Tax Bands and Rates
2025/26 2026/27 2027/28
Personal Allowance £12,570 £12,570 £12,570
There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140.
Scottish Rates 2025/26
Taxable Income Band Tax Rate
Over £12,571 to £15,397 Starter rate 19%
Over £15,398 to £27,491 Scottish basic rate 20%
Over £27,492 to £43,662 Intermediate rate 21%
Over £43,663 to £75,000 Higher rate 42%
Over £75,001 to £125,140 Advanced rate 45%
Above £125,140 Top rate 48%
Rest of the UK/Welsh rates
Taxable Income Band Tax Rate
Over £12,571 to £50,270 Basic rate 20%
Over £50,271 to £125,140 Higher rate 40%
Above £125,140 Additional rate 45%
The income tax thresholds will be frozen until 2031. From 2031/32 they are expected to rise in line with inflation.
Changes have been made to savings and dividends rates and from April 2027 property income will have its own rate of tax.
Savings rates 2025/26 2026/27 2027/28
Starting rate 0% 0% 0%
Basic rate taxpayers 20% 20% 22%
Higher rate taxpayers 40% 40% 42%
Additional rate taxpayers 45% 45% 47%
These rates apply to savings income received above the savings allowance of £1,000 for Basic rate taxpayers and £500 for Higher rate taxpayers
The starting rate does not apply for individuals who have non-savings taxable income (broadly earnings, pensions, trading profits and property income) exceeding £5,000
Dividend rates 2025/26 2026/27 2027/28
Basic rate taxpayers 8.75% 10.75% 10.75%
Higher rate taxpayers 33.75% 35.75% 35.75%
Additional rate taxpayer 39.35% 41.35% 41.35%
These rates apply to dividend income received above the £500 tax-free dividend allowance.
Property Income 2025/26 2026/27 2027/28
Basic rate taxpayers 20% 20% 22%
Higher rate taxpayers 40% 40% 42%
Additional rate taxpayers 45% 45% 47%
Pension tax limits
Annual Allowance: £60,000
Minimum Annual Allowance: £10,000
Threshold income: £200,000
Adjusted income: £260,000
Lump Sum Allowance: £268,275
Lump Sum and Death Benefit Allowance: £1,073,100
Individuals who have Threshold income for a tax year of greater than £200,000 have their Annual Allowance restricted. It is reduced by £1 for every £2 of Adjusted income over £260,000, to the Minimum Annual Allowance.
The Lump Sum Allowance relates to the general maximum that may be able to be taken as a tax-free lump sum.
The Lump Sum and Death Benefit Allowance relates to the general maximum that may be able to be taken as a tax-free lump sum in certain circumstances
Individual Savings Accounts
Investment Limits
2025/26 2026/27
Individual Savings Accounts (ISAs) £20,000 £20,000
Junior ISAs £9,000 £9,000
Lifetime ISAs (excluding government bonus) £4,000 £4,000
Child Trust Funds £9,000 £9,000
These limits will remain frozen until 5 April 2031.
From 6 April 2027, the annual ISA cash limit will be set at £12,000. The remaining £8,000 will be designated for stocks and shares ISA investment. This restriction will not apply for those over the age of 65, where the cash ISA limit will remain at £20,000.
National Insurance Contributions
Employees 2025/26 2026/27
Threshold Rate Threshold Rate
Lower Earnings Limit £6,408 0% £6,708 0%
Primary Threshold £12,570 8% £12,570 8%
Upper Earnings Limit £50,268 2% £50,268 2%
Employers 2025/26
Threshold Rate Threshold Rate
Secondary Threshold £5,000 15% £5,000 15%
The Employment Allowance allows eligible businesses with employer NICs bills to deduct £10,500 from their employer NICs bill.
The Budget also announced employee and employer National Insurance contributions (NICs) on salary sacrifice pension contributions above £2,000 a year and introduced a tax on homes valued at £2 million or more.
Self Employed 2025/26
Threshold Rate Threshold Rate
Small Profits Threshold £6,845 0% £7,105 0%
Lower Profit Limit £12,570 8% £12,570 8%
Upper Profit Limit £50,270 2% £50,270 2%
For April 2026 the main Class 2 rate will increase from £3.50 to £3.65 per week and the Class 3 rate will increase from £17.75 to £18.40 per week.
