What Are the 2026/27 tax year rates and allowances?

By Paul AnkersPublished On: 23 February 2026Categories: News, Tax

Income Tax

Lower Earnings Limit (LEL) – increasing from £6,500 to £6,708 from 2026/27 to ensure there’s enough for the state pension credit in the year
Primary threshold – £12,570
Secondary threshold – £5,000
Employers and directors must pay NI Class 1 contributions at 8% and 2%
Employers pay NI Class 1 contributions at 15%

Profits up to £50,000 – 19%
Profits above £50,000 to £250,000 subject to marginal relief effectively taxed at 26.5%
Profits above £250,000 – 25%

It’s up to you to decide, because you control the company, but many will choose a salary of £12,570 for 2026/27 to match the personal allowance, or a salary of £6,708 to qualify for state pension credit
The Employment Allowance is not available to single-director companies where the director is the only employee paid above the Secondary Threshold
Employment allowance of £10,500 towards NIC if you have more than one employee and are eligible

National Minimum Wage – increasing from £12.21 to £12.71 for those aged 21 and over
Capital Gains Tax annual exemption – remains at £3,000
The high income threshold for Child Benefit remains at £60,000. Child Benefit is now tapered for payments between £60,000 and £80,000, when the full amount is repayable
From April 2026 the eldest / only child will receive £27.05 per week, and additional children will receive £17.90 per week
The rate for BADR is changing – it will increase to 18% from April 2026

Note: All the information and advice in this blog post was correct at the time of writing.