Resources · Reviewed 2 August 2026

Tax rates 2026/27.

Every UK rate, allowance and threshold for the current tax year: income tax, National Insurance, pensions, capital gains, inheritance tax, corporation tax, VAT, stamp duty and the key filing dates, with the planning points that go with them.

Download the PDF ↓Checked against GOV.UK and HMRC

Personal allowance£12,570

Higher rate starts£50,270

Dividend upper rate35.75%

CGT main rates18/24%

Corporation tax main rate25%

IHT nil rate band£325,000

Personal tax

Income TaxEngland, Wales & NI

Rates on taxable income	Band	Rate
Basic rate	£1 to £37,700	20%
Higher rate	£37,701 to £125,140	40%
Additional rate	Over £125,140	45%
Allowances	2026/27	2025/26
Personal allowance Reduced by £1 for every £2 of adjusted net income over £100,000, so nil at £125,140	£12,570	£12,570
Marriage allowance Transferable; worth up to £252 of tax	£1,260	£1,260
Blind person's allowance	£3,250	£3,130
Married couple's allowance Born before 6 Apr 1935; relief at 10%. Min £4,530	£11,700	£11,270
Trading allowance / property allowance	£1,000	£1,000
Rent-a-room relief	£7,500	£7,500

Planning point: the 62% tax trapBetween £100,000 and £125,140 the withdrawal of the personal allowance creates an effective marginal rate of 62% on earnings once National Insurance is included (60% from income tax alone). A pension contribution or Gift Aid donation that brings adjusted net income back to £100,000 gets income tax relief at an effective 60%. Salary sacrifice can also save the 2% National Insurance.

Savings & Dividend Income

Dividends	2026/27	2025/26
Dividend allowance	£500	£500
Ordinary rate ▲	10.75%	8.75%
Upper rate ▲	35.75%	33.75%
Additional rate	39.35%	39.35%
Savings	2026/27	2025/26
Starting rate for savings: 0% Only available where non-savings income is below £17,570	£5,000	£5,000
Personal savings allowance: basic rate	£1,000	£1,000
Personal savings allowance: higher rate Nil for additional rate taxpayers	£500	£500

Dividend rates rose 2 points on 6 April 2026. For an owner-managed company the salary/dividend balance, and the timing of declarations either side of 5 April, are worth revisiting rather than repeating last year's numbers.

Where the Marginal Rates BiteEmployees, incl. NIC

£50,270 to £100,000	42%
£60,000 to £80,000 with children 42% plus 1% of Child Benefit clawed back for every £200	42% +
£100,000 to £125,140, the 62% tax trap	62%
£100,000 with children in funded childcare Tax-Free Childcare and funded hours are lost outright at the line	100%+
Over £125,140	47%

Pension contributions and Gift Aid reduce adjusted net income and can step you back out of every band above.

National InsuranceClass 1, 2, 3 & 4

Employees: Class 1 primary	Annual	Rate
Lower earnings limit	£6,708
Primary threshold	£12,570
Earnings £12,570 to £50,270		8%
Earnings above £50,270		2%
Employers: Class 1 secondary	Annual	Rate
Secondary threshold	£5,000	15%
Class 1A and Class 1B on benefits		15%
Employment allowance Not available to sole-director companies with no other qualifying employee	£10,500
Self-employed	Threshold	Rate
Class 2: voluntary Profits above the small profits threshold give a qualifying year at no cost. From 6 April 2026 not available for periods abroad: Class 3 only, with a 10-year UK residence or contribution test	£7,105	£3.65 pw
Class 3: voluntary		£18.40 pw
Class 4: profits £12,570 to £50,270		6%
Class 4: profits above £50,270		2%

Child Benefit & the HICBC

Charge starts (fully clawed back at £80,000) Based on the higher earner's adjusted net income	£60,000
Rate of charge	1% per £200

State Pension & Statutory PayWeekly

New State Pension	£241.30
Basic State Pension: full rate (category B spouse's rate £110.75)	£184.90
Statutory Sick Pay Or 80% of average weekly earnings if lower; payable from the first day of sickness	£123.25
Statutory Maternity / Paternity Pay Or 90% of average weekly earnings if lower; first 6 weeks of SMP at 90%	£194.32
National Living Wage: 21 and over 18 to 20: £10.85 \| Under 18 and apprentice: £8.00 (hourly, from 1 April 2026)	£12.71

Pensions & investments

Registered Pensions

Annual allowance	£60,000
Money purchase annual allowance Triggered by flexibly accessing a defined contribution pension	£10,000
Tapered allowance: threshold income	£200,000
Tapered allowance: adjusted income Allowance reduced by £1 for every £2 above, to a minimum of £10,000	£260,000
Lump sum allowance Broadly the cap on tax-free cash	£268,275
Lump sum & death benefit allowance	£1,073,100
Overseas transfer allowance	£1,073,100
Maximum relievable contribution 100% of relevant UK earnings, or £3,600 gross if higher	100%

Planning point: carry forwardUnused annual allowance can be carried forward three tax years provided you were a member of a registered scheme in each. For 2026/27 that reaches back to 2023/24, and any unused 2023/24 allowance is lost after 5 April 2027.

Tax-Efficient Investments

ISAs	Limit	Relief
Overall ISA subscription limit	£20,000
Junior ISA	£9,000
Lifetime ISA Open between ages 18 and 39; 25% government bonus	£4,000	+25%
Venture capital schemes	Limit	Relief
EIS £2m where above £1m is in knowledge-intensive companies. 3-year hold	£1,000,000	30%
SEIS 3-year hold; half of any gain reinvested is exempt from CGT, up to £100,000 of gains	£200,000	50%
VCT ▼Relief cut from 30% to 20% for shares issued on or after 6 April 2026. 5-year hold	£200,000	20%

Risk warning. EIS, SEIS and VCT investments are high risk and illiquid. Relief depends on the company retaining qualifying status. We advise on the tax position, not the merits of the investment.

Capital & estate

Capital Gains Tax

Annual exempt amount	2026/27	2025/26
Individuals, and personal representatives for the year of death and the next two years	£3,000	£3,000
Most trustees	£1,500	£1,500
Rates	2026/27	2025/26
Individuals: basic rate band	18%	18%
Individuals: above basic rate band	24%	24%
Trustees and personal representatives	24%	24%
Business Asset Disposal Relief ▲£1m lifetime limit per individual	18%	14%
Investors' Relief ▲£1m lifetime limit	18%	14%

BADR is now 18%, up from 14% in 2025/26 and 10% before that: £80,000 more tax on a £1m gain than at 10%. If an exit is on the horizon, structure and timing decisions are worth taking early.

Reporting. If you are UK resident and owe tax on a UK residential property gain, you must report it and pay within 60 days of completion. Non-residents must report all UK property disposals within 60 days. Other gains are reported through Self Assessment.

Inheritance Tax

Thresholds and rates	2026/27
Nil rate band Frozen until 5 April 2031. Unused proportion transferable to a spouse or civil partner	£325,000
Residence nil rate band Withdrawn by £1 for every £2 of estate value above £2,000,000	£175,000
Rate on death	40%
Reduced rate Where 10% or more of the net estate passes to charity	36%
Lifetime rate on chargeable transfers	20%
Lifetime exemptions	Per year
Annual exemption One year's unused exemption may be carried forward	£3,000
Small gifts: per recipient	£250
Wedding gifts: child / grandchild / other	£5,000 / £2,500 / £1,000
Normal expenditure out of income	Unlimited
Taper relief: effective rate on gifts	Rate
0 to 3 years before death	40%
3 to 4 years \| 4 to 5 years	32% \| 24%
5 to 6 years \| 6 to 7 years	16% \| 8%
7 years or more	Nil

New from 6 April 2026: the APR/BR allowance. 100% agricultural and business property relief is now capped at a £2.5m allowance per person, transferable between spouses, with 50% relief on qualifying value above it. Shares traded on a recognised stock exchange but not listed, which in practice means AIM shares, qualify for 50% relief only. Succession plans written before this change may no longer do what they were built to do.

Trusts & Estates

Income tax: trustees	Dividend	Other
Discretionary and accumulation trusts	39.35%	45%
Interest in possession trusts ▲	10.75%	20%
De minimis: no tax if trust income is £500 or less; above that, all of it is taxed Divided where a settlor has more than one trust, to a floor of £100	£500
Inheritance tax: relevant property	Rate
Entry charge on lifetime transfer into trust On value above the available nil rate band	20%
Ten-year anniversary and exit charges: maximum	6%
CGT: annual exempt amount and rate	£1,500 / 24%

Stamp Duty Land TaxEngland & NI

Residential: consideration	Rate
Up to £125,000	0%
£125,001 to £250,000	2%
£250,001 to £925,000	5%
£925,001 to £1,500,000	10%
Over £1,500,000	12%
Supplements and reliefs	Rate
Additional dwellings On top of standard rates. Refundable if the former main residence is sold within 36 months	+5%
Non-UK resident purchasers	+2%
First-time buyers 0% to £300,000, then 5% to £500,000. No relief above £500,000	Relief
Companies: dwellings over £500,000 Unless a relief such as property rental business applies	17%

Scotland and Wales charge LBTT and LTT instead, at different rates and thresholds.

Business tax

Corporation TaxFY commencing 1 April 2026

Main rate: profits over £250,000	25%
Small profits rate: profits up to £50,000	19%
Marginal relief fraction Effective marginal rate of 26.5% between the limits	3/200
Patent Box effective rate	10%
R&D expenditure credit: merged scheme Taxable credit, above the line	20%
R&D intensive SMEs: extra deduction Loss-making SMEs with R&D of 30%+ of total expenditure; payable credit 14.5%	86%

Associated companies divide the £50,000 and £250,000 limits between them, as do short accounting periods.

Value Added Tax

Standard rate	20%
Reduced rate Domestic fuel and power, certain renovations, children's car seats	5%
Registration threshold Rolling 12 months, or expected to be exceeded in the next 30 days alone	£90,000
Deregistration threshold	£88,000
Flat rate scheme: joining turnover	£150,000
Cash and annual accounting: joining turnover	£1,350,000

Capital Allowances

Annual Investment Allowance Most plant and machinery, including second-hand assets. Shared across a group	£1,000,000
Full expensing: companies, new main rate assets	100%
50% first-year allowance: companies, new special rate assets	50%
First-year allowance, main rate ★New from 1 January 2026. Available to unincorporated businesses and leased assets. Excludes cars, second-hand assets and overseas leasing	40%
Writing down allowance: main pool ▼Reduced from 18%. Effective 1 April 2026 for companies, 6 April 2026 for income tax	14%
Writing down allowance: special rate pool	6%
Structures and Buildings Allowance	3%

Employment

Company Cars, Vans & Mileage

Car benefit: appropriate percentage	CO2 g/km	%
Zero emission	0	4%
Plug-in hybrid: electric range 130 miles +	1 to 50	4%
Electric range 70 to 129 / 40 to 69 miles	1 to 50	7% / 10%
Electric range 30 to 39 / under 30 miles	1 to 50	14% / 16%
51 to 74 g/km: 17% rising by 1% per 5 g/km to 21%; 75 g/km and above: 21% plus 1% per 5 g/km	51 to 54	17%
Maximum Diesel cars not meeting RDE2 add a 4% supplement, capped at 37%	155+	37%
Fuel and van charges	2026/27	2025/26
Car fuel benefit multiplier	£29,200	£28,200
Van benefit charge	£4,170	£4,020
Van fuel benefit charge	£798	£769
Own vehicle: approved mileage rates	First 10,000	Above
Cars and vans ▲Raised from 45p in June 2026, backdated to 6 April 2026	55p	25p
Motorcycles	24p	24p
Bicycles	20p	20p
Passenger supplement: per passenger	5p	5p

Planning point: the electric company carAt a 4% appropriate percentage, an electric car provided through the company remains one of the most efficient benefits available. The percentage is legislated to rise to 5% in 2027/28 and further thereafter, so the advantage narrows over time rather than disappearing.

Employment & Payroll

Trivial benefits exemption: per benefit £300 annual cap for directors of close companies and their families	£50
Annual staff functions: per head	£150
Homeworking allowance: per week Employer reimbursement without evidence	£6
Apprenticeship Levy: rate and allowance Employers with an annual pay bill over £3m	0.5% / £15,000

New from 6 April 2026. Employers can reimburse the cost of flu vaccinations, eye tests and homeworking equipment free of tax and NIC. Employees can no longer claim homeworking cost relief directly from HMRC.

Student Loan RepaymentsAnnual thresholds

Plan 1 \| Plan 2	£26,900 \| £29,385	9%
Plan 4 \| Plan 5	£33,795 \| £25,000	9%
Postgraduate loan	£21,000	6%

What’s changing, and when

Now

In force from 6 April 2026

Dividend ordinary and upper rates up 2 points. BADR and Investors' Relief at 18%. VCT relief cut to 20%. APR/BR £2.5m allowance introduced. Main pool writing down allowance cut to 14%. Mileage for cars and vans up to 55p. MTD for Income Tax begins above £50,000 of qualifying income.

Apr 2027

Savings and property income rates rise

Savings and property income rates rise 2 points to 22%, 42% and 47% (England and Northern Ireland; the Senedd and the Scottish Parliament can set their own property rates for Welsh and Scottish taxpayers). Unused pension funds and most death benefits enter the estate for inheritance tax. Cash ISA subscriptions capped at £12,000 for under-65s within the £20,000 limit. MTD extends above £30,000.

Apr 2028

Making Tax Digital widens again

Qualifying income above £20,000 comes into quarterly reporting. A high value council tax surcharge on residential property is due to begin.

Apr 2029

Salary sacrifice into pensions capped

NIC relief on pension salary sacrifice limited to £2,000 a year. Employee and employer National Insurance will be charged on amounts sacrificed above that.

Apr 2031

Thresholds unfrozen

Income tax and NIC thresholds and the IHT nil rate band are frozen until this date, pulling more income into higher bands each year.

Key dates 2026/27

2026

31 OctPaper Self Assessment return for 2025/26

30 DecFile online to have tax under £3,000 collected through your 2027/28 PAYE code

2027

31 JanOnline return, balancing payment for 2025/26 and first payment on account for 2026/27

5 AprEnd of the 2026/27 tax year: ISA and CGT allowances lapse, and unused 2023/24 pension allowance can no longer be carried forward

6 JulP11D and P11D(b) for 2026/27; employee copies due

22 JulClass 1A National Insurance paid electronically

31 JulSecond payment on account for 2026/27

Ongoing

19 / 22Monthly PAYE and NIC: post by the 19th, electronic by the 22nd

60 daysReport and pay CGT on UK residential property after completion

9m + 1dCorporation tax payment for companies outside the quarterly regime

12 monthsCorporation tax return filing deadline

Rates apply to England, Wales and Northern Ireland unless stated. Scottish taxpayers pay different income tax rates and bands on non-savings, non-dividend income. Welsh rates are currently the same as in England and Northern Ireland. This page is a summary for information only and is not formal tax advice; please take advice on your own position before acting.

Tax rates 2026/27, questions answered.

For England, Wales and Northern Ireland the basic rate is 20% on taxable income up to £37,700, the higher rate is 40% from £37,701 to £125,140, and the additional rate is 45% above £125,140. The personal allowance is £12,570 and is withdrawn by £1 for every £2 of adjusted net income above £100,000, so it is fully gone at £125,140. Scottish taxpayers pay different rates and bands on non-savings, non-dividend income.

Yes. From 6 April 2026 the ordinary dividend rate rose from 8.75% to 10.75% and the upper rate rose from 33.75% to 35.75%. The additional rate is unchanged at 39.35% and the dividend allowance remains £500. For company owners this changes the arithmetic on the salary and dividend mix.

The nil rate band is £325,000 and the residence nil rate band is £175,000, both frozen until 5 April 2031. The residence nil rate band is withdrawn by £1 for every £2 of estate value above £2,000,000. The rate on death is 40%, reduced to 36% where at least 10% of the net estate passes to charity.

Business Asset Disposal Relief and Investors' Relief are charged at 18% for disposals on or after 6 April 2026, up from 14% in 2025/26 and 10% in 2024/25. The lifetime limit is £1 million for each relief.

From 6 April 2026, 100% agricultural property relief and business property relief are capped by a £2.5 million allowance per person, transferable between spouses and civil partners, with 50% relief on qualifying value above the allowance. Shares quoted on a recognised exchange but not listed, which in practice means AIM shares, qualify for 50% relief only.

55p per mile for the first 10,000 business miles in cars and vans, then 25p. The 45p rate was increased to 55p in June 2026 and backdated to 6 April 2026, so cards published earlier in the year still show the old figure. Motorcycles are 24p, bicycles 20p, and there is a 5p per passenger supplement.

Making Tax Digital for Income Tax applies from 6 April 2026 where qualifying income from self-employment and property was above £50,000 in the 2024/25 return. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.

The main rate is 25% on profits above £250,000 and the small profits rate is 19% on profits up to £50,000, with marginal relief between the two at a fraction of 3/200, giving an effective marginal rate of 26.5%. Both limits are shared between the company and any associated companies, so they are divided by the number of associated companies plus one, and are reduced for short accounting periods.

Savings income and property income will be taxed at 22%, 42% and 47% in place of 20%, 40% and 45%. Unused pension funds and most death benefits come into the estate for inheritance tax, and cash ISA subscriptions are limited to £12,000 for those under 65 within the overall £20,000 limit.

Rates tell you what you owe.
Advice changes what you owe.

Everything on this page is public. What isn’t public is how the pieces fit together for you: the order you take income in, how a business is structured before a sale, what happens to a family company under the new relief cap.

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