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A new tax year, a new update to thresholds, allowances and tax rates. Knowing where you stand with your taxes can help you make the most of your income and stay compliant with HMRC.
Individuals, business owners and investors are impacted by these changes, so here is a guide highlighting the most important updates for the 2025/26 tax year.
What Is My Income Tax Rate? Personal Allowances and Bands (UK excluding Scotland)
| Allowances | 2025/26 | 2024/25 |
|---|---|---|
| Personal Allowance (PA) | £12,570 | £12,570 |
| Marriage Allowance | £1,260 | £1,260 |
| Blind Person’s Allowance | £3,270 | £3,070 |
| Rent-a-Room relief | £7,500 | £7,500 |
| Trading/Property Allowance | £1,000 | £1,000 |
PA is reduced by £1 for every £2 of adjusted net income above £100,000, and fully withdrawn when income exceeds £125,140.
| Tax Band | Taxable Income Range | Rate |
|---|---|---|
| Basic Rate | Up to £37,700 | 20% |
| Higher Rate | £37,701 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
What are the Scottish Income Tax Rates (Non-Savings, Non-Dividend Income)?
| Band | Rate | 2025/26 | 2024/25 |
|---|---|---|---|
| Starter | 19% | £2,445 | £2,306 |
| Basic | 20% | £2,446 to £13,100 | £2,307 to 13,991 |
| Intermediate | 21% | £13,101 to £31,620 | £13,992 to £31,092 |
| Higher | 42% | £31,621 to £62,430 | £31,093 to £62,430 |
| Advanced | 45% | £62,431 to 125,140 | £62,431 to £125,140 |
| Top | 48% | over £125,140 | Over £125,140 |
How Much Tax Should I Pay on Dividend and Savings Income?
| Allowance Type | 2025/26 | 2024/25 |
|---|---|---|
| Personal Savings Allowance (Basic Rate) | £1,000 | £1,000 |
| Personal Savings Allowance (Higher Rate) | £500 | £500 |
| Dividend Allowance | £500 | £500 |
Dividend income above the alliance is taxed at:
-
8.75% for basic rate taxpayers
-
33.75% for higher rate taxpayers
-
39.35% for additional rate taxpayers
What are My National Insurance Contributions (NICs)?
Class 1 (Employees)
| Income Band | Employee Rate | Employer Rate |
|---|---|---|
| Up to £12,570 | 0% | 0% |
| £12,570 to £50,270 | 8% | 13.8% |
| Over £50,270 | 2% | 13,8% |
Self-Employed NICs
-
Class 2 NICs were abolished from April 2024
-
Class 4 NICs apply at 6% on profits between £12,570 and £50,270, and at 2% on profits above £50,270.
How Much Capital Gains Tax (CGT) Should I Be Paying?
| Type of Gain | Basic Rate | Higher Rate |
|---|---|---|
| Residential Property | 18% | 24% |
| Other Chargeable Assets | 10% | 20% |
| Business Asset Disposal Relief | 10% | 10% |
The annual CGT exemption remains at £3,000 for individuals and £1,500 for most trusts.
How Much Is Corporation Tax?
The main rate of corporation tax remains at:
-
25% for companies with profits over £250,000
-
19% for companies with profits up to £50,000
Companies with profits between £50,000 and £250,000 continue to benefit from marginal relief.
What is the Current VAT Rate?
-
Standard VAT rate is 20%
-
Registration threshold is £90,000 (up from £85,000)
-
Deregistration threshold remains at £88,000.
What Are the Key Tax Deadlines?
| Obligation | Due Date |
|---|---|
| Self Assessment (1st Payment) | 31st January 2026 |
| Self Assessment (2nd Payment) | 31st July 2026 |
| Corporation Tax (standard rules) | 9 months + 1 day after year-end |
| P11D and P11D(b) Filing | 6th July 2026 |
| Class 1A NIC Payment | 19th July 2026 |
How Much Inheritance Tax (IHT) Should I Pay?
The thresholds for inheritance tax remain frozen in 2025/26:
-
NIL Band Rate (NRB): £325,000
-
Residence NIL Rate Band (RNRB): £175,000
Married couples or civil partners can combine their allowances in order to pass on up to £1 million tax-free (providing they meet the residence requirements). The standard IHT rate is 40% on estates above the NRB, reduced to 36% if at least 10% is left to charity.
What are the Pensions and Retirement Savings for 2025/26?
Pensions remains fairly stable for 2025/26:
-
Annual Allowance: £60,000 (tapered down to a minimum of £10,000 for higher earners with an adjusted income of over £260,000)
-
Lifetime Allowance: This was abolished from April 2024 but the maximum tax-free lump sum remains capped at £268,275, unless protected.
Contributions continue to receive tax relief at your marginal rate. Pensions remain one of the most effective long-term tax-efficient saving options.
What are the Investments and Savings Limits in 2025/26?
| Investment Vehicle | 2025/26 Limit |
|---|---|
| Individual Savings Account (ISA) | £20,000 |
| Lifetime ISA (LISA) | £4,000 |
| Junior ISA | £9,000 |
| Venture Capital Trust (VCT) | £200,000 |
| Enterprise Investment Scheme (EIS) | £2,000,000 |
| Seed Enterprise Investment Scheme (SEIS) | £200,000 |
How Much is the High Income Child Benefit Charge (HICBC)?
The HICBC now applies when one parent earns more than £60,000 (up from £50,000). 1% of the child benefit must be repaid on every £200 earned above that threshold. At £80,000 the benefit is fully withdrawn.
How Much is Property Tax This Year?
Property tax can affect both homebuyers and landlords. So, whether you’re buying your first home, adding to your portfolio or working your way up the property ladder, these are the 2025/26 thresholds to help you budget correctly… and avoid unexpected costs.
Stamp Duty Land Tax (SDLT) - England and Northern Ireland
| Property Price | SDLT Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Over £1.5 million | 12% |
First-time buyers pay no SDLT on the first £300,000 for properties up to £500,000. A 3% surcharge applies to additional properties.
How Much is Land and Buildings Transaction Tax (LBTT) in Scotland?
| Property Price | LBTT Rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Over £750,000 | 12% |
First-time buyers receive relief on the first £175,000. A 4% Additional Dwelling Supplement applies to extra properties.
Need Help Understanding Your Taxes?
Even the smallest of changes in rates or allowances can have a big impact on your personal or business situation. To make the most of your income, savings and pension contributions, staying up to date is key.
If you’re unsure how these changes affect you, speak to an expert to make sure you’re making the most of your money this year. Book a consultation or contact us today at 033 0088 3616, email [email protected]
Any questions? Schedule a call with one of our experts.
Gary Zouvani
I am a qualified chartered management accountant with over 25 years’ experience working in industry and accountancy practise. Currently DNS group operations director I manage over 50 employees as well as head up our accountancy franchise proposition.
Gary Zouvani
I am a qualified chartered management accountant with over 25 years’ experience working in industry and accountancy practise. Currently DNS group operations director I manage over 50 employees as well as head up our accountancy franchise proposition.
