threshold | £90,000 |
| VAT Deregistration Threshold | £88,000 |
A UK-established business generally needs to consider compulsory VAT registration if its taxable turnover for the previous 12 months exceeds £90,000, or if it expects taxable turnover to exceed £90,000 within the relevant 30-day test.
Inheritance Tax Thresholds 2026/27
Inheritance Tax (IHT) is generally charged on the value of an estate above the available tax-free thresholds, subject to exemptions and reliefs.
| IHT Threshold / Rate | 2026/27 |
|---|---|
| Nil-Rate Band | £325,000 |
| Residence Nil-Rate Band | Up to £175,000 |
| Standard IHT Rate | 40% |
| Residence Nil-Rate Band Taper Starts | £2 million estate value |
The residence nil-rate band is subject to qualifying conditions and can be tapered for larger estates. Unused qualifying nil-rate bands can potentially transfer between spouses and civil partners.
A qualifying married couple or civil partnership may potentially pass on as much as £1 million before IHT where both full nil-rate bands and residence nil-rate bands are available. This is not an automatic £1 million allowance for every estate.
Pension Tax Allowances 2026/27
Pension contributions can be highly tax-efficient, but several separate limits determine how much tax-relieved pension saving an individual can make.
| Pension Limit | 2026/27 |
|---|---|
| Standard Annual Allowance | £60,000 |
| Money Purchase Annual Allowance | £10,000 |
| Adjusted Income Threshold for Taper | £260,000 |
| Minimum Tapered Annual Allowance | £10,000 |
| Standard Lump Sum Allowance | £268,275 |
£60,000 is not automatically a tax-free contribution limit for everyone. The amount of personal contributions qualifying for tax relief can also depend on relevant UK earnings, while the annual allowance can be reduced for high earners or people who have flexibly accessed pension benefits.
ISA Allowances 2026/27
Individual Savings Accounts allow investments to grow free of UK Income Tax and Capital Gains Tax, subject to the applicable ISA rules and annual subscription limits.
| ISA | 2026/27 Allowance |
|---|---|
| Adult ISA | £20,000 |
| Junior ISA | £9,000 |
The overall adult ISA subscription limit can be allocated across eligible ISA products, subject to the rules applying to each ISA type.
Employment Allowance 2026/27
The Employment Allowance for 2026/27 is £10,500. Eligible employers can use the allowance to reduce their employer Class 1 National Insurance liability.
Eligibility rules apply. In particular, a company where the only employee liable for employer National Insurance is a director will not normally qualify simply because it operates a director-only payroll.
Making Tax Digital for Income Tax: 2026/27 Thresholds
Making Tax Digital for Income Tax is being introduced in stages for qualifying self-employed individuals and landlords. Whether a person must join depends on their qualifying income and the applicable tax year.
| MTD Start Date | Qualifying Income Threshold |
|---|---|
| 6 April 2026 | Over £50,000 |
| 6 April 2027 | Over £30,000 |
| 6 April 2028 | Over £20,000 |
Qualifying income broadly relates to gross income from self-employment and property before expenses, subject to the detailed MTD rules. Those brought within MTD will need compatible software and digital records.
Read our full Making Tax Digital guide and our guide to MTD software.
UK Tax Rates, Thresholds and Allowances 2026/27: Summary
Some of the most important UK tax figures to remember for 2026/27 are:
Individuals
Personal Allowance: £12,570
Higher-rate threshold*: £50,270
Additional-rate threshold: £125,140
Dividend Allowance: £500
CGT annual exemption: £3,000
Businesses
Corporation Tax: 19%–25%
VAT registration: £90,000
Employer NI: 15%
Employer NI threshold: £5,000
Employment Allowance: £10,500
*For taxpayers entitled to the standard Personal Allowance in England, Wales and Northern Ireland.
Frequently Asked Questions About UK Tax Rates 2026/27
What is the tax-free Personal Allowance for 2026/27?
The standard UK Personal Allowance for the 2026/27 tax year is £12,570. It reduces by £1 for every £2 of adjusted net income above £100,000 and is normally completely lost at £125,140.
What are the UK Income Tax rates for 2026/27?
For England, Wales and Northern Ireland, the main 2026/27 Income Tax rates are 20% basic rate, 40% higher rate and 45% additional rate. Scotland has separate rates and bands for non-savings, non-dividend income.
What is the 40% tax threshold for 2026/27?
For someone entitled to the full £12,570 Personal Allowance in England, Wales or Northern Ireland, the 40% higher rate generally starts when total income exceeds £50,270. Different bands apply to Scottish non-savings, non-dividend income.
What is the additional-rate tax threshold for 2026/27?
The additional rate of Income Tax generally applies above £125,140 in England, Wales and Northern Ireland.
What are the dividend tax rates for 2026/27?
The 2026/27 dividend tax rates are 10.75% for dividends falling within the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band. The Dividend Allowance is £500.
What is the National Insurance rate for employees in 2026/27?
Most Category A employees pay Class 1 National Insurance at 8% on earnings between the primary threshold and upper earnings limit and 2% above the upper earnings limit.
What is the employer National Insurance rate for 2026/27?
The standard employer National Insurance rate is 15%. For a standard Category A employee, the annual employer Secondary Threshold is £5,000.
What is the Corporation Tax rate for 2026?
The Corporation Tax main rate is 25%. A 19% small profits rate can apply to qualifying companies with profits of £50,000 or less, with Marginal Relief potentially applying between £50,000 and £250,000. These thresholds can be reduced by associated companies and for short accounting periods.
What is the VAT registration threshold in 2026?
The UK VAT registration threshold is £90,000 of taxable turnover. Businesses generally need to monitor turnover on a rolling 12-month basis rather than only looking at their annual accounts.
What is the Capital Gains Tax allowance for 2026/27?
The Capital Gains Tax Annual Exempt Amount for most individuals is £3,000 for 2026/27. The annual exempt amount for most trustees is £1,500.
What is the pension annual allowance for 2026/27?
The standard pension annual allowance is £60,000, although a lower allowance can apply to high-income individuals or people who have flexibly accessed pension benefits. Tax relief on personal contributions is also subject to separate rules, including relevant UK earnings.
When does Making Tax Digital for Income Tax start?
MTD for Income Tax starts from 6 April 2026 for qualifying self-employed people and landlords with qualifying income over £50,000. The threshold reduces to over £30,000 from April 2027 and over £20,000 from April 2028.
About This UK Tax Rates Guide
This guide has been prepared by The Online Accountants to provide a practical reference to the main UK tax rates, thresholds and allowances applying in 2026/27. Tax rules can depend on individual circumstances and can change following government announcements and legislation.
Last reviewed: 30 September 2026. Figures should be checked against current HMRC guidance before making significant tax, investment or financial decisions.
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