UK Tax Year Comparison
Compare your take-home pay across UK tax years. See exactly how frozen thresholds, National Insurance changes, and Scottish rate divergence affect your income for 2026-27, 2025-26, and 2024-25.
What Changed?
The Personal Allowance (£12,570) and basic rate threshold (£50,270) remain frozen through 2027-28. Employee NI stayed at 8%/2% after the cut in April 2024. Scotland continued to diverge with its own six-band structure. The result: fiscal drag — as wages rise, more income is taxed at higher rates even though the rates themselves haven’t changed.
Key Facts
Personal Allowance
Frozen since 2021
£12,570 through at least 2027-28
Employee NI Rate
8% / 2%
Cut from 10% in April 2024
Scotland Divergence
6 bands vs 3
Starter 19% to Top 48%
Thresholds vs Rates
Thresholds matter more
Frozen thresholds pull more earners into higher bands
Fiscal Drag Impact
Hidden tax rise
OBR estimates millions more paying higher rate by 2028
Key Changes for 2026-27
Income tax thresholds remain frozen
The Personal Allowance stays at £12,570 and the higher rate threshold at £50,270, continuing the freeze that started in 2021.
Employer NI rate stays at 15%
The employer NI rate remains at 15% with the £5,000 secondary threshold, introduced in April 2025.
Capital gains tax rates unchanged
CGT rates remain at 18% (basic) and 24% (higher) for most assets after the October 2024 increases.
Dividend allowance stays at £500
The tax-free dividend allowance remains at £500, down from £2,000 in 2022-23.
Annual Difference
£0
take-home in 2026-27 vs 2025-26
Monthly Difference
£0.00
per month
Effective Rate (2026-27)
20.96%
total deductions as % of gross
No differences between 2025-26 and 2026-27 for your inputs.
Pre-calculated salary comparisons
Quick year-on-year breakdowns at common UK salary levels.
What Changed Between Tax Years
The headline story across recent UK tax years is stability in rates but erosion in real terms. The Personal Allowance has been fixed at £12,570 since April 2021, and the basic rate band ceiling at £50,270. The government extended this freeze through 2027-28, meaning that for at least seven consecutive years the thresholds have not kept pace with inflation or wage growth.
The most significant rate change in this period was the National Insurance reduction. Employee Class 1 NI was cut from 12% to 10% in January 2024, then further to 8% from April 2024. This put more money in workers’ pockets but was partially offset by the threshold freeze. The upper earnings rate remained at 2%.
Scotland has continued to set its own income tax rates, creating a six-band system that differs markedly from the three-band structure in England, Wales, and Northern Ireland. For 2025-26, Scotland adjusted its Starter and Basic band thresholds compared to 2024-25, changing the amount of income taxed at each rate. Scottish taxpayers earning between roughly £28,000 and £43,000 pay slightly more income tax than their English counterparts, while those earning below £28,000 may pay marginally less.
The Personal Allowance taper at £100,000 remains unchanged. Anyone earning between £100,000 and £125,140 faces an effective 60% marginal rate due to losing £1 of allowance for every £2 earned above £100,000. This trap has not been adjusted and continues to create a significant cliff for earners moving through that income range.
For most employees, the practical effect is that a pay rise may not deliver the expected increase in take-home pay. A worker earning £35,000 in 2021-22 who now earns £40,000 is paying tax on an additional £5,000 that would have been partially sheltered if thresholds had risen with CPI. This “fiscal drag” is the single biggest factor driving differences between tax years for middle-income earners.
Income Tax Rate Comparison
Below are the income tax bands for the three most recent tax years. The Personal Allowance is £12,570 for all years shown and tapers for income above £100,000.
England, Wales & Northern Ireland
| Band | 2026-27 | 2025-26 | 2024-25 |
|---|---|---|---|
| Personal Allowance | £12,570 | £12,570 | £12,570 |
| Basic (20%) | £12,571 – £50,270 | £12,571 – £50,270 | £12,571 – £50,270 |
| Higher (40%) | £50,271 – £125,140 | £50,271 – £125,140 | £50,271 – £125,140 |
| Additional (45%) | Over £125,140 | Over £125,140 | Over £125,140 |
Scotland
| Band | 2026-27 | 2025-26 | 2024-25 |
|---|---|---|---|
| Starter (19%) | £12,571 – £16,537 | £12,571 – £15,397 | £12,571 – £14,876 |
| Basic (20%) | £16,538 – £29,526 | £15,398 – £27,491 | £14,877 – £26,561 |
| Intermediate (21%) | £29,527 – £43,662 | £27,492 – £43,662 | £26,562 – £43,662 |
| Higher (42%) | £43,663 – £75,000 | £43,663 – £75,000 | £43,663 – £75,000 |
| Advanced (45%) | £75,001 – £125,140 | £75,001 – £125,140 | £75,001 – £125,140 |
| Top (48%) | Over £125,140 | Over £125,140 | Over £125,140 |
Worked Example: £50,000 Salary
Scenario: You earn £50,000 per year in England and want to compare 2025-26 with 2024-25.
Income Tax (both years): With the Personal Allowance at £12,570 and the basic rate band unchanged, your taxable income is £37,430. At 20%, income tax is £7,486 in both years.
National Insurance (both years): Employee Class 1 NI at 8% on earnings between £12,570 and £50,000 gives £37,430 × 8% = £2,994.40. The rate was already 8% for the full 2024-25 year (having been cut in April 2024).
Total Deductions: £7,486 + £2,994.40 = £10,480.40 in both years.
Take-Home Pay: £50,000 − £10,480.40 = £39,519.60 per year, or about £3,293 per month.
Difference: For this particular salary in England, the 2025-26 and 2024-25 tax years produce identical results. The difference only appears if your salary has changed between years, or if you are in Scotland where band thresholds were adjusted.
Frequently asked questions
Why has my take-home pay decreased even though tax rates haven’t changed?
This is due to fiscal drag. The Personal Allowance and basic rate threshold have been frozen at £12,570 and £50,270 since 2021-22. As wages rise with inflation, more of your income falls into higher tax bands. Even without any change in tax rates, you pay a larger share of your income in tax each year your salary increases.
When will the Personal Allowance increase again?
The Personal Allowance and higher rate threshold have been frozen until at least April 2028. The government announced this freeze in the Autumn Statement 2022. Until thresholds are uprated, fiscal drag will continue to pull more earners into higher tax bands as wages rise.
How do Scottish tax rates differ from the rest of the UK?
Scotland has six income tax bands (Starter at 19%, Basic at 20%, Intermediate at 21%, Higher at 42%, Advanced at 45%, and Top at 48%) compared to three bands in England, Wales, and Northern Ireland (Basic 20%, Higher 40%, Additional 45%). The Personal Allowance is the same UK-wide at £12,570, but the thresholds between bands differ.
Has National Insurance changed between 2024-25 and 2025-26?
For employees, the Class 1 NI rates have remained at 8% (main rate) and 2% (additional rate) for both 2024-25 and 2025-26. The primary threshold (£12,570) and upper earnings limit (£50,270) are also unchanged. The main change in recent years was the reduction from 10% to 8% that took effect in April 2024.
What is fiscal drag and how does it affect me?
Fiscal drag occurs when tax thresholds are not increased in line with inflation or wage growth. As your salary rises, you pay proportionally more tax because a larger portion of your income falls into higher tax bands. With the Personal Allowance frozen at £12,570 since 2021, a worker whose salary increased from £30,000 to £35,000 over that period now pays tax on an extra £5,000 that would have been tax-free if thresholds had risen with wages.
Does this calculator include student loan repayments or pension contributions?
No. This comparison focuses on income tax and National Insurance only, which are the main deductions affected by tax year changes. For a full breakdown including student loans, pension contributions, and other deductions, use the Take-Home Pay Calculator, which also has a year-on-year comparison toggle.
Why is the comparison showing no difference between years?
If you see no difference, it means the income tax bands, rates, and NI thresholds are identical for those two years at your income level. For England/Wales/NI, the 2025-26 and 2026-27 rates and thresholds are currently the same. Scotland may show differences due to changes in Scottish-specific band thresholds between years.
How does the Personal Allowance taper affect the comparison?
If your income exceeds £100,000, the Personal Allowance is reduced by £1 for every £2 above that threshold, disappearing entirely at £125,140. This taper creates an effective 60% marginal rate in that income range. Since the taper threshold has been frozen along with the Personal Allowance, it affects the same earners across all recent tax years.
Sources
Related Calculators
Last updated March 2026. Reflects 2026-27, 2025-26, and 2024-25 tax year rates.
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