Key takeaways
- For 2026/27 (6 April 2026 to 5 April 2027) the Personal Allowance stays at £12,570 and the higher rate starts at £50,271; both are frozen until April 2031.
- In England, Wales and Northern Ireland the rates are 20%, 40% and 45%, with the additional rate above £125,140.
- Scotland has six bands for earnings, from 19% to 48%, with the higher rate starting at £43,663.
- Dividend tax rates rose by 2 percentage points from 6 April 2026, to 10.75% and 35.75%; the additional rate stays at 39.35%.
- The Personal Allowance is withdrawn by £1 for every £2 of income over £100,000, creating an effective 60% rate up to £125,140.
The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. Income Tax thresholds have been frozen since 2021 and the Autumn Budget 2025 extended the freeze to April 2031, so the headline bands are unchanged. The main change this year is to dividends, which now carry higher rates.
Income Tax rates for England, Wales and Northern Ireland
| 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% |
These rates apply to earnings, pensions, rental profits and self-employed profits. Wales sets its own rates through the Welsh rates of Income Tax, which for 2026/27 match those above.
The bands assume you get the standard Personal Allowance. In technical terms, the basic rate band is the first £37,700 of taxable income above your allowance, and the higher rate band runs to £125,140.
Scottish Income Tax rates 2026/27
If you live in Scotland, Scottish rates apply to your earnings, pensions and property income. Savings and dividend income 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% |
Scottish taxpayers have tax codes starting with S. National Insurance is a UK tax and uses the same thresholds everywhere, so a Scottish higher rate taxpayer earning between £43,663 and £50,270 pays 42% tax plus 8% employee NI.
Dividend tax rates 2026/27
| Band | Dividend rate 2025/26 | Dividend rate 2026/27 |
|---|---|---|
| Dividend Allowance | £500 at 0% | £500 at 0% |
| Basic rate | 8.75% | 10.75% |
| Higher rate | 33.75% | 35.75% |
| Additional rate | 39.35% | 39.35% |
Dividends are treated as the top slice of income, so the rate depends on your other income. See our guide to tax on dividend income for examples.
Savings income rates 2026/27
| Allowance or band | Amount |
|---|---|
| Starting rate for savings (0%) | Up to £5,000, reduced by non-savings income above the Personal Allowance |
| Personal Savings Allowance, basic rate taxpayer | £1,000 |
| Personal Savings Allowance, higher rate taxpayer | £500 |
| Personal Savings Allowance, additional rate taxpayer | £0 |
Interest above these allowances is taxed at 20%, 40% or 45% in 2026/27. From April 2027 the savings rates rise to 22%, 42% and 47%, and new property income rates of 22%, 42% and 47% are introduced. Our tax on savings guide covers the detail.
The Personal Allowance and the £100,000 taper
Most people get a Personal Allowance of £12,570. It is reduced by £1 for every £2 of adjusted net income above £100,000, and disappears completely at £125,140.
Between £100,000 and £125,140 every extra £1 of income costs 40p in higher rate tax plus 20p from the lost allowance: an effective rate of 60%, or 62% once employee National Insurance is added. Pension contributions and Gift Aid reduce adjusted net income and can restore the allowance; see higher rate tax planning.
Other allowances that can increase your tax-free income include the Marriage Allowance (£1,260 transferable between spouses) and the Blind Person’s Allowance (£3,250 for 2026/27).
Worked examples for 2026/27
Employee earning £40,000 (England)
| Slice of income | Tax |
|---|---|
| First £12,570 | £0 |
| Next £27,430 at 20% | £5,486 |
| Total Income Tax | £5,486 |
Employee earning £70,000 (England)
| Slice of income | Tax |
|---|---|
| First £12,570 | £0 |
| £37,700 at 20% | £7,540 |
| £19,730 at 40% | £7,892 |
| Total Income Tax | £15,432 |
Employee earning £110,000 (England)
The Personal Allowance is reduced by £5,000 (half of the £10,000 over £100,000), to £7,570.
| Slice of income | Tax |
|---|---|
| First £7,570 | £0 |
| £37,700 at 20% | £7,540 |
| £64,730 at 40% | £25,892 |
| Total Income Tax | £33,432 |
National Insurance is charged separately; see National Insurance rates 2026/27. For your own figures, use our income tax calculator or the take-home pay calculator.
Thresholds frozen until 2031
| Tax year | Personal Allowance | Higher rate threshold | Additional rate threshold |
|---|---|---|---|
| 2023/24 | £12,570 | £50,270 | £125,140 |
| 2024/25 | £12,570 | £50,270 | £125,140 |
| 2025/26 | £12,570 | £50,270 | £125,140 |
| 2026/27 | £12,570 | £50,270 | £125,140 |
| 2027/28 to 2030/31 | Frozen | Frozen | Frozen |
Because thresholds stay fixed while pay rises, more people move into the higher and additional rate bands each year. This “fiscal drag” is the main reason Income Tax receipts keep growing without changes to the rates.
Frequently asked questions
What is the tax-free Personal Allowance for 2026/27?
£12,570, the same as in every year since 2021/22. It is reduced for income over £100,000 and is nil above £125,140.
When does the 40% rate start in 2026/27?
At £50,271 of income for most taxpayers in England, Wales and Northern Ireland. In Scotland the 42% higher rate starts at £43,663.
Have Income Tax rates changed for 2026/27?
The rates on earnings, pensions and property income have not changed. Dividend tax rates rose by 2 percentage points at the basic and higher rates from 6 April 2026.
What is the 60% tax trap?
Between £100,000 and £125,140, the loss of the Personal Allowance means each extra £1 of income is taxed at an effective 60% (62% with National Insurance).
Do Scottish rates apply to my dividends?
No. Scottish rates apply to earnings, pensions and property income. Savings and dividend income are taxed at UK rates wherever you live in the UK.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance in October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.