Current Income Tax Rates and Personal Allowances

Understanding how much tax-free income you can earn and which Income Tax rates apply to you is essential for managing your finances. Your Personal Allowance and the tax bands that apply depend on where you live in the UK and how much you earn. This guide explains the current rates for the 2026 to 2027 tax year for England, Northern Ireland, Scotland, and Wales.

Your Personal Allowance

The Personal Allowance is the amount of income you can earn before you start paying Income Tax. For the 2026 to 2027 tax year, the standard Personal Allowance is £12,570. This means you pay no tax on the first £12,570 of your income.

High earners

If you earn more than £100,000, your Personal Allowance starts to reduce. It goes down by £1 for every £2 that your adjusted net income (your total income before tax, minus certain deductions like pension contributions and Gift Aid donations) is above £100,000. This means your Personal Allowance disappears entirely if your income is £125,140 or above.

Blind Person's Allowance

If you qualify for Blind Person's Allowance, this tax-free amount is added on top of your Personal Allowance, allowing you to earn more before paying tax.

Income Tax rates for England and Northern Ireland

If you live in England or Northern Ireland, you pay tax at the following rates for the 2026 to 2027 tax year:

• Personal Allowance: Up to £12,570 – 0%
• Basic rate: £12,571 to £50,270 – 20%
• Higher rate: £50,271 to £125,140 – 40%
• Additional rate: Over £125,140 – 45%

For example, if you earn £35,000 and have the standard Personal Allowance of £12,570, you pay 20% tax on £22,430 (which is £35,000 minus £12,570).

Income Tax rates for Scotland

If you live in Scotland, you pay Scottish Income Tax rates on your wages, pension, and most other taxable income. Scotland has more tax bands than the rest of the UK.

For the 2026 to 2027 tax year, the Scottish rates are:

• Personal Allowance: Up to £12,570 – 0%
• Starter rate: £12,571 to £16,537 – 19%
• Basic rate: £16,538 to £29,526 – 20%
• Intermediate rate: £29,527 to £43,662 – 21%
• Higher rate: £43,663 to £75,000 – 42%
• Advanced rate: £75,001 to £125,140 – 45%
• Top rate: Over £125,140 – 48%

You pay Scottish Income Tax if you live in Scotland. Your tax code will start with an 'S' (for example, S1257L) to show your employer or pension provider they should deduct tax at Scottish rates.

You still pay the same tax as the rest of the UK on dividends and savings interest.

Who counts as a Scottish taxpayer

You're a Scottish taxpayer if Scotland is your main home. If you have homes both in Scotland and elsewhere in the UK, your main home is usually where you spend most of your time. However, it may be where you spend less time if that's where most of your possessions are, your family lives, or you're registered for services like your GP or bank account.

If you don't have a permanent home, count the number of days you spent in Scotland during the tax year (where you were at midnight each day). If you spent more days in Scotland than anywhere else in the UK, you're a Scottish taxpayer for the whole tax year.

Income Tax rates for Wales

If you live in Wales, you pay Welsh Income Tax rates set by the Welsh Government. For the 2026 to 2027 tax year, the Welsh rates are:

• Personal Allowance: Up to £12,570 – 0%
• Basic rate: £12,571 to £50,270 – 20%
• Higher rate: £50,271 to £125,140 – 40%
• Additional rate: Over £125,140 – 45%

These rates are currently the same as those for England and Northern Ireland. If you're employed or receive a pension, your tax code will start with a 'C' to show you pay the Welsh rates.

Like Scottish taxpayers, you pay the same tax as the rest of the UK on dividends and savings interest.

If you move between UK nations

If you move to Scotland or Wales (or away from them), you must tell HMRC about your change of address. You'll pay tax based on where you live for the longest period during the tax year (6 April to 5 April).

When HMRC updates your tax rate, the change is backdated to 6 April (the start of that tax year). Your tax will be adjusted automatically through your wages or pension so you pay the correct total amount for the year.

Other tax-free allowances

Besides your Personal Allowance, you may have other tax-free allowances:

• Savings interest: You may be able to earn some savings interest tax-free
• Dividend income: You have a tax-free allowance if you own shares in a company
• Trading allowance: Your first £1,000 of self-employment income may be tax-free
• Property allowance: Your first £1,000 of rental income may be tax-free (unless you use the Rent a Room Scheme)

You pay tax on any income above these allowances.

Ways to reduce your Income Tax

You may be able to reduce the tax you pay by claiming Income Tax reliefs if you're eligible.

If you're married or in a civil partnership, you may be able to claim Marriage Allowance. This allows you to transfer some of your Personal Allowance to your partner if your income is below the standard Personal Allowance. If you or your partner were born before 6 April 1935, you may instead be able to claim Married Couple's Allowance.

Previous tax year (2025 to 2026)

The Personal Allowance for 2025 to 2026 was also £12,570. The rates for England, Northern Ireland, and Wales were the same as for 2026 to 2027.

Scottish Income Tax rates for 2025 to 2026 were slightly different:

• Starter rate: £12,571 to £15,397 – 19%
• Basic rate: £15,398 to £27,491 – 20%
• Intermediate rate: £27,492 to £43,662 – 21%
• Higher rate: £43,663 to £75,000 – 42%
• Advanced rate: £75,001 to £125,140 – 45%
• Top rate: Over £125,140 – 48%

Checking your tax

If you're employed or receive a pension, you can check your Income Tax online to see your Personal Allowance, your tax code, how much tax you've paid in the current tax year, and how much you're likely to pay for the rest of the year.

Sources

• Income Tax rates and Personal Allowances
• Rates and allowances for Income Tax
• Income Tax in Scotland
• Income Tax in Wales

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.