The main UK tax rates, allowances and thresholds for the 2026 to 2027 tax year (6 April 2026 to 5 April 2027), each with a link to its GOV.UK source. The figures come from the same tables that run the Ledgers app and our free calculators, so all three always agree.
These bands apply in England, Wales and Northern Ireland to earnings, pensions, property income and self-employment profits, for someone with the standard Personal Allowance.
| 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% |
The Personal Allowance tapers. It is reduced by half of any income over £100,000, so it is gone once income reaches £125,140. Savings interest and dividends have their own rules; dividends are covered below.
Scotland sets its own bands and rates for earnings, pensions and most other income, so a Scottish taxpayer pays different amounts from someone elsewhere in the UK. The Personal Allowance is the same, and dividends and savings are taxed at UK rates.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 to £16,537 | 19% |
| Basic rate | £16,538 to £29,526 | 20% |
| Intermediate rate | £29,527 to £43,662 | 21% |
| Higher rate | £43,663 to £75,000 | 42% |
| Advanced rate | £75,001 to £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Sources: GOV.UK: Income Tax rates and Personal Allowances · GOV.UK: Scottish Income Tax
Dividends sit on top of your other income. The tax-free allowance covers the first slice; the rest is taxed at the rate for the band it falls in. The basic and higher rates each rose by 2 percentage points from 6 April 2026.
| 2026/27 | 2025/26 | |
|---|---|---|
| Dividend allowance | £500 | £500 |
| Basic rate band | 10.75% | 8.75% |
| Higher rate band | 35.75% | 33.75% |
| Additional rate band | 39.35% | 39.35% |
Paying yourself from a limited company? The salary vs dividends calculator works out the best mix using these rates.
Source: GOV.UK: Tax on dividends
| Threshold | Weekly | Monthly | Annual |
|---|---|---|---|
| Lower earnings limit | £129 | £559 | £6,708 |
| Primary threshold (employee NI starts) | £242 | £1,048 | £12,570 |
| Secondary threshold (employer NI starts) | £96 | £417 | £5,000 |
| Upper earnings limit | £967 | £4,189 | £50,270 |
| Freeport and Investment Zone upper secondary threshold | £481 | £2,083 | £25,000 |
| Who pays | Rate | On earnings |
|---|---|---|
| Employee (main rate) | 8% | £12,570 to £50,270 a year |
| Employee (above the upper earnings limit) | 2% | Over £50,270 a year |
| Employer | 15% | Over £5,000 a year |
| Employment Allowance | Up to £10,500 | Off the employer’s bill for the year |
Pay between the lower earnings limit and the primary threshold counts towards the State Pension with no employee National Insurance to pay. A director’s National Insurance is worked out on annual earnings. Employment Allowance is not available to a company whose only employee paid above the secondary threshold is a director.
| Figure | |
|---|---|
| Class 4 main rate | 6% on profits from £12,570 to £50,270 |
| Class 4 upper rate | 2% on profits over £50,270 |
| Class 2 Small Profits Threshold | £7,105 a year |
| Class 2 voluntary rate | £3.65 a week |
With profits at or above the Small Profits Threshold, Class 2 is treated as paid and nothing is due. Below it you can pay voluntarily to protect your State Pension. The self-employed tax calculator applies these rates to your profit.
Sources: GOV.UK: Rates and thresholds for employers 2026 to 2027 · GOV.UK: Self-employed National Insurance rates · GOV.UK: Employment Allowance
| Taxable profits | Rate |
|---|---|
| Up to £50,000 | 19% (small profits rate) |
| Over £50,000 up to £250,000 | 25% less marginal relief, which works out at 26.5% on the profit between the two limits |
| Over £250,000 | 25% (main rate) |
Marginal relief is the upper limit minus your taxable profits, multiplied by 3/200 (1.5%). Both limits are divided by the number of associated companies plus one, and cut proportionately for an accounting period shorter than 12 months. Corporation Tax is due 9 months and 1 day after the end of the accounting period. Try the Corporation Tax calculator.
| Allowance | Rate |
|---|---|
| Annual investment allowance | 100% on the first £1,000,000 a year |
| Full expensing (companies, new main rate assets) | 100% |
| New main rate first-year allowance | 40% on expenditure from 1 January 2026 |
| Special rate first-year allowance | 50% |
| Main pool writing-down allowance | 14% a year, for periods starting on or after 1 April 2026 |
| Special rate pool writing-down allowance | 6% a year |
A period that spans a change in the writing-down allowance rate uses a blended rate, weighted by days each side of the change.
Sources: GOV.UK: Corporation Tax rates and reliefs · GOV.UK: Marginal Relief for Corporation Tax · GOV.UK: Work out your capital allowances: rates and pools
| Figure | Applies to | |
|---|---|---|
| Registration threshold | £90,000 | Taxable turnover over the last 12 months |
| Deregistration threshold | £88,000 | Expected taxable turnover over the next 12 months |
| Standard rate | 20% | Most goods and services |
| Reduced rate | 5% | Some goods and services, such as home energy |
| Zero rate | 0% | Zero-rated goods and services, such as most food |
The registration test is a rolling one. If your taxable turnover for the last 12 months goes over the threshold at the end of any month, you must register within 30 days of the end of that month.
Sources: GOV.UK: When to register for VAT · GOV.UK: Cancel your VAT registration · GOV.UK: VAT rates
Sole traders and landlords join MTD for Income Tax by qualifying income: gross self-employment and property income before expenses. The test is strictly “over” the threshold, measured on an earlier tax return.
| Qualifying income | Measured on your return for | You must use MTD from |
|---|---|---|
| Over £50,000 | 2024 to 2025 | 6 April 2026 |
| Over £30,000 | 2025 to 2026 | 6 April 2027 |
| Over £20,000 | 2026 to 2027 | 6 April 2028 |
| Quarterly update covering | Deadline |
|---|---|
| 6 April 2026 to 5 July 2026 | 7 August 2026 |
| 6 July 2026 to 5 October 2026 | 7 November 2026 |
| 6 October 2026 to 5 January 2027 | 7 February 2027 |
| 6 January 2027 to 5 April 2027 | 7 May 2027 |
| Tax return (final declaration) | 31 January 2028 |
For 2026 to 2027 there are no penalty points for a late quarterly update, but every update must be sent before you can submit your tax return. Check where you stand with the MTD scope checker, or read the complete MTD for Income Tax guide.
Source: GOV.UK: Check if you're eligible for Making Tax Digital for Income Tax
Employers deduct student loan repayments through payroll on pay above the threshold for the employee’s plan.
| Plan | Annual | Monthly | Weekly | Rate above threshold |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241.66 | £517.30 | 9% |
| Plan 2 | £29,385 | £2,448.75 | £565.09 | 9% |
| Plan 4 | £33,795 | £2,816.25 | £649.90 | 9% |
| Plan 5 | £25,000 | £2,083.33 | £480.76 | 9% |
| Postgraduate loan | £21,000 | £1,750 | £403.84 | 6% |
Source: GOV.UK: Rates and thresholds for employers 2026 to 2027
If a close company lends money to a director who is also a shareholder and the loan is still outstanding 9 months and 1 day after the end of the accounting period, the company pays s455 tax on it. The rate depends on when the loan was made, and the tax is repaid once the loan is.
| Loan made | s455 rate |
|---|---|
| 6 April 2016 to 5 April 2022 | 32.5% |
| 6 April 2022 to 5 April 2026 | 33.75% |
| On or after 6 April 2026 | 35.75% |
A director who owes the company more than £10,000 at any point in the year, without paying interest at HMRC’s official rate (3.75%), will usually have a taxable benefit in kind. The director’s loan calculator works out the charge and the dates.
Sources: GOV.UK: Directors' loans: you owe your company money · GOV.UK: HMRC manual CTM61505
The most an employer can pay per business mile, for an employee using their own vehicle, without tax or National Insurance.
| Vehicle | First 10,000 business miles | Over 10,000 |
|---|---|---|
| Cars and vans | 55p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
Carrying a fellow employee on a journey that is also work for them adds 5p per passenger per business mile.
| Rate | Figure | How it is set |
|---|---|---|
| Bank of England base rate | 3.75% | At 13 October 2026 |
| HMRC late-payment interest | 7.75% | Base rate plus 4 percentage points |
| Statutory interest on late business invoices | 11.75% | Base rate plus 8 percentage points, fixed for each six months |
| HMRC official rate of interest | 3.75% | From 6 April 2026 |
HMRC charges late-payment interest from the day a tax bill is overdue. Statutory interest is what one business can charge another on a late invoice, using the base rate on 31 December for January to June and on 30 June for July to December. The official rate values cheap or interest-free loans from an employer.
Sources: GOV.UK: Travel: mileage and fuel rates and allowances · GOV.UK: HMRC interest rates for late and early payments · GOV.UK: Late commercial payments: charging interest · GOV.UK: Beneficial loan arrangements: HMRC official rates
The Budget of 28 October 2026 set these figures for the 2027 to 2028 tax year (6 April 2027 to 5 April 2028). They take effect through Finance Bill 2026-27, so check the enacted figures before relying on them. Income Tax rates and bands, the Personal Allowance, dividend tax, Corporation Tax, VAT thresholds and the employer National Insurance rate and threshold are unchanged.
| Figure | 2026/27 | 2027/28 |
|---|---|---|
| Dividend allowance and rates | £500; 10.75% / 35.75% / 39.35% | £500; 10.75% / 35.75% / 39.35% |
| Savings income rates (basic / higher / additional) | 20% / 40% / 45% | 24% / 44% / 49% |
| Property income rates (England, Wales and NI) | 20% / 40% / 45% | 24% / 44% / 49% |
| Trading allowance | £1,000 | £3,000 |
| Class 1 lower earnings limit (a year) | £6,708 | £6,916 |
| Class 2 small profits threshold | £7,105 | £7,355 |
| Class 2 voluntary rate (a week) | £3.65 | £3.80 |
| Mileage, cars and vans over 10,000 miles | 25p | 35p from 6 April 2027 |
| Main pool writing-down allowance | 14% a year | 12% a year for periods starting on or after 1 April 2027 |
| New main rate first-year allowance | 40% | 50% on expenditure from 1 January 2027 |
Savings rates apply across the UK. The property income rates apply in England, Wales and Northern Ireland; Scotland and Wales can set their own. The lower earnings limit and the Class 2 figures are uprated by the September inflation figure, as usual; the other Class 1 thresholds are held to April 2031.
Sources: GOV.UK: Budget 2026: Overview of Tax Legislation and Rates · GOV.UK: Budget 2026 Annex A: rates and allowances · GOV.UK: Income Tax: changes to tax rates for property and savings income · GOV.UK: Income Tax: increasing the trading allowance · GOV.UK: Capital allowances: reduce the main rate writing-down allowance and increase the main rate first-year allowance
£12,570. It is reduced by half of any income over £100,000, so it is gone once income reaches £125,140. The allowance is the same across the UK, including Scotland.
The first £500 of dividends is tax-free. Above that, dividends are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. The basic and higher rates each rose by 2 percentage points from 6 April 2026.
15% on each employee's earnings above the secondary threshold of £5,000 a year. Eligible employers can claim Employment Allowance, which takes up to £10,500 a year off the bill.
You must register if your taxable turnover for the last 12 months goes over £90,000. You can ask to deregister if you expect it to be below £88,000 over the next 12 months.
19% on profits up to £50,000 and 25% on profits over £250,000. In between, the company pays the main rate less marginal relief. The limits are shared between associated companies and reduced for an accounting period shorter than 12 months.
55p a mile for the first 10,000 business miles in a car or van, then 25p a mile. Motorcycles are 24p a mile and bicycles 20p a mile.
The same rates, applied to your numbers.
Ledgers keeps your books from your bank feed and applies these rates for you, from VAT returns to payroll.
Start free →Guidance only, not personalised tax advice. Figures are checked against GOV.UK (last checked 13 October 2026). For your circumstances, speak to your accountant.