UK Income Tax Rates for 2026-27: Tax Bands, Allowances and Historical Comparison
UK Income Tax is charged on taxable income according to the applicable rates and bands. This guide explains the current tax bands in England, Wales and Northern Ireland, the different Scottish rates, tax-free allowances, savings and dividend income, and historical rates for 2011-12 to 2013-14.
Income Tax rates for 2026-27 in England, Wales and Northern Ireland
The following bands generally apply to non-savings, non-dividend income, such as employment earnings, pensions, self-employment profits and rental profits. The total income bands shown assume the standard Personal Allowance of £12,570, subject to its withdrawal for higher earners.
| Band | Annual income (standard allowance) | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic | £12,571 to £50,270 | 20% |
| Higher | £50,271 to £125,140 | 40% |
| Additional | Over £125,140 | 45% |
In terms of taxable income after allowances, the basic band covers the first £37,700. The higher band extends above £37,700 to £125,140, with the additional rate applying above £125,140. Personal Allowance tapering changes the practical calculation. See HMRC's current income tax rates.
Scottish Income Tax bands for 2026-27
Scottish rates apply to non-savings, non-dividend income of Scottish taxpayers. UK-wide rules generally apply to savings and dividend income.
| Scottish band | Taxable income after allowances | Rate |
|---|---|---|
| Starter | Up to £3,967 | 19% |
| Basic | £3,968 to £16,956 | 20% |
| Intermediate | £16,957 to £31,092 | 21% |
| Higher | £31,093 to £62,430 | 42% |
| Advanced | £62,431 to £125,140 | 45% |
| Top | Over £125,140 | 48% |
These are bands for taxable income after relevant allowances, not gross salary thresholds. Source: HMRC rates and allowances.
Personal Allowance and other tax reliefs
The standard Personal Allowance is £12,570 in 2026-27. Under the Income Tax Act 2007, an individual's entitlement depends on the statutory rules. The allowance is reduced by £1 for every £2 of adjusted net income exceeding £100,000, reaching zero at £125,140.
| Allowance | 2026-27 | Explanation |
|---|---|---|
| Standard Personal Allowance | £12,570 | Ordinary tax-free income allowance |
| Marriage Allowance transferable amount | £1,260 | Subject to eligibility; transfers unused allowance to spouse or civil partner |
| Blind Person's Allowance | £3,250 | Additional allowance for eligible taxpayers |
| Married Couple's Allowance | £4,530 to £11,700 | Restricted eligibility, including birth before 6 April 1935; tax relief is at 10% |
Other reliefs may be available for eligible pension contributions, charitable donations and certain employment expenses. See HMRC's allowances guidance.
Tax on savings interest and dividends in 2026-27
Starting rate for savings
The starting rate for savings is 0% on up to £5,000 of qualifying savings income. Each £1 of non-savings income above the Personal Allowance generally reduces the available starting-rate band by £1. It is not available once non-savings income exceeds the allowance by £5,000.
Personal Savings Allowance
The Personal Savings Allowance is generally £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers and zero for additional-rate taxpayers. These rules can interact with the starting savings rate.
Dividend rates
For 2026-27, the dividend allowance is £500. Taxable dividend income above the allowance is generally charged at:
| Dividend band | 2025-26 | 2026-27 |
|---|---|---|
| Basic / ordinary | 8.75% | 10.75% |
| Higher / upper | 33.75% | 35.75% |
| Additional | 39.35% | 39.35% |
The 2026-27 increases to ordinary and upper dividend rates were made by section 4 of the Finance Act 2026. Dividend tax bands depend on other taxable income and the applicable allowances.
Example: how UK Income Tax is calculated
For an individual in England earning £60,000 entirely from employment in 2026-27, with the standard Personal Allowance and no other reliefs:
| Calculation | Amount |
|---|---|
| Gross employment income | £60,000 |
| Less Personal Allowance | £12,570 |
| Taxable income | £47,430 |
| Basic-rate tax: £37,700 at 20% | £7,540 |
| Higher-rate tax: £9,730 at 40% | £3,892 |
| Total Income Tax | £11,432 |
This is an illustrative Income Tax calculation only. National Insurance contributions, student loan deductions, pension arrangements and other adjustments are excluded.
Historical UK Income Tax rates: 2011-12, 2012-13 and 2013-14
The original comparison is preserved below as historical information. The rates and thresholds are not applicable to the current tax year.
| Taxable income band or rate | 2011-12 | 2012-13 | 2013-14 |
|---|---|---|---|
| Starting-rate savings band | £0-£2,560 | £0-£2,710 | £0-£2,790 |
| Starting rate for savings | 10% | 10% | 10% |
| Basic-rate taxable band (20%) | £0-£35,000 | £0-£34,370 | £0-£32,010 |
| Higher-rate taxable band (40%) | £35,001-£150,000 | £34,371-£150,000 | £32,011-£150,000 |
| Additional rate on taxable income over £150,000 | 50% | 50% | 45% |
These historic band limits are expressed in taxable income after applicable allowances. The 10% starting rate applied only to savings income and was unavailable where non-savings income used up the starting-rate band. Employment, self-employment, pensions, property income and taxable benefits generally counted as non-savings income.
Historical dividend tax rates were 10% (ordinary), 32.5% (upper) and 42.5% (additional) in 2011-12 and 2012-13. The dividend additional rate was reduced to 37.5% in 2013-14. These historic rates should not be confused with current dividend rates.
Legal provisions and official HMRC sources
The Income Tax Act 2007 establishes the statutory framework for income tax rates, allowances and reliefs. Sections 1 to 4 of the Finance Act 2026 address the 2026-27 income tax charge, main rates, default and savings rates, and changes to dividend rates. Official reference pages include Income Tax rates and Personal Allowances, current and past rates and HMRC's rates and allowances annex.
UK tax treatment depends on residence, income type, reliefs, taxpayer circumstances and the tax year. Always check HMRC guidance and current legislation before filing or planning a transaction.