UK Income Tax Rates 2025–2026 & 2024

Direct Taxes

Income Tax

Main personal allowances and reliefs

	2025/26	2024/25
Personal allowance*	£12,570	£12,570
Marriage/civil partners' transferable allowance	£1,260	£1,260
Blind person's allowance	£3,130	£3,070
Rent-a-room relief	£7,500	£7,500
Property allowance and trading allowance (each)	£1,000	£1,000

*Personal allowance reduced by £1 for every £2 of adjusted net income over £100,000

UK taxpayers (excl. Scotland) — non-dividend, non-savings income

	2025/26	2024/25
20% basic rate on taxable income up to	£37,700	£37,700
40% higher rate on next slice of income over	£37,700	£37,700
45% additional rate on income over	£125,140	£125,140

Scottish taxpayers — non-dividend, non-savings income

	2025/26	2024/25
19% starter rate on income up to	£2,827	£2,306
20% basic rate on next slice up to	£14,921	£13,991
21% intermediate rate up to	£31,092	£31,092
42% higher rate up to	£62,430	£62,430
45% advanced rate up to	£125,140	£125,140
48% top rate on income over	£125,140	£125,140

All UK taxpayers — savings & dividends

	2025/26	2024/25
Starting rate at 0% on savings income up to**	£5,000	£5,000
Personal savings allowance — Basic rate	£1,000	£1,000
Personal savings allowance — Higher rate	£500	£500
Personal savings allowance — Additional rate	£0	£0
Dividend allowance	£500	£500

Dividend tax rates

Basic rate: 8.75%

Higher rate: 33.75%

Additional rate: 39.35%

Trusts

Income exemption: £500

Dividend rate: 39.35%

Other income: 45%

**Not available if taxable non-savings income exceeds the starting rate band

High Income Child Benefit Charge: 1% of benefit per £200 of adjusted net income between £60,000 and £80,000

Employment Taxes

National Insurance Contributions

Class 1 — Employees & Employers

	2025/26
NICs rate	Employee: 8% \| Employer: 15%
No NICs for employees generally on the first	£242 pw
No NICs for younger employees* on the first	£242 pw
NICs rate charged up to	£967 pw
2% NICs on earnings over	£967 pw

*No employer NICs on the first £967 pw for employees under 21, apprentices under 25 and veterans in first 12 months of civilian employment. No employer NICs on the first £481 pw for employees at freeports and investment zones (first 36 months).

Other NIC Classes

Employment allowance: £10,500 (not available if sole employee is a director)
Class 1A Employer: 15% on most employees' and directors' taxable benefits
Class 2 Self-employed: £3.50/week (£182.00 pa), Small profits threshold: £6,845
Class 3: Voluntary flat rate £17.75/week (£923.00 pa)
Class 4 Self-employed: £12,570–£50,270 at 6%; Over £50,270 at 2%

Investment Taxes

Capital Gains Tax

Annual exemption

	2025/26	2024/25
Individuals, estates, etc	£3,000	£3,000
Trusts generally	£1,500	£1,500

CGT Rates

Band	From 30/10/24	To 29/10/24
Below UK higher rate band	18%	10%
Surcharge (residential / carried interest)	0% / 0%	8% / 8%
Within higher/additional rate bands	24%	20%
Surcharge (residential / carried interest)	0% / 4%	4% / 8%
Trusts and estates	24%	20%

Business Asset Disposal Relief: 14% (was 10%) on lifetime limit of £1,000,000 for trading businesses and companies (minimum 5% participation, held ≥ 2 years)

*For 2025/26, carried interest CGT rate for all bands is 32%

Wealth Transfer

Inheritance Tax

	2025/26	2024/25
Nil-rate band*	£325,000	£325,000
Residence nil-rate band*†	£175,000	£175,000
Rate of tax on excess	40%	40%
Rate if at least 10% of net estate left to charity	36%	36%
Lifetime transfers to and from certain trusts	20%	20%
Non-long-term-resident spouse/civil partner exemption	£325,000	£325,000

100% relief: businesses, unlisted/AIM companies, some farmland/buildings
50% relief: certain other business assets
Annual exempt gifts: £3,000 per donor | £250 per donee
Tapered charge on gifts 3–7 years before death: Years 0–3 at 40%, then 8% less per year until 0% at 7+ years

*Up to 100% of unused proportion of a deceased spouse's nil-rate band can be claimed on the survivor's death.
†Estates over £2,000,000: value of residence nil-rate band is reduced by 50% of the excess over £2,000,000.

Property Taxes

Stamp Duties & Property Transaction Taxes

Stamp Duty and SDRT: Stocks and marketable securities — 0.5%
Additional residential and all corporate residential properties: £40,000 or more — add 3% to SDLT rates, 2% to LTT and 4% to most LBTT rates

England & N Ireland — SDLT on slices of value from 1/4/25

Residential property	%	Commercial property¹	%
Up to £125,000	0	Up to £150,000	0
£125,001–£250,000	2	£150,001–£250,000	2
£250,001–£925,000	5	Over £250,000	5
£925,001–£1,500,000	10
Over £1,500,000	12

First time buyers: 0% on first £300,000 for properties up to £500,000
Non-resident purchasers: 2% surcharge on properties £40,000 or more
Residential properties bought by companies etc over £500,000: 17% of total consideration, subject to exemptions

¹10% for freeport and investment zone qualifying property in England only

Scotland — Land and Buildings Transaction Tax (LBTT)

Residential property	%	Commercial property	%
Up to £145,000	0	Up to £150,000	0
£145,001–£250,000	2	£150,001–£250,000	1
£250,001–£325,000	5	Over £250,000	5
£325,001–£750,000	10
Over £750,000	12

First time buyers: 0% on the first £175,000

Wales — Land Transaction Tax (LTT)

Residential property	%	Commercial property	%
Up to £225,000	0	Up to £225,000	0
£225,001–£400,000	6	£225,001–£250,000	1
£400,001–£750,000	7.5	£250,001–£1,000,000	5
£750,001–£1,500,000	10	Over £1,000,000	6
Over £1,500,000	12

Business Taxes

Corporation Tax

Year to 31/3/26 and 31/3/25

Profits	Effective rate	Diverted profits
£0–£50,000	19.0%	31%
£50,001–£250,000	26.5%
£250,001 and above	25.0%

Loans to participants: 33.75% tax rate.

Indirect Taxes

Value Added Tax

Standard rate	20%
Domestic fuel	5%
Installation of energy saving materials (except Northern Ireland)	0%
Registration level	£90,000
Deregistration	£88,000
Flat rate scheme turnover limit	£150,000
Cash and annual accounting schemes turnover limit	£1,350,000

Benefits in Kind

Car Benefits

Taxable amount based on original list price and CO₂ emissions in g/km.

Zero emission cars: 3%

Petrol and diesel hybrids — CO₂ 1–50g/km (electric-only range)

Range (electric-only miles)	< 30	30–39	40–69	70–129	130+
Benefit %	15%	13%	9%	6%	3%

All non-diesel cars over 50g/km CO₂

51–54 g/km	55 & over
16%	17%*–37%

*Increased for every extra 5g/km by 1% up to the maximum 37%. Diesels not meeting RDE2: add 4% to non-diesel rates, up to 37%

Fuel benefit (taxable amount for private use)

	2025/26	2024/25
CO₂ % charge used for car benefit multiplied by	£28,200	£27,800

Benefits in Kind

Vans — For Private Use

	2025/26	2024/25
Zero emission: chargeable amount	Nil	Nil
Other vans: chargeable amount	£4,020	£3,960
Fuel: chargeable amount	£769	£757

Travel Costs

Tax-Free Business Mileage Allowance

Cars and vans — first 10,000 miles	45p per mile	then 25p per mile
Qualifying passenger	5p per mile
Motorcycles	24p per mile	Bicycles 20p per mile

Retirement

Registered Pensions & State Pension

Registered pensions

	2025/26	2024/25
Lump sum and death benefit allowance	£1,073,100	£1,073,100
Lump sum allowance	£268,275	£268,275
Money purchase annual allowance	£10,000	£10,000
Annual allowance*	£60,000	£60,000

*Reduced by £1 for every £2 of adjusted income over £260,000 to a minimum of £10,000, subject to threshold income being over £200,000

State pension

	Annual	Weekly
New state pension	£11,973.00	£230.25
Basic state pension — single person*	£9,175.40	£176.45
Basic state pension — spouse/civil partner*	£5,496.40	£105.70

*State pension age reached before 6/4/16

Tax-Efficient Savings

Tax Incentivised Investments

	25/26	24/25
Total ISA limit (excl. Junior ISAs)	£20,000	£20,000
Lifetime ISA	£4,000	£4,000
JISA / Child Trust Fund	£9,000	£9,000
Venture Capital Trust (VCT) at 30%	£200,000	£200,000
Enterprise Investment Scheme (EIS) at 30%*	£2,000,000	£2,000,000
EIS eligible for CGT deferral relief	No limit	No limit
Seed EIS (SEIS) at 50%	£200,000	£200,000
SEIS CGT reinvestment relief	50%	50%

*Above £1,000,000 investment must be in knowledge-intensive companies

UK Tax Rates 2025–2026