Tax Rates 2026
Income Tax Allowances
2026/27 £12,570
2025/26 £12,570
Personal Allowance (PA)* Marriage Allowance† Blind Person’s Allowance Rent-a-room relief** Trading income allowance** Property income allowance**
1,260 3,250 7,500 1,000
1,260 3,130 7,500 1,000
1,000 1,000 *PA is withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There is no allowance given above £125,140. †The part of the PA that is transferable to a spouse or civil partner who is not a higher or additional rate taxpayer. **If gross income exceeds this, the limit may be deducted instead of actual expenses. Rate bands 2026/27 2025/26 Basic Rate Band (BRB) £37,700 £37,700 Higher Rate Band (HRB) 37,701 – 125,140 37,701 – 125,140 Additional rate over 125,140 over 125,140 Personal Savings Allowance (PSA) – Basic rate taxpayer 1,000 1,000 – Higher rate taxpayer 500 500 Dividend Allowance (DA) 500 500 BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations. Tax rates Rates differ for General/Savings/Dividend income 2026/27 2025/26 G S D G S D Basic rate % 20 20 10.75 20 20 8.75 Higher rate % 40 40 35.75 40 40 33.75 Additional rate % 45 45 39.35 45 45 39.35 General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (mainly interest). Scottish taxpayers are taxed at different rates on general income (see below). Where savings income falls in the first £5,000 of the BRB, it is taxed at nil rather than 20%. The PSA taxes savings income at nil, where it would otherwise be taxable at 20% or 40%. Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £500 of dividend income at nil, rather than the rate that would otherwise apply. Income tax - Scotland 2026/27 2025/26 Starter rate 19% £3,967 £2,827 Basic rate 20% 3,968 – 16,956 2,828 – 14,921 Intermediate rate 21% 16,957 – 31,092 14,922 – 31,092 Higher rate 42% 31,093 – 62,430 31,093 – 62,430 Advanced rate 45% 62,431 – 125,140 62,431 – 125,140 Top rate 48% over 125,140 125,140 Savings and dividend income are taxed at normal UK rates. High Income Child Benefit Charge (HICBC) 1% of child benefit for each £200 of adjusted net income between £60,000 and £80,000.
Income Tax (continued) New UK residents
From 2025/26, those who are in their first 4 years of UK residence, having been non-resident for the previous 10 years, can claim to have most types of foreign income exempt from UK tax for the year. A similar claim is available for foreign capital gains. In prior years, ‘remittance basis’ was available for UK residents who were neither UK- domiciled nor deemed domiciled. If claimed, foreign income or gains were only taxable in the UK if remitted here. Remittance basis users with unremitted income or gains can use the Temporary Repatriation Facility in 2025/26 to 2027/28. This allows them to be taxed at a favourable rate (12% or, in 2027/28, 15%) on designated income or gains; otherwise, their unremitted income and gains become taxable at normal rates when remitted to the UK. Pensions Registered Pensions 2026/27 2025/26 Annual Allowance (AA)* £60,000 £60,000 Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600. *Usually tapered down, to a minimum of £10,000, when adjusted income exceeds £260,000. The maximum tax-free pension lump sum is £268,275, unless a higher amount is “protected”. State pension (per week) 2026/27 2025/26 Old state pension £184.90 £176.45 New state pension 241.30 230.25
Annual investment limits Individual Savings Account (ISA)
2026/27 £20,000
2025/26 £20,000
– Overall limit – Lifetime ISA Junior ISA EIS – 30% relief
4,000 9,000
4,000 9,000
2,000,000 200,000
2,000,000 200,000
Seed EIS (SEIS) – 50% relief Venture Capital Trust (VCT) – 20% (2025/26: 30%) relief
200,000
200,000
National Insurance Contributions Class 1 (Employees)
Employee
Employer
Main NICs rate No NICs on first
8%
15%
£242pw £967pw £967pw
£96pw no limit
Main rate charged up to* 2% rate on earnings above
N/A
Employment allowance per business** £10,500 *Nil rate of employer NICs on earnings up to £967pw for employees aged under 21, apprentices aged under 25 and ex-armed forces personnel in their first twelve months of civilian employment. **Some businesses do not qualify, including certain sole director companies. N/A Employer contributions (at 15%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B). Class 2 (Self-employed) Flat rate per week if profits below £7,105 (voluntary) £3.65
National Insurance Contributions (continued) Class 3 (Voluntary) Flat rate per week
£18.40
Class 4 (Self-employed) On profits between £12,570 and £50,270
6%
On profits over £50,270 2% Employees with earnings above £129 per week and the self-employed with annual profits over £7,105 (or who pay voluntary Class 2 contributions) can access entitlement to contributory benefits. Vehicle Benefits Cars: Taxable benefit: List price of car multiplied by chargeable percentage. Electric CO2 Range 2026/27 2025/26 g/km miles % % 0 N/A 4 3 1-50 >130 4 3 1-50 70 -129 7 6 1-50 40 - 69 10 9 1-50 30 - 39 14 13 1-50 <30 16 15 51-54 N/A 17 16 Then a further 1% for each 5g/km CO 2 emissions, up to a maximum of 37%. Diesel cars that are not RDE2 standard suffer a 4% supplement on the above figures but are still capped at 37%. Certain plug-in hybrid vehicles first registered after 31 December 2024, which have an emissions figure of 51 or more, are deemed to have an emissions figure of 1. Vans: Chargeable value of £4,170 (2025/26: £4,020) if private use is more than home-to-work. Zero-emission vans charged at £Nil (2025/26: £Nil). Fuel benefit Employer provides fuel for private motoring in an employer-owned: Car: CO 2 -based percentage from above table multiplied by £29,200 (2025/26: £28,200). Van: £798 (2025/26: £769). Employee contributions do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge). Tax-free mileage allowances Employee’s own transport per business mile Cars and vans: first 10,000 miles 45p Cars and vans: over 10,000 miles 25p Business passengers 5p Motorcycles 24p Bicycles 20p Motorcycles 24p Bicycles 20p
Capital Gains Tax Annual exempt amount Individuals, estates
2026/27 £3,000
2025/26 £3,000
Most trusts
1,500
1,500
Tax rate Individual up to Basic Rate Limit (BRL) Individual above BRL, trusts and estates Business Asset Disposal Relief (BADR)
18% 24% 18%
18% 24% 14%
BADR is available on qualifying gains up to a lifetime limit of £1 million. Corporation Tax Year to 31.3.2027
31.3.2026
Main rate (profits above £250,000) Small profits rate (profits up to £50,000)
25% 19%
25% 19%
Marginal relief band (MRB) £50k – £250k Fraction in MRB (effective marginal rate) 3/200 (26.5%) 3/200 (26.5%) Research and development relief Accounting periods beginning on or after 1.4.2024 R&D Expenditure Credit (RDEC) scheme * 20% R&D-intensive SMEs enhanced expenditure scheme ** 86% *Taxable expenditure credit for qualifying R&D. **Additional deduction for qualifying R&D. £50k – £250k R&D-intensive companies are those that have R&D expenditure constituting at least 30% of total tax-deductible P&L expenses plus capitalised R&D costs. Loss-making R&D- intensive companies can claim a payable credit rate of 14.5% from HMRC in exchange for their losses (capped at £20,000 plus 3 x [PAYE & NIC]). Main capital allowances Plant and machinery allowances Year to Year to Companies only 31.3.27 31.3.26 – First-year allowance (main pool) 100% 100% – First-year allowance (special rate pool) 50% 50% Annual Investment Allowance (AIA) – Expenditure of up to £1m 100% 100% New electric vans 100% 100% Writing down allowance: main pool 14% 18% Writing down allowance: special rate pool 6% 6% Motor cars purchased CO 2 (g/km) New cars only Nil 100% 100% In general pool up to 50 14% 18% In special rate pool above 50 6% 6% Structures and buildings allowance Fixed deduction per annum 3% 3% For income tax businesses, capital allowance rates are set for periods to 5 April, rather than 31 March.
Property Taxes Annual Tax on Enveloped Dwellings (ATED)
ATED applies to ‘high value’ residential properties owned via a corporate structure, unless the property is used for a qualifying purpose. The tax applies to properties valued at more than £500,000. Property value Annual charge to 31.3.2027 31.3.2026 £0.5m – £1m £4,600 £4,450 £1m – £2m 9,450 9,150 £2m – £5m 32,200 31,050 £5m – £10m 74,450 72,700 £10m – £20m 151,450 145,950 Over £20m 303,450 292,350 Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) Residential property (1st property only) SDLT - England & NI LBTT - Scotland LTT - Wales £000 Rate £000 Rate £000 Rate Up to 125 Nil Up to 145 Nil Up to 225 Nil 125 – 250 2% 145 – 250 2% 225 – 400 6.0% 250 – 925 5% 250 – 325 5% 400 – 750 7.5% 925 – 1,500 10% 325 – 750 10% 750 – 1,500 10.0% Over 1,500 12% Over 750 12% Over 1,500 12.0% A surcharge applies for all three taxes where an additional residential property interest is purchased for more than £40,000 (unless replacing a main residence). It is also pay- able by all corporate purchasers. The rate is 5% (SDLT) and 8% (LBTT) of the total purchase price. LTT has specific higher rates in bandings: up to 180k: 5%, 180 - 250k: 8.5%, 250 - 400k: 10%, 400 - 750k: 12.5%, 750-1,500k: 15%, >1,500k: 17%. For SDLT: – First-time buyers purchasing a property of up to £500,000 pay a nil rate on the first £300,000 of the purchase price. – A 2% supplement applies where the property is bought by certain non-UK residents. – A rate of 17% may apply to the total purchase price, where the property is valued
above £500,000 and purchased by a ‘non-natural person’ (e.g. a company). For LBTT, first-time buyer relief increases the nil rate band to £175,000. Non-residential or mixed use property SDLT - England & NI LBTT - Scotland LTT - Wales £000 Rate £000 Rate £000
Rate
Up to 150 150 – 250 Over 250
Nil 2% 5%
Up to 150 150 – 250 Over 250
Nil 1% 5%
Up to 225 225 – 250 250 – 1,000 Over 1,000
Nil 1% 5% 6%
Value Added Tax Standard rate (1/6 of VAT-inclusive price) Registration level - Taxable turnover Deregistration level - Taxable turnover
20%
£90,000 88,000
£90,000 88,000.
Inheritance Tax
2026/27 £325,000 175,000
2025/26 £325,000 175,000
Nil rate band (NRB)*
NRB Residential enhancement (RNRB)†*
Tax rate on death**
40% 20%
40%
Tax rate on lifetime transfers to most trusts 20% *Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused NRB and RNRB band may be claimed to increment the current NRB and RNRB when the survivor dies. † RNRB is available for transfers on death of a main residence to (broadly) direct descendants. It tapers away at the rate of £1 for every £2 of estate value above £2m. **Rate reduced to 36% if at least 10% of the relevant estate is left to charity. Unlimited exemption for transfers between spouses/civil partners, except if transferor is a ‘long-term resident’ and transferee is not; maximum exemption is then £325,000. 100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trad- ing companies, qualifying unincorporated trading businesses and certain farmland/ buildings , up to a maximum value of £2.5 million (2025/26: unlimited); 50% relief available thereafter. Reduced tax charge on gifts within 7 years before death Years before death 0-3 3-4 4-5 5-6 6-7 % of full death tax charge payable 100 80 60 40 20 Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient. Key dates and deadlines Self assessment 2026/27 2025/26 1st payment on account 31 January 2027 2026 2nd payment on account 31 July 2027 2026 Balancing payment 31 January 2028 2027 Capital Gains Tax* 31 January 2028 2027 Other payment dates Class 1A NIC 19 July 2027 2026 Class 1B NIC 19 October 2027 2026 Corporation tax is due 9 months and 1 day from the end of the accounting period, unless a ‘large’ company paying by quarterly instalments.
2025/26 Filing deadlines Issue P60s to employees
31 May 6 July
2026 2026
P11D, P11D(b)
Self Assessment Tax Return (SATR) paper version Online SATR if outstanding tax to be included in 2027/28 PAYE code (if under £3,000)
31 October
2026
30 December 31 January
2026
Online SATR 2027 *A CGT return is due within 60 days of completion of sale of any UK land and buildings by a non-resident and of sale of UK residential property with a tax liability by a UK resident. Any CGT payable is also due within 60 days. You are advised to consult us before acting on any information contained herein.
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