What’s changed for the 2026/27 tax year

Each April brings a new set of tax rates and thresholds. This guide sets out what changed between the 2025/26 and 2026/27 tax years, using the official figures from HMRC and GOV.UK. The table is generated directly from the two years’ rules, so it lists every change we model, and the narrative explains what each means for your pay.

Summary of changes

These are all the rates and thresholds that changed between the two tax years:

You can check the official figures on GOV.UK’s Income Tax rates and Personal Allowances page and HMRC’s rates and thresholds for employers.

Income tax in England, Wales and Northern Ireland

There’s no change to the main income tax figures. The Personal Allowance remains £12,570, the higher-rate threshold remains £50,270, and the additional rate still applies above £125,140. The taper of the Personal Allowance above £100,000 is also unchanged.

These thresholds have been frozen for several years. With pay rising, more of people’s income falls into the higher bands, a process often called fiscal drag. If your salary stays the same, your income tax is unchanged: on £30,000, your take-home pay changes by £0 compared with last year.

Blind Person’s Allowance went up from £3,130 to £3,250.

Scottish income tax

Scotland raised the thresholds for its starter and basic rates, while the point at which the Scottish higher rate starts is unchanged. The basic rate now starts above £16,537, up from £15,397, and the intermediate rate starts above £29,526, up from £27,491. The higher rate still starts above £43,662.

This means slightly more income is taxed at the lower Scottish rates. On £24,000, a Scottish taxpayer’s take-home pay changes by £11 a year, and on £30,000 by £32. Our guide to Scottish income tax has the full band table.

Dividend tax

The dividend ordinary rate rose from 8.75% to 10.75%, and the dividend upper rate from 33.75% to 35.75%. The additional rate stays at 39.35%, and the dividend allowance stays at £500. This mainly affects company directors who pay themselves in dividends and people with shares held outside an ISA or pension. The dividend vs salary calculator uses the new rates.

National Insurance

Employee and employer Class 1 rates are unchanged: employees pay 8% and 2%, and employers pay 15%. The primary threshold, upper earnings limit and secondary threshold are also unchanged.

The lower earnings limit rose from £6,500 to £6,708 a year. You need to earn at least this much from a job for the year to count towards your State Pension, and it’s also the minimum for statutory payments such as Statutory Sick Pay and Maternity Pay.

For the self-employed, voluntary Class 2 contributions rose to £3.65 a week, and the small profits threshold to £7,105. See our National Insurance guide.

Student loans

Repayment thresholds rose for Plans 1, 2 and 4. The Plan 2 threshold, for example, went from £28,470 to £29,385. On a £35,000 salary with a Plan 2 loan, take-home pay rises by £82 a year because of the higher threshold.

Plan 5 repayments start this year for the first time, for people who started an undergraduate course in England from August 2023 and have since left their course. The Plan 5 threshold is £25,000. The Postgraduate Loan threshold is unchanged. Our student loan guide has the details.

Minimum wage

The National Living Wage for workers aged 21 and over went up from £12.21 to £12.71 an hour. For a full-time worker on 37.5 hours a week, that’s about £975 a year more before tax. The rates for younger workers and apprentices went up too. See minimum wage rates for the full table.

Statutory pay

The standard weekly rate of Statutory Maternity Pay, and of paternity, adoption and shared parental pay, rose from £187.18 to £194.32 a week. The weekly lower earnings limit for eligibility went from £125 to £129. Our maternity pay calculator uses the right rate for each week of leave.

Frozen thresholds and fiscal drag

When tax thresholds stay the same while pay rises, more income ends up taxed, and taxed at higher rates. This is called fiscal drag. Someone who gets a pay rise in line with inflation pays a larger share of their pay in tax, even though no rate has gone up. Over time, more people move into the higher-rate band, and more people lose part of their Personal Allowance above £100,000. The effect also applies to the High Income Child Benefit Charge threshold of £60,000, which is unchanged. Our fiscal drag data shows income tax and National Insurance on fixed salaries for every year since 2021/22.

Checking your first payslips of the year

Your first payslip after 6 April should use the new year’s rates and your tax code for the new year. Most people keep the same code, 1257L, from one year to the next. If your code was changed during the previous year to collect tax or give you a refund, it may change again in April. Compare your April payslip with our calculator, and check the student loan line if you’re on Plan 1, 2 or 4, as the higher thresholds should reduce your repayments slightly.

What it means for you

For most employees in England, Wales and Northern Ireland, take-home pay on the same salary is unchanged, because income tax and National Insurance thresholds are frozen. A pay rise therefore goes further than it would under higher rates, but more of it may fall into higher bands over time. The pay rise calculator shows how much of a rise you keep, and our take-home pay calculator uses the 2026/27 rates by default, with the previous year available to compare.