News in Brief- Tax rates and thresholds for 2026/27

Details of the tax rates and thresholds applying for the 2026/27 tax year have been published.

The basic rate of tax remains at 20%, the higher rate at 40% and the additional rate at 45%. The personal allowance remains at £12,570 and the basic rate band at £37,700. The additional rate applies to taxable income in excess of £125,140. The personal allowance abatement threshold remains at £100,000, with the personal allowance being reduced by £1 for every £2 by which adjusted net income exceeds £100,000. Taxpayers with adjusted net income of £125,140 and above will not receive a personal allowance. The personal allowance and tax thresholds are frozen for tax years up to 2030/31.

The increase in the ordinary and upper dividend tax rates announced in the Budget comes into effect from 6 April 2026. From that date, the ordinary dividend rate will rise from 8.75% to 10.75% and the upper dividend rate will rise from 33.75% to 35.75%. The additional dividend rate is unchanged at 39.35%. The dividend allowance remains at £500.

The savings starting rate remains at 0% and the savings starting rate band remains at £5,000, basic rate taxpayers remain entitled to a personal savings allowance of £1,000, while higher rate taxpayers remain entitled to a personal savings allowance of £500. As now, additional rate taxpayers are not entitled to a personal savings allowance.