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The UK income tax bands for 2026/27 are unchanged from last year in England, Wales and Northern Ireland. You pay no tax on the first £12,570 (your Personal Allowance), 20% on income from £12,571 to £50,270, 40% from £50,271 to £125,140 and 45% above £125,140. These thresholds are frozen until April 2031, so more people move into higher bands as pay rises.
This guide sets out every income tax band and rate for the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027. It covers Scottish rates, National Insurance, dividends, savings, the new property income rates from April 2027, and worked examples of the tax on common salaries.
Income tax bands 2026/27: England, Wales and Northern Ireland
These are the main income tax bands for most UK taxpayers.
| 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% |
The income tax bands apply to your total taxable income from employment, self-employment, pensions and rental income. Savings and dividends are taxed at their own rates, shown further down, but they use up the same bands.
Wales has the power to set its own rates, but the Welsh rates for 2026/27 match those in England and Northern Ireland.
The Personal Allowance and the £100,000 tax trap
Most people get a Personal Allowance of £12,570. If your adjusted net income is over £100,000, the allowance falls by £1 for every £2 above that limit, so it disappears completely at £125,140.
This creates an effective tax rate of 60% on income between £100,000 and £125,140, before National Insurance. Paying into a pension or making Gift Aid donations reduces your adjusted net income and can restore some or all of the allowance. Our guide to pension tax changes explains the limits.
You can also transfer £1,260 of your Personal Allowance to a spouse or civil partner through the Marriage Allowance, if you earn less than the allowance and they are a basic-rate taxpayer.
Scottish income tax bands 2026/27
If you live in Scotland, different income tax bands apply to earnings, pensions and rental income. Savings and dividends 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% |
National Insurance rates 2026/27
National Insurance is charged on top of income tax on earnings, but not on pensions, savings, dividends or rental income.
| Who pays | Earnings | Rate |
|---|---|---|
| Employees (Class 1) | £12,570 to £50,270 a year | 8% |
| Employees (Class 1) | Over £50,270 | 2% |
| Employers (Class 1) | Over £5,000 per employee | 15% |
| Self-employed (Class 4) | Profits £12,570 to £50,270 | 6% |
| Self-employed (Class 4) | Profits over £50,270 | 2% |
Class 2 National Insurance is no longer compulsory for the self-employed. You can pay it voluntarily to protect your State Pension record if your profits are low.
Dividend tax rates 2026/27
Dividend rates rose by 2 percentage points from April 2026 for basic and higher-rate taxpayers.
| Band | Dividend tax rate |
|---|---|
| Dividend allowance | First £500 tax-free |
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
Directors of limited companies are hit hardest, as most take part of their pay as dividends. Our guide to a tax-efficient director salary shows how to balance salary and dividends for 2026/27.
Savings income
Savings interest is taxed at 20%, 40% or 45% in 2026/27, but most people pay little or none because of three allowances:
- Starting rate for savings: up to £5,000 of interest at 0%, reduced by £1 for every £1 of other income above your Personal Allowance.
- Personal Savings Allowance: £1,000 of interest tax-free for basic-rate taxpayers, £500 for higher-rate taxpayers and nothing for additional-rate taxpayers.
- ISAs: interest and growth inside an ISA are tax-free.
From April 2027, the rates on savings income rise to 22%, 42% and 47%.
New property income rates from April 2027
From 6 April 2027, rental profit for individual landlords will be taxed at its own rates of 22%, 42% and 47%, instead of the standard 20%, 40% and 45%. Mortgage interest relief will also be given at 22%. If you own rental property, read our guide to whether to put your property in a limited company before the change.
How much tax will I pay? Worked examples for 2026/27
These examples are for employees in England with a standard tax code and no other income.
| Salary | Income tax | Employee NI | Take-home pay |
|---|---|---|---|
| £25,000 | £2,486 | £994 | £21,520 |
| £35,000 | £4,486 | £1,794 | £28,720 |
| £60,000 | £11,432 | £3,211 | £45,357 |
| £110,000 | £33,432 | £4,211 | £72,357 |
On a £60,000 salary, the first £12,570 is tax-free, £37,700 is taxed at 20% (£7,540) and the remaining £9,730 at 40% (£3,892). On £110,000, the Personal Allowance falls to £7,570, which is why the tax jumps more than the salary.
You can check your own figures with our free employed and self-employed tax calculator or the National Insurance calculator.
What the frozen thresholds mean for you
The Personal Allowance and higher-rate threshold have been frozen since 2021 and will stay frozen until April 2031. As wages rise, more of your income falls into the higher bands, a process often called fiscal drag. Each year more people in Bolton and across the UK cross the £50,270 higher-rate threshold or the £100,000 trap without realising.
Ways to reduce the effect include:
- Paying more into a pension, through salary sacrifice or relief at source.
- Claiming every allowable expense if you are self-employed.
- Sharing income with a spouse, for example through jointly owned property or company shares.
- Using ISAs for savings and investments.
- Timing dividends across tax years if you run a limited company.
Frequently asked questions
What are the income tax bands for 2026/27?
In England, Wales and Northern Ireland: 0% up to £12,570, 20% from £12,571 to £50,270, 40% from £50,271 to £125,140 and 45% above £125,140. Scotland has six bands from 19% to 48%.
Has the Personal Allowance changed for 2026/27?
No. It stays at £12,570 and is frozen until April 2031. It is reduced for anyone with income over £100,000.
When does the 2026/27 tax year end?
The tax year runs from 6 April 2026 to 5 April 2027. If you need to file a Self Assessment return for it, the online deadline is 31 January 2028. For this year’s return, see our Self Assessment deadline checklist.
Do the same income tax bands apply to the self-employed?
Yes. Sole traders use the same income tax bands and rates on their profit, plus Class 4 National Insurance at 6% and 2%. Our accountants for sole traders page explains what you can claim to reduce your profit.
What is the 60% tax trap?
Between £100,000 and £125,140, you lose £1 of Personal Allowance for every £2 you earn, so the effective rate on that income is 60%. Pension contributions are the most common way to reduce it.
Need help with your tax?
Knowing the income tax bands is the first step. Using them well, through pensions, expenses and the right mix of salary and dividends, is where an accountant saves you money. Cangaf’s ACCA-qualified team in Bolton can review your income and give you a fixed-fee quote.
Official guidance: Income Tax rates and Personal Allowances, Scottish Income Tax rates and bands 2026 to 2027, National Insurance rates and categories and Tax on dividends.
Related guides: Renters’ Rights Act 2026: Essential Guide to Avoid Problems · Do I Need to Pay Tax on Foreign Income? · Tax Guide For UK Landlords Receiving Rental Income
