Tax rates and allowances 2026/27
The main rates for the tax year 6 April 2026 to 5 April 2027. Income Tax bands are for England, Wales and Northern Ireland; Scotland has its own.
Source: HMRC and GOV.UK, checked on 8 November 2026. General information only, not advice on your own situation.
Income Tax
On earnings, pensions, self-employed profits and rental income.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Your Personal Allowance goes down by £1 for every £2 of income over £100,000, so there is none at £125,140 or more.
These allowances and bands are frozen until 5 April 2031.
Scotland has its own rates and bands for earnings, pensions and rental income: Scottish Income Tax on GOV.UK (opens GOV.UK in a new tab).
Dividends and savings
Dividends
| Item | Allowance or rate |
|---|---|
| Dividend allowance | £500 |
| Basic rate taxpayers | 10.75% |
| Higher rate taxpayers | 35.75% |
| Additional rate taxpayers | 39.35% |
Savings interest
| Item | Tax-free amount |
|---|---|
| Personal Savings Allowance, basic rate taxpayers | £1,000 |
| Personal Savings Allowance, higher rate taxpayers | £500 |
| Personal Savings Allowance, additional rate taxpayers | £0 |
| Starting rate for savings | Up to £5,000 at 0% |
Every £1 of other income above your Personal Allowance reduces the £5,000 starting rate for savings by £1.
National Insurance
| Who pays | Earnings or profits | Rate |
|---|---|---|
| Employees | £12,570 to £50,270 a year | 8% |
| Employees | Over £50,270 a year | 2% |
| Employers | Over £5,000 a year per employee | 15% |
| Self-employed (Class 4) | £12,570 to £50,270 of profits | 6% |
| Self-employed (Class 4) | Over £50,270 of profits | 2% |
Many employers can reduce their bill with the Employment Allowance, which is £10,500 for 2026/27.
The self-employed no longer have to pay Class 2. If your profits are under £7,105, you can pay voluntary Class 2 at £3.65 a week to protect your State Pension record.
Mileage
Tax-free rates for business journeys in your own vehicle.
Employees using their own vehicle
| Vehicle | First 10,000 business miles | After 10,000 miles |
|---|---|---|
| Cars and vans | 55p a mile | 25p a mile |
| Motorcycles | 24p a mile | 24p a mile |
| Bicycles | 20p a mile | 20p a mile |
Self-employed: simplified expenses
| Vehicle | First 10,000 business miles | After 10,000 miles |
|---|---|---|
| Cars and goods vehicles, including vans | 55p a mile | 25p a mile |
| Motorcycles | 24p a mile | 24p a mile |
The 55p rate applies to the whole 2026/27 tax year, from 6 April 2026. It was 45p before.
If your employer pays you less than these rates, you can claim tax relief on the difference.
Employers can also pay 5p a mile, tax-free, for each fellow employee you carry as a passenger on a business journey.
Company cars and vans
Taxable values of company vehicles for 2026/27.
| Item | 2026/27 |
|---|---|
| Fully electric company car | 4% of the list price |
| Car fuel benefit multiplier | £29,200 |
| Company van benefit | £4,170 a year |
| Van fuel benefit | £798 a year |
| Zero-emission van | No van benefit charge |
Advisory fuel rates for company cars change every quarter: current advisory fuel rates on GOV.UK (opens GOV.UK in a new tab).
Capital Gains Tax
| Item | 2026/27 |
|---|---|
| Annual exempt amount | £3,000 |
| Basic rate taxpayers | 18% |
| Higher and additional rate taxpayers | 24% |
| Business Asset Disposal Relief | 18%, on up to £1 million of lifetime gains |
If you sell a UK residential property and tax is due, report it and pay within 60 days of completion.
Corporation Tax
For financial year 2026, starting 1 April 2026.
| Taxable profits | Rate |
|---|---|
| Up to £50,000 | 19% (small profits rate) |
| £50,001 to £250,000 | 25%, reduced by marginal relief |
| Over £250,000 | 25% (main rate) |
The £50,000 and £250,000 limits are shared between associated companies and reduced for accounting periods shorter than 12 months.
VAT
| Item | Rate or threshold |
|---|---|
| Standard rate | 20% |
| Reduced rate | 5% |
| Zero rate | 0% |
| Registration threshold | £90,000 taxable turnover in 12 months |
| Deregistration threshold | £88,000 |
Employers
Minimum wage from 1 April 2026
| Age | Hourly rate |
|---|---|
| 21 and over (National Living Wage) | £12.71 |
| 18 to 20 | £10.85 |
| Under 18 | £8.00 |
| Apprentices | £8.00 |
Tax-free extras for staff
| Item | Limit |
|---|---|
| Trivial benefits | Up to £50 each (directors of close companies: £300 a year in total) |
| Annual staff party or event | Up to £150 a head a year |
The apprentice rate is for apprentices under 19, or 19 and over in the first year of their apprenticeship.
Other allowances
| Item | 2026/27 |
|---|---|
| Trading allowance | £1,000 |
| Property allowance | £1,000 |
| Rent a Room scheme | £7,500 (£3,750 if you share the income) |
| Marriage Allowance transfer | £1,260 |
| High Income Child Benefit Charge | Starts over £60,000; all Child Benefit is paid back over £80,000 |
| Pension annual allowance | £60,000 |
| ISA allowance | £20,000 |
| Working from home, self-employed flat rate | £10, £18 or £26 a month, by hours worked at home |
Changes from April 2027
Already announced, mostly at Budget 2026 on 28 October 2026. Some still need to be passed into law.
- Property income and savings interest: new rates of 24%, 44% and 49%, subject to the Finance Bill 2026-27.
- Mileage: the rate after 10,000 business miles rises from 25p to 35p.
- Business Asset Disposal Relief: the lifetime limit falls to £500,000.
- Trading allowance: rises to £3,000.
- Company vehicles: fully electric cars 5%, van benefit £4,310, van fuel benefit £825, car fuel benefit multiplier £30,200.
- Payroll: company cars, car fuel, vans, van fuel and medical benefits must be reported through payroll.
- Minimum wage from 1 April 2027: £13.21 (21 and over), £11.27 (18 to 20), £8.31 (under 18 and apprentices).
Checked against GOV.UK on 8 November 2026. We update this page after each Budget. These are the main rates; your own position may depend on other rules, so ask us before you rely on them for a decision.
Sources
Figures and dates on this page come from these GOV.UK pages. Contains public sector information licensed under the Open Government Licence v3.0. We take care to keep this page accurate, but rules change and every situation is different, so please speak to us before you act on it.
- Income Tax rates and Personal Allowances (opens GOV.UK in a new tab)
- Income Tax thresholds maintained until 5 April 2031 (opens GOV.UK in a new tab)
- Tax on dividends (opens GOV.UK in a new tab)
- Tax on savings interest (opens GOV.UK in a new tab)
- Rates and thresholds for employers 2026 to 2027 (opens GOV.UK in a new tab)
- Self-employed National Insurance rates (opens GOV.UK in a new tab)
- Mileage allowance payments (480, Appendix 3) (opens GOV.UK in a new tab)
- Simplified expenses: vehicles (opens GOV.UK in a new tab)
- Van benefit charge and fuel benefit charges for 2026 to 2027 (opens GOV.UK in a new tab)
- Company car benefit: the appropriate percentage (480, Appendix 2) (opens GOV.UK in a new tab)
- Capital Gains Tax rates and allowances (opens GOV.UK in a new tab)
- Business Asset Disposal Relief (opens GOV.UK in a new tab)
- Corporation Tax rates (opens GOV.UK in a new tab)
- VAT rates (opens GOV.UK in a new tab)
- VAT thresholds (opens GOV.UK in a new tab)
- National Minimum Wage and National Living Wage rates (opens GOV.UK in a new tab)
- Budget 2026: overview of tax legislation and rates (opens GOV.UK in a new tab)
Questions about your own tax?
We can work out what these rates mean for you. Email us for a free consultation.