Understanding the latest Income Tax and National Insurance rates can help you plan your finances and avoid unexpected tax bills. For the 2026/27 tax year, many of the main tax thresholds remain frozen until 2031.
Personal Allowance
The standard Personal Allowance remains at £12,570. This is the amount most people can earn before paying Income Tax.
Income Tax Bands (England, Wales and Northern Ireland)
Personal Allowance
- Income: Up to £12,570
- Tax rate: 0%
Basic Rate
- Income: £12,571 to £50,270
- Tax rate: 20%
Higher Rate
- Income: £50,271 to £125,140
- Tax rate: 40%
Additional Rate
- Income: Over £125,140
- Tax rate: 45%
National Insurance Rates
National Insurance contributions vary depending on whether you’re employed, self-employed or an employer.
Employees (Class 1)
- 8% on earnings between £12,570 and £50,270.
- 2% on earnings above £50,270.
Employers (Class 1)
- 15% on earnings above the secondary threshold.
Self-Employed (Class 4)
- 6% on profits between £12,570 and £50,270.
- 2% on profits above £50,270.
Why These Thresholds Matter
Knowing which tax band you fall into can help you understand how much Income Tax and National Insurance you’ll pay, whether you’re employed, self-employed or running a business.
As many thresholds remain frozen until 2031, more people may find themselves paying higher rates of tax as earnings increase over time.
If you’d like advice on your tax position or need help understanding how these rates apply to you or your business, we’re always happy to help.
