Income tax

Rates

Income tax applies to the amount of income after deduc­tion of per­son­al allowances.

Income is taxed in a spe­cif­ic order with sav­ings and div­i­dend income taxed last.

Div­i­dend income and sav­ings income falling with­in the div­i­dend and sav­ings allowances still form part of total income of an indi­vid­ual.

The start­ing rate band is only applic­a­ble to sav­ings income. The 0% rate is not avail­able if the tax­able amount of non-sav­ings income exceeds the start­ing rate band.

The Scot­tish Par­lia­ment set the rates of income tax and the lim­its at which these rates apply for Scot­tish res­i­dents on non-sav­ings and non-div­i­dend income.

Income tax is devolved to Wales on non-sav­ings and non-div­i­dend income. Welsh res­i­dent tax­pay­ers con­tin­ue to pay the same over­all income tax rates using the UK rates and bands. The total rate of income tax = UK income tax + Welsh rate of income tax. Sav­ings income and div­i­dend income are taxed using UK tax rates and bands.

2026/27:

For Scot­tish res­i­dents the fol­low­ing bands apply for non-sav­ings and non-div­i­dend income:

For Welsh res­i­dents the fol­low­ing bands apply for non-sav­ings and non-div­i­dend income:

There are spe­cial rates for sav­ings and div­i­dend income falling into above bands of tax­able income.

Savings Allowance:

Dividend Allowance:

2025/26:

For Scot­tish res­i­dents the fol­low­ing bands apply for non-sav­ings and non-div­i­dend income:

For Welsh res­i­dents the fol­low­ing bands apply for non-sav­ings and non-div­i­dend income:

There are spe­cial rates for sav­ings and div­i­dend income falling into above bands of tax­able income.

Savings Allowance:

Dividend Allowance:

Allowances

A per­son­al allowance gives an indi­vid­ual an annu­al amount of income free from income tax.

Income above the per­son­al allowances is sub­ject to income tax.

The per­son­al allowance will be reduced if an indi­vid­u­al’s ‘adjust­ed net income’ is above £100,000. The allowance is reduced by £1 for every £2 of income above £100,000.

An indi­vid­ual born before 6 April 1935 may be enti­tled to a mar­ried cou­ple’s allowance but this is reduced if ‘adjust­ed net income’ is above the mar­ried cou­ple’s allowance income lim­it (see table below).

Mar­riage allowance — 10% of the per­son­al allowance may be trans­fer­able between cer­tain spous­es where nei­ther pays tax above the basic rate. The Mar­riage allowance is not avail­able to cou­ples enti­tled to the Mar­ried Cou­ple’s allowance.

Personal Allowance

Blind person’s allowance

£3,250 (2025/26: £3,130)

Married couple’s allowance

Either part­ner born before 6th April 1935.

Note…

1. Reduce mar­ried cou­ples allowance by £1 for every £2 of ‘adjust­ed net income’ above this lim­it.