What is the tax rates in UK for years 2025/26?

Tax rates 2025/26, allowances, and deadlines

As the new tax year begins, individuals and businesses in the UK need to stay informed about the latest tax rates and thresholds. The 2025/26 tax year brings some key changes that may impact your financial planning, investments, and business decisions. In this article, we break down the latest tax rates for income tax, corporation tax, capital gains tax, and more.

Income Tax Rates for 2025/26

For individuals, income tax rates remain a crucial factor in personal financial planning. The bands for 2025/26 are as follows:

Income Tax Rates and Bands
Band	Income Range	Tax Rate
Personal Allowance (PA)	Up to £12,570	0%
Basic Rate Band (BRB)	£12,571 – £50,270	20%
Higher Rate Band (HRB)	£50,271 – £125,140	40%
Additional Rate	Above £125,140	45%

The Personal Allowance remains frozen, meaning more individuals may find themselves moving into higher tax brackets due to wage increases.

National Insurance Contributions (NICs)

For employees and self-employed individuals, National Insurance contributions play a key role in overall tax liability. The NIC rates for 2025/26 are:

Employees (Class 1 NICs)
Rate	Tax Rate
Earnings up to £12,570	0%
Earnings between £12,571 and £50,270	8%
Earnings above £50,270	2%

Self-Employed (Class 4 NICs)
Rate	Tax Rate
Profits between £12,570 and £50,270	6%
Profits above £50,270	2%

Corporation Tax Rates

Corporation tax rates remain structured based on a company’s profits:

Corporation Tax Rates
Rate	Detail	Tax Rate
Small Profits Rate	profits up to £50,000	19%
Main Rate	profits above £250,000	25%
Marginal Relief	applies for profits between £50,000 and £250,000, resulting in a gradual increase in the effective tax rate	–

Dividend Tax Rates

For shareholders and investors, dividend taxation is another key consideration. The tax-free Dividend Allowance for 2025/26 remains at £500. Dividend tax rates are as follows:

Dividend Tax Rates
Rate	Tax Rate
Basic Rate taxpayers	8.75%
Higher Rate taxpayers	33.75%
Additional Rate taxpayers	39.35%

Capital Gains Tax (CGT)

If you’re selling property, shares, or other assets, capital gains tax rates apply:

Capital Gains Tax
Rate	Tax Rate
Annual Exempt Amount	£3,000 (reduced from £6,000 in 2024/25)
Basic Rate taxpayers	10% (18% for residential property)
Higher/Additional Rate taxpayers	20%
Higher Rate (residential property)	20% (24% for residential property)

Inheritance Tax (IHT)

Inheritance Tax remains a major consideration for estate planning. The 2025/26 rates are:

Inheritance Tax (IHT)
Rate	Details
Nil-Rate Band	£325,000
Residence Nil-Rate Band	£175,000
Above threshold rate	40% (or 36% if at least 10% of the estate is left to charity)

Stamp Duty Land Tax (SDLT)

For property buyers in England and Northern Ireland, SDLT rates apply as follows:

Stamp Duty Land Tax (SDLT)
Rate	Tax Rate
Up to £250,000	0%
£250,001 to £925,000	5%
£925,001 to £1.5 million	10%
Above £1.5 million	12%

First-time buyers benefit from relief on properties up to £425,000.

How These Changes Impact You

With frozen allowances and shifting thresholds, many taxpayers may end up paying more in tax. Now is the perfect time to review your financial strategy, whether you’re an individual planning your income or a business managing corporate tax obligations.

Plan Ahead with Expert Guidance

Navigating the UK tax system can be complex, but proactive planning can help minimise your tax liabilities. If you need expert advice on how these changes impact you or your business, our team at Naseems Accountants is here to help.

Contact us today for a personalised tax consultation and take control of your financial future!