Reference
Reference: UK Allowances and Thresholds 2025/26
Personal allowance, trading allowance, AIA, dividend allowance, VAT threshold and other key UK tax allowances for 2025/26.
Quick answers
What's the personal allowance for 2025/26?
The standard UK personal allowance for 2025/26 is £12,570. It tapers away above £100,000 of adjusted net income — losing £1 for every £2 over the threshold — and is fully gone by £125,140.
What is the trading allowance?
The trading allowance lets individuals earn up to £1,000 of self-employment, hobby or casual income each tax year tax-free. There's a separate property allowance of £1,000 covering small rental income.
How much is the AIA in 2025/26?
The Annual Investment Allowance is £1,000,000 per year — letting most businesses fully deduct qualifying plant and machinery purchases up to that amount in the year of acquisition. It excludes cars.
UK Allowances and Thresholds 2025/26
Personal allowances
| Allowance | 2025/26 |
|---|---|
| Personal allowance | £12,570 |
| Marriage allowance (transferable) | £1,260 |
| Blind person's allowance | £3,130 |
| Personal savings allowance — basic rate | £1,000 |
| Personal savings allowance — higher rate | £500 |
| Starting rate for savings | £5,000 (tapered) |
| Dividend allowance | £500 |
Personal allowance reduces by £1 for every £2 of income above £100,000 — gone by £125,140.
Trading and property allowances
| Allowance | 2025/26 |
|---|---|
| Trading allowance | £1,000 |
| Property allowance | £1,000 |
| Rent a Room scheme | £7,500 |
Capital allowances
| Allowance | 2025/26 |
|---|---|
| Annual Investment Allowance (AIA) | £1,000,000 |
| Full expensing (companies, new main-rate) | 100% |
| 50% first-year (companies, new special-rate) | 50% |
| Main pool WDA | 18% |
| Special rate pool WDA | 6% |
| Structures and Buildings Allowance | 3% |
VAT
| Threshold | 2025/26 |
|---|---|
| Registration | £90,000 |
| Deregistration | £88,000 |
| Cash Accounting (max turnover) | £1,350,000 |
| Annual Accounting (max turnover) | £1,350,000 |
| Flat Rate Scheme (max joining turnover) | £150,000 |
National Insurance thresholds
| Threshold | 2025/26 |
|---|---|
| Lower Earnings Limit (Class 1) | £6,500 |
| Primary Threshold (Class 1) | £12,570 |
| Upper Earnings Limit (Class 1) | £50,270 |
| Secondary Threshold (employer) | £5,000 |
| Class 2 small profits threshold | £6,845 |
| Class 4 lower limit | £12,570 |
| Class 4 upper limit | £50,270 |
| Employment Allowance | £10,500 |
Capital Gains Tax
| Allowance | 2025/26 |
|---|---|
| Annual exempt amount (individuals) | £3,000 |
| Annual exempt amount (trusts) | £1,500 |
| Business Asset Disposal Relief lifetime limit | £1,000,000 |
Inheritance Tax
| Band | 2025/26 |
|---|---|
| Nil-rate band | £325,000 |
| Residence nil-rate band | £175,000 |
| Annual gift exemption | £3,000 |
| Small gifts (per person) | £250 |
| Wedding gifts (parent → child) | £5,000 |
Pensions
| Allowance | 2025/26 |
|---|---|
| Annual allowance | £60,000 |
| Money purchase annual allowance | £10,000 |
| Tapered annual allowance min | £10,000 |
| Lump sum allowance | £268,275 |
| Lump sum and death benefit allowance | £1,073,100 |
This is general guidance for the 2025/26 UK tax year and is not personal tax advice. Always check the latest figures on GOV.UK or speak to a qualified accountant for your situation.
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