UK Salary Calculator
← Back to guides

UK Tax 2024/2025 vs 2025/2026: What Changed and How It Affects You

comparison6 min read2026-06-26

The 2025/2026 tax year brought several changes from 2024/2025. This guide compares both years side by side so you can see exactly what changed and how it affects your finances.

Income Tax Bands Comparison

For the rest of the UK (England, Wales, Northern Ireland), income tax bands and rates remained unchanged between 2024/2025 and 2025/2026:

  • Personal Allowance: £12,570 (frozen — unchanged since 2021/2022)
  • Basic Rate (20%): £12,571 - £50,270 (frozen)
  • Higher Rate (40%): £50,271 - £125,140 (frozen)
  • Additional Rate (45%): Over £125,140 (frozen)

This continued freezing of thresholds means more people are dragged into higher tax bands each year as their salaries rise with inflation — a phenomenon known as fiscal drag.

Scottish Tax Bands

Scotland's bands also remained largely frozen in 2025/2026, though the Scottish Government confirmed they would maintain the six-band structure with no rate changes. The starter rate remains at 19%, introducing a small divergence from the UK basic rate of 20%.

National Insurance: The Biggest Change

The most significant change was the NI rate cut:

  • 2024/2025: Main employee NI rate was 8% (already reduced from 10% in early 2024)
  • 2025/2026: Main employee NI rate reduced further to 6%
  • The 2% rate on earnings above £50,270 remained unchanged

Example: How the Changes Affect Your Take-Home Pay

Here are examples comparing take-home pay between 2024/2025 and 2025/2026 for UK taxpayers:

  • £25,000: £20,740 (2024-25) vs £21,540 (2025-26) — gain of £800
  • £35,000: £27,640 (2024-25) vs £28,658 (2025-26) — gain of £1,018
  • £50,000: £37,140 (2024-25) vs £38,388 (2025-26) — gain of £1,248

Other Allowances

The following allowances remained frozen at 2024/2025 levels:

  • Personal Savings Allowance: £1,000 (basic rate), £500 (higher rate)
  • Dividend Allowance: £1,000 (previously reduced from £2,000)
  • Capital Gains Tax Annual Exempt Amount: £3,000 (previously reduced from £6,000)
  • ISA Allowance: £20,000

Tax Code Changes

The most common tax code for 2025/2026 remains 1257L, reflecting the frozen Personal Allowance of £12,570.

Use our salary calculator to compare your take-home pay across different tax years and see exactly how the changes affect you.