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UK Tax Brackets and Allowances for 2026/27
Every band and allowance on one page, kept current, with the 60% zone the official tables never show
UK Tax Brackets and Allowances · 2026/27
Every band, and what yours actually costs you
The full 2026/27 tables, then a checker that shows your marginal rate, including the 60% band the official tables never print.
Your position (employment income)
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The 2026/27 rates and bands (England, Wales and Northern Ireland)
| Income tax | Band (total 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% |
| Dividend tax (raised April 2026) | Band (total income) | Rate |
|---|---|---|
| Dividend allowance | First £500 | 0% |
| Basic rate | Up to £50,270 | 10.75% |
| Higher rate | £50,271 to £125,140 | 35.75% |
| Additional rate | Over £125,140 | 39.35% |
| Employee National Insurance | Band | Rate |
|---|---|---|
| Below primary threshold | Up to £12,570 | 0% |
| Main rate | £12,571 to £50,270 | 8% |
| Above upper earnings limit | Over £50,270 | 2% |
| Key allowances and other rates | 2026/27 |
|---|---|
| ISA allowance | £20,000 |
| Pension annual allowance | £60,000 (tapers to £10,000 for high earners) |
| Capital gains tax exemption | £3,000 |
| Capital gains tax rates | 18% basic, 24% higher |
| Personal Savings Allowance | £1,000 basic, £500 higher, £0 additional |
| Inheritance tax nil-rate band | £325,000 (+£175,000 residence band) |
| Full new State Pension | £241.30 a week (£12,548 a year) |
Figures for England, Wales and Northern Ireland, verified against gov.uk in August 2026 and refreshed every April and after each Budget. The checker models employment income only: self-employed National Insurance differs, and dividends and savings use the separate rates above. Talk to us about what your marginal rate means for pension and investment decisions. The first conversation is free.
The figures first, then what your marginal rate means
The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. Income tax starts above the £12,570 personal allowance: 20% to £50,270, then 40% to £125,140, then 45%. The allowance itself shrinks by £1 for every £2 of income over £100,000, which creates an effective 60% band up to £125,140.
Two things changed in April 2026 that older guides still get wrong. Dividend tax rose by two percentage points, to 10.75% at basic rate and 35.75% at higher rate. And Business Asset Disposal Relief reached 18%, the end of a two-year climb. Our guides to salary versus dividends and Business Asset Disposal Relief cover what those changes mean in practice.
The bands set the price of every financial decision. What a pension contribution really costs you, whether dividends still beat salary, and when a withdrawal pushes you into a worse band. Our pension tax relief calculator and tapered annual allowance guide pick up where the tables leave off.
Frazer James is an independent, FCA-regulated firm of Certified Financial Planners. This page is refreshed every April and after each Budget.
The 60% zone
Between £100,000 and £125,140 the personal allowance taper makes each £1 effectively taxed at 60%. Pension contributions in that band earn relief at the same rate.
Dividends cost more now
The April 2026 rise took basic-rate dividend tax to 10.75% and higher-rate to 35.75%. For some directors, salary now beats dividends for the marginal pound.
Frozen thresholds do the work
The personal allowance and higher-rate threshold are frozen while wages rise. Each year, more income lands in higher bands without any rate changing. Planning around the bands matters more, not less.
Since working together, I feel more organised, more secure and more positive about the future. The advice has been exceptionally valuable, financially, professionally and personally.
Questions people ask about the tax bands
What are the UK income tax brackets for 2026/27?
In England, Wales and Northern Ireland there are four bands. Nothing up to the £12,570 personal allowance, then 20% to £50,270, 40% to £125,140, and 45% above that. The personal allowance tapers away between £100,000 and £125,140 of income. Scotland sets different bands for earned income.
Why is there an effective 60% tax rate?
Between £100,000 and £125,140 you pay 40% tax and also lose £1 of personal allowance for every £2 of income. Losing tax-free allowance while paying 40% works out at an effective 60% on each pound in that band. A pension contribution that brings your income back below £100,000 restores the allowance and earns relief at the same 60%.
What is the tax-free personal allowance for 2026/27?
£12,570, unchanged and frozen. It applies to most people with income under £100,000. For pensioners, the full new State Pension of £12,548 now uses all but £22 of it. That is why many retired people are starting to receive tax bills.
How are dividends taxed in 2026/27?
The first £500 falls within the dividend allowance at 0%. Above that: 10.75% at basic rate, 35.75% at higher rate and 39.35% at additional rate. The basic and higher rates rose by two percentage points in April 2026, which changed the salary-versus-dividend arithmetic for company directors.
Are these figures different in Scotland?
Partly. Scotland sets its own bands and rates for earned income, so salary and pension income are taxed differently there. Savings and dividend income use the UK-wide rates and allowances shown on this page, as do capital gains tax and inheritance tax.
Reviewed by
BSc, MLIBF, PETR, Chartered ALIBF · Co-Founder and Chartered Associate
Chris has spent over a decade in financial planning and specialises in research and technical analysis. He checks every figure and calculation on this page before it is published.
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