Tax Facts Budget 2025
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Income Tax Allowances 2025/26 £ 12,570 100,000 1,260
2026/27 £ 12,570 100,000 1,260
Personal allowance Income limit Transferable marriage allowance1 Married couple’s allowance1 (relief at 10%) Either partner born before 6.4.1935 11,270 11,700 Income limit 37,700 39,200 Minimum where income exceeds limit 4,360 4,530 Blind person’s allowance 3,130 3,250 Dividend allowance 500 500 Personal savings allowance Basic rate taxpayers 1,000 1,000 Higher rate taxpayers 500 500
Income Tax Rates Taxable income £ 2025/26 0 – 37,700 37,701 – 125,140 Over 125,140
Rate % 20 40 45
Dividend rate % 8.75 33.75 39.35
2026/27 0 – 37,700 37,701 – 125,140 Over 125,140
Rate % 20 40 45
Dividend rate % 10.75 35.75 39.35
Scottish taxpayers. The Scottish Budget is expected on 13 January 2026. Welsh taxpayers. The Final Welsh Budget is expected to be published on 20 January 2026. A 0% starting rate for savings income only applies to the extent that such income falls within the first £5,000 of taxable income. If taxable non-savings income exceeds the limit, the starting rate does not apply. A 0% rate applies to savings income falling within the personal savings allowance. Income taxable at the starting rate for savings does not fall within the personal savings allowance. A 0% rate applies to dividend income within the dividend allowance. The trust rate of income tax is 45%. The dividend trust rate is 39.35%. 1
Available for civil partners.
National Insurance Contributions 2026/27 Class 1 (Earnings related) Employees Weekly earnings First £242 £242.01 – £967 Over £967 Employers Weekly earnings First £96 Over £96
Nil 8% 2%
Nil 15%
Employees’ rates are reduced to 1.85% for married women with valid certificates of election but the 2% rate above £967 still applies. Rates are nil for employees over state pensionable age. Normal employers’ contributions are still payable. Employers’ rates for employees under 21, apprentices under 25 and eligible veterans are nil on earnings up to £967 per week, and for eligible employees in freeport and investment zone tax sites on earnings up to £481 per week. Employment allowance (per employer) – £10,500 a year. Class 1A and Class 1B – 15% Class 2 (Self-employed) – Flat rate £3.65 a week (voluntary). Small profits threshold £7,105 a year. Class 3 (Voluntary contributions) – £18.40 a week. Class 4 (Self-employed) – 6% of profits between £12,570 and £50,270 a year. 2% of profits above £50,270 a year.
Inheritance Tax 2025/26 Nil-rate band1 £325,000 Residence nil-rate band1 £175,000 Rate of tax on excess 40%2 Chargeable lifetime transfers 20% Annual gifts of up to £3,000 per donor are exempt.
2026/27 £325,000 £175,000 40%2 20%
Agricultural and business property reliefs Combined value of qualifying property up to £1m3 Balance over £1m
2026/27 100% 50%
1 2 3
Unused nil-rate band is transferable to spouse or civil partner. 36% where 10% or more of the net estate is left to charity. £1m allowance transferable between spouses/civil partners.
Capital Gains Tax Annual exempt amounts 2026/27 Individuals, disabled trusts and, for year of death and next two years, personal representatives Trusts generally Rates 2026/27 Individuals: Standard rate Higher rate Trustees and PRs Gains to which business asset disposal relief applies1 Gains to which investors’ relief applies1
£ 3,000 1,500 18% 24% 24% 18% 18%
Corporation Tax Financial Year to Main rate Small profits rate 19% rate limit marginal relief limit marginal relief fraction effective marginal rate
31/3/2026 25% 19% £50,000 £250,000 3/200 26.5%
31/3/2027 25% 19% £50,000 £250,000 3/200 26.5%
Stamp Taxes Shares and marketable securities Transfers of land and buildings3 Residential (on band of consideration)4,5,6 £0 – £125,000 £125,001 – £250,000 £250,001 – £925,000 £925,001 – £1,500,000 Over £1,500,000 Non-residential (on band of consideration) £0 – £150,000 £150,001 – £250,000 Over £250,000 Leases (Rent – on band of net present value)3 Residential Non-residential £0 – £125,000 £0 – £150,000 Over £125,000 £150,001 – £5,000,000 n/a Over £5,000,000 Freeport and investment zone special tax sites Qualifying purchases receive full SDLT relief.
0.5%2 0% 2% 5% 10% 12% 0% 2% 5% 0% 1% 2%
Subject to lifetime limit on gains of £1 million. Rounded up to the nearest multiple of £5. Transactions of £1,000 or less exempt. In Scotland land and buildings transaction tax. In Wales land transaction tax. 4 Where the consideration exceeds £500,000 and the purchase is by – or by a partnership including – a company or collective investment scheme enveloping the property, the rate is 17% of the total consideration. 5 Where the consideration is no more than £500,000 and the purchaser is a firsttime buyer, the 0% band is increased to £300,000 (and the 5% rate applies to any consideration above £300,000 up to £500,000). 6 Rates are increased by 5 percentage points for certain purchases, including purchases of additional residential properties by individuals. Transactions under £40,000 are excluded. Rates are increased by 2 percentage points for purchases by non-UK residents. 1
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Car Benefit 2026/27 CO2 Electric emissions range g/km (miles) 0 N/A 1-50 >130 1-50 70-129 1-50 40-69 1-50 30-39 1-50 <30 51–54 55–59 60–64 65–69 70–74 75–79 80–84 85–89 90–94
% of list price 4 4 7 10 14 16 17 18 19 20 21 21 22 23 24
CO2 emissions g/km 95–99 100-104 105-109 110-114 115-119 120-124 125-129 130-134 135-139 140-144 145-149 150-154 155 or more
% of list price 25 26 27 28 29 30 31 32 33 34 35 36 37
4% supplement (up to max 37%) applies to diesel cars which do not meet the RDE2 standard. Deemed 1g/km CO2 emissions figure applies for certain plug-in hybrid cars.
Car Fuel Benefit For 2026/27, car fuel benefit is calculated by applying the above car benefit percentage to a figure of £29,2001.
Tax-Free Mileage Allowances Employee’s own vehicle Motorcars and vans Up to 10,000 business miles Over 10,000 business miles Each passenger making same trip Motorcycles Cycles
2026/27 45p 25p 5p 24p 20p
Advisory fuel rates for company car from 1 December 2025 Cylinder capacity Petrol Diesel LPG 0-1,400 cc 12p – 11p 0-1,600 cc – 12p – 1,401 cc - 2,000 cc 14p – 13p 1,601 cc - 2,000 cc – 13p – Over 2,000 cc 22p 18p 21p Advisory electric rates Home charger 7p Public charger 14p 1
Subject to confirmation.
Fixed Rate Deductions: Unincorporated Businesses Vehicle expenditure Motorcars and goods vehicles Up to 10,000 business miles Over 10,000 business miles Motorcycles
Amount per mile 45p 25p 24p
Business use of home Hours worked per month 25 or more 51 or more 101 or more
Amount per month £10 £18 £26
Private use of business premises Number of occupants 1 2 3 or more
Disallowable amount per month £350 £500 £650
Individual Savings Accounts Limits Annual limit Junior ISA annual limit Lifetime ISA annual limit Help to Buy ISA monthly limit
2025/26 £20,000 £9,000 £4,000 £200
2026/27 £20,000 £9,000 £4,000 £200
Investment limit 1 Enterprise investment scheme £1,000,000 Venture capital trusts £200,000 Seed enterprise investment scheme £200,000
Income tax relief rate 30% 20% 50%
Investment Reliefs
Value Added Tax Standard rate Reduced rate Registration threshold (from 1 April 2026) Deregistration limit (from 1 April 2026) Annual accounting scheme turnover limit Cash accounting scheme turnover limit Flat rate scheme turnover limit
20% 5% £90,000 pa £88,000 pa £1,350,000 pa £1,350,000 pa £150,000 pa
Investment limit is £2,000,000 if any amount over £1,000,000 is invested in knowledge-intensive companies. 1
Capital Allowances Dredging (straight-line basis) Writing-down allowance
Rate % 4
Know-how (reducing balance basis) Writing-down allowance
25
Mineral extraction (reducing balance basis) Writing-down allowances General Acquisition of mineral asset
25 10
Patent rights (reducing balance basis) Writing-down allowance
25
Plant and machinery (reducing balance basis) Annual investment allowance – max £1,000,000 pa
100
First-year allowances Main rate expenditure Cars with CO2 emissions 0 g/km Electric charge-point equipment Full expensing (companies only) main rate expenditure special rate expenditure Assets for use in freeport or investment zone special tax sites (companies only) Writing-down allowances Main rate expenditure Cars (other than low-emission cars) Special rate expenditure (including integral features and thermal insulation) Long-life assets
40 100 100 100 50 100 14 6 6 6
Research and development Allowance
100
Structures and buildings (straight-line basis) Writing-down allowance General Freeport and investment zone special tax sites
3 10
Registered Pension Schemes Individual contributions Maximum tax-relievable contributions are the higher of: 100% of taxable UK earnings; or £3,600 (where the scheme applies tax relief at source). 2026/27 Annual allowance Threshold income limit Adjusted income limit Minimum where income exceeds limit Lump sum allowance Lump sum and death benefit allowance
£60,000 £200,000 £260,000 £10,000 £268,275 £1,073,100
2025/26 Annual allowance Threshold income limit Adjusted income limit Minimum where income exceeds limit Lump sum allowance Lump sum and death benefit allowance
£60,000 £200,000 £260,000 £10,000 £268,275 £1,073,100
Unused annual allowance can be c/f for up to three years.
State Pension 2026/27
weekly £
total (52 weeks) £
New state pension1 Full rate
241.30
12,548
Old state pension2 Single person (cat A or B) Single person (cat B lower) Non-contributory (cat C or D)
184.90 110.75 110.75
9,615 5,759 5,759
1 April 2025 £ 21 and over £12.21 18–20 £10.00 16–17 £7.55 Apprentices £7.55 Accommodation Offset (per day) £10.66
1 April 2026 £ £12.71 £10.85 £8.00 £8.00 £11.10
National Minimum Wage
Those reaching state pension age on or after 6 April 2016. Those reaching state pension age before 6 April 2016.
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