What Are the 2025-26 Tax Year Rates and Allowances?

Tax-free personal allowance – £12,570

Basic rate – 20% up to £37,700

Higher rate – 40% – from £37,701 to £125,140

Additional rate – 45% – above £125,140

Primary threshold – £12,570

Secondary threshold – £5,000

Employees and directors must pay NI Class 1 contributions at 8% and 2%

Employers pay NI Class 1 contributions at 15%

Basic rate – 8.75%

Higher rate – 33.75%

Additional rate – 39.35%

Dividends basic rate – £37,700 and a salary of £12,570

Tax-free allowance – £500

Pay £3,255 Income Tax to HMRC by 31 Jan 2027

Profits up to £50,000 – 19%

Profits above £50,000 to £250,000 will receive a tapered increase to 25%

Profits above £250,000 – 25%

It’s up to you to decide, because you control the company, but many will choose a salary of £12,570 for 2025/26 to match the personal allowance, or a salary of £6,500 to qualify for state pension credit

Employment allowance of £10,500 towards NIC if you have more than one employee and are eligible

Income is above £21,000 – repayment rate of 6%

National Minimum Wage – increasing from £11.44 to £12.21 for those aged 21 and over

Capital Gains Tax annual exemption – remains at £3,000

The high income threshold for Child Benefit remains at £60,000

From April 2025 the eldest / only child will receive £26.05 per week, and additional children will receive £17.25 per week