The Autumn Budget 2026 saw no changes to the Income Tax thresholds. From next April, the personal allowance will remain at £12,570, while the basic rate limit remains £37,700 and the higher rate threshold remains £50,270 in England, Wales and Northern Ireland. These thresholds remain frozen under previously announced policy until April 2031. Scottish Income Tax rates and thresholds differ.

From April 2027, the tax rates applying to savings income will increase. The savings basic rate will rise from 20% to 24%, the savings higher rate from 40% to 44%, and the savings additional rate from 45% to 49%.

The rates applying to property income will also increase from April 2027. The property basic rate will be 24%, the property higher rate 44% and the property additional rate 49%. These rates apply in England, Wales and Northern Ireland, while devolved arrangements may affect the rates applying in Scotland.

When these increases were first announced in last year’s Budget, the planned tax rates for savings and property income were 2% lower than the rates now due to take effect from April 2027. The Chancellor increased the planned tax rates in his Budget speech.

The tax rates on dividend income will remain unchanged in 2027-28. The ordinary rate is 10.75%, the upper rate is 35.75% and the additional rate is 39.35%. These rates apply to dividend income above the £500 dividend allowance.

The Personal Savings Allowance also remains unchanged. Basic rate taxpayers can receive up to £1,000 of savings income tax-free, while higher rate taxpayers can receive up to £500. The starting rate for savings remains 0% on up to £5,000 for eligible lower-income savers, subject to the relevant conditions.

The Government will introduce a new Pension Tax Allowance from 6 April 2027, initially for three tax years. The allowance is designed to prevent pensioners whose total income is up to the value of the full new State Pension from being brought into paying Income Tax. The allowance will be calculated at the basic rate of 20% on the difference between the full new State Pension and the Personal Allowance. For pensioners with income above the full new State Pension, the allowance will be reduced by £1 for every £3 of additional income.

Source:HM Treasury | 28-10-2026
Categories: Income Tax

by Admin

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