UK Tax Rules for 2026/27 Explained

Income Tax thresholds for 2026/27

The standard Personal Allowance is £12,570. For England, Wales and Northern Ireland, the basic rate is 20% on taxable income up to £37,700, the higher rate is 40%, and the additional rate is 45% above £125,140. The Personal Allowance reduces by £1 for every £2 of adjusted net income above £100,000.

National Insurance in 2026/27

Most employees pay Class 1 National Insurance at 8% between the £12,570 annual primary threshold and £50,270 upper earnings limit, then 2% above that. The exact result depends on each pay period, so an annual calculator remains an estimate.

Savings and investment allowances

• The overall ISA allowance is £20,000 and the Junior ISA allowance is £9,000.
• The pension annual allowance is normally £60,000, although tapering and the money purchase annual allowance can reduce it.
• The Capital Gains Tax annual exempt amount is £3,000 for individuals.
• The dividend allowance is £500.

What to check on your payslip

• Your tax code, and whether it reflects your actual circumstances.
• Pension contributions and whether they are taken before tax.
• Any benefits in kind that change your taxable income.

Use the income tax calculator to see an estimate of your tax, National Insurance and monthly take-home pay. Scottish Income Tax uses different bands. Always check figures against HMRC before acting on them.