Tax Rates & Allowances

Tax Rates and Allowances 2025/26

Tax Rates 2025/26 – Downloadable booklet for your reference

We have summarised the key rates and allowances which are fundamental to our business and personal lives. We are sure that you will find them a useful point of reference and have set out below a few examples of how they can be used.

Personal tax rates

As the UK tax system becomes more devolved, it is important to keep abreast of the changes taking place in the Scottish and Welsh income tax rates and bands. We have summarised the relevant information together with the rates and allowances which apply to investment income.

Buying property

If you buy property then property taxes payable are different depending where the property is in the United Kingdom. Stamp Duty Land Tax is payable on property in England and Northern Ireland, whilst Land and Buildings Transaction Tax is payable on property in Scotland and Land Transaction Tax on property in Wales. Our tax rates highlight the main rates so that you can consider the potential cost of buying property.

Business or asset sale

If you sell an asset such as shares or your business, capital gains tax may be due. Our tax rates highlight the main rates and reliefs so that you can consider the tax bill that may arise.

Rates for businesses

If you run a business, obtaining the right allowances on equipment that your business buys can affect the tax that your business has to pay each year. We have summarised the main allowances that are available.

Rates for employees

Our guide explains how these are computed to help ensure that you are paying the correct amount of tax.

Rates that affect us all

Long term planning for a comfortable retirement can never start too early. Our tax rates explain how much can be contributed to an approved pension scheme each year tax efficiently.

Our tax rates contain the main inheritance tax rates and exemptions but early planning can mitigate these tremendously.


These rates are intended for use as a quick point of reference. Should you require any further information, have a simple question or require detailed advice we are only a phone call away.

 

- Plant and machinery

2025/26
2024/25
  • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
  • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (‘integral features‘), computers, cars, vans and similar equipment used in a business.
  • There are special rules for cars and certain ‘environmentally friendly’ equipment.
  • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
  • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
  • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
  • A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

AIA

  • Special rules apply to accounting periods straddling the dates shown in the tables below.
  • The AIA may need to be shared between certain businesses under common ownership.

AIA limits – companies

Annual limit
£
1,000,000

AIA limits – sole traders and partnerships

Annual limit
£
1,000,000

Other plant and machinery allowances

  • Expenditure upon which AIA is not given/claimed will obtain relief through the ‘main rate pool‘ or the ‘special rate pool‘ rather than each item being dealt with separately.
  • The annual rate of WDA is 18% in the ‘main rate pool‘ and 6% in the ‘special rate pool‘.
  • A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

Other allowances

First Year Allowance (FYA) on certain plant, machinery and cars of 0g/km (for cars purchased before 1 April 2026) 100%
Corporation tax FYA (‘full expensing’) on certain new, unused plant and machinery 100%
Corporation tax FYA on new, unused long-life assets, integral features of buildings, etc. 50%

Cars

  • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
  • AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

Cars acquired from April 2021

Emissions (g/km)

Pool

Allowance
0 Main rate 100% FYA
≤ 50 Main rate 18% WDA
>50 Special rate 6% WDA
    • The cost of purchasing capital equipment in a business is not a revenue tax deductible expense. However, tax relief is available on certain capital expenditure in the form of capital allowances.
    • Plant and machinery allowances may be available on items such as machines, equipment, furniture, certain fixtures in a building (‘ integral features ‘), computers, cars, vans and similar equipment used in a business.
    • There are special rules for cars and certain ‘environmentally friendly’ equipment.
    • Plant and machinery allowances may be available to owners of commercial property which is let out to a business.
    • The Annual Investment Allowance (AIA) gives a 100% write-off on most types of plant and machinery (but not cars) up to an annual limit.
    • Writing down allowances (WDA) are given for expenditure for which AIA is not, or cannot be, claimed.
    • A Structures and Buildings Allowance of 3% may be available for qualifying investments to construct new, or renovate old, non-residential structures and buildings.

    AIA

    • Special rules apply to accounting periods straddling the dates shown in the tables below.
    • The AIA may need to be shared between certain businesses under common ownership.

    AIA limits – companies

    Annual limit
    £
    1,000,000

    AIA limits – sole traders and partnerships

    Annual limit
    £
    1,000,000

    Other plant and machinery allowances

    • Expenditure upon which AIA is not given/claimed will obtain relief through the ‘ main rate pool ‘ or the ‘ special rate pool ‘ rather than each item being dealt with separately.
    • The annual rate of WDA is 18% in the ‘ main rate pool ‘ and 6% in the ‘ special rate pool ‘.
    • A 100% first year allowance (FYA) may be available on certain energy efficient plant and cars.

    Other allowances

    Corporation tax super-deduction on certain plant and machinery until 31 March 2023 130%
    First Year Allowance (FYA) on certain plant, machinery and cars of 0 g/km 100%
    Corporation tax FYA on long-life assets, integral features of buildings, etc. until 31 March 2023 50%
    Corporation tax FYA (‘full expensing’) on certain new, unused plant and machinery from 1 April 2023 100%
    Corporation tax FYA on new, unused long-life assets, integral features of buildings, etc. from 1 April 2023 50%

    Cars

    • For expenditure incurred on cars, costs are generally allocated to one of the two plant and machinery pools.
    • AIA is not available on any car but a 100% first year allowance may be available on certain cars. To qualify for first year allowance, the car must be purchased new.

    Cars acquired from April 2021

    Emissions (g/km)

    Pool

    Allowance
    0 Main rate 100% FYA
    ≤ 50 Main rate 18% WDA
    >50 Special rate 6% WDA

 
2025/26
2024/25
  • CGT is payable by individuals, trustees and personal representatives (PRs). Companies pay corporation tax on their capital gains.
  • There are annual tax-free allowances (the ‘annual exempt amount’) for individuals, trustees and PRs. Companies do not have an annual exempt amount.
  • For individuals, net gains are added to total taxable income to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income, do not exceed the basic rate band.
  • Gains which qualify for Investors’ Relief are charged at 14% for the first £1m of qualifying gains.
  • Gains which qualify for Business Asset Disposal Relief are charged at 14% for the first £1 million.

Rates and annual exemption

Individuals 2025/26
£
Exemption 3,000
Standard rate 18%
Higher rate 24%

The higher rate applies to higher rate and additional rate taxpayers.

Additionally, prior to 30 October 2024 higher rates of 18% and 24% may apply to the disposal of certain residential property.

Trusts 2025/26
£
Exemption 1,500
Rate 24%
      • CGT is payable by individuals, trustees and personal representatives (PRs) . Companies pay corporation tax on their capital gains.
      • There are annual tax-free allowances (the ‘annual exempt amount’) for individuals, trustees and PRs. Companies do not have an annual exempt amount.
      • For individuals, net gains are added to total taxable income to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income, do not exceed the basic rate band .
      • Gains which qualify for Investors’ Relief are charged at 10% for the first £10m of qualifying gains (£1m for disposals on or after 30 October 2024).
      • Gains which qualify for Business Asset Disposal Relief are charged at 10% for the first £1 million.

      Rates and annual exemption

      Individuals 2024/25 (until 29/10/2024) 2024/25 (from 30/10/2024)
      £ £
      Exemption 3,000 3,000
      Standard rate 10% 18%
      Higher rate 20% 24%

      The higher rate applies to higher rate and additional rate taxpayers.

      Additionally, prior to 30 October 2024 higher rates of 18% and 24% may apply to the disposal of certain residential property.

      Trusts 2024/25 (until 29/10/2024) 2024/25 (from 30/10/2024)
      £ £
      Exemption 1,500 1,500
      Rate 20% 24%

 
2025/26
2024/25
  • The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO2 emissions.
  • For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).
  • The overall maximum percentage is capped at 37%.
  • The list price includes accessories.
  • The list price is reduced for capital contributions made by the employee up to £5,000.
  • Special rules may apply to cars provided for disabled employees.

2025/26

CO2 emissions g/km % of list price taxed
0 3
1 – 50
Electric range 130 or more 3
70 – 129 6
40 – 69 9
30 – 39 13
under 30 15
51 – 54 16
55-59 17
60-64 18
65-69 19
70-74 20
75-79 21
80-84 22
85-89 23
90-94 24
95-99 25
100-104 26
105-109 27
110-114 28
115-119 29
120-124 30
125-129 31
130-134 32
135-139 33
140-144 34
145-149 35
150-154 36
155 and above 37

 

      • The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO 2 emissions.
      • For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).
      • The overall maximum percentage is capped at 37%.
      • The list price includes accessories.
      • The list price is reduced for capital contributions made by the employee up to £5,000.
      • Special rules may apply to cars provided for disabled employees.

      2024/25

      CO2 emissions g/km % of list price taxed
      0 2
      1 – 50
      Electric range 130 or more 2
      70 – 129 5
      40 – 69 8
      30 – 39 12
      under 30 14
      51 – 54 15
      55-59 16
      60-64 17
      65-69 18
      70-74 19
      75-79 20
      80-84 21
      85-89 22
      90-94 23
      95-99 24
      100-104 25
      105-109 26
      110-114 27
      115-119 28
      120-124 29
      125-129 30
      130-134 31
      135-139 32
      140-144 33
      145-149 34
      150-154 35
      155-159 36
      160 and above 37

 
2025/26
2024/25
  • Car fuel benefit applies if an employee has the benefit of private fuel for a company car.
  • The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.
  • The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.
Car fuel benefit 2025/26
Fuel charge multiplier £28,200

 

    • Car fuel benefit applies if an employee has the benefit of private fuel for a company car.
    • The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.
    • The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.
    Car fuel benefit 2024/25
    Fuel charge multiplier £27,800

 

- Advisory fuel rates for company cars

2025/26
  • Advisory rates only apply where employers reimburse employees for business travel in a company car or require employees to repay the cost of fuel used for private travel in a company car.
  • If the rate paid per mile of business travel is no higher than the advisory rate for the particular engine size and fuel type of the car, HMRC will accept that there is no taxable profit and no Class 1 NIC liability.

The advisory fuel rates for journeys undertaken on or after 1 March 2025 are:

Engine size Petrol
1400cc or less 12p
1401cc – 2000cc 15p
Over 2000cc 23p

 

Engine size Diesel
1600cc or less 12p
1601cc – 2000cc 13p
Over 2000cc 17p

 

Engine size LPG
1400cc or less 11p
1401cc – 2000cc 13p
Over 2000cc 21p

Hybrid cars are treated as either petrol or diesel cars for this purpose.

The Advisory Electricity Rate for fully electric cars is 7p per mile. Electricity is not a fuel for car fuel benefit purposes.

2025/26
2024/25
Child Benefit is receivable by a person responsible for each child until they reach 16, or 19 if they stay in education or training.If the person (or their spouse or partner) has ‘adjusted net income‘ above £60,000 the person with the highest income has to pay some of the Child Benefit as a tax charge.

Where adjusted net income is more than £80,000 a year, the tax charge equals the Child Benefit received.

Rates – 2025/26 £ per week
Eldest/Only Child £26.05
Other Children £17.25

 

Child Benefit is receivable by a person responsible for each child until they reach 16, or 19 if they stay in education or training.If the person (or their spouse or partner) has ‘ adjusted net income ‘ above £60,000 the person with the highest income has to pay some of the Child Benefit as a tax charge.

Where adjusted net income is more than £80,000 a year, the tax charge equals the Child Benefit received.

Rates – 2024/25 £ per week
Eldest/Only Child £25.60
Other Children £16.95

 
2025/26
2024/25
  • Corporation tax rates are set for each Financial Year. A Financial Year runs from 1 April to the following 31 March.
  • If the accounting period of a company straddles the 31 March, the profits are apportioned on a time basis to each Financial Year.
  • The Northern Ireland Executive has committed to setting the rate of corporation tax at 12.5% when the Northern Ireland Executive demonstrates its finances are on a sustainable footing.
Year to 31.3.26 Profits band £ Rate %
Small profits rate 0 – 50,000 19
Marginal rate 50,001 – 250,000 26.5
Main rate Over 250,000 25
Marginal relief fraction 3/200

 

  • Corporation tax rates are set for each Financial Year. A Financial Year runs from 1 April to the following 31 March.
  • If the accounting period of a company straddles the 31 March, the profits are apportioned on a time basis to each Financial Year.
  • The Northern Ireland Executive has committed to setting the rate of corporation tax at 12.5% when the Northern Ireland Executive demonstrates its finances are on a sustainable footing.
  • Year to 31.3.25 Profits band £ Rate %
    Small profits rate 0 – 50,000 19
    Marginal rate 50,001 – 250,000 26.5
    Main rate Over 250,000 25
    Marginal relief fraction 3/200

    For the year to 31.3.23 the main rate of corporation tax was 19%. Special rules apply to accounting periods straddling 1 April 2023. For the year to 31.3.24 the profits limits are reduced for a company with associated companies. Different rates apply for ring-fenced (broadly oil industry) profit.

 
2025/26
2024/25

Statutory pay

  • Payments may be required from an employer if an employee is not at work for a variety of reasons.
  • There are detailed conditions for an employee to qualify for any of these statutory payments.
  • Employees are only eligible for a statutory payment if they have sufficient average weekly earnings of at least the lower earnings limit.

Statutory Sick Pay

  • Payments may be required from an employer if an employee is too ill to work.
  • SSP is generally payable for a period up to 28 weeks.

Statutory Maternity Pay

  • Payments may be required from an employer when an employee takes time off to have a baby.
  • SMP is payable for a period up to 39 weeks.

Statutory Paternity Pay

  • Payments may be required from an employer when an employee takes time off during their partner’s Statutory Maternity Pay period.
  • Payment is for a period of either one or two complete weeks.

Shared Parental Pay

  • Payments may be required from an employer when an employee takes time off following the curtailment of the period of SMP by the mother.
  • Payment is for up to a maximum of 37 weeks and is dependent on the mother’s unused SMP period.

Statutory Adoption Pay

  • Payments may be required from an employer when an employee takes time off when they adopt a child.
  • Payment is for a period up to 39 weeks.

Statutory Parental Bereavement Pay

  • Payments may be required from an employer when parents take time off following the death of a child or a stillbirth.
  • Payment is for up to a maximum of two weeks.
2025/26 Statutory pay rates –
average weekly earnings £125 or over
Statutory Sick Pay £118.75
Statutory Maternity Pay
First six weeks 90% of weekly earnings
Next 33 weeks £187.18
Statutory Paternity Pay – two weeks £187.18
Statutory Adoption Pay – 39 weeks
First six weeks 90% of weekly earnings
Next 33 weeks £187.18
Shared Parental Pay £187.18
Statutory Parental Bereavement Pay – two weeks £187.18

With the exception of Statutory Sick Pay, statutory payments may be payable at 90% average weekly earnings throughout the payment period in certain circumstances. This applies where 90% weekly earnings are less than the standard rate of £187.18.

Statutory pay

  • Payments may be required from an employer if an employee is not at work for a variety of reasons.
  • There are detailed conditions for an employee to qualify for any of these statutory payments.
  • Employees are only eligible for a statutory payment if they have sufficient average weekly earnings of at least the lower earnings limit.

Statutory Sick Pay

  • Payments may be required from an employer if an employee is too ill to work.
  • SSP is generally payable for a period up to 28 weeks.

Statutory Maternity Pay

  • Payments may be required from an employer when an employee takes time off to have a baby.
  • SMP is payable for a period up to 39 weeks.

Statutory Paternity Pay

  • Payments may be required from an employer when an employee takes time off during their partner’s Statutory Maternity Pay period.
  • Payment is for a period of either one or two complete weeks.

Shared Parental Pay

  • Payments may be required from an employer when an employee takes time off following the curtailment of the period of SMP by the mother.
  • Payment is for up to a maximum of 37 weeks and is dependent on the mother’s unused SMP period.

Statutory Adoption Pay

  • Payments may be required from an employer when an employee takes time off when they adopt a child.
  • Payment is for a period up to 39 weeks.

Statutory Parental Bereavement Pay

  • Payments may be required from an employer when parents take time off following the death of a child or a stillbirth.
  • Payment is for up to a maximum of two weeks.
2024/25 Statutory pay rates –
average weekly earnings £123 or over
Statutory Sick Pay £116.75
Statutory Maternity Pay
First six weeks 90% of weekly earnings
Next 33 weeks £184.03
Statutory Paternity Pay – two weeks £184.03
Statutory Adoption Pay – 39 weeks
First six weeks 90% of weekly earnings
Next 33 weeks £184.03
Shared Parental Pay £184.03
Statutory Parental Bereavement Pay – two weeks £184.03

With the exception of Statutory Sick Pay, statutory payments may be payable at 90% average weekly earnings throughout the payment period in certain circumstances. This applies where 90% weekly earnings are less than the standard rate of £184.03.

2025/26
2024/25
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.

Income tax personal allowances £
Personal Allowance 12,570
Marriage Allowance 1,260
Blind person’s allowance 3,130
Married couple’s allowance

Either partner born before 6 April 1935
– Maximum reduction in tax bill 1127
– Minimum reduction in tax bill 436
Married couple’s allowance income limit

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

 37,700
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.

Income tax personal allowances £
Personal Allowance 12,570
Marriage Allowance 1,260
Blind person’s allowance 3,070
Married couple’s allowance

Either partner born before 6 April 1935
– Maximum reduction in tax bill 1108
– Minimum reduction in tax bill 428
Married couple’s allowance income limit

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

 37,000

 

- Across the UK

Income tax rates – across the UK

2025/26
2024/25
  • 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.

Income tax rates

Band of taxable income Rate Rate if dividends
£ % %
0 – 37,700 Basic rate 20 8.75
37,701 – 125,140 Higher rate 40 33.75
Over 125,140 Additional rate 45 39.35
Special rates for savings and dividend income falling into above bands of taxable income
Savings Allowance
Basic rate taxpayers 1,000 0
Higher rate taxpayers 500 0
Additional rate taxpayers Nil N/A
Dividend Allowance
for all taxpayers 500 0

 

      • 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.

      Income tax rates

      Band of taxable income Rate Rate if dividends
      £ % %
      0 – 37,700 Basic rate 20 8.75
      37,701 – 125,140 Higher rate 40 33.75
      Over 125,140 Additional rate 45 39.35
      Special rates for savings and dividend income falling into above bands of taxable income
      Savings Allowance
      Basic rate taxpayers 1,000 0
      Higher rate taxpayers 500 0
      Additional rate taxpayers Nil N/A
      Dividend Allowance
      for all taxpayers 500 0

- Scotland

2025/26
2024/25
  • Scottish resident taxpayers are liable on non-savings and non-dividend income as set out below.
  • Savings income and dividend income are taxed using UK tax rates and bands.
Band of taxable income Rate
£ %
0 – 2,827 Starter rate 19
2,828 – 14,921 Basic rate 20
14,922 – 31,092 Intermediate rate 21
31,093 – 62,430 Higher rate 42
62,431 – 125,140 Advanced rate 45
Over 125,140 Top rate 48

 

      • Scottish resident taxpayers are liable on non-savings and non-dividend income as set out below.
      • Savings income and dividend income are taxed using UK tax rates and bands.
      Band of taxable income Rate
      £ %
      0 – 2,306 Starter rate 19
      2,307 – 13,991 Basic rate 20
      13,992 – 31,092 Intermediate rate 21
      31,093 – 62,430 Higher rate 42
      62,431 – 125,140 Advanced rate 45
      Over 125,140 Top rate 48

 

- Wales

2025/26
2024/25
  • Income tax is devolved to Wales.
  • 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.
Band of taxable income UK Rate Welsh Rate Total Rate
£ % % %
0 – 37,700 Basic rate 10 10 20
37,701 – 125,140 Higher rate 30 10 40
Over 125,140 Additional rate 35 10 45
  • Income tax is devolved to Wales.
  • 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.
Band of taxable income UK Rate Welsh Rate Total Rate
£ % % %
0 – 37,700 Basic rate 10 10 20
37,701 – 125,140 Higher rate 30 10 40
Over 125,140 Additional rate 35 10 45

 
2025/26
2024/25
The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax.Savers are able to subscribe any amounts into a cash ISA, a stocks and shares ISA or an innovative finance ISA subject to not exceeding the overall annual investment limit.

Investors may transfer their investments from one kind of ISA to another.

The Lifetime ISA is available for those aged between 18 and 40. Save up to £4,000 each year up until the age of 50, and receive a government bonus of 25% (a bonus of up to £1,000 a year). Savers can use some or all of the money to buy their first home, or keep it until they are aged 60 when the account can be accessed tax free. Conditions apply to the account holder and property purchased.  Penalties apply if funds are withdrawn in other circumstances.

A Help to Buy ISA provides a tax free savings account for first time buyers wishing to save for a home. The scheme provides a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. The bonus will be paid in the form of a voucher when the first home is purchased. Conditions apply to the account holder and to the property purchased. Help to Buy ISAs closed to new savers on 30 November 2019. Existing holders can continue saving until 30 November 2029 and will have until 1 December 2030 to claim their bonus.

ISA limits 2025/26
Overall annual investment limit £20,000
Junior ISA annual investment limit £9,000
Help to Buy ISA monthly subscription limit £200
Lifetime ISA annual investment limit £4,000

 

The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax.Savers are able to subscribe any amounts into a cash ISA, a stocks and shares ISA or an innovative finance ISA subject to not exceeding the overall annual investment limit.

Investors may transfer their investments from one kind of ISA to another.

The Lifetime ISA is available for those aged between 18 and 40. Save up to £4,000 each year up until the age of 50, and receive a government bonus of 25% (a bonus of up to £1,000 a year). Savers can use some or all of the money to buy their first home, or keep it until they are aged 60 when the account can be accessed tax free. Conditions apply to the account holder and property purchased.  Penalties apply if funds are withdrawn in other circumstances.

A Help to Buy ISA provides a tax free savings account for first time buyers wishing to save for a home. The scheme provides a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. The bonus will be paid in the form of a voucher when the first home is purchased. Conditions apply to the account holder and to the property purchased. Help to Buy ISAs closed to new savers on 30 November 2019. Existing holders can continue saving until 30 November 2029 and will have until 1 December 2030 to claim their bonus.

ISA limits 2024/25
Overall annual investment limit £20,000
Junior ISA annual investment limit £9,000
Help to Buy ISA monthly subscription limit £200
Lifetime ISA annual investment limit £4,000

 
2025/26
  • IHT may be payable when an individual’s estate is worth more than the IHT nil rate band when they die.
  • Lifetime and death transfers between UK domiciled spouses are exempt from IHT.
  • A further nil rate band of £175,000 may be available in relation to current or former residences.
  • The IHT threshold available on death may be increased for surviving spouses as there may have been a nil rate band not used, or not fully used, on the first death.
  • There are reliefs for some business and farming assets which reduce their value for IHT purposes.
  • IHT may also be payable on gifts made in an individual’s lifetime but within seven years of death.
  • Some lifetime gifts are exempt.
  • Transfers of assets into trust made in an individual’s lifetime may be subject to an immediate charge but at lifetime rates.
  • There are also charges on some trusts.

IHT rates and nil rate band 2025/26 and 2024/25

IHT nil rate £325,000
Lifetime rate 20%
Death rate 40%
Death rate if sufficient charitable legacies made 36%

IHT reliefs for lifetime gifts

Annual exemption £3,000
Small gifts £250
Marriage/civil partnership
– parent £5,000
– grandparent £2,500
– other spouse/civil partner £2,500
– other £1,000

IHT – reduced charge on gifts within seven years of death

Years before death % of death charge
0-3 100
3-4 80
4-5 60
5-6 40
6-7 20

 
2025/26
2024/25
Land and Buildings Transaction Tax (LBTT) is payable on land and property transactions in Scotland.

LBTT (Residential property)

Consideration (£) Rate
0 – 145,000 0%
145,001 – 250,000 2%
250,001 – 325,000 5%
325,001 – 750,000 10%
750,001 and above 12%

The rates apply to the portion of the total value which falls within each band.

From 5 December 2024 residential rates may be increased by 8% where further residential properties, costing over £40,000, are acquired.

First-time Buyer relief raises the zero rate tax threshold for first-time buyers from £145,000 to £175,000.

LBTT (Non-residential)

Consideration (£) Rate
0 – 150,000 0%
150,001 – 250,000 1%
Over 250,000 5%

The rates apply to the portion of the total value which falls within each band.

Land and Buildings Transaction Tax (LBTT) is payable on land and property transactions in Scotland.

LBTT (Residential property)

Consideration (£) Rate
0 – 145,000 0%
145,001 – 250,000 2%
250,001 – 325,000 5%
325,001 – 750,000 10%
750,001 and above 12%

The rates apply to the portion of the total value which falls within each band.

From 5 December 2024 residential rates may be increased by 8% (6% until 4 December 2024) where further residential properties, costing over £40,000, are acquired.

First-time Buyer relief raises the zero rate tax threshold for first-time buyers from £145,000 to £175,000.

LBTT (Non-residential)

Consideration (£) Rate
0 – 150,000 0%
150,001 – 250,000 1%
Over 250,000 5%

The rates apply to the portion of the total value which falls within each band.

2025/26
2024/25
Land Transaction Tax (LTT) is payable on land and property transactions in Wales.

LTT (Residential property)

Consideration (£) Rate
0 – 225,000 0%
225,001 – 400,000 6%
400,001 – 750,000 7.5%
750,001 – 1,500,000 10%
Over 1,500,000 12%

The rates apply to the portion of the total value which falls within each band.

Residential rates may be increased where further residential properties costing over £40,000 or over are acquired.

Higher residential tax rates

Higher residential rates may apply when you already own one or more residential properties.

Consideration (£) Rate
0 – 180,000 5%
180,001 – 250,000 8.5%
250,001 – 400,000 10%
400,001 – 750,000 12.5%
750,001 – 1,500,000 15%
Over 1,500,000 17%

The rates apply to the portion of the total value which falls within each band.

LTT (Non-residential)

Consideration (£) Rate
0 – 225,000 0%
225,001 – 250,000 1%
250,001 – 1,000,000 5%
Over 1,000,000 6%

The rates apply to the portion of the total value which falls within each band.

Land Transaction Tax (LTT) is payable on land and property transactions in Wales.

LTT (Residential property)

Consideration (£) Rate
0 – 225,000 0%
225,001 – 400,000 6%
400,001 – 750,000 7.5%
750,001 – 1,500,000 10%
Over 1,500,000 12%

The rates apply to the portion of the total value which falls within each band.

Residential rates may be increased where further residential properties costing over £40,000 or over are acquired.

Higher residential tax rates

Higher residential rates may apply when you already own one or more residential properties. For transactions before 11 December 2024 these rates were 1% lower.

Consideration (£) Rate
0 – 180,000 5%
180,001 – 250,000 8.5%
250,001 – 400,000 10%
400,001 – 750,000 12.5%
750,001 – 1,500,000 15%
Over 1,500,000 17%

The rates apply to the portion of the total value which falls within each band.

LTT (Non-residential)

Consideration (£) Rate
0 – 225,000 0%
225,001 – 250,000 1%
250,001 – 1,000,000 5%
Over 1,000,000 6%

Land Transaction Tax (LTT) is payable on land and property transactions in Wales.

LTT (Residential property)

Consideration (£) Rate
0 – 225,000 0%
225,001 – 400,000 6%
400,001 – 750,000 7.5%
750,001 – 1,500,000 10%
Over 1,500,000 12%

The rates apply to the portion of the total value which falls within each band.

Residential rates may be increased where further residential properties costing over £40,000 or over are acquired.

Higher residential tax rates

Higher residential rates may apply when you already own one or more residential properties. From 11 December 2024 these are:

Consideration (£) Rate
0 – 180,000 5%
180,001 – 250,000 8.5%
250,001 – 400,000 10%
400,001 – 750,000 12.5%
750,001 – 1,500,000 15%
Over 1,500,000 17%

Higher residential rates may apply when you already own one or more residential properties. Between 22 December 2022 and 10 December 2024 these were:

Consideration (£) Rate
0 – 180,000 4%
180,001 – 250,000 7.5%
250,001 – 400,000 9%
400,001 – 750,000 11.5%
750,001 – 1,500,000 14%
Over 1,500,000 16%

The rates apply to the portion of the total value which falls within each band.

LTT (Non-residential)

Consideration (£) Rate
0 – 225,000 0%
225,001 – 250,000 1%
250,001 – 1,000,000 5%
Over 1,000,000 6%

The rates apply to the portion of the total value which falls within each band.

The rates apply to the portion of the total value which falls within each band.

2025/26
  • MAPs represent the maximum tax free mileage allowances an employee can receive from their employer for using their own vehicle for business journeys.
  • An employer is allowed to pay an employee a certain amount of MAPs each year without having to report payments to HMRC.
  • If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

MAP rates per business mile 2025/26 and 2024/25

Cars and vans Rate per mile
Up to 10,000 miles 45p
Over 10,000 miles 25p
Bicycles 20p
Motorcycles 24p

 
2025/26
2024/25
  • National Minimum Wage rates apply to employees up to the age of 20.
  • National Living Wage (NLW) rates apply to employees 21 and over.
  • The Apprentice rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship.
  • Penalties apply to employers who fail to pay minimum wages.
Age NLW 18-20 16-17 Apprentice
From 1 April 2025 £12.21 £10 £7.55 £7.55

 

  • National Minimum Wage rates apply to employees up to the age of 20.
  • National Living Wage (NLW) rates apply to employees 21 and over.
  • The Apprentice rate applies to apprentices under 19, or 19 and over in the first year of apprenticeship.
  • Penalties apply to employers who fail to pay minimum wages.
Age NLW 18-20 16-17 Apprentice
From 1 April 2024 £11.44 £8.60 £6.40 £6.40

 

- Rates and Allowances

2025/26
2024/25
  • Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
  • Employers pay Class 1 NIC in accordance with the table below.
  • Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate to 0% up to the Upper Secondary Threshold of £967 per week. Also applies to veterans in the first 12 months of employment.
  • Employees’ Class 1 NIC stop when they reach their State Pension age. The employer’s contribution continues.

Employees – Class 1 – 2025/26

Earnings per week %
Up to £242* Nil
£242.01 – £967 8
Over £967 2

Entitlement to state pension and other contribution-based benefits is retained for earnings between £125 and £242 per week.

Employers – Class 1 – 2025/26

Earnings per week %
Up to £96 Nil
Over £96 15

Other National Insurance payable by employers

Class 1A – 15% on broadly all taxable benefits provided to employees and on certain taxable termination payments in excess of £30,000

Class 1B – 15% on taxable PAYE Settlement Agreements

Self-employed – Class 2 and 4

  • A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
  • Class 2 NIC stop when a person reaches State Pension age.
  • From 6 April 2024, there is no longer a requirement to pay Class 2. Voluntary contributions can still be made.
  • Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.

Self-employed – Class 2 – 2025/26

Flat rate per week £3.50
Small Profits Threshold £6,845 per year
Lower Profits Limit n/a

A self-employed person with profits below the Small Profits Threshold might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and other benefits.

Class 4 – 2025/26

Annual profits %
Up to £12,570 Nil
£12,570.01 – £50,270 6
Over £50,270 2

Class 3

  • A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
  • Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.

Class 3 – 2025/26

Flat rate per week £17.75

    • Employees start paying Class 1 NIC from age 16 (if sufficient earnings).
    • Employers pay Class 1 NIC in accordance with the table below.
    • Employer NIC for employees under the age of 21 and apprentices under the age of 25 is reduced from the normal rate to 0% up to the Upper Secondary Threshold of £967 per week. Also applies to veterans in the first 12 months of employment.
    • Employees’ Class 1 NIC stop when they reach their State Pension age . The employer’s contribution continues.

    Employees – Class 1 – 2024/25

    Earnings per week %
    Up to £242* Nil
    £242.01 – £967 8
    Over £967 2

    Entitlement to state pension and other contribution-based benefits is retained for earnings between £125 and £242 per week.

    Employers – Class 1 – 2024/25

    Earnings per week %
    Up to £96 Nil
    Over £96 13.8

    Other National Insurance payable by employers

    Class 1A – 13.8% on broadly all taxable benefits provided to employees and on certain taxable termination payments in excess of £30,000

    Class 1B – 13.8% on taxable PAYE Settlement Agreements

    Self-employed – Class 2 and 4

    • A self-employed person starts paying Class 2 and Class 4 NIC from 16 or over (if sufficient profits)
    • Class 2 NIC stop when a person reaches State Pension age.
    • From 6 April 2024, there is no longer a requirement to pay Class 2. Voluntary contributions can still be made.
    • Class 4 NIC stop from the start of the tax year after the one in which the person reaches State Pension age.

    Self-employed – Class 2 – 2025/26

    Flat rate per week £3.45
    Small Profits Threshold £6,725 per year
    Lower Profits Limit n/a

    A self-employed person with profits below the Small Profits Threshold might decide to carry on paying Class 2 voluntarily to accrue entitlement to the State Pension and other benefits.

    Class 4 – 2025/26

    Annual profits %
    Up to £12,570 Nil
    £12,570.01 – £50,270 6
    Over £50,270 2

    Class 3

    • A person needs 35 years (30 years if State Pension age is before 6 April 2016) of NIC to get a full State Pension.
    • Class 3 voluntary contributions can be paid to fill or avoid gaps in a NI record.

    Class 3 – 2025/26

    Flat rate per week £17.45

2025/26
2024/25
Auto enrolment places duties on employers to automatically enrol ‘workers’ into a work based pension scheme. Employers are required to automatically enrol all ‘eligible jobholders’ into a qualifying pension scheme and pay pension contributions on their behalf.

Employer minimum contribution Total minimum contribution
3% 8%

Where the employer does not make the total minimum contribution the employee is obliged to pay the balance.

2025/26
Automatic enrolment earnings trigger £10,000
Qualifying earnings band – lower limit £6,240
Qualifying earnings band – upper limit £50,270
Auto enrolment places duties on employers to automatically enrol ‘workers’ into a work based pension scheme. Employers are required to automatically enrol all ‘eligible jobholders’ into a qualifying pension scheme and pay pension contributions on their behalf.

Employer minimum contribution Total minimum contribution
3% 8%

Where the employer does not make the total minimum contribution the employee is obliged to pay the balance.

2024/25
Automatic enrolment earnings trigger £10,000
Qualifying earnings band – lower limit £6,240
Qualifying earnings band – upper limit £50,270

 

- Tax Relief on Pension Contributions

2025/26
2024/25
  • Tax relief available for personal contributions is the higher of £3,600 (gross) or 100% of relevant earnings.
  • Any contributions in excess of £60,000, whether personal or by the employer, may be subject to income tax on the individual.
  • The limit may be reduced to £10,000 once money purchase pensions are accessed.
  • Where the £60,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
  • The annual allowance is tapered for those with adjusted income over £260,000. For every £2 of income over £260,000 an individual’s annual allowance will be reduced by £1, down to a minimum of £10,000.
  • Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’ for the purposes of the business. The tax relief for large contributions may be spread over several years.
    • Tax relief available for personal contributions is the higher of £3,600 (gross) or 100% of relevant earnings.
    • Any contributions in excess of £60,000, whether personal or by the employer, may be subject to income tax on the individual.
    • The limit may be reduced to £10,000 once money purchase pensions are accessed.
    • Where the £60,000 limit is not fully used it may be possible to carry the unused amount forward for three years.
    • The annual allowance is tapered for those with adjusted income over £260,000. For every £2 of income over £260,000 an individual’s annual allowance will be reduced by £1, down to a minimum of £10,000.
    • Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’ for the purposes of the business. The tax relief for large contributions may be spread over several years.
2025/26
  • A property allowance is available to individuals.
  • The property allowance will not apply to partnership income or to income on which rent a room relief is given.
Income up to £1,000 Property income assessable NIL
Income over £1,000 Election to deduct £1,000 rather than the actual expenses

 

- Key Dates

2025/26
2024/25
31 January 2025 – First payment on account due for 2024/25 tax year. 31 July 2025 – Second payment on account for 2024/25 tax year.

5 October 2025 – Deadline for notifying HMRC of new sources of income (including the Child Benefit charge) if no tax return has been issued for 2024/25 tax year.

31 October 2025 – Deadline for submission of 2024/25 non-electronic returns.

30 December 2025 – Deadline for submission of 2024/25 electronic tax returns if ‘coding out’ of eligible underpayment is required.

31 January 2026 – Deadline for filing electronic tax returns for 2024/25. Balancing payment due for 2024/25 tax year. First payment on account due for 2025/26 tax year.

31 January 2024 – First payment on account due for 2023/24 tax year. 31 July 2024 – Second payment on account for 2023/24 tax year.

5 October 2024 – Deadline for notifying HMRC of new sources of income (including the Child Benefit charge) if no tax return has been issued for 2023/24 tax year.

31 October 2024 – Deadline for submission of 2023/24 non-electronic returns.

30 December 2024 – Deadline for submission of 2023/24 electronic tax returns if ‘coding out’ of eligible underpayment is required.

31 January 2025 – Deadline for filing electronic tax returns for 2023/24. Balancing payment due for 2023/24 tax year. First payment on account due for 2024/25 tax year.

2025/26
When you buy shares, you usually pay a tax or duty of 0.5% on the transaction. If you buy shares electronically Stamp Duty Reserve Tax (SDRT) is payable. For shares purchased using a stock transfer form, you will pay Stamp Duty if the transaction is over £1,000.
2025/26
  • SDLT is payable on land and property transactions in England and Northern Ireland.
  • Property transactions in Scotland are subject to Land and Buildings Transaction Tax (LBTT).
  • Property transactions in Wales are subject to Land Transaction Tax (LTT).

Residential property

The rates apply to the portion of the total value which falls within each band.

Consideration (£) Rate
0 – 125,000 0%
125,001 – 250,000 2%
250,001 – 925,000 5%
925,001 – 1,500,000 10%
1,500,001 and above 12%

These rates may be increased by 5% where further residential properties, costing over £40,000, are acquired on or after 30 October 2024 and by 3% before that date.

First-time Buyer relief

First-time buyers may be eligible for first-time buyer relief on purchases of residential property up to £500,000. The rates apply to the portion of the total value which falls within each band.

Consideration (£) Rate
0 – 300,000 0%
300,001 – 500,000 5%
for purchases over 500,000 normal rates apply

Non-residential SDLT rates

Consideration (£) Rate
0 – 150,000 0%
150,001 – 250,000 2%
Over 250,000 5%

Payable on consideration which falls in each band.

2025/26
2024/25
  • The basic State Pension is a regular payment from the government that an individual may be entitled to when they reach State Pension age.
  • The basic State Pension depends on the number of years an individual has paid National Insurance or has National Insurance credits, eg while unemployed or claiming certain benefits.
  • To receive the basic State Pension an individual must have paid or been credited with National Insurance contributions (NIC).
  • In 2016 the State Pension was reformed into a single-tier new State Pension. In order to benefit from the full amount the individual will need 35 years, rather than the previous 30 years of NIC or credits for the full amount, with pro-rating where 35 years is not achieved. You will usually need 10 qualifying years to get any State Pension. The amount an individual receives can be higher or lower depending on their National Insurance record. It will only be higher if you have over a certain amount of Additional State Pension.
  • Currently an individual may also be entitled to the Additional State Pension. How much an individual gets depends on the number of qualifying years of NIC, the amount of earnings and whether the individual has been contracted out of the scheme.
Weekly State Pension 2025/26
Basic – single person £176.45
New State Pension £230.25
  • The basic State Pension is a regular payment from the government that an individual may be entitled to when they reach State Pension age .
  • The basic State Pension depends on the number of years an individual has paid National Insurance or has National Insurance credits, eg while unemployed or claiming certain benefits.
  • To receive the basic State Pension an individual must have paid or been credited with National Insurance contributions (NIC).
  • In 2016 the State Pension was reformed into a single-tier new State Pension. In order to benefit from the full amount the individual will need 35 years, rather than the previous 30 years of NIC or credits for the full amount, with pro-rating where 35 years is not achieved. You will usually need 10 qualifying years to get any State Pension. The amount an individual receives can be higher or lower depending on their National Insurance record. It will only be higher if you have over a certain amount of Additional State Pension.
  • Currently an individual may also be entitled to the Additional State Pension. How much an individual gets depends on the number of qualifying years of NIC, the amount of earnings and whether the individual has been contracted out of the scheme.
Weekly State Pension 2024/25
Basic – single person £169.50
New State Pension £221.20

 
2025/26

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. Individuals are entitled to relief on investments in certain unquoted trading companies through EIS. A junior version of EIS the SEIS is also available.

Maximum investment per annum £1,000,000
Additional investment limit where investing in knowledge-intensive companies £2,000,000
Income tax relief 30%
CGT treatment on disposal if held for 3 years Exempt

Capital gains from the disposal of other assets may be deferred by making an EIS investment.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. SEIS is a junior version of EIS.

Maximum investment per annum £200,000*
Income tax relief 50%
CGT treatment on disposal if held for 3 years Exempt

An individual who makes a capital gain on another asset and uses the amount of the gain to make a SEIS investment will not pay tax on 50% of the gain (subject to certain conditions).

Capital gains from the disposal of other assets may be exempt up to £100,000* per annum by making an SEIS investment.

*Limits subject to Parliamentary approval.

Social Investment Relief (SIR)

Social Investment Relief (SIR) was designed to encourage private individuals to invest in social enterprises including charities.

SIR closed to any new investments from 6 April 2023.

 

Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies. VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment. Individuals are entitled to relief on investments in VCTs.

Maximum investment per annum £200,000
Income tax relief 30%
Dividend income Exempt
Capital gains treatment on disposal Exempt
2025/26
  • A Trade Allowance is available to individuals.
  • There is an equivalent rule for certain miscellaneous income. This will apply to the extent that the £1,000 trading allowance is not used against trading income.
  • The trade allowance is not available against partnership income.
Income up to £1,000 Profits assessable NIL
Income over £1,000 Election to deduct £1,000 allowance rather than the actual expenses

 
2025/26
2024/25
  • Van benefit is chargeable if the van is available for an employee’s private use.
  • A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.
  • The charges do not apply to vans if a ‘restricted private use condition‘ is met throughout the year.
  • A reduced benefit charge may apply to vans which cannot emit CO2 when driven.
Van benefits 2025/26
Van benefit £4,020
Fuel benefit £769

 

      • Van benefit is chargeable if the van is available for an employee’s private use.
      • A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.
      • The charges do not apply to vans if a ‘ restricted private use condition ‘ is met throughout the year.
      • A reduced benefit charge may apply to vans which cannot emit CO 2 when driven.
      Van benefits 2024/25
      Van benefit £3,960
      Fuel benefit £757

 
2025/26
2024/25
  • Registered businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs.
  • Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.
  • There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children’s clothes.
  • Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.
  • A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.
VAT – rates and limits
Standard rate 20%
Reduced rate 5%
Annual Registration Limit
– from 1.4.25 – 31.3.26		 £90,000
Annual Deregistration Limit
– from 1.4.25 – 31.3.26		 £88,000

 

  • Registered businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs.
  • Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.
  • There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children’s clothes.
  • Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.
  • A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.
VAT – rates and limits
Standard rate 20%
Reduced rate 5%
Annual Registration Limit
– from 1.4.24 – 31.3.25		 £90,000
Annual Deregistration Limit
– from 1.4.24 – 31.3.25		 £88,000

 
2025/26
2024/25
Businesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2024.

CO2
band 		Gross monthly
£ 		VAT
£ 		Net
£
120 or less 58 9.67 48.33
125 87 14.50 72.50
130 92 15.33 76.67
135 98 16.33 81.67
140 105 17.50 87.50
145 110 18.33 91.67
150 116 19.33 96.67
155 122 20.33 101.67
160 127 21.17 105.83
165 134 22.33 111.67
170 139 23.17 115.83
175 145 24.17 120.83
180 151 25.17 125.83
185 157 26.17 130.83
190 163 27.17 135.83
195 169 28.17 140.83
200 174 29 145
205 180 30 150
210 186 31 155
215 192 32 160
220 198 33 165
225 or more 203 33.83 169.17
CO 2
band 		Gross 3 month period £ VAT
£ 		Net
£
120 or less 174 29 145
125 263 43.83 219.17
130 279 46.50 232.50
135 297 49.50 247.50
140 315 52.50 262.50
145 332 55.33 276.67
150 350 58.33 291.67
155 368 61.33 306.67
160 385 64.17 320.83
165 403 67.17 335.83
170 420 70 350
175 437 72.83 364.17
180 455 75.83 379.17
185 473 78.83 394.17
190 490 81.67 408.33
195 508 84.67 423.33
200 526 87.67 438.33
205 544 90.67 453.33
210 560 93.33 466.67
215 578 96.33 481.67
220 596 99.33 496.67
225 or more 613 102.17 510.83
CO 2
band 		Annual gross
£ 		VAT
£ 		Net
£
120 or less 702 117 585
125 1,050 175 875
130 1,123 187.17 935.83
135 1,191 198.50 992.50
140 1,263 210.50 1,052.50
145 1,331 221.83 1,109.17
150 1,404 234 1,170
155 1,471 245.17 1,225.83
160 1,544 257.33 1,286.67
165 1,612 268.67 1,343.33
170 1,685 280.83 1,404.17
175 1,752 292 1,460
180 1,825 304.17 1,520.83
185 1,893 315.50 1,577.50
190 1,965 327.50 1,637.50
195 2,033 338.83 1,694.17
200 2,106 351 1,755
205 2,174 362.33 1,811.67
210 2,246 374.33 1,871.67
215 2,314 385.67 1,928.33
220 2,387 397.83 1,989.17
225 or more 2,454 409 2,045

Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge.

For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used.

For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size. If its cylinder capacity is:

  • If its cylinder capacity is 1,400cc or less, use CO2 band 140
  • If its cylinder capacity exceeds 1,400cc but does not exceed 2,000cc, use CO2 band 175;
  • If its cylinder capacity exceeds 2,000cc, use CO2 band 225 or above.
Businesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2023.

CO2
band 		Gross monthly
£ 		VAT
£ 		Net
£
120 or less 61 10.17 50.83
125 91 15.17 75.83
130 97 16.17 80.83
135 103 17.17 85.83
140 110 18.33 91.67
145 115 19.17 95.83
150 122 20.33 101.67
155 128 21.33 106.67
160 134 22.33 111.67
165 140 23.33 116.67
170 146 24.33 121.67
175 152 25.33 126.67
180 159 26.50 132.50
185 164 27.33 136.67
190 171 28.50 142.50
195 178 29.67 148.33
200 183 30.50 152.50
205 190 31.67 158.33
210 195 32.50 162.50
215 202 33.67 168.33
220 208 34.67 173.33
225 or more 214 35.67 178.33
CO 2
band 		Gross 3 month period £ VAT
£ 		Net
£
120 or less 183 30.50 152.50
125 276 46.00 230.00
130 293 48.83 244.17
135 312 52.00 260.00
140 331 55.17 275.83
145 349 58.17 290.83
150 368 61.33 306.67
155 386 64.33 321.67
160 405 67.50 337.50
165 423 70.50 352.50
170 441 73.50 367.50
175 459 76.50 382.50
180 478 79.67 398.33
185 497 82.83 414.17
190 515 85.83 429.17
195 534 89.00 445.00
200 552 92.00 460.00
205 571 95.17 475.83
210 588 98.00 490.00
215 607 101.17 505.83
220 626 104.33 521.67
225 or more 644 107.33 536.67
CO 2
band 		Annual gross
£ 		VAT
£ 		Net
£
120 or less 737 122.83 614.17
125 1,103 183.83 919.17
130 1,179 196.50 982.50
135 1,250 208.33 1,041.67
140 1,327 221.17 1,105.83
145 1,398 233.00 1,165.00
150 1,474 245.67 1,228.33
155 1,545 257.50 1,287.50
160 1,622 270.33 1,351.67
165 1,693 282.17 1,410.83
170 1,769 294.83 1,474.17
175 1,840 306.67 1,533.33
180 1,917 319.50 1,597.50
185 1,988 331.33 1,656.67
190 2,064 344.00 1,720.00
195 2,135 355.83 1,779.17
200 2,212 368.67 1,843.33
205 2,283 380.50 1,902.50
210 2,359 393.17 1,965.83
215 2,430 405.00 2,025.00
220 2,507 417.83 2,089.17
225 or more 2,578 429.67 2,148.33

Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge.

For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used.

For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size. If its cylinder capacity is:

  • If its cylinder capacity is 1,400cc or less, use CO 2 band 140
  • If its cylinder capacity exceeds 1,400cc but does not exceed 2,000cc, use CO 2 band 175;
  • If its cylinder capacity exceeds 2,000cc, use CO 2 band 225 or above.

- Passenger Cars

2025/26
2024/25
For vehicles first registered on or after 1 April 2017, the VED or ‘Road Tax’ rate for the first 12 months is based on CO2 emissions shown on the V5 (Registration Document).Subsequent years are charged at the standard rate. Cars with a list price of over £40,000 when new pay an additional rate of £425 per year on top of the standard rate, in the second to sixth years after the car’s first registration.

New diesel vehicles that do not meet the Euro 6d emissions standard are charged a supplement on their First Year Rate to the effect of moving up by one VED band.

VED bands and rates for cars first registered on or after 1 April 2017

CO2 emissions (g/km) Standard rate First year rate
0 £195 £10
1-50 £195 £110
51-75 £195 £130
76-90 £195 £270
91-100 £195 £350
101-110 £195 £390
111-130 £195 £440
131-150 £195 £540
151-170 £195 £1,360
171-190 £195 £2,190
191-225 £195 £3,300
226-255 £195 £4,680
Over 255 £195 £5,490

VED bands and rates for cars registered on or after 1 March 2001 but before 1 April 2017

VED band CO 2 emissions (g/km) Standard rate
A Up to 100 £20
B 101-110 £20
C 111-120 £35
D 121-130 £165
E 131-140 £195
F 141-150 £215
G 151-165 £265
H 166-175 £315
I 176-185 £345
J 186-200 £395
K 201-225* £430
L 226-255 £735
M Over 255 £760

*Including cars emitting over 225g/km registered before 23 March 2006.

For vehicles first registered on or after 1 April 2017, the VED or ‘Road Tax’ rate for the first 12 months is based on CO 2 emissions shown on the V5 (Registration Document).Subsequent years are charged at the standard rate. Cars with a list price of over £40,000 when new pay an additional rate of £390 per year on top of the standard rate, in the second to sixth years after the car’s first registration.

New diesel vehicles that do not meet the Euro 6d emissions standard are charged a supplement on their First Year Rate to the effect of moving up by one VED band.

VED bands and rates for cars first registered on or after 1 April 2017

CO 2 emissions (g/km) Standard rate First year rate
0 £0 £0
1-50 £190 £10
51-75 £190 £30
76-90 £190 £135
91-100 £190 £175
101-110 £190 £195
111-130 £190 £220
131-150 £190 £270
151-170 £190 £680
171-190 £190 £1,095
191-225 £190 £1,650
226-255 £190 £2,340
Over 255 £190 £2,745

VED bands and rates for cars registered on or after 1 March 2001 but before 1 April 2017

VED band CO 2 emissions (g/km) Standard rate
A Up to 100 £0
B 101-110 £20
C 111-120 £35
D 121-130 £160
E 131-140 £190
F 141-150 £210
G 151-165 £255
H 166-175 £305
I 176-185 £335
J 186-200 £385
K 201-225* £415
L 226-255 £710
M Over 255 £735

*Including cars emitting over 225g/km registered before 23 March 2006.