Tax year 2025/26: UK tax rates, deadlines and changes

Published Monday 20 April 2026

Table of contents

• When does the new tax year start?
• Income tax rates and personal allowances 2025/26
• Key tax deadlines for businesses in 2025/26
• National Insurance updates: what businesses need to know
• Navigating the 2025/26 tax year: key changes for businesses
• FAQs on UK tax year 2025/26

Key takeaways

• Prepare for higher payroll costs by updating your cash flow plans to reflect the employer National Insurance rate rise from 13.8% to 15%, and the secondary threshold drop from £9,100 to £5,000 — but check if the expanded Employment Allowance (now £10,500 with no earnings cap) reduces your bill.
• Mark your key self-assessment deadlines now: register by 5 October 2025, file your paper return by 31 October 2025, and submit your online return and pay any tax owed by 31 January 2026 to avoid an automatic £100 penalty.
• Start using compatible accounting software as soon as possible to prepare for Making Tax Digital for income tax, which requires digital records and quarterly updates to HMRC from April 2026 for those earning over £50,000, and from April 2028 for those earning over £20,000.
• Update your payroll software to reflect the new National Living Wage of £12.21 per hour for workers aged 21 and over, and the increased statutory pay rate of £187.18 per week for maternity, paternity, adoption, and shared parental leave.

When does the new tax year start?

The UK tax year 2025/26 runs from 6 April 2025 to 5 April 2026. This is the period used to calculate your income tax and National Insurance contributions.

Key changes for this tax year include:

• updated National Insurance rates and thresholds
• frozen income tax personal allowances
• expanded Making Tax Digital requirements
• new compliance deadlines for businesses

Update your systems and review your financial records before key deadlines to stay compliant.

Income tax rates and personal allowances 2025/26

The standard personal allowance for 2025/26 is £12,570. This is the amount of income you can earn before paying income tax.

The allowance has been frozen at this level since 2021. Your personal allowance may be reduced if your income exceeds £100,000.

The income tax bands vary depending on where you live in the UK. England, Wales, and Northern Ireland share the same rates, while Scotland has its own system with different thresholds.

Tax rates and bands for England, Wales, and Northern Ireland

The income tax bands for England, Wales, and Northern Ireland in 2025/26 are:

• Basic rate: 20% on income from £12,571 to £50,270
• Higher rate: 40% on income from £50,271 to £125,140
• Additional rate: 45% on income over £125,140

Scotland operates a different income tax structure with more bands and rates than the rest of the UK.

Tax rates and bands for Scotland

Scotland sets its own income tax rates. The bands for 2025/26 are:

• Starter rate: 19% on income from £12,571 to £14,876
• Basic rate: 20% on income from £14,877 to £26,561
• Intermediate rate: 21% on income from £26,562 to £43,662
• Higher rate: 42% on income from £43,663 to £75,000
• Advanced rate: 45% on income from £75,001 to £125,140
• Top rate: 48% on income over £125,140

Your personal allowance reduces by £1 for every £2 you earn over £100,000. This means your allowance is zero if your income exceeds £125,140.

Check which rates apply based on where you live, as Scotland has different bands.

Key tax deadlines for businesses in 2025/26

Missing a tax deadline triggers an automatic £100 penalty, with interest charges on any unpaid tax. Additional penalties apply the longer you delay.

Mark these key dates to stay compliant throughout the 2025/26 tax year.

Self-assessment is how sole traders and business partners report and pay income tax to HMRC.

Self-assessment tax return deadlines

Key deadlines for 2025/26:

• 5 October 2025: register for self-assessment if you're a first-time filer
• 31 October 2025: submit your paper tax return
• 31 January 2026: file your online return and pay any tax owed

VAT-registered businesses need to file returns regularly throughout the year.

VAT deadlines

VAT returns are due one month and seven days after each VAT period ends. Most businesses file quarterly.

For example, if your VAT period ends 31 March 2025, your deadline is 7 May 2025.

You have flexibility with VAT accounting periods:

• choose a VAT period that suits your business (it doesn't need to match your financial year)
• apply for monthly or annual filing if preferred (subject to HMRC approval)

Employers must report pay and deductions through PAYE each time they pay employees.

PAYE deadlines

Send a Full Payment Submission (FPS) to HMRC on or before each payday. The FPS reports employee pay and deductions.

PAYE payments are due by the 22nd of the following tax month when paying electronically. For example, if the tax month ends 5 May 2025, your payment deadline is 22 May 2025.

National Insurance updates: what businesses need to know

Employer National Insurance increased from 13.8% to 15% from 6 April 2025. The secondary threshold also dropped from £9,100 to £5,000, meaning you pay NICs on more of each employee's earnings.

These changes affect cash flow planning for all businesses with employees. The measure will impact around 1.2 million employers according to government analysis.

The changes to National Insurance affect employers, employees, and self-employed people in different ways.

Main changes

The following sections outline the specific changes to National Insurance rates, thresholds, and allowances.

Increase to employer's National Insurance

Here are the key changes to employer National Insurance:

• Rate increase: from 13.8% to 15%
• Secondary threshold reduction: from £9,100 to £5,000
• Impact: higher payroll costs requiring updated cash flow planning

National Insurance also includes specific thresholds that determine when contributions become due.

Changes to earning thresholds

Here are the earnings thresholds for 2025/26:

• Lower Earnings Limit (employees): £125 per week (£542 per month, £6,500 per year equivalent), which protects entitlement to certain contributory benefits
• Small Profits Threshold (self-employed): £6,845 per year, above which you're treated as having paid Class 2 NICs for benefit entitlement purposes

Self-employed people and those with gaps in their National Insurance record can make voluntary contributions.

Class 2 and 3 National Insurance contribution rate increase

Here are the National Insurance contribution rates for 2025/26:

• Class 2 (self-employed): voluntary contributions available at £3.50 per week for those wishing to protect State Pension entitlement
• Class 3 (voluntary): £17.75 per week, used to fill gaps in your National Insurance record

Learn more about National Insurance contributions.

The Employment Allowance helps reduce the National Insurance costs for eligible businesses.

Enhanced employment allowance to support small businesses

The Employment Allowance increased from £5,000 to £10,500 for 2025/26. This allowance reduces your employer NIC bill.

The £100,000 earnings cap has been removed, so the allowance is no longer restricted and more businesses now qualify according to ICAEW. If you're eligible, you could offset up to £10,500 of your employer NICs.

Find out how to claim Employment Allowance.

Navigating the 2025/26 tax year: key changes for businesses

When you understand these updates, you can budget accurately and avoid unexpected expenses. Key tax year changes affect your payroll costs, compliance requirements, and business planning.

Making Tax Digital continues to expand, bringing digital record-keeping requirements to more businesses.

Making Tax Digital (MTD) for income tax

Making Tax Digital for income tax requires self-employed individuals and landlords to keep digital records and send quarterly updates to HMRC.

The rollout follows a timeline based on income thresholds:

• April 2026: income over £50,000
• April 2027: income over £30,000
• April 2028: income over £20,000, which is earlier than previously announced according to ACCA

You can sign up voluntarily before your threshold applies to get familiar with the system.

To prepare for MTD, take these steps:

• start using compatible accounting software
• keep your financial records digital and up to date
• get advice from an accountant if you're unsure what's required

Learn more about MTD for income tax.

Employers must also update their payroll systems to reflect changes to minimum wage and statutory pay rates.

Payroll and statutory pay adjustments

Minimum wage and statutory pay rates increased from April 2025. Update your payroll systems and budgets to reflect the new figures.

The National Living Wage and minimum wage rates increased across all age bands.

Minimum wage and living wage increases

Here are the national minimum wage rates from April 2025:

• Age 21 and over (National Living Wage): £12.21 per hour
• Age 18 to 20: £10.00 per hour
• Under 18 and apprentices: £7.55 per hour

View the latest minimum wage rates.

Statutory payment rates for maternity, paternity, and other leave have also increased.

Statutory pay increases

Here are the statutory pay rates from April 2025:

• Statutory Maternity Pay (SMP): £187.18 per week
• Statutory Paternity Pay (SPP): £187.18 per week
• Statutory Adoption Pay (SAP): £187.18 per week
• Statutory Shared Parental Pay (ShPP): £187.18 per week

Make sure your payroll software is updated with these new rates to ensure accurate payments to employees.

FAQs on UK tax year 2025/26

Here are answers to common questions about the 2025/26 tax year changes.

When does the 2025/26 tax year start and end?

The UK tax year 2025/26 runs from 6 April 2025 to 5 April 2026.

What is the personal allowance for 2025/26?

The personal allowance for 2025/26 is £12,570. This is the amount you can earn before paying income tax.

How much has employer National Insurance increased?

Employer National Insurance increased from 13.8% to 15% from 6 April 2025. The secondary threshold also reduced from £9,100 to £5,000.

What is the Employment Allowance for 2025/26?

The Employment Allowance increased from £5,000 to £10,500 for 2025/26. The £100,000 earnings cap has been removed, so more businesses now qualify.

When do I need to file my self-assessment tax return?

The deadline for online self-assessment tax returns is 31 January 2026. Paper returns must be submitted by 31 October 2025.

What is Making Tax Digital and when does it apply to me?

Making Tax Digital for income tax requires you to keep digital records and send quarterly updates to HMRC. The rollout depends on your income: April 2026 for income over £50,000, April 2027 for income over £30,000, and April 2028 for income over £20,000.