What is the Personal Allowance for 2026/27?
The standard Personal Allowance for the 2026/27 tax year is £12,570. This is the amount of income you can receive in a tax year before you start paying Income Tax. It applies to most forms of income, including employment earnings, self-employment profits, and most pension income.
This figure has been frozen since the 2021/22 tax year, and the government confirmed in the Autumn Budget that thresholds would remain frozen through to April 2028. Because wages have generally risen with inflation while this threshold has not moved, more people are being pulled into paying tax or into higher tax bands than would otherwise be the case — a process often referred to as 'fiscal drag'.
Income Tax bands for England, Wales and Northern Ireland
Once your income exceeds the Personal Allowance, tax is charged in bands. For 2026/27, taxpayers in England, Wales and Northern Ireland pay the Basic Rate of 20% on taxable income from £0 up to £37,700 (after the allowance is deducted), the Higher Rate of 40% on taxable income from £37,701 to £125,140, and the Additional Rate of 45% on taxable income above £125,140.
For example, someone earning £45,000 a year would pay no tax on the first £12,570, then 20% on the next £32,430 up to £45,000. None of their income falls into the 40% band because their total earnings sit below £50,270 (the Personal Allowance plus the Basic Rate band).
The £100,000 taper: losing your Personal Allowance
If your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 you earn above that threshold. This means the allowance is fully withdrawn once income reaches £125,140, creating an effective marginal tax rate of 60% on income between £100,000 and £125,140 for those in England, Wales and Northern Ireland.
For example, someone with adjusted net income of £110,000 would lose £5,000 of their Personal Allowance (half of the £10,000 excess over £100,000), reducing it from £12,570 to £7,570. Many people in this position reduce their adjusted net income through pension contributions or Gift Aid donations to avoid this tax trap.
Scottish Income Tax rates and bands
Scotland sets its own Income Tax rates and bands, though the Personal Allowance of £12,570 is set by the UK government and applies UK-wide. For 2026/27, Scottish taxpayers have additional bands, including a Starter Rate of 19% and an Intermediate Rate of 21%, alongside Higher and Top Rates that are higher than the rest of the UK for equivalent income levels.
If you live in Scotland, your tax code will typically begin with an 'S', and your take-home pay calculation will differ from someone earning the same salary in England. It is worth checking your tax code carefully, particularly after a job change or if you have moved between Scotland and the rest of the UK during the tax year.
Frequently asked questions
Is the Personal Allowance increasing for 2026/27?
No. The Personal Allowance remains frozen at £12,570 for 2026/27, as confirmed by the government's policy of freezing thresholds until April 2028.
Do I lose my Personal Allowance entirely if I earn over £100,000?
Not immediately. It is reduced by £1 for every £2 earned above £100,000 and is fully removed once adjusted net income reaches £125,140.
Does the Personal Allowance apply in Scotland?
Yes, the £12,570 Personal Allowance is a UK-wide figure, but the tax rates applied above it differ in Scotland, which has its own bands set by the Scottish Parliament.
Sources
External links open the official source used to review this guide.