Tax year 2026/27

Notes for people with more than one kind of income

Last reviewed against published 2026/27 material in October 2026. This is general reading for a UK audience. It is not your return, not a calculation, and not a reason to skip GOV.UK or a qualified adviser. Rates move. Your facts matter more than our paragraphs.

A lamp-lit reading chair beside a bookshelf

How to use this page

Figures below are the ones widely published for 6 April 2026 to 5 April 2027. Where a change is scheduled for a later year, we say so. If a sentence and an HMRC page disagree, the HMRC page wins. Scottish income tax rates on non-savings, non-dividend income differ from the rest of the UK. If you live in Scotland, read the Scottish rates before you apply the bands printed here, which are the rates used for England, Wales, and Northern Ireland on that type of income.

Income tax on pay and profits

Personal allowance

£12,570

Frozen, and scheduled to stay frozen beyond this year. It tapers away by £1 for every £2 of income over £100,000, and is gone at £125,140.

Basic rate

20%

On taxable income up to the basic-rate limit. The higher-rate threshold most readers meet in published tables is £50,270 of total income, allowance included.

Higher rate

40%

From £50,271 to £125,140 on the published UK bands for non-savings, non-dividend income outside Scotland.

Additional rate

45%

Above £125,140. Extra income in this band is expensive. A “small” side profit is not small here.

Allowances that show up when you add a stream

Trading allowance, £1,000

Gross trading income up to £1,000 in the year can fall under the trading allowance. It is not a second personal allowance glued on top in the way headline writers sometimes claim. It is relief against trading income.

If you use the allowance, you cannot also deduct expenses for that same income. If your costs are higher than £1,000, calculating real profit may be better. If you are already in Self Assessment, or you want to claim a loss, the “do nothing under £1,000” shortcut may not apply. Read the HMRC trading-allowance page before you decide you are invisible.

Property has its own £1,000 allowance. You do not mix the two into one bucket.

Property allowance and Rent a Room

The property allowance is up to £1,000 of gross property income. Rent a Room is different: up to £7,500 from furnished letting in your only or main home, or £3,750 if someone else also receives income from that letting. Both figures are the published limits and are described as unchanged while other property tax rules are due to shift later.

You generally choose a scheme rather than stacking every relief on the same receipts. Rent a Room has conditions about the home and the letting. It is not a shelter for a separate rental house. If gross receipts sit under the limit you use, you may not need to pay tax on them, and you may not need to tell HMRC, subject to the exceptions on the official page. “May” is doing real work in that sentence.

Dividends in 2026/27

The dividend allowance is £500. Above that, published rates from 6 April 2026 are 10.75% at the ordinary rate, 35.75% at the upper rate, and 39.35% at the additional rate. The ordinary and upper rates are higher than the year before. The additional rate did not move with them.

Dividends inside an ISA are not taxed in the same way. The overall ISA allowance for 2026/27 remains £20,000. From 6 April 2027 the government has said the cash ISA limit will be £12,000 within that £20,000 overall, with savers over 65 still able to put £20,000 in a cash ISA. That is next year. Do not file this year’s return as if it had already happened.

Savings interest

The personal savings allowance is widely stated as £1,000 for basic-rate taxpayers, £500 for higher-rate, and £0 for additional-rate. A starting rate for savings can also cover up to £5,000 of interest where your other income is low enough. Banks report interest. “The bank didn’t take tax” does not always mean the interest is yours to ignore, especially once a side income pushes you up a band.

National Insurance beside the tax

Employees and the self-employed are not in the same National Insurance system. For 2026/27, published Class 1 employee rates are 8% between the primary threshold and the upper earnings limit, then 2%. Published weekly anchors are £242 to £967, with 2% above that. Employers pay 15% above £5,000 a year. That employer line matters if you ever take someone on. It is not your Class 4 bill.

Class 4, for the self-employed, is published at 6% on profits between £12,570 and £50,270, and 2% above £50,270. Profits under the lower limit do not pay Class 4.

Class 2 is no longer a routine compulsory charge. If profits are at least the small profits threshold, published at £7,105, Class 2 is treated as paid for the year, which protects the contribution record without a bill. Below that, you can pay Class 2 voluntarily. The published weekly rate is £3.65. Voluntary Class 3, a different product, is published at £18.40 a week. Check a State Pension forecast before you buy years. Not every gap is worth filling.

Also on the same form

Student loan repayments can rise when total income rises. The plan type sets the threshold.
High Income Child Benefit Charge still exists. Extra income can bring it into view.
VAT registration is a turnover test. The published taxable-turnover threshold is £90,000 on a rolling 12 months. A hobby that becomes a shop can cross it.
Capital gains have their own annual exempt amount, published at £3,000. Rates depend on the asset and your band. Confirm them before you sell.

Self Assessment, without the folklore

You register for Self Assessment when HMRC says your situation requires it, not when a forum agrees. Common triggers include self-employed income above the trading allowance, untaxed property income, significant untaxed dividends or interest, and being told to file. The published deadline to register is 5 October after the end of the tax year in which you first needed a return. Online filing and balancing payment are due 31 January following the end of that tax year. Payments on account can make that January larger than people expect.

Keep gross amounts, dates, and costs. A photo of a receipt is a record if you can still find it in three years. A memory of “about four hundred” is not.

From April 2027, published plans raise the tax rates on property income to 22%, 42%, and 47%, and they change the cash ISA split described above. Those are not the rates for the return you are thinking about in October 2026. Mention them so a headline next spring does not feel like a surprise. Do not apply them early.

Pension contributions have their own annual allowance, widely published at £60,000, with a taper for high incomes and a lower allowance in some cases after flexible access. We are not going to pretend a paragraph can place you inside those rules.

Income tax on GOV.UK Self Assessment on GOV.UK