TAX RATES, ALLOWANCES AND RELIEFS FOR 2025/2026

     
   £ (GBP)   
Income limit for personal allowance  £100,000   
Personal allowance  £12,570   
Married couple's allowance maximum amount (for those born before 6 April 1935)  £11,270   
Married couple's allowance minimum amount (for those born before 6 April 1935)  £4,360   
Transferable Tax Allowance for married couples and civil partners  £1,260   
Blind person's allowance  £3,130   

 

Income Tax Rates / Savings rates

   
Rate on taxable income  Band, £(GBP)  Rate,% 
Starting savings rate   0 - £5,000  0* 
Basic rate   £0 - £37,700  20** 
Higher rate  £37,701 - £125,140  40*** 
Additional rate   over £125,140  45**** 
* Starting savings rate is available for savings income only. The rate 0% is not available if taxable non-savings income exceeds £5,000. 
Personal Savings Allowance -  £500 /  £1,000 (for basic rate taxpayers / for higher taxpayers)
Dividend Allowance of £500 is tax free.  
** except dividends (8.75%) 
*** except dividends (33.75%) 
**** except dividends (39.35%) 

 

National Insurance Contributions 

   
Weekly earnings £(GBP)  Not contracted out   
Class I (employment) Employee’s rate      
Up to £242  Nil   
£242.01 to £967 8%   
Over £967 2%   
Employer’s rates        
Employment allowance, per employer, per year*        £10,500   
Up to £96 Nil   
Above £96 15.0%   
Class 2      
Small Profits Threshold is £6,845 per year   
Class 2 rate per week is £0 (£3.50 voluntary Below Small Profits Threshold)  
Class 4      
Lower annual earnings limit is £12,570   
Upper annual earnings limit is £50,270      
Class 4 rate below lower earnings limit  0%   
Class 4 rate between lower and upper earnings limit  6%   
Class 4 rate above upper earnings limit  2%   
* The previous limit restricting availability of the employment allowance to smaller employers will be removed from the 2025/26 tax year.  Previously, employers were only eligible for the employment allowance if their total secondary Class 1 liability in the previous tax year was under £100,000.    
*  No employers NIC for employees aged under 21 (and apprentices up to age 25) on earnings up to £967 per week (the upper earnings limit).      

 

Capital Gains Tax 

   
Rates for gains on assets other than residential property and carried interest:    
Standard rate taxpayers  18%   
Higher& additional rate taxpayers  24%   
Rate for trustees and personal representatives for gains on assets other than residential property and carried interest:    
Standard rate taxpayers  24%   
Higher& additional rate taxpayers  24%   
Individual annual exemption   £3,000   
Trusts annual exemption   £1,500   
Business asset disposal relief: lifetime limit on qualifying gains £1,000,000   
Investors’ relief: lifetime limit on gains for external investors £1,000,000   
Rate on gains subject to business asset disposal relief 14% / 14%   
Rate on gains subject to investors’ relief 14% / 14%   
Rates for individuals for gains on residential property not eligible for Private Residence Relief) 18% / 24%   
Rates for individuals (for gains on carried interest) 32% / 32%   
Rates for trustees and personal representatives for gains on residential property not eligible for Private Residence Relief) 24% / 24%   
Rates for personal representatives (for gains on carried interest) 32% / 32%   

 

Temporary Repatriation Facility

   
Rate of designated foreign income and gains (FIG) 12%   

 

Individual Savings Accounts (ISAs)

   
 Max annual contributions – Total overall annual investment limit a combination of amounts between a Cash and Stocks and Shares NISA, up to the overall annual limit of £20,000.  £20 000  

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