UK tax rates and thresholds 2026/27

The standard Personal Allowance is £12,570. It goes down by £1 for every £2 of adjusted net income over £100,000, so it is zero from £125,140.

Scottish taxpayers get the same £12,570 Personal Allowance but pay tax on earnings through six bands. GOV.UK shows the bands as income after allowances.

The first £500 of dividends is tax-free. Above that, the rate depends on your Income Tax band. The basic and higher dividend rates went up by 2 percentage points from 6 April 2026.

Employees pay Class 1 at 8% on earnings between the Primary Threshold and the Upper Earnings Limit and 2% above it. Employers pay 15% above the Secondary Threshold. Self-employed people pay Class 4 on profits over £12,570. Class 2 is voluntary: with profits of £7,105 or more it is treated as paid, and below that you can choose to pay it. Class 3 is the voluntary rate for filling gaps in your record.

You repay 9% of income over the threshold on Plans 1, 2, 4 and 5, and 6% over the threshold on a Postgraduate Loan. What you owe does not change the monthly amount.

Hourly rates from 1 April 2026.

Most goods and services carry the 20% standard rate. A business must register for VAT if its taxable turnover for the last 12 months goes over £90,000, or is expected to go over £90,000 in the next 30 days.

Residential rates for someone who will own only this property. Add 5% to every band if you will own more than one home. Non-UK residents usually pay a further 2%. Scotland and Wales set their own property taxes.

Gains above the annual tax-free allowance are taxed at 18% where they fall within the basic rate band (when added to taxable income) and 24% above it.

Tax is charged at 40% on the part of an estate above the threshold. Leaving a home to children or grandchildren can raise the threshold to £500,000, and a spouse or civil partner’s unused threshold can be added on the second death. The residence band tapers away by £1 for every £2 an estate is worth over £2 million.

For redundancies on or after 6 April 2026. You usually need 2 years’ service, and service counts for up to 20 years.

The tax-free amount an employer can pay when you use your own vehicle for work. The car and van rate for the first 10,000 miles rose from 45p to 55p for 2026/27.

After the first payment, which depends on CO2 emissions, most cars pay the standard rate. Cars with a list price over £40,000 (or electric cars over £50,000) pay an extra £440 a year for 5 years from the second time they are taxed.

Fuel Duty is a fixed amount per litre, and standard-rate VAT at 20% is also paid on road fuel. The pump prices are the UK averages for the week starting 12 October 2026 (DESNZ, published 13 October 2026).

Each council sets its own Band D figure; the other bands are fixed fractions of it. These are the England averages for 2026/27, including adult social care and parish precepts.