Income tax rates and bands for 2026 to 2027

The bands below apply to taxable income, which is your income after the Personal Allowance has been taken off. So a basic rate band of £37,700 sits on top of the £12,570 allowance for someone who receives the full allowance.

The Personal Allowance is not fixed for everyone. GOV.UK says it goes down by £1 for every £2 that your adjusted net income is above £100,000, so by the time income reaches £125,140 there is no allowance left at all. Between those two figures, each extra pound of income both falls into the higher rate band and removes part of the allowance, which makes that slice of income unusually expensive.

Adjusted net income is HMRC's own measure for this test, and some reliefs can reduce it, so anyone close to £100,000 should check GOV.UK's definition or ask an accountant to model the effect on a full set of figures.

If you are a Scottish taxpayer, Scotland's rates apply to your earnings, pension and property income, while savings and dividend rates are the same as the rest of the UK. HMRC prints the 2026 to 2027 bands as bands of taxable income above the Personal Allowance. The Scottish Budget on 3 December 2026 is due to set the 2027 to 2028 bands.

Dividends have their own allowance and rates. The first £500 of dividends is covered by the dividend allowance, and the rest is taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band for 2026 to 2027. Company directors who pay themselves mostly in dividends will find our dividend tax calculator useful.

Savings interest has two allowances of its own. The Personal Savings Allowance lets basic rate taxpayers receive £1,000 of interest tax free, higher rate taxpayers £500 and additional rate taxpayers nothing. On top of that, if your other taxable income is below £17,570, the starting rate for savings means you can earn up to £5,000 of interest and not pay tax on it, although GOV.UK says that £5,000 shrinks by £1 for every £1 of other income above your Personal Allowance.

At the Autumn Budget on 28 October 2026, the government set out rates of 24%, 44% and 49% for savings income and for property income from 2027 to 2028, with the property rates not applying to Scottish taxpayers. These rates are announced rather than law, and need legislation in the Finance Bill 2026-27. The 2027 to 2028 figures published with the Budget keep the Personal Allowance at £12,570 and the income tax bands unchanged, and list dividend rates and the £500 allowance as unchanged too.

For landlords, the new property rates matter most, and our guide to how rental income is taxed explains how property profit is worked out. Sole traders and employees with a sideline will find more on how extra income stacks on top of a salary in paying tax on a side hustle.

Rates tell only part of the story, because National Insurance, student loan repayments and payments on account all sit alongside income tax. Our income tax calculator gives a quick estimate for 2026 to 2027, and the take-home pay calculator shows the effect on a salary. Rates are general information here, not tax advice for your situation. If you would like someone to check a return, our self assessment tax returns page explains how that works, and where we can, we will put you in touch with a local accountant through get in touch.