UK Individual Tax
Earned Income
An individual is taxed on most sources of income if they are UK-resident or if the income is UK derived. Some exceptions exist, however, including some state benefits and some types of savings interest.
The table below shows the personal tax rates for the tax year ended 05 April 2026:
| Band | Taxable income | Tax rate |
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | over £125,140 | 45% |
| Income limit for Personal Allowance | over £100,000 |
The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero.
Personal Savings Allowance
You are entitled to up to £1000 of tax free interest income depending on your tax bracket:
| Income Tax band | Tax-free savings income |
| Basic rate | £1,000 |
| Higher rate | £500 |
| Additional rate | £0 |
Dividend Income
| Band | Tax rate |
| Basic rate | 8.75% |
| Higher rate | 33.75% |
| Additional rate | 39.35% |
You also get a dividend allowance each year. You only pay tax on any dividend income above the dividend allowance.
| Tax year | Dividend allowance |
|---|---|
| 6 April 2024 to 5 April 2025 | £500 |
| 6 April 2023 to 5 April 2024 | £1,000 |
| 6 April 2022 to 5 April 2023 | £2,000 |
| 6 April 2021 to 5 April 2022 | £2,000 |
