UK Tax Rates and Allowances 2026/27

Income tax rates and bands 2026/27

Income tax applies to earnings from employment, self-employment, pensions and most other taxable income. Rates for England, Wales and Northern Ireland in 2026/27:

Band	Taxable income	Rate
Personal allowance	£0 – £12,570	0%
Basic rate	£12,571 – £50,270	20%
Higher rate	£50,271 – £125,140	40%
Additional rate	Above £125,140	45%

If your adjusted net income exceeds £100,000, your personal allowance is reduced by £1 for every £2 over that threshold. It reaches zero at £125,140, creating an effective 60% marginal rate on income between £100,000 and £125,140.

National Insurance rates 2026/27

National Insurance (NI) funds state benefits including the State Pension. The class you pay depends on whether you are employed, self-employed or an employer.

Employee National Insurance (Class 1)

Deducted from employee pay through PAYE:

Earnings	Rate
Up to £12,570	0%
£12,570 – £50,270	8%
Above £50,270	2%

Employer National Insurance (Class 1)

Paid by employers on employee earnings above the secondary threshold:

Earnings	Rate
Up to £5,000	0%
Above £5,000	15%

The employer secondary threshold was reduced from £9,100 to £5,000 from April 2025, and the employer rate increased from 13.8% to 15%. These rates continue unchanged in 2026/27.

Self-employed National Insurance (Class 4)

Paid on self-employment profits through Self Assessment:

Profits	Rate
Up to £12,570	0%
£12,570 – £50,270	9%
Above £50,270	2%

Class 2 NI — previously a flat weekly charge on self-employed profits — was abolished from 6 April 2024. Self-employed people now pay Class 4 only.

Dividend tax rates 2026/27

Dividends received above the dividend allowance are taxed at special rates. These apply to dividends from UK and foreign companies, including those paid through a limited company.

Band	Rate
Dividend allowance (first £500)	0%
Basic rate	8.75%
Higher rate	33.75%
Additional rate	39.35%

The dividend allowance was £2,000 in 2023/24 and reduced to £500 from 2024/25. It remains at £500 for 2026/27.

Corporation tax rates 2026/27

UK-resident limited companies pay corporation tax on their profits. Since April 2023, a two-tier system with marginal relief applies:

Profits	Rate
Up to £50,000	19% (small profits rate)
£50,000 – £250,000	Marginal relief (effective rate between 19% and 25%)
Above £250,000	25% (main rate)

The £50,000 and £250,000 thresholds are divided by the number of associated companies. If your company has associated companies, the thresholds are reduced accordingly.

Capital Gains Tax rates 2026/27

Capital Gains Tax (CGT) applies when you sell or dispose of assets such as shares, business assets or property that is not your main home.

Taxpayer	Most assets	Residential property
Basic rate	10%	18%
Higher or additional rate	20%	24%

The annual CGT exempt amount is £3,000 for 2026/27. Gains within this allowance are tax-free.

VAT thresholds 2026/27

VAT registration is compulsory when your taxable turnover exceeds the registration threshold. Key VAT figures for 2026/27:

Threshold	Amount
Registration threshold	£90,000
Deregistration threshold	£88,000
Flat Rate Scheme — join	£150,000
Flat Rate Scheme — leave	£230,000

Standard VAT rates: standard 20%, reduced 5%, zero 0%.

Mileage rates 2026/27

HMRC approved mileage rates for sole traders and employees claiming business travel by simplified expenses:

Vehicle	Rate
Car	55p per mile (first 10,000 miles), 25p thereafter
Motorcycle	24p per mile
Bicycle	20p per mile

The car rate for the first 10,000 miles increased from 45p to 55p per mile in May 2026 — the first change to HMRC approved mileage rates since 2011. The rate for miles above 10,000 remains 25p.

Pension allowances 2026/27

Allowance	Amount
Annual allowance	£60,000
Money Purchase Annual Allowance (MPAA)	£10,000
Lifetime allowance	Abolished (from April 2024)

The annual allowance may be reduced if your adjusted income exceeds £260,000. The MPAA applies once you have accessed a defined contribution pension flexibly.

Key Self Assessment dates 2026/27

Important deadlines for the 2026/27 tax year (6 April 2026 to 5 April 2027):

Date	Deadline
6 April 2026	2026/27 tax year begins
5 October 2027	Register with HMRC if newly self-employed
31 October 2027	Paper Self Assessment return deadline
31 January 2028	Online filing and balancing payment due
31 January 2028	First payment on account due
31 July 2028	Second payment on account due

Other key allowances 2026/27

Allowance	Amount
Personal allowance	£12,570
Dividend allowance	£500
Trading allowance	£1,000
Property allowance	£1,000
Personal Savings Allowance — basic rate	£1,000
Personal Savings Allowance — higher rate	£500
Marriage allowance transfer	£1,260
CGT annual exempt amount	£3,000
Rent-a-room relief	£7,500

What changed from 2025/26 to 2026/27

The main change for 2026/27 is the HMRC approved car mileage rate increasing from 45p to 55p per mile for the first 10,000 business miles — effective from May 2026.

All other major rates and allowances remain frozen at 2025/26 levels, including:

• Personal allowance — £12,570
• Income tax bands — 20%, 40%, 45% thresholds unchanged
• Employee Class 1 NI — 8% and 2% rates, thresholds unchanged
• Employer Class 1 NI — 15% above £5,000
• Self-employed Class 4 NI — 9% and 2% rates
• Dividend tax rates and £500 allowance
• Corporation tax — 19% / 25% with marginal relief
• VAT registration threshold — £90,000
• Pension annual allowance — £60,000

Frequently asked questions

What is the income tax personal allowance for 2026/27?

The personal allowance is £12,570 for 2026/27 — unchanged from 2025/26 and frozen until at least April 2028.

What is the higher rate tax threshold for 2026/27?

The higher rate threshold is £50,270 — unchanged from 2025/26. Income above this up to £125,140 is taxed at 40%.

What National Insurance do self-employed people pay in 2026/27?

Self-employed people pay Class 4 NI at 9% on profits between £12,570 and £50,270, and 2% above £50,270. Class 2 NI was abolished from April 2024.

What is the corporation tax rate for 2026/27?

The small profits rate is 19% on profits up to £50,000. The main rate is 25% on profits above £250,000. Marginal relief applies between £50,000 and £250,000.

What changed in the 2026/27 tax year?

The main change for 2026/27 was the HMRC approved mileage rate for cars increasing from 45p to 55p per mile — the first change since 2011. All other major rates and allowances remain unchanged from 2025/26.