Tax year 2026/27
UK tax rates and thresholds
The numbers sole traders and small companies use most, for 6 April 2026 to 5 April 2027.
Income Tax (England, Wales and Northern Ireland)
| Personal allowance | £12,570 (reduced by £1 for every £2 of income over £100,000) |
|---|---|
| Basic rate 20% | £12,571 to £50,270 |
| Higher rate 40% | £50,271 to £125,140 |
| Additional rate 45% | Over £125,140 |
Income Tax (Scotland, earned income)
| Starter 19% | £12,571 to £16,537 |
|---|---|
| Basic 20% | £16,538 to £29,526 |
| Intermediate 21% | £29,527 to £43,662 |
| Higher 42% | £43,663 to £75,000 |
| Advanced 45% | £75,001 to £125,140 |
| Top 48% | Over £125,140 |
Ranges include the personal allowance. Savings and dividends use the UK bands.
National Insurance
| Class 4 (self-employed) | 6% on profits £12,570 to £50,270; 2% above |
|---|---|
| Class 2 (voluntary) | £3.65 a week if profits are under £7,105 |
| Class 1 employee | 8% on pay £12,570 to £50,270; 2% above |
| Class 1 employer | 15% on pay above £5,000 a year |
| Employment Allowance | Up to £10,500 (not for companies whose only employee is a director) |
Companies
| Corporation Tax, small profits rate | 19% on profits up to £50,000 |
|---|---|
| Corporation Tax, main rate | 25% on profits over £250,000 |
| Between £50,000 and £250,000 | Main rate less marginal relief |
| Dividend allowance | £500 |
| Dividend tax | 10.75% basic, 35.75% higher, 39.35% additional |
VAT
| Standard, reduced and zero rates | 20%, 5% and 0% |
|---|---|
| Registration threshold | £90,000 taxable turnover in a rolling 12 months |
| Deregistration threshold | £88,000 |
| Flat Rate Scheme | Join up to £150,000 (excluding VAT); limited cost trader rate 16.5% |
Allowances and expenses
| Trading allowance | £1,000 |
|---|---|
| Annual Investment Allowance | £1,000,000 |
| Mileage: cars and vans | 55p a mile for the first 10,000 business miles, then 25p |
| Mileage: motorbikes and bicycles | 24p and 20p a mile |
Late payment (business to business)
| Statutory interest | 8% plus the Bank of England base rate on the reference day |
|---|---|
| Fixed compensation | £40 under £1,000; £70 under £10,000; £100 from £10,000 |
Checked against HMRC and GOV.UK in October 2026. Rates change, usually from 6 April; always check GOV.UK before relying on them. General information, not tax advice.
These rates, applied to your own numbers.
Fenquist keeps a running tax estimate from your invoices and expenses.