2026/27 reference guide
UK Tax Rates and Thresholds 2026/27
A practical summary of the main rates used by employees, sole traders and small companies. It is not a complete list of every UK tax or relief.
Quick reference
At a glance
Tapers when adjusted net income exceeds £100,000.
Then 2% above the upper earnings limit.
A 0% band that still uses tax-band space.
Normally above the £5,000 secondary threshold.
Marginal Relief may apply between the profit limits.
Based on taxable turnover, not profit.
Employees and sole traders
Income Tax and the Personal Allowance
The standard Personal Allowance is £12,570. It falls by £1 for every £2 of adjusted net income above £100,000, so it is usually nil at £125,140.
The tables below show taxable income after allowances, not gross pay. With the full Personal Allowance, the £37,700 basic rate band normally ends at £50,270 of gross income.
England, Wales and Northern Ireland
| Taxable income after allowances | Rate |
|---|---|
| Up to £37,700 | 20% |
| £37,701 to £125,140 | 40% |
| Over £125,140 | 45% |
Scotland
Scottish rates apply to most non-savings, non-dividend income. Savings interest and dividends continue to use UK-wide rules.
| Taxable income after allowances | Rate |
|---|---|
| Up to £3,967 | 19% |
| £3,968 to £16,956 | 20% |
| £16,957 to £31,092 | 21% |
| £31,093 to £62,430 | 42% |
| £62,431 to £125,140 | 45% |
| Over £125,140 | 48% |
Employees, employers and sole traders
National Insurance
Employees
These are annual equivalents for a standard category A employee. Payroll normally works out employee National Insurance separately for each pay period; directors use special annual rules.
| Annual earnings | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 to £50,270 | 8% |
| Over £50,270 | 2% |
Employers
Standard category A employer National Insurance is 15% above the £5,000 annual secondary threshold. Eligible employers may reduce their bill by up to £10,500 using the Employment Allowance. Special employee categories and exclusions can change the result.
Self-employed people
| Annual profits | Rate |
|---|---|
| Below £7,105 | £3.65 a week if paid voluntarily |
| £7,105 to £12,570 | Class 2 treated as paid |
| Over £12,570 to £50,270 | 6% Class 4 |
| Over £50,270 | 2% Class 4 |
Shareholders and company directors
Dividend tax
The Dividend Allowance is £500. It is a 0% rate rather than a deduction, so those dividends still use space in your tax bands. Dividends sit on top of most other income when the applicable rate is worked out.
| Band reached by the dividends | Rate |
|---|---|
| Basic rate band | 10.75% |
| Higher rate band | 35.75% |
| Additional rate band | 39.35% |
Limited companies
Corporation Tax
Corporation Tax uses the financial year beginning 1 April 2026, rather than the personal tax year. The profit limits can be reduced for short accounting periods and divided between associated companies.
| Taxable profits | Rate |
|---|---|
| Up to £50,000 | 19% small profits rate |
| £50,001 to £250,000 | 25% main rate less Marginal Relief |
| Over £250,000 | 25% main rate |
The marginal rate on an extra slice of profit within the relief band is not the same as the company’s overall effective tax rate.
VAT-registered and growing businesses
VAT rates and registration thresholds
VAT treatment depends on what you sell. Exempt supplies are not the same as zero-rated supplies, and special rules can apply.
| VAT rate | Rate |
|---|---|
| Standard | 20% |
| Reduced | 5% |
| Zero | 0% |
| Threshold | Taxable turnover |
|---|---|
| Registration | £90,000 |
| Deregistration | £88,000 |
The registration test usually looks at taxable turnover over the previous 12 months. A separate test applies if you expect to exceed the threshold in a single 30-day period.
Put the figures to work
Choose a calculator
Use the calculator that matches your situation for an estimate with the working shown.
Common questions
Frequently asked questions
What dates does the 2026/27 tax year cover?
The personal tax year runs from 6 April 2026 to 5 April 2027. Corporation Tax uses financial years starting on 1 April, while VAT registration is tested using rolling taxable turnover and a separate forward-looking test.
Are Income Tax rates different in Scotland?
Yes. Scotland has separate rates and bands for most non-savings, non-dividend income, including employment and self-employment income. UK-wide rules continue to apply to savings interest and dividends.
Why is the £37,700 basic-rate band different from £50,270?
£37,700 is the amount of taxable income in the basic-rate band. Someone receiving the full £12,570 Personal Allowance would normally reach the higher-rate threshold at £50,270 of gross income.
Is employee National Insurance worked out annually?
Usually not. Employee National Insurance is generally calculated for each pay period, so the annual figures here are a useful summary rather than the exact method used by payroll. Directors have special annual rules.
Does Corporation Tax use the personal tax year?
No. Corporation Tax rates are set by financial year from 1 April. A company accounting period that crosses 1 April can sometimes need its profits split between financial years.
Is this a complete list of every UK tax?
No. This guide focuses on the main rates used by employees, sole traders and small companies. It does not cover every relief, special rate or tax, so check the official guidance for your circumstances.