Budget 2025: Essential tax rates and thresholds

Income tax rates

Taxable income (not dividends and not for Scottish residents) £	Rate  %	Tax  £	Cumulative £
2026/27
Savings: 0–5,000	0	Nil	Nil
0–37,700	20	7,540.00	7,540.00
37,701–125,140	40	34,976.00	42,516.00
Over 125,140	45	–	–
2025/26
Savings: 0–5,000	0	Nil	Nil
0–37,700	20	7,540.00	7,540.00
37,701–125,140	40	34,976.00	42,516.00
Over 125,140	45	–	–

Tax rates for dividend income

Dividends within:	2026/27	2025/26
Basic rate band	10.75%	8.75%
Dividend allowance	£500	£500
Higher rate band	35.75%	33.75%
Dividend allowance	£500	£500
Additional rate band	39.35%	39.35%
Dividend allowance	£500	£500

Personal allowances and reliefs

	2026/27 £	2025/26 £
Personal allowance	12,570	12,570
Income limit for personal allowance	100,000	100,000
Allowances for couples
Marriage allowance	1,260	1,260
Married couples: minimum (born before 6 April 1935)	4,360	4,360
Married couples: maximum (born before 6 April 1935)	11,270	11,270
Income limit for married couples’ allowance, born before 6 April 1935	37,700	37,700
Blind person’s allowance	3,130	3,130
Rent-a-room relief	7,500	7,500
Trading income allowance	1,000	1,000
Property income allowance	1,000	1,000
Savings allowance – basic tax band	1,000	1,000
Savings allowance – higher tax band	500	500

Pension allowances 

Tax year	2026/27 £	2025/26 £
Annual allowance (AA)	60,000	60,000
AA is tapered when adjusted income including pension contributions exceeds:	260,000	260,000
and net income excluding pension contributions exceeds:	200,000	200,000
Minimum tapered annual allowance	10,000	10,000
Money purchase annual allowance (MPAA)	10,000	10,000
Lump sum allowance	268,275	268,275
Lump sum and death benefit allowance	1,073,100	1,073,100

Corporation tax rates

Year from 1 April	2026	2025
Main rate	25%	25%
Small profits rate	19%	19%
Small profits rate where profits don’t exceed:	£50,000	£50,000
Marginal relief lower limit	£50,000	£50,000
Marginal relief upper limit	£250,000	£250,000
Standard fraction	3/200	3/200

CGT rates and annual exemptions

	Tax year	Annual exempt amount		Tax rate paid by
		Individuals PRs and trusts for disabled	General trusts	Individualswithin:		Trustees and PRs
				Basic rate band	Higher tax bands
		£	£	%	%	%
2026/27: exempt amount		3,000	1,500
BAD relief and Investors relief				18	18
Residential property and all other assets				18	24	24
Carried interest				32	32	32
2025/26: exempt amount		3,000	1,500
BAD relief and Investors relief				14	14
Residential property and all other assets				18	24	24
Carried interest				32	32	32

NIC rates and thresholds

NIC: Class 1 primary monthly thresholds 

Employee (primary)	2026/27 £	2025/26 £
Lower earnings limit (LEL)	542	542
Primary threshold (PT)	1,048	1,048
Upper earnings limit (UEL)	4,189	4,189

NIC: Class 1 primary rates 

Employee (primary)	2026/27	2025/26
Up to LEL	N/A	N/A
From LEL to PT	0%	0%
From PT to UEL	8%	8%
Above UEL	2%	2%

NIC: Class 1 secondary monthly thresholds 

Employer (Secondary)	2026/27 £	2025/26  £
Secondary threshold (ST)	416	416
Upper secondary threshold for under 21s (UST)	4,189	4,189
Apprentice Upper secondary threshold (AUST) for under 25s	4,189	4,189
Veteran Upper Secondary Threshold (VUST)	4,189	4,189
Investment Zone Upper Secondary Threshold (IZUST)	2,083	2,083
Freeport Upper Secondary Threshold (FUST)	2,083	2,083

NIC: Class 1 secondary rates 

Employer (Secondary)	2026/27	2025/26
Up to: ST, FUST, AUST, FUST, IZUST, VUST	0%	0%
Above: ST, UST, AUST, FUST, IZUST, VUST	15%	15%
Employment allowance – annual amount per company/group	£10,500	£10,500

NIC: Class 2 rates and thresholds

Tax year		Flat rate per week (note 1)	Share fishermen per week	Volunteer development workers per week	Small profits threshold (note 2)	Lower profits threshold (note 3)
		£	£	£	£	£
	2026/27	3.50	4.15	6.25	6,845	12,570
	2025/26	3.50	4.15	6.25	6,845	12,570

Notes:

1. Self-employed traders with profits below the small profits threshold do not have to pay class 2 NIC, but they are not entitled to a NI credit. They can pay class 2 NIC voluntarily.      
2. From 2024/25 onwards there is no liability to class 2 NIC for self-employed traders with profits above the small profits threshold, but all self-employed traders with profits above the small profits threshold are entitled to an NI credit.

NIC: Class 3 rates

Tax year		Weekly rate £
	2026/27	17.80
	2025/26	17.75

NIC: Class 4 rates and thresholds

Tax year		Main rate	Additional rate	Lower profits limit	Upper profits limit
		%	%	£	£
	2026/27	6	2	12,570	50,270
	2025/26	6	2	12,570	50,270

VAT registration and deregistration limits

Effective date	Registration turnover £	Registration exception: turnover not exceeding £	Deregistration turnover  £
1 April 2026	90,000	88,000	88,000
1 April 2025	90,000	88,000	88,000
1 April 2024	90,000	88,000	88,000

High-income child benefit charge (HICBC)

Period child benefit received	Lower income threshold  £	Upper income threshold £
From 6 April 2026	60,000	80,000
From 6 April 2024	60,000	80,000
From 7 January 2013 to 5 April 2024	50,000	60,000

Annual tax on enveloped dwellings (ATED)

Property value £	2026/27 £	2025/26 £
500,001–1,000,000	4,450	4,450
1,000,0001–2,000,000	9,150	9,150
2,000,001–5,000,000	31,050	31,050
5,000,001–10,000,000	72,700	72,700
10,000,001–20,000,000	145,950	145,950
Over £20,000,000	292,350	292,350