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Tax Hub
Tax rates, allowances and key dates for 2026 to 2027
Everything a business owner or landlord needs to check in one place, kept current as HMRC changes it. Figures shown are for the 2026 to 2027 tax year unless stated.
Rates and allowances
The numbers that matter this year
ITIncome Tax
England, Wales and Northern Ireland. Scottish rates differ, see below.
| Personal AllowanceFrozen until April 2031 | £12,570 |
| Basic rate 20% | £12,571 to £50,270 |
| Higher rate 40% | £50,271 to £125,140 |
| Additional rate 45% | Over £125,140 |
| Allowance taperAllowance is nil at £125,140 | £1 per £2 over £100,000 |
| Marriage AllowanceTransferable to a spouse | £1,260 |
| Trading allowanceTax free casual income | £1,000 |
| Property allowanceTax free property income | £1,000 |
| Rent a room relief | £7,500 |
High Income Child Benefit Charge applies between £60,000 and £80,000 of adjusted net income, at 1% per £200.
SCScottish Income Tax
Applies to non savings, non dividend income of Scottish taxpayers.
| Starter rate | 19% |
| Basic rate | 20% |
| Intermediate rate | 21% |
| Higher rate | 42% |
| Advanced rate | 45% |
| Top rateOver £125,140 | 48% |
Savings and dividend income are taxed at the UK wide rates. Band thresholds for 2026 to 2027 are set by the Scottish Budget; confirm the current figures before relying on them.
DVDividends and savings
Dividend rates rose by two points from April 2026.
| Dividend allowance | £500 |
| Dividend basic rate | 10.75% |
| Dividend higher rate | 35.75% |
| Dividend additional rate | 39.35% |
| Personal savings allowance, basic | £1,000 |
| Personal savings allowance, higher | £500 |
| Starting rate for savingsReduced by other income over the allowance | £5,000 at 0% |
| ISA allowance | £20,000 |
Savings income rates are due to rise by two points from April 2027.
NINational Insurance
Class 1 for employees and employers, Class 4 for the self employed.
| Employee, main rate£12,570 to £50,270 a year | 8% |
| Employee, above upper limit | 2% |
| Employer rateAbove £5,000 a year | 15% |
| Employment AllowanceFor eligible employers | £10,500 |
| Class 4, main rate£12,570 to £50,270 | 6% |
| Class 4, above upper limit | 2% |
| Class 2Credited automatically above the small profits threshold | Voluntary |
| Class 1A on benefits | 15% |
CTCorporation Tax
Rates depend on taxable profits, divided between associated companies.
| Small profits rateProfits up to £50,000 | 19% |
| Main rateProfits over £250,000 | 25% |
| Marginal reliefEffective rate rises from 19% to 25% | Between £50,000 and £250,000 |
| Payment due | 9 months and 1 day after year end |
| Return due | 12 months after year end |
CGCapital Gains Tax
Same rates now apply to residential property and other assets.
| Annual exempt amount | £3,000 |
| Basic rate taxpayers | 18% |
| Higher and additional rate | 24% |
| Business Asset Disposal Relief£1m lifetime limit, up from 14% | 18% |
| Residential property reportingReport and pay within 60 days of completion | 60 days |
VATVAT
Registration is tested on a rolling twelve month basis.
| Standard rate | 20% |
| Reduced rate | 5% |
| Registration threshold | £90,000 |
| Deregistration threshold | £88,000 |
| Flat Rate Scheme entryMust leave above £230,000 | Turnover up to £150,000 |
| Cash accounting entry | Turnover up to £1.35m |
CACapital allowances
Deductions for plant, machinery and buildings.
| Annual Investment Allowance100% in year of purchase | £1,000,000 |
| Full expensingNew main pool plant, companies only | 100% |
| Special rate first year | 50% |
| Main pool writing down | 18% |
| Special rate pool | 6% |
| Structures and Buildings | 3% a year |
| Electric cars, 0 g/kmNew cars only | 100% first year |
Mileage allowance: 45p a mile for the first 10,000 business miles, 25p after that. Electric company car benefit is 4% for 2026 to 2027.
IHTInheritance Tax
Nil rate bands frozen until April 2031.
| Nil rate band | £325,000 |
| Residence nil rate bandTapered above £2m estates | £175,000 |
| Rate on death | 40% |
| Rate on lifetime transfers | 20% |
| Business and agricultural relief50% above, from April 2026 | 100% on first £1m |
| Taper on giftsRate falls from 32% to 8% | 3 to 7 years |
Unused pension funds are due to come within the estate from April 2027.
MTDMaking Tax Digital for Income Tax
Sole traders and landlords, tested on gross qualifying income.
| From April 2026Live now | Over £50,000 |
| From April 2027 | Over £30,000 |
| From April 2028 | Over £20,000 |
| Quarterly update deadlines | 7 Aug, 7 Nov, 7 Feb, 7 May |
| Final declaration | 31 January |
Not sure when you join? Use the MTD checker.
Figures reflect HMRC guidance as published for the 2026 to 2027 tax year and are checked when rates change. They are general information, not advice for your circumstances.
Charities
VAT and Gift Aid for charities
Charities meet VAT questions most businesses never do. Grant income is usually outside the scope, trading income brings partial exemption, and some purchases qualify for zero rating or reliefs that are easy to miss. Gift Aid adds 25p to every pound donated, but only with the declarations and records to prove it.
We keep the records that separate business from non business activity, prepare partial exemption calculations for registered charities, and run Gift Aid and Small Donations Scheme claims with the audit trail an examiner will ask for.
What we cover
- Business and non business apportionment
- Partial exemption and the de minimis test
- Charity VAT reliefs on purchases
- Gift Aid and Small Donations Scheme claims
- Trading subsidiaries and Gift Aid payments
Key dates
Deadlines for the year ahead
MTD quarterly updateQuarter to 5 October, for sole traders and landlords in MTD for Income Tax.
CIS and PAYEMonthly CIS return and PAYE payment for October (22nd if paying electronically).
CIS and PAYEMonthly CIS return and PAYE payment for November (22nd if paying electronically).
Self AssessmentOnline return, balancing payment for 2025 to 2026 and first payment on account for 2026 to 2027.
MTD quarterly updateQuarter to 5 January.
Tax year endLast day of 2026 to 2027. ISA and pension contributions must be made by now.
MTD quarterly updateQuarter to 5 April.
P60sIssue P60s to every employee on the payroll at 5 April.
P11DP11D and P11D(b) for benefits in kind due to HMRC and employees.
Class 1A NICPayment of Class 1A National Insurance on benefits.
Second payment on accountFor 2026 to 2027 Self Assessment.
MTD quarterly updateQuarter to 5 July.
Corporation Tax is due nine months and one day after your company year end, and Companies House accounts nine months after. VAT returns are due one month and seven days after each quarter.
Guides
Answers to the questions clients ask us most
Making Tax Digital for Income Tax: who, when and what to do
Thresholds, dates, what counts as qualifying income, the quarterly cycle and penalties.
Read the guideLandlordsShould I put my rental property into a limited company?
Mortgage interest restriction, incorporation relief, stamp duty, ongoing costs, when it works and when it does not.
Read the guideLimited companiesSalary and dividends for 2026 to 2027
The sensible director salary for this year, the dividend allowance and worked examples at three profit levels.
Read the guideLimited companiesCompanies House identity verification: what directors must do
Who has to verify, how, deadlines, and how an Authorised Corporate Service Provider can do it for you.
Read the guideSelf employedDo I need to register for VAT?
The £90,000 test explained, rolling twelve months, voluntary registration and scheme choice.
Read the guideLandlordsSelling a property: the 60 day capital gains return
Who must report, how the gain is worked out, rates, and what happens if you miss the deadline.
Read the guideWant these numbers applied to your situation?
A free 30 minute call is the quickest way to find out what the rates mean for you.
Or just pick up the phone
+44 7456 385980info@taxmesh.co.uk
