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1,000 1,000 *PA is withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000.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.
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