UK Income Tax: Rates for 2026/27

Rates and Thresholds 2026/27: Decision-First Snapshot

If you only need the practical takeaway, use this quick map: check where your salary sits within the tax bands 2026/27, then model the exact net outcome with your deductions.

People often search "rates and thresholds 2026/27", "tax bands 2026/27", and "tax thresholds 2026/27" as if they are the same. They overlap, but not exactly: bands are ranges, thresholds are the cut-off points where your marginal rate changes.

Tax Bands 2026/27 vs Tax Thresholds 2026/27

Use this simple rule to avoid planning errors:

• Tax bands 2026/27 are the slices of income taxed at each rate.
• Tax thresholds 2026/27 are the income points where you move into the next band.

When forecasting take-home pay, compare your expected taxable income against thresholds first, then apply the bands to the relevant slices of income rather than your whole salary. Use our UK Tax Calculator to model your exact 2026/27 deductions.

England, Wales & Northern Ireland — Income Tax 2026/27

The table below shows the income tax bands that apply to residents of England, Wales, and Northern Ireland in 2026/27. These are set by the UK Government at Westminster (Welsh rates of income tax match the UK rates for 2026/27).

These bands are identical to 2025/26. The Personal Allowance has now been frozen at £12,570 since April 2021, and is due to stay there until at least April 2028. With average earnings growing by around 4–5% per year, the effective tax burden is quietly increasing even though the rates on paper haven't moved — a process economists call fiscal drag.

One relief: the £100,000 Personal Allowance taper still applies. For every £2 of income above £100,000, you lose £1 of Personal Allowance, creating an effective marginal rate of 60% on income between £100,000 and £125,140. Above £125,140 the allowance is fully withdrawn. Our Tax Trap Optimizer shows how pension salary sacrifice can help you escape this band.

Scotland — Income Tax 2026/27

Scotland has separate income tax rates and bands, set by the Scottish Parliament under devolved powers. For 2026/27 the Scottish Government has widened the starter and basic rate bands significantly, in a move intended to make sure lower earners in Scotland see their tax bills fall in real terms.

The changes to the starter and basic bands are meaningful for lower earners. The starter rate upper limit rises by 11.2% (from £14,876 to £16,537), and the basic rate upper limit rises by 11.2% too (from £26,561 to £29,526). By benchmarking these thresholds to Scotland's median earnings, the Scottish Government aims to ensure workers on typical wages don't face higher taxes than they did the previous year in real terms.

The flip side: Scots earning above around £43,700 continue to face higher rates than their equivalents in England. At the higher rate, Scotland charges 42% against England's 40%; and above £75,000, Scotland charges 45% while England doesn't hit that rate until £125,141. At the very top, Scotland's 48% rate compares to 45% in England. The cumulative difference on a £90,000 salary can be several hundred to a couple of thousand pounds per year.

National Insurance 2026/27

National Insurance rates and thresholds are unchanged for 2026/27. Employees continue to pay the same rates introduced from April 2024 (following the two-percentage-point reduction from 12% to 10%, then to 8%).

The employer NI hike from April 2025 (rate up from 13.8% to 15%, threshold down from £9,100 to £5,000) continues into 2026/27. This significantly increased the employment cost of hiring — especially for lower-paid and part-time workers. On a salary of £25,000 the employer pays around £3,000 in employer NI, compared to around £2,200 under the old rules.

Use our UK Tax Calculator to see both employee and employer NI on any salary.

Student Loan Thresholds 2026/27

Student loan repayments are triggered when your income exceeds the plan-specific threshold. For 2026/27 the thresholds are:

If you started university in August 2023 or later, you are on Plan 5 — the newest repayment plan. Plan 5 has a lower threshold than Plan 2 (£25,000 vs £29,385) and a longer repayment period (40 years vs 30). The combination means many Plan 5 graduates will repay more over their lifetime than those on earlier plans.

Student loan repayments are collected via PAYE or Self Assessment — they are calculated on top of income tax and National Insurance. Use our UK Tax Calculator to see the combined impact on your take-home pay.

Capital Gains Tax & Dividend Allowance 2026/27

Both the CGT annual exempt amount and the dividend allowance are unchanged for 2026/27, having already been cut sharply in recent years.

The CGT exemption has fallen dramatically — from £12,300 in 2022/23 to just £3,000. If you are managing an investment portfolio, selling property, or exiting a business, even relatively modest gains above the exemption will now generate a CGT bill. Using your ISA allowance (up to £20,000 per year) to shelter investments entirely from CGT and dividend tax remains one of the most valuable strategies available.

Use our Capital Gains Tax Calculator to estimate your liability on property, shares, crypto, or business assets under 2026/27 rates.

Who Is Most Affected?

How to Reduce Your 2026/27 Tax Bill

The thresholds may be frozen, but there are practical steps you can take to manage your tax position:

1. Max out your ISA allowance. The annual ISA allowance remains £20,000. Interest, dividends, and capital gains inside an ISA are completely free from income tax and CGT. With the dividend allowance slashed to £500 and CGT exemption at £3,000, sheltering investments in an ISA has never been more valuable.
2. Use pension salary sacrifice. Increasing your pension contribution via salary sacrifice reduces your taxable income and, crucially, reduces your National Insurance liability too. For higher-rate taxpayers, every £1 into a pension effectively costs just 60p after income tax and NI relief. If you earn between £100,000 and £125,140, it can cost as little as 40p.
3. Claim all allowable expenses. If you are self-employed or a company director, ensure you are claiming every allowable business expense — from home office costs to training, professional subscriptions, and equipment.
4. Consider income splitting with a spouse. If your spouse or civil partner has a lower income (or unused Personal Allowance), transferring income-generating assets like savings or investment portfolios to them can shift dividends or interest into a lower tax band. The Marriage Allowance (£1,260 for 2026/27) also allows one partner to transfer unused Personal Allowance to the other.
5. Time capital gains carefully. With the CGT annual exemption at £3,000, planning realisation of gains to coincide with a year where your total income is lower (e.g. part-year working, sabbatical, retirement) can reduce the rate you pay. Using both spouses' exemptions and ISA allowances is also worth considering.

Quick Reference: Key Figures for 2026/27

Next Reads and Tools

For practical follow-through after checking rates and thresholds 2026/27, these are the most useful pages:

• UK Tax Calculator to model take-home pay from your exact salary and deductions.
• What Is National Insurance? for NI rates, classes, and contribution rules.
• Bonus Tax Explained UK if your compensation includes annual or quarterly bonuses.
• Self Assessment Guide UK if you also have freelance, rental, or investment income.
• Where Does My Tax Go Calculator to visualize how your total contribution is allocated.