Income tax is the most common tax paid by individuals in the UK. Understanding the current income tax rates, allowances and reliefs can help you manage your tax position and identify opportunities to reduce the amount of tax you pay.
Download our Brighter Thinking Tax Planner
For the 2026/27 tax year, income tax is charged at:
- 20% on the first £37,700 of taxable income
- 40% on income between £37,701 and £125,140
- 45% on income above £125,140
Most individuals benefit from a £12,570 personal allowance, although this is gradually withdrawn once income exceeds £100,000, creating an effective 60% tax rate between £100,000 and £125,140. The personal allowance is currently frozen until April 2031.
Additional allowances may also apply, including the £500 dividend allowance, the personal savings allowance (£1,000 for basic rate taxpayers and £500 for higher rate taxpayers), and the £5,000 starting rate for savings for individuals with modest non-savings income.
Families should also be aware of the High Income Child Benefit Charge, which applies where income exceeds £60,000, with Child Benefit fully clawed back once income reaches £80,000. There are also key considerations for married couples, property income, charitable donations and National Insurance changes, all of which may affect your overall income tax position.
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Key deadlines to be aware of
- 60 days after completion – deadline to report UK residential property disposals for Capital Gains Tax purposes
- 6 April 2027 – 31 January 2028 – charitable donations made in this period can be carried back and claimed against 2026/27 income (if the claim is made before filing the tax return)
For more detailed explanations and planning strategies, download the full Income Tax section of our 2026/27 Tax Planner.
