Short answer
As of 27 October 2026, the statutory freeze on UK income tax thresholds (£12,570 personal allowance, £50,270 higher-rate line) remains in legal effect, driving fiscal drag as nominal wages rise. Headline income tax rates stand at 20% basic, 40% higher, and 45% additional, while standard employee Class 1 National Insurance remains at 8% on earnings between £12,570 and £50,270. The overall annual ISA allowance remains £20,000 across all wrappers, and the tax-free trading allowance for side-hustle earners is £1,000.
Active rules and verified statutory baselines
| Measure | Statutory Rule in Force | Legal Status | Verified Source |
|---|---|---|---|
| Personal Allowance | £12,570 tax-free allowance | Frozen through April 2028 (extension to 2031 planned) | GOV.UK Tax Rates |
| Higher-Rate Threshold | £50,270 (40% rate applies above) | Frozen in statute | GOV.UK Tax Rates |
| Employee Class 1 NI | 8% on £12,570 to £50,270; 2% above | In active legal force | HMRC NI Guidance |
| Annual ISA Allowance | £20,000 maximum per tax year across wrappers | Active baseline rule | GOV.UK ISA Rules |
| Capital Gains Tax | 18% basic rate / 24% higher rate on standard gains & residential property | In active legal force | HMRC CGT Guidance |
| Trading Allowance | £1,000 tax-free gross trading turnover | Active baseline rule | HMRC Trading Rules |
Confirmed baselines
- Headline income tax rates: 20% basic, 40% higher, and 45% additional on employment earnings remain unchanged in primary legislation.
- Overall annual ISA allowance: The overarching £20,000 annual allowance across all ISA wrappers remains in force.
- Employee National Insurance: Standard Class 1 employee contributions remain at 8% on earnings between £12,570 and £50,270, and 2% above.
- VAT: The standard rate of Value Added Tax remains 20%.
- Trading allowance: The £1,000 tax-free trading allowance for side-hustle and self-employment income remains active.
What it means for employees, savers, and self-employed or side income
For employees
Because the personal allowance (£12,570) and higher-rate line (£50,270) stay frozen while wages increase, wage growth automatically pushes a larger fraction of earnings into taxable bands. You can calculate the exact cumulative cost on your salary using our interactive Autumn Budget 2026 Tax Calculator.
For savers
For the 2026/27 tax year, savers can utilize up to the full £20,000 allowance in Cash ISAs, Stocks & Shares ISAs, or any combination of permitted wrappers. Model allowances and savings targets in our Cash ISA Allowance 2027 Planner.
For self-employed and side income
If your gross trading or side-hustle revenue is £1,000 or less per tax year, you owe no tax and do not need to register with HMRC. Net trading profits over £1,000 require Self Assessment registration and are taxed at standard income tax and Class 4 National Insurance rates.
Interactive tools and related analysis
- Autumn Budget 2026 Tax Calculator → Model your multi-year fiscal drag bill.
- Cash ISA Allowance 2027 Guide & Planner → Check birth dates and split £20,000 allowance.
- Rising Interest Rates Survival Guide → Manage cash and mortgage exposure.