Income Tax — England, Wales & Northern Ireland
Income tax is paid on earnings, pensions, rental income, and savings interest above the personal savings allowance. The basic rate band was frozen at £50,270 until at least 2027/28 — so more people are being pulled into higher rate tax each year due to wage growth.
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
The personal allowance tapers from £100,000: it reduces by £1 for every £2 of income above £100,000, reaching £0 at £125,140. This creates an effective 60% marginal rate between £100,000 and £125,140.
Income Tax — Scotland
Scottish income tax rates are set by the Scottish Parliament and differ from the rest of the UK. Scottish taxpayers pay these rates on employment income, pensions, and rental income, but not on savings interest or dividends (which use UK-wide rates).
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 – £14,876 | 19% |
| Basic Rate | £14,877 – £26,561 | 20% |
| Intermediate Rate | £26,562 – £43,662 | 21% |
| Higher Rate | £43,663 – £75,000 | 42% |
| Advanced Rate | £75,001 – £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
National Insurance
National Insurance contributions (NICs) fund the state pension and certain benefits. There are different classes depending on your employment status.
Class 1 — Employees
| Weekly Earnings | Annual Equivalent | Rate |
|---|---|---|
| Up to £242/week | Up to £12,570 | 0% |
| £242 – £967/week | £12,571 – £50,270 | 8% |
| Over £967/week | Over £50,270 | 2% |
Class 1 — Employers
| Weekly Earnings per Employee | Annual Equivalent | Rate |
|---|---|---|
| Up to £96/week | Up to £5,000 | 0% |
| Over £96/week | Over £5,000 | 15% |
The employer NI rate increased from 13.8% to 15% and the secondary threshold was reduced from £9,100 to £5,000, both effective from April 2025 (Autumn Budget 2024). The Employment Allowance increased from £5,000 to £10,500, allowing eligible smaller employers to offset up to £10,500 of their NI liability per year.
Class 4 — Self-Employed
| Annual Profit | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 – £50,270 | 6% |
| Over £50,270 | 2% |
Class 2 NI (previously a flat weekly charge of £3.45) was abolished from April 2024. Access to contributory benefits is now maintained via Class 4 contributions, with a credit mechanism for those with profits below the Small Profits Threshold.
ISA & Savings Allowances
| Account | Annual Limit | Notes |
|---|---|---|
| Adult ISA (any type) | £20,000 | Total across all ISAs; cannot carry forward |
| Lifetime ISA (LISA) | £4,000 | Within the £20,000 limit; 25% government bonus (max £1,000/yr); ages 18–39 to open |
| Junior ISA (JISA) | £9,000 | For under-18s; separate to adult ISA allowance |
| Help to Buy ISA bonus | 25% bonus | Closed to new accounts Nov 2019; existing holders can still save £200/month; max bonus £3,000 |
Personal Savings Allowance
| Tax Band | Allowance |
|---|---|
| Basic rate taxpayer | £1,000 |
| Higher rate taxpayer | £500 |
| Additional rate taxpayer | £0 |
Interest earned within an ISA does not count towards the PSA and is completely tax-free.
Pensions
| Allowance | Amount | Notes |
|---|---|---|
| Annual Allowance | £60,000 | Or 100% of earnings if lower; includes employer contributions |
| Tapered Annual Allowance — minimum | £10,000 | For those with adjusted income over £260,000; reduces by £1 per £2 above threshold |
| Tapered Allowance — threshold | £260,000 | Adjusted income (all income + employer pension contributions) |
| Money Purchase Annual Allowance | £10,000 | If you have flexibly accessed a DC pension; limits further contributions |
| Lifetime Allowance | Abolished | Removed from April 2024 — no longer a cap on total pension fund size |
| New State Pension (full) | ~£230/week | Approx £11,975/year; triple lock applies; state pension age currently 66 |
Capital Gains Tax
| Asset / Taxpayer | Rate | Notes |
|---|---|---|
| Annual Exempt Amount | £3,000 | Gains below this are tax-free; cannot carry unused allowance forward |
| Residential property & shares — basic rate | 18% | On gains within your remaining basic rate band |
| Residential property & shares — higher/additional rate | 24% | On gains above your basic rate band |
| Business Asset Disposal Relief (BADR) | 14% | On qualifying business disposals up to £1m lifetime limit; rising to 18% from April 2026 |
| Main residence (Private Residence Relief) | 0% | Your only or main home is fully exempt |
The unified 18%/24% rates for both property and shares came into effect from 30 October 2024 (Autumn Budget). Previously, shares were taxed at 10%/20%.
Dividend Tax
| Band | Rate |
|---|---|
| Dividend Allowance | £500 tax-free |
| Basic rate | 8.75% |
| Higher rate | 33.75% |
| Additional rate | 39.35% |
Dividends received within an ISA or pension are completely tax-free. The dividend allowance was reduced from £2,000 to £1,000 in 2023/24 and again to £500 in 2024/25, where it remains for 2025/26.
Stamp Duty Land Tax (England & Northern Ireland)
SDLT is paid when you buy property or land over certain thresholds. The stamp duty holiday thresholds that were in place until 31 March 2025 reverted to the previous levels from 1 April 2025.
Standard residential rates (from 1 April 2025)
| Purchase Price Portion | Rate |
|---|---|
| Up to £250,000 | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
First-time buyer rates (from 1 April 2025)
| Purchase Price Portion | Rate | Notes |
|---|---|---|
| Up to £300,000 | 0% | FTB relief; threshold reduced from £425,000 on 1 April 2025 |
| £300,001 – £500,000 | 5% | FTB relief applies up to £500,000 total price |
| Over £500,000 | Standard rates apply; FTB relief withdrawn entirely | |
Additional property surcharge
An additional 5% SDLT is charged on top of standard rates when purchasing a second home, buy-to-let property, or any residential property when you already own another. This surcharge increased from 3% to 5% in October 2024.
Scotland has Land and Buildings Transaction Tax (LBTT) and Wales has Land Transaction Tax (LTT) with their own separate bands.
Inheritance Tax
| Threshold / Rate | Amount | Notes |
|---|---|---|
| Nil Rate Band | £325,000 | Frozen until 2029/30; transferable to a surviving spouse |
| Residence Nil Rate Band | £175,000 | When main home passes to direct descendants; tapers above £2m estate |
| Combined (individual) | £500,000 | NRB + RNRB where eligible |
| Combined (couple) | £1,000,000 | Both nil rate bands can be transferred to surviving spouse |
| Standard rate | 40% | On the estate above the threshold |
| Reduced rate | 36% | If 10% or more of the net estate is left to charity |
Child Benefit & High Income Charge
| Payment | Weekly Rate | Annual |
|---|---|---|
| First or only child | £26.05 | £1,354.60 |
| Each additional child | £17.25 | £897.00 |
The High Income Child Benefit Tax Charge (HICBC) applies where either parent's adjusted net income exceeds £60,000. The charge is 1% of the child benefit received for every £200 of income above £60,000. The full benefit is clawed back when income reaches £80,000. The HICBC threshold increased from £50,000 to £60,000 in April 2024.
Keeping up to date
UK tax rates and allowances typically change each April at the start of the new tax year. Major announcements happen at the Autumn Statement (usually November) and the Spring Budget (usually March). Always verify figures at GOV.UK for the most current information.
All MoneyTools calculators use the rates on this page and are updated at the start of each tax year. If you spot a figure that looks out of date, please let us know.