Income Tax Rates and Personal Allowances 2026/27

Tax year: 6 April 2026 to 5 April 2027
Applicable to: Individuals in England

Income Tax is charged on various types of personal income, including earnings from employment, profits from self-employment, pensions, rental income and certain savings and investment income.

The amount of Income Tax you pay depends on your total taxable income, the allowances available to you and the tax bands into which your income falls.

Personal Allowance – £12,570

The standard Personal Allowance for the 2026/27 tax year is £12,570.

This means that most individuals can receive up to £12,570 of income before becoming liable to Income Tax.

Your Personal Allowance may be higher if you are eligible for certain allowances, or lower if your income exceeds £100,000.

Income Tax Rates for 2026/27

For an individual in England receiving the standard £12,570 Personal Allowance:

Income	Tax Rate
Up to £12,570	0% – Personal Allowance
£12,571 to £50,270	20% – Basic rate
£50,271 to £125,140	40% – Higher rate
Over £125,140	45% – Additional rate

These rates generally apply to non-savings and non-dividend income.

Different rates and bands apply to Scottish taxpayers.

Income Above £100,000

The Personal Allowance is gradually withdrawn where an individual’s adjusted net income exceeds £100,000.

For every £2 of adjusted net income above £100,000, the Personal Allowance is reduced by £1.

Therefore, if adjusted net income reaches £125,140, the standard Personal Allowance is completely withdrawn.

Example

Suppose your adjusted net income is £110,000.

Your income exceeds £100,000 by:

£110,000 − £100,000 = £10,000

Your Personal Allowance would therefore be reduced by:

£10,000 ÷ 2 = £5,000

Instead of receiving the normal £12,570 Personal Allowance, your remaining allowance would be:

£12,570 − £5,000 = £7,570

This is an important area for tax planning, particularly for individuals whose income falls between £100,000 and £125,140.

What Counts as Taxable Income?

Income potentially subject to Income Tax can include:

salary and wages;
bonuses and commissions;
profits from self-employment;
rental income;
pension income;
certain State benefits;
savings interest;
dividend income; and
other taxable income.

Different allowances and tax rates can apply to savings and dividend income.

Savings Income

A Personal Savings Allowance may allow some savings interest to be received without paying Income Tax.

For 2026/27:

Income Tax position	Personal Savings Allowance
Basic rate taxpayer	£1,000
Higher rate taxpayer	£500
Additional rate taxpayer	£0

A starting rate for savings of up to £5,000 at 0% may also be available to individuals with relatively low levels of other income.

The amount available depends on your other taxable income.

Dividend Income

A separate Dividend Allowance of £500 applies for 2026/27.

Dividend income above the available allowance may be subject to dividend tax depending on the individual’s tax band.

Dividends should therefore be considered separately when calculating an individual’s overall Income Tax liability.

Blind Person’s Allowance

The Blind Person’s Allowance for 2026/27 is £3,250.

Where eligible, this is an additional tax-free allowance that can increase the amount of income an individual can receive before paying Income Tax.

Specific eligibility requirements apply.

Married Couple’s Allowance

Married Couple’s Allowance may be available where one of the spouses or civil partners was born before 6 April 1935, subject to the relevant conditions.

For 2026/27:

Maximum Married Couple’s Allowance: £11,700
Minimum Married Couple’s Allowance: £4,530

This allowance operates differently from the standard Personal Allowance and provides tax relief at a specified rate.

Tax Planning for Higher Earners

Individuals approaching or exceeding £100,000 of adjusted net income should consider their tax position before the end of the tax year.

Depending on individual circumstances, areas that may be worth reviewing include:

pension contributions;
Gift Aid donations;
timing of income;
salary and dividend arrangements for company directors;
investment income;
use of available allowances; and
legitimate transfers of income-producing assets between spouses or civil partners.

Tax planning should always take account of the individual’s wider financial circumstances rather than being undertaken solely to reduce tax.

Do You Need to Complete a Self Assessment Tax Return?

You may need to submit a Self Assessment tax return if you have income that has not been fully taxed at source or if HMRC requires you to report your circumstances.

This can commonly include individuals with:

self-employed income;
property rental income;
significant investment income;
Capital Gains Tax reporting requirements;
partnership income;
foreign income;
certain high-income circumstances; or
other untaxed income.

The requirement to submit a tax return depends on your particular circumstances.

How Fair View Accounting & Tax Services Can Help

Personal taxation can become more complicated when you have several sources of income or your income moves into the higher tax bands.

We can assist with:

Self Assessment tax returns;
personal tax planning;
rental and property income;
Capital Gains Tax;
dividend and salary planning;
company director taxation;
pension-related tax planning;
HMRC enquiries and correspondence; and
reviewing your overall tax position.

Need help with your 2026/27 personal tax affairs?

Important Information

This factsheet provides general information only and should not be regarded as personalised tax, investment, pension or financial advice.

Tax treatment depends on individual circumstances and tax legislation may change. Professional advice should be obtained before taking or refraining from action based on this information.