Skip to main content
UK Tax Allowances and Brackets for 2026/27
Updated March 2026
April Leeson, Financial Adviser - DipPFS
As we enter the 2026/27 tax year, staying informed about your tax obligations is more than just a matter of compliance, it's a key part of protecting your long-term wealth. While many of the headline thresholds remain frozen, the subtle shifts in the tax landscape, combined with the effects of inflation, mean that more people than ever are finding themselves in higher tax brackets.
At The Private Office, we believe that effective tax planning is not a one-off event but an ongoing conversation. This page provides a clear breakdown of the rates and allowances for the 2026/27 tax year to help you understand how they apply to your unique financial journey.
The Personal Allowance is the amount of income you can earn each year before you start paying Income Tax. For the 2026/27 tax year, the standard Personal Allowance remains frozen at £12,570.
While a frozen allowance might suggest stability, it often results in what economists call 'fiscal drag'. As salaries rise to meet the cost of living, a larger proportion of your earnings may exceed this tax-free limit.
It is also important to remember that the Personal Allowance is not available to everyone in full. If your 'adjusted net income' exceeds £100,000, your allowance reduces by £1 for every £2 earned above that threshold. This means that for those earning £125,140 or more, the Personal Allowance is removed entirely. If you fall into this bracket, maximising your tax allowances through pension contributions or charitable giving can be an effective way to restore some of this allowance.
| Earning bracket | Personal allowance |
|---|---|
| Under £100,000 | £12,570 |
| £100,000 to £125,140 | Reduced by £1 for every £2 earned between £100,000 and £125,140 |
| Over £125,140 | £0 |
You may also be entitled to other allowances and reliefs based on your circumstances. We've summarised the main ones below.
| Main personal allowances and reliefs | 2026/27 | 2025/26 |
|---|---|---|
| Marriage/civil partners’ transferable allowance | £1,260 | £1,260 |
| Blind person’s allowance | £3,250 | £3,250 |
| Rent-a-room relief | £7,500 | £7,500 |
| Property allowance and trading allowance (each) | £1,000 | £1,000 |
Your income tax band is determined by your total taxable income (which includes salary, bonuses, pensions and rental income) after your Personal Allowance has been deducted. For 2026/27, the thresholds for England, Wales and Northern Ireland remain unchanged, continuing the freeze that is currently due to last until 2031.
Understanding your band is the first step in identifying opportunities for investment management that could lower your overall liability. For instance, higher-rate taxpayers may want to consider the benefits of holding assets within a Cash ISA or a Stocks and Shares ISA to shield their returns from further taxation.
Income tax bands for England, Wales and Northern Ireland for 2026/27
| UK taxpayers excluding Scottish taxpayers’ non-dividend, non-savings income | 2026/27 | 2025/26 |
|---|---|---|
| 20% basic rate on taxable income up to | £37,700 | £37,700 |
| 40% higher rate on next slice of income over | £37,700 | £37,700 |
| 45% additional rate on income over | £125,140 | £125,140 |
Income tax bands for Scotland for 2026/27
| Scottish taxpayers’ non-dividend, non-savings income | 2026/27 | 2025/26 |
|---|---|---|
| 19% basic rate on taxable income up to | £3,967 | £2,827 |
| 20% basic rate on next slice up to | £16,956 | £14,921 |
| 21% intermediate rate on next slice up to | £31,092 | £31,092 |
| 42% higher rate on next slice up to | £62,430 | £62,430 |
| 45% advanced rate on next slice up to | £125,140 | £125,140 |
| 48% top rate on income over | £125,140 | £125,140 |
One of the most significant changes for the 2026/27 tax year is the increase in Dividend Tax rates. While the Dividend Allowance remains at £500, the rates applied to any income above this have risen by 2% for Basic and Higher rate taxpayers.
| Dividend Tax Band | 2026/27 rate |
|---|---|
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
For business owners who pay themselves via dividends, or investors with significant portfolios held outside of tax-efficient wrappers, this increase makes the timing of income and the structure of your assets more critical than ever.
As well as your personal tax allowance, there are various other taxes and allowances to be aware of which may impact your income. We've summarised the main ones below.
For a comprehensive view of all tax rates and thresholds for the tax year 2026/27, download our free Tax Tables guide.
Income Tax
The tax rates you'll pay on the income you earn.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Personal allowance*
|
£12,570
|
£12,570
|
Marriage/civil partners' transferable allowance
|
£1,260
|
£1,260
|
Blind person's allowance
|
£3,250
|
£3,130
|
Rent-a-room relief
|
£7,500
|
£7,500
|
Property allowance and trading allowance (each)
|
£1,000
|
£1,000
|
Description
|
2026/27
|
2025/26
|
|---|---|---|
20% basic rate on taxable income up to
|
£37,700
|
£37,700
|
40% higher rate on next slice of income over
|
£37,700
|
£37,700
|
45% additional rate on income over
|
£125,140
|
£125,140
|
Description
|
2026/27
|
2025/26
|
|---|---|---|
19% starter rate on taxable income up to
|
£3,967
|
£2,827
|
20% basic rate on next slice up to
|
£16,956
|
£14,921
|
21% intermediate rate on next slice up to
|
£31,092
|
£31,092
|
42% higher rate on next slice up to
|
£62,430
|
£62,430
|
45% advanced rate on next slice up to
|
£125,140
|
£125,140
|
48% top rate on income over
|
£125,140
|
£125,140
|
Description
|
2026/27
|
2025/26
|
|---|---|---|
Starting rate at 0% on band of savings income up to**
|
£5,000
|
£5,000
|
Personal savings allowance at 0% (basic rate)
|
£1,000
|
£1,000
|
Personal savings allowance at 0% (higher rate)
|
£500
|
£500
|
Personal savings allowance at 0% (additional rate)
|
£0
|
£0
|
Dividend allowance at 0%
|
£500
|
£500
|
Dividend tax rate (basic)
|
10.75%
|
8.75%
|
Dividend tax rate (higher)
|
35.75%
|
33.75%
|
Dividend tax rate (additional)
|
39.35%
|
39.35%
|
Description
|
2026/27
|
2025/26
|
|---|---|---|
Income exemption generally
|
£500
|
£500
|
Rate applicable to trusts: Dividends
|
39.35%
|
39.35%
|
Rate applicable to trusts: Other income
|
45%
|
45%
|
Pensions
Key figures and allowances to be aware of for your pensions.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Lump sum and death benefit allowance
|
£1,073,100
|
£1,073,100
|
Lump sum allowance
|
£268,275
|
£268,275
|
Money purchase annual allowance
|
£10,000
|
£10,000
|
Annual allowance*
|
£60,000
|
£60,000
|
Annual allowance charge on excess is at applicable tax rate(s) on earnings.
Find out more about pensions, lump sums and the lump sum and death benefit allowance in our pensions hub.
Description
|
Annual
|
Weekly
|
|---|---|---|
New state pension
|
£12,547.60
|
£241.30
|
Basic state pension – single person*
|
£9,614.80
|
£184.90
|
Basic state pension – spouse/civil partner*
|
£5,759.00
|
£110.75
|
Read our state pension article to find out more.
National Insurance
Read the rates and thresholds for the different National Insurance classes.
Description
|
Employee
|
Employer
|
|---|---|---|
NICs rate
|
8%
|
15%
|
No NICs for employees generally on the first
|
£242 pw
|
£96 pw
|
No NICs for younger employees* on the first
|
£242 pw
|
£967 pw
|
NICs rate charged up to
|
£967 pw
|
No limit
|
2% NICs on earnings over
|
£967 pw
|
N/A
|
Description
|
Weekly
|
Monthly
|
Annual
|
|---|---|---|---|
Lower earnings limit
|
£129
|
£559
|
£6,708
|
Primary threshold
|
£242
|
£1,048
|
£12,570
|
Secondary threshold
|
£96
|
£417
|
£5,000
|
Upper earnings limit (and upper secondary thresholds)
|
£967
|
£4,189
|
£50,270
|
Description
|
Rate/Amount
|
|---|---|
Employment allowance (per business)*
|
£10,500
|
Class 1A Employer (on most taxable benefits)
|
15%
|
Class 2 Self-employed flat rate per week (voluntary)
|
£3.65 (£189.80 pa)
|
Class 2 Small profits threshold
|
£7,105
|
Class 4 Self-employed on profits of £12,570 to £50,270
|
6%
|
Class 4 Self-employed on profits over £50,270
|
2%
|
Class 3 Voluntary flat rate per week
|
£18.40 (£956.80 pa)
|
Investments
The thresholds and tax rates for ISAs and tax-incentivised investments.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Total ISA limit (excluding Junior ISAs (JISAs))
|
£20,000
|
£20,000
|
Lifetime ISA
|
£4,000
|
£4,000
|
JISA / Child Trust Fund
|
£9,000
|
£9,000
|
Find out more about ISAs, including Junior ISAs, Lifetime ISAs and Stocks and Shares ISAs in our article 'What is an ISA?'.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Venture Capital Trust (VCT) up to £200,000
|
20%
|
30%
|
Enterprise Investment Scheme (EIS) at 30%*
|
£2,000,000
|
£2,000,000
|
EIS eligible for CGT deferral relief
|
No limit
|
No limit
|
Seed EIS (SEIS) at 50%
|
£200,000
|
£200,000
|
SEIS CGT reinvestment relief
|
50%
|
50%
|
Capital Gains Tax
See the tax rates you'll pay on any profit when you sell or gift an asset.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Individuals, estates, etc
|
£3,000
|
£3,000
|
Trusts generally
|
£1,500
|
£1,500
|
Learn more about capital gains tax.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Below UK higher rate band
|
18%
|
18%
|
Within UK higher and additional rate bands
|
24%
|
24%
|
Carried interest (all tax bands)
|
N/A
|
32%
|
Trusts and estates
|
24%
|
24%
|
Inheritance Tax
Inheritance is a tax on your wealth that is paid on your death; see the thresholds and rates below.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Nil-rate band*
|
£325,000
|
£325,000
|
Residence nil-rate band*†
|
£175,000
|
£175,000
|
Rate of tax on excess /
if at least 10% net estate left to charity
|
40% / 36%
|
40%/36%
|
Lifetime transfers to and from certain trusts
|
20%
|
20%
|
Non-long-term resident spouse/civil partner exemption
|
£325,000
|
£325,000
|
Find out more about the thresholds, nil-rate bands and how to reduce an IHT bill in our inheritance tax hub.
Description
|
2026/27
|
2025/26
|
|---|---|---|
Businesses, unlisted shares, some farms
|
100% up to a maximum of £2,500,000*, with 50% thereafter
|
100%
|
AIM shares
|
50%
|
100%
|
Certain other assets
|
50%
|
50%
|
Description
|
Amount
|
|---|---|
Per donor
|
£3,000
|
Per donee
|
£250
|
Find out more about gifting and taper relief in our tax planning hub.
Stamp Duty
The rates and thresholds for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT).
Description
|
Rate
|
|---|---|
Stocks and marketable securities
|
0.5%
|
Residential property value
|
%
|
Commercial property value†
|
%
|
|---|---|---|---|
Up to £125,000
|
0
|
Up to £150,000
|
0
|
£125,001–£250,000
|
2
|
£150,001–£250,000
|
2
|
£250,001–£925,000
|
5
|
Over £250,000
|
5
|
£925,001–£1,500,000
|
10
|
||
Over £1,500,000
|
12
|
†0% for freeport and investment zone qualifying property in England only
Residential property value
|
%
|
Commercial property value†
|
%
|
|---|---|---|---|
Up to £145,000
|
0
|
Up to £150,000
|
0
|
£145,001–£250,000
|
2
|
£150,001–£250,000
|
1
|
£250,001–£325,000
|
5
|
Over £250,000
|
5
|
£325,001–£750,000
|
10
|
||
Over £750,000
|
12
|
†0% for freeport and investment zone qualifying property
Residential property value
|
%
|
Commercial property value†
|
%
|
|---|---|---|---|
Up to £225,000
|
0
|
Up to £225,000
|
0
|
£225,001–£400,000
|
6
|
£225,001–£250,000
|
1
|
£400,001–£750,000
|
7.5
|
£250,001–£1,000,000
|
5
|
£750,001–£1,500,000
|
10
|
Over £1,000,000
|
6
|
Over £1,500,000
|
12
|
VAT & Corporation Tax
Check the rates for VAT and corporation tax below.
Description
|
Rate/Threshold
|
|---|---|
Standard rate
|
20%
|
Domestic fuel
|
5%
|
Installation of energy saving materials (except NI)
|
0%
|
Registration level
|
£90,000
|
Deregistration
|
£88,000
|
Flat rate scheme turnover limit
|
£150,000
|
Cash and annual accounting schemes turnover limit
|
£1,350,000
|
Profits
|
Effective Rate
|
|---|---|
£0–£50,000
|
19.0%
|
£50,001–£250,000
|
26.5%
|
£250,001 and above
|
25.0%
|
Diverted profits
|
31%
|
Loans to participators
|
33.75%
|
Description
|
Allowance / Rate
|
|---|---|
Plant & machinery (P&M) 100% annual investment allowance (1st year)
|
£1,000,000
|
P&M allowance for companies (1st year)*
|
100%
|
Special rate P&M allowance for companies (1st year)*
|
50%
|
P&M allowance for all businesses (1st year) from 1 January 2026
|
40%
|
P&M**
|
14%
|
Patent rights and know-how**
|
25%
|
Special rate P&M e.g. long-life assets and integral features of buildings**
|
6%
|
Structures and buildings (straight line)†
|
3%
|
Motor cars - CO2 emissions of g/km:
0*
1-50
Over 50
|
Capital allowance:
100% first year
18% pa**
6% pa**
|
**Annual reducing balance
†10% for freeports & investment zones
Description
|
Rate
|
|---|---|
Capital expenditure
|
100%
|
R&D merged scheme
|
20%
|
R&D intensive SME payable credit
|
14.5%
|
R&D intensive SME intensity ratio
|
30%
|
Benefits
Find the main benefit rates, including child benefits and statutory pay rates below.
Description
|
Rate
|
|---|---|
NLW aged 21 and over
|
£12.71/hour
|
NMW aged 18-20
|
£10.85/hour
|
NMW Under 18/apprentice
|
£8.00/hour
|
Description
|
Weekly
|
|---|---|
First or only child
|
£27.05
|
Each subsequent child
|
£17.90
|
Description
|
Weekly
|
|---|---|
For certain benefit claimants, per child under 16
|
£28.20
|
Description
|
Rate
|
|---|---|
Statutory Sick Pay (standard rate)
|
£123.25
|
Statutory Maternity/Adoption Pay (first 6 weeks)
|
90% of average weekly pay
|
Statutory Maternity/Adoption Pay (next 33 weeks)
|
90% of average weekly pay up to £194.32
|
Statutory Paternity Pay
|
90% of average weekly pay up to £194.32
|
Shared Parental Pay (up to 37 weeks)
|
90% of average weekly pay up to £194.32
|
Car & Mileage
The tax rates and allowances on company car benefits.
Description
|
Rate
|
|---|---|
Cars and vans (first 10,000 miles)
|
45p per mile
|
Cars and vans (over 10,000 miles)
|
25p per mile
|
Qualifying passenger
|
5p per mile
|
Motorcycles
|
24p per mile
|
Bicycles
|
20p per mile
|
Description
|
2026/27
|
2025/26
|
|---|---|---|
Zero emission cars
|
4%
|
3%
|
Fuel benefit multiplier - taxable amount for private use
|
£29,200
|
£28,200
|
Petrol and diesel hybrids with CO2 emissions 1–50g/km
Range – electric-only miles
<30
30-39
40-69
70-129
130+
|
-
-
16%
14%
10%
7%
4%
|
-
-
15%
13%
9%
6%
3%
|
All non-diesel cars over 50g/km CO2
51-54
55 and over
|
-
17%
18%*–37%
|
-
16%
17%*–37%
|
Diesels not meeting RDE2: add 4% to non-diesel rates, up to 37%
Description
|
2026/27
|
2025/26
|
|---|---|---|
Zero emission: chargeable amount
|
Nil
|
Nil
|
Other vans: chargeable amount
|
£4,170
|
£4,020
|
Fuel: chargeable amount
|
£798
|
£769
|
Discover all of our tax planning services >
The Financial Conduct Authority does not regulate tax advice. This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.
Steffan Alemanno
Senior Financial Adviser - Chartered Financial Planner, APFS
Helping clients navigate their financial goals, Steffan is a Chartered Financial Planner who supports a wide range of planning needs and prepares them for both today and the future.
Ellie Jarvis
Senior Financial Adviser - Chartered Financial Planner, APFS
Based in Leeds, Ellie is a Chartered Financial Planner guiding clients nationwide through retirement, tax, investment and broader financial planning decisions.
Alex Hatfield
Partner - Chartered Financial Planner, FPFS, MCSI
Alex, Partner and Chartered Financial Planner, helps clients plan for every stage of life, using cash-flow modelling to give clarity and confidence in their financial future.