UK Tax Calculator Tax year 2026/27

UpdatedLast reviewed 28 October 2026.

Budget 2026: what changed and what it means for your pay

Every tax change Chancellor John Healey announced on 28 October 2026, in plain English, with the date it starts and who it hits.

Delivered
Wed 28 Oct 2026
Most changes start
6 April 2027
Chancellor
John Healey
Measures listed
15

What the Chancellor announced

Budget 2026 announcements
ChangeWhat happensWhenWho it affects
Income tax rates and thresholds unchanged for 2027/28The 20%, 40% and 45% rates on earnings stay. The Personal Allowance stays at £12,570, the higher-rate threshold at £50,270 and the additional-rate threshold at £125,140 (OOTLAR Annex A), so the freeze to April 2031 goes ahead. Dividend rates are unchanged at 10.75%, 35.75% and 39.35%.6 April 2027Who it affects: Every income tax payer
Pension Tax AllowancePeople at or above State Pension age with total income up to £13,037 pay no income tax: a reduction worth up to £94, enough to cover the tax on the full new State Pension of £13,036.40 a year. It tapers by £1 for every £3 of income above £13,037 and is nil at £13,319. HMRC applies it automatically. It runs for 2027/28 to 2029/30; the Treasury expects 500,000 pensioners to benefit, 290,000 of them paying no tax at all.6 April 2027Who it affects: Pensioners with total income of up to £13,319
Savings income tax up another 2 pointsInterest above your allowances is taxed at 24%, 44% and 49% from April 2027, two points more than the 22%, 42% and 47% set at Budget 2025. The £1,000 and £500 Personal Savings Allowances and the £5,000 starting rate band are unchanged.6 April 2027Who it affects: Savers with interest above the Personal Savings Allowance
Property income tax up another 2 pointsRental profits are taxed at 24%, 44% and 49% from April 2027 in England, Wales and Northern Ireland, two points more than the rates set at Budget 2025.6 April 2027Who it affects: Landlords holding property in their own name
Cash ISA limit stays at £20,000The planned £12,000 cash ISA cap for under-65s is dropped: the full £20,000 can go into cash for everyone over 18. The government will work with industry on a new incentive for people investing in a stocks and shares ISA for the first time.From 6 April 2027Who it affects: Savers
Lifetime ISA withdrawal charge cut to 20%For a first home above the £450,000 Lifetime ISA price cap, the withdrawal charge falls from 25% to 20%, so buyers no longer lose part of their own savings. Other unauthorised withdrawals stay at 25%.From 29 October 2026Who it affects: Lifetime ISA holders buying a first home above £450,000
First Time Buyer ISAReplaces the Lifetime ISA for new savers: a 25% government bonus on the final balance, up to a £20,000 balance, paid on withdrawal towards a first home worth up to £450,000. Existing Lifetime ISA holders can keep paying in under the current rules.April 2029Who it affects: First-time buyers
Trading allowance triples to £3,000The tax-free allowance for trading income rises from £1,000 to £3,000, and the Self Assessment reporting threshold for trading income rises with it.6 April 2027Who it affects: Side hustles and small sole traders
Tax-free mileage rates upThe 55p a mile rate for the first 10,000 business miles in a car or van is made permanent, and the rate above 10,000 miles rises from 25p to 35p. Applies to employee mileage allowances and the self-employed simplified rates.6 April 2027Who it affects: Around 2 million employees and 1 million self-employed people who drive their own vehicle for work
Fuel duty cut extendedThe 5p a litre cut and the freeze, due to end on 1 January 2027, run to 30 June 2027. From 1 July 2027 rates return to their pre-March 2022 level and rise with RPI.Until 30 June 2027Who it affects: Drivers
Energy bill supportA £100 Household Energy Payment for homes in council tax bands A to D in England from January 2027, with equivalent support elsewhere in the UK; the 0% VAT rate on domestic electricity extended to 1 July 2027; gas standing charges to be abolished, with the cost moved into unit rates.January 2027Who it affects: Up to 20 million households
National Living Wage £13.21Up 3.9% from 1 April 2027, about £910 a year more for a full-time worker on it. The 18 to 20 rate rises to £11.27.1 April 2027Who it affects: Workers on the minimum wage
Capital gains tax for founders and business ownersA new Founders' Relief gives a 10% rate on up to £10 million of lifetime gains for qualifying founders. The Business Asset Disposal Relief lifetime limit is cut from £1 million to £500,000. The main rates stay at 18% and 24%.6 April 2027Who it affects: Founders and people selling a business
Self-employed National Insurance for 2027/28Class 4 stays at 6% and 2% on the frozen £12,570 and £50,270 limits. The Class 2 small profits threshold rises to £7,355 and the voluntary Class 2 rate to £3.80 a week.6 April 2027Who it affects: Sole traders and partners
Making Tax Digital: first-year penalty easementNo late-submission penalty points for quarterly updates in 2027/28 for Self Assessment taxpayers who join Making Tax Digital for Income Tax in April 2027. The £30,000 income threshold for joining is unchanged.6 April 2027Who it affects: Sole traders and landlords with income over £30,000

When was the Budget 2026?

The Autumn Budget was delivered on Wednesday 28 October 2026 by Chancellor John Healey in the House of Commons, after Prime Minister's Questions at 12 noon. It was his first Budget and the first under Prime Minister Andy Burnham.

  1. 12 noonPrime Minister's Questions
  2. About 12:30pmBudget speech in the House of Commons
  3. After the speechBudget document, tax overview and costings on gov.uk
  4. Same afternoonOBR economic and fiscal forecast

HM Treasury published the Budget document, the Overview of Tax Legislation and Rates and the policy costings on gov.uk once the speech ended, and the Office for Budget Responsibility published its forecast the same afternoon. Those documents, not the speech, are where the detail lives: every figure on this page comes from them and they are linked under Sources.

The backdrop: the government says its stability rule is met by £15 billion in 2029/30, rising to £22 billion in 2030/31, and it kept the pledge not to raise the main rates of income tax, National Insurance or VAT. The money came from savings and property income, banks, capital gains reliefs and smaller taxes instead.

Tax changes confirmed before the Budget

Announced at earlier fiscal events, mostly the November 2025 Budget, and still going ahead. Where Budget 2026 changed one of these, the new version is in the table above.

Tax changes confirmed before Budget 2026 and still going ahead
ChangeWhat happensWhenWho it affects
Income tax and NI thresholds frozenPersonal Allowance stays at £12,570, higher-rate threshold at £50,270, additional-rate threshold at £125,140. NI thresholds are aligned and frozen too. Budget 2026 confirmed the same figures for 2027/28.Until 5 April 2031Who it affects: Every employee, self-employed person and pensioner who pays income tax
Dividend tax up 2 pointsOrdinary rate 10.75% (was 8.75%), upper rate 35.75% (was 33.75%). Additional rate unchanged at 39.35%. Unchanged again for 2027/28.Already in force from 6 April 2026Who it affects: Company directors and investors outside an ISA or pension
Plan 2 student loan threshold frozenRepayments start at £29,385 and the threshold stops rising with earnings. Budget 2026 did not reverse the freeze; its figures for 2027/28 count it in.April 2027 to April 2030Who it affects: Graduates on Plan 2 loans (England and Wales, started 2012 to 2022)
State pension rise (triple lock)The full new State Pension is £13,036.40 a year (£250.70 a week) in 2027/28, the figure the Pension Tax Allowance is built around. The triple lock continues to April 2029.April 2027Who it affects: State pensioners
Unused pensions brought into inheritance taxMost unused pension funds and death benefits count towards the estate for inheritance tax.6 April 2027Who it affects: People passing on pension pots
Making Tax Digital for Income Tax widensQuarterly digital updates become compulsory for sole traders and landlords with qualifying income over £30,000 (over £50,000 since April 2026, over £20,000 from April 2028).6 April 2027Who it affects: Self-employed people and landlords
Salary sacrifice pension NI capPension contributions above £2,000 a year made through salary sacrifice start attracting employee and employer National Insurance. Budget 2026 restated the cap without changing it.6 April 2029Who it affects: Employees using salary sacrifice for pensions
High Value Council Tax SurchargeAnnual surcharge from £2,500 on homes worth £2 million or more, rising to £7,500 above £5 million. The £2 million threshold is unchanged.April 2028Who it affects: Owners of homes worth £2m+ in England
Pay-per-mile charge for electric carsElectric Vehicle Excise Duty charged per mile on top of road tax: 3p a mile for battery electric cars and 1.5p for plug-in hybrids, rising with CPI from 2029/30.April 2028Who it affects: Electric and plug-in hybrid drivers

What was ruled out

Ruled out

Income tax rates

No rise in the 20%, 40% or 45% rates. The Prime Minister has recommitted to the manifesto pledge.

Ruled out

Employee National Insurance rates

The 8% and 2% employee rates are covered by the same pledge.

Ruled out

VAT

The standard 20% rate is covered by the same pledge.

Ruled out

Corporation tax above 25%

The headline rate is capped at 25% for this Parliament.

What did not happen

Rumoured before the speech and absent from the Budget documents.

Did not happen

Personal Allowance rise

Not announced. The allowance stays at £12,570 for 2027/28 and the freeze to April 2031 stands. The only new allowance is the Pension Tax Allowance for people at State Pension age.

Did not happen

Reversing the Plan 2 student loan freeze

Did not happen. The Budget document counts the freeze of the Plan 2 repayment threshold in its figures for 2027/28.

Did not happen

Pension tax relief and the tax-free lump sum

Untouched. The pension changes announced are technical: the two-year rule on death benefits goes and defined benefit schemes get a surplus extraction regime.

Did not happen

Capital gains tax aligned with income tax

Did not happen. The rates stay at 18% and 24%. Instead, Business Asset Disposal Relief is cut to £500,000 and a 10% Founders' Relief arrives from April 2027.

Did not happen

Fuel duty rise on 1 January

Did not happen. The 5p cut and the freeze run to 30 June 2027, with the RPI rise deferred to 1 July 2027.

Did not happen

Mansion tax threshold cut to £1.5 million

Did not happen. The High Value Council Tax Surcharge keeps its £2 million threshold from April 2028.

What the Budget 2026 means for your pay

Take-home pay for 2026/27 at common salaries (employed, England, Wales and Northern Ireland, no pension or student loan), the combined income tax and NI rate on your next pound, and what the threshold freeze is costing you this year. Budget 2026 confirmed the same Personal Allowance, thresholds and NI rates for 2027/28, so for pay alone these figures carry over from April 2027.

Take-home pay 2026/27 by salary and what a threshold change would be worth
SalaryTake-home 2026/27Per monthIncome tax + NITax on next £1Cost of the freeze*
£20,000£17,920£1,493 a monthTax + NI £2,080Next £1: 28%£137
£25,000£21,520£1,793 a monthTax + NI £3,480Next £1: 28%£137
£30,000£25,119£2,093 a monthTax + NI £4,881Next £1: 28%£138
£35,000£28,719£2,393 a monthTax + NI £6,281Next £1: 28%£138
£40,000£32,320£2,693 a monthTax + NI £7,680Next £1: 28%£137
£50,000£39,520£3,293 a monthTax + NI £10,480Next £1: 28%£137
£60,000£45,358£3,780 a monthTax + NI £14,642Next £1: 42%£412
£75,000£54,057£4,505 a monthTax + NI £20,943Next £1: 42%£412
£100,000£68,557£5,713 a monthTax + NI £31,443Next £1: 62%£412
£125,000£78,058£6,505 a monthTax + NI £46,942Next £1: 62%£412

*Cost of the freeze: how much more you would take home if the income tax and NI thresholds had risen 3.9%, the earnings growth figure behind next April's State Pension rise. Illustrative, not a forecast.

"Tax on next £1" is income tax plus employee NI on your next pound of pay. Click any salary for the full breakdown.

Why frozen thresholds are a tax rise you don't see

Unchanged tax rates do not mean an unchanged tax bill. With every threshold frozen until April 2031, a pay rise that only keeps up with prices still pushes more of your income into tax.

On £40,000, a 3.9% rise to £41,560 adds £1,560 before tax, and you keep £1,123 of it (72%). On £49,000, the same rise to £50,910 takes you past £50,270 into the 40% band, and you keep £1,286 of £1,910 (67%).

A 3.9% pay rise under frozen thresholds
£40,000 → £41,560+£1,560
£49,000 → £50,910+£1,910

That is fiscal drag. On £60,000 the freeze costs about £412 this year compared with thresholds rising in line with earnings, and the gap grows every year it continues. Budget 2026 left the Personal Allowance at £12,570 and the freeze to April 2031 in place, so the drag continues. If you are close to £50,270 or £100,000, pension contributions are the main legal way to pull income back under the line.

Budget 2026 calculator: check your salary

Enter your annual salary to see your 2026/27 take-home pay and what each scenario would be worth to you.

See your full breakdown with pension and student loan options →

What the Budget 2026 means for you

Employees

No rate rose and no threshold moved: the Personal Allowance stays at £12,570 and the higher-rate threshold at £50,270 for 2027/28, so a pay rise next year is taxed the same way as this year and fiscal drag continues. If you drive your own car for work, the 55p mileage rate is now permanent and the rate above 10,000 miles rises to 35p from April 2027. The National Living Wage rises 3.9% to £13.21 on 1 April 2027. The salary sacrifice pension cap announced last year still starts in April 2029. On Plan 2? The repayment threshold freeze was not reversed.

Self-employed and sole traders

Class 4 National Insurance stays at 6% and 2% on frozen limits (how Class 2 and Class 4 work), with voluntary Class 2 at £3.80 a week for profits below the £7,355 small profits threshold. The trading allowance triples to £3,000 from 6 April 2027, and the reporting threshold for trading income rises with it, and simplified mileage above 10,000 miles rises to 35p. Making Tax Digital still applies from 6 April 2027 if your self-employment and property income is over £30,000, with no late-submission penalty points for quarterly updates in the first year. Nothing changes the next payment dates: the balancing payment and first payment on account are due on 31 January 2027 (all Self Assessment deadlines).

Savers and investors

From 6 April 2027 savings interest above your Personal Savings Allowance (£1,000 basic rate, £500 higher rate) is taxed at 24%, 44% or 49%, two points more than last year's Budget set. The cash ISA limit stays at £20,000 for everyone, so the planned £12,000 cap is gone. Dividend tax stays at 10.75% and 35.75%. Lifetime ISA holders buying a first home above £450,000 now pay a 20% withdrawal charge instead of 25%, and a First Time Buyer ISA with a 25% bonus on up to £20,000 arrives in April 2029. If you have savings outside an ISA, the 2026/27 allowance is worth using before April.

Landlords

Property income held in your own name is taxed at 24%, 44% or 49% from April 2027 in England, Wales and Northern Ireland, two points more than the rates set at Budget 2025. Landlords with property income over £30,000 join Making Tax Digital the same month. The £2 million threshold for the council tax surcharge from April 2028 is unchanged.

Pensioners

From 6 April 2027 the new Pension Tax Allowance means anyone at or above State Pension age with total income up to £13,037 pays no income tax: a reduction worth up to £94, enough to cover the full new State Pension of £13,036.40 a year (£250.70 a week). It tapers by £1 for every £3 of income above £13,037 and is gone at £13,319, so a pensioner whose total income is above £13,319 still pays tax on everything above £12,570. HMRC applies it automatically and it runs to 2029/30. From April 2027 unused pension pots also count for inheritance tax.

Scotland

Scottish income tax rates and bands on earnings are set in the Scottish Budget, not this one, and the new property income rates apply only in England, Wales and Northern Ireland. National Insurance, savings tax and dividend tax are UK-wide, so the 24%, 44% and 49% savings rates reach Scottish savers, and the Pension Tax Allowance is worked out at the 20% basic rate for Scottish taxpayers. See the Scotland tax calculator for current Scottish take-home pay.

Budget 2026: frequently asked questions

When was the Budget 2026?

Chancellor John Healey delivered the Autumn Budget on Wednesday 28 October 2026 in the House of Commons. The Budget document, the Overview of Tax Legislation and Rates and the policy costings were published on gov.uk the same afternoon, along with the Office for Budget Responsibility's forecast.

Did income tax go up in the Budget 2026?

No. The 20%, 40% and 45% rates on earnings are unchanged, and the Personal Allowance and thresholds stay at £12,570, £50,270 and £125,140 for 2027/28, frozen to April 2031. The rises are on savings and property income, which go to 24%, 44% and 49% from April 2027, and on banks, capital gains reliefs and some duties.

Did the Personal Allowance go up in the Budget?

No. It stays at £12,570 for 2027/28, where it has been since 2021. The only new allowance is the Pension Tax Allowance, which removes income tax for people at State Pension age with total income up to £13,037. Keeping the allowance frozen while wages grow costs someone on £60,000 about £412 this year.

What tax changes start in April 2027?

Savings and property income tax rates rise to 24%, 44% and 49%; the trading allowance rises to £3,000; the Pension Tax Allowance begins; tax-free mileage above 10,000 miles rises to 35p; Business Asset Disposal Relief is capped at £500,000 and Founders' Relief starts; the Plan 2 student loan threshold freeze begins; unused pensions come into inheritance tax; and Making Tax Digital extends to sole traders and landlords with income over £30,000. The cash ISA limit stays at £20,000.

Will pensioners pay tax on the State Pension from 2027?

Not if the State Pension is all they have. The Pension Tax Allowance removes the income tax on total income up to £13,037, which covers the full new State Pension of £13,036.40 a year. It tapers by £1 for every £3 of income above £13,037 and is gone at £13,319, so pensioners with a private pension or other income above that still pay tax on everything above £12,570. HMRC applies it automatically from 6 April 2027 and it runs to 2029/30.

Is National Insurance changing?

Employee rates stay at 8% and 2% and the thresholds stay frozen. The only 2027/28 changes are the lower earnings limit (£133 a week), the Class 2 small profits threshold (£7,355) and the voluntary Class 2 rate (£3.80 a week). The cap on NI relief for salary sacrifice pension contributions above £2,000 a year still starts in April 2029.

What does the Budget 2026 mean for the self-employed?

Class 4 NI stays at 6% and 2% on frozen thresholds. The trading allowance triples to £3,000 from 6 April 2027, simplified mileage above 10,000 miles rises to 35p, and Making Tax Digital applies from the same date to sole traders with income over £30,000, with no late-submission penalty points for quarterly updates in 2027/28. Self-employed landlords and savers also face the 24%, 44% and 49% rates.

When do the Budget 2026 changes take effect?

The Lifetime ISA charge cut applies from 29 October 2026. The 5p fuel duty cut continues until 30 June 2027. The £100 Household Energy Payment arrives from January 2027. Most tax changes, including the savings and property rates, the trading allowance and the Pension Tax Allowance, start on 6 April 2027. The electric vehicle mileage charge starts in April 2028 and the First Time Buyer ISA in April 2029.

Does the Budget change income tax in Scotland?

Not the rates and bands on earnings, which the Scottish Government sets in its own budget. The new property income rates apply only in England, Wales and Northern Ireland. National Insurance, savings tax and dividend tax are UK-wide, so the 24%, 44% and 49% savings rates reach Scottish savers, and the Pension Tax Allowance is worked out at the 20% basic rate for Scottish taxpayers.

See your full breakdown

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Sources