Tax rates, allowances and household bills: your questions answered
Income tax bands, personal allowance, Scottish rates, National Insurance, fiscal drag, VAT, council tax bands, stamp duty and inheritance tax.
What are the council tax bands based on?
In England, council tax bands A to H are based on what a home would have sold for on 1 April 1991. Band A covers values up to £40,000 and band H more than £320,000, according to the Valuation Office. Wales has nine bands, A to I, based on values on 1 April 2003. Scotland uses 1991 values with bands A to H.
Related: How much has council tax gone up this year? · What is the maximum council tax increase allowed without a referendum?
What is the inheritance tax threshold, and how many estates pay it?
Inheritance tax is usually charged at 40% on the part of an estate above £325,000, according to GOV.UK. The threshold can rise to £500,000 when a home is left to children or grandchildren, and unused thresholds can pass to a surviving spouse or civil partner. Everything left to a spouse, civil partner or charity is exempt.
Related: What is the capital gains tax rate in the UK? · How much tax revenue does the UK collect?
What are the income tax bands in England, Wales and Northern Ireland?
For 2026-27, GOV.UK gives these income tax bands for people outside Scotland with the standard personal allowance: 0% up to £12,570; basic rate 20% on £12,571 to £50,270; higher rate 40% on £50,271 to £125,140; and additional rate 45% above £125,140.
Related: What is the personal allowance, and is it frozen? · What are the Scottish income tax rates? · How many people pay higher-rate tax in the UK? · How much income tax does the UK raise?
How much is stamp duty on a house?
In England and Northern Ireland, Stamp Duty Land Tax on a home you will own as your only property is 0% on the first £125,000, 2% on the next £125,000, 5% from £250,001 to £925,000, 10% to £1.5 million and 12% above that, according to GOV.UK. First-time buyers pay nothing up to £300,000 on homes worth £500,000 or less. Buyers of additional homes usually pay 5% on top.
Related: What is the average house price in the UK? · What are the council tax bands based on?
What are the Scottish income tax rates?
Scotland has six income tax bands above the personal allowance for 2026-27, set by the Scottish Parliament: starter rate 19% (£12,571 to £16,537), basic 20% (to £29,526), intermediate 21% (to £43,662), higher 42% (to £75,000), advanced 45% (to £125,140) and top rate 48% above that, according to GOV.UK.
Related: What are the income tax bands in England, Wales and Northern Ireland? · How many people pay higher-rate tax in the UK?
What is the capital gains tax rate in the UK?
For 2026-27, individuals pay capital gains tax at 18% on gains that fall within the basic-rate band and 24% above it, after a tax-free allowance of £3,000 a year (£1,500 for most trusts), according to GOV.UK. Trustees and personal representatives pay 24%.
Related: What is the inheritance tax threshold, and how many estates pay it? · What are the income tax bands in England, Wales and Northern Ireland?
What is the personal allowance, and is it frozen?
The personal allowance is the amount of income you can receive each tax year without paying income tax. For 2026-27 (6 April 2026 to 5 April 2027) the standard allowance is £12,570, according to GOV.UK. It is reduced by £1 for every £2 of adjusted net income over £100,000, so it disappears entirely at £125,140.
Related: What are the income tax bands in England, Wales and Northern Ireland? · What is fiscal drag, and how much does the tax threshold freeze raise? · How many people pay higher-rate tax in the UK?
What are the National Insurance rates?
For 2026-27, employees on standard category A pay no National Insurance on weekly earnings up to £242, then 8% on earnings from £242.01 to £967 a week and 2% above that, according to GOV.UK. Employers pay 15% on most employees' earnings above £96 a week (£5,000 a year).
Related: What are the income tax bands in England, Wales and Northern Ireland? · How much tax revenue does the UK collect?
What is fiscal drag, and how much does the tax threshold freeze raise?
Fiscal drag is the rise in tax paid when thresholds stay fixed while incomes grow, so more people start paying tax or move into a higher band. The Office for Budget Responsibility explains it in Box 3.3 of its November 2025 Economic and fiscal outlook.
Related: What is the personal allowance, and is it frozen? · How many people pay higher-rate tax in the UK? · What is the OBR and what does it forecast?
What is the VAT rate in the UK?
The standard rate of VAT in the UK is 20%, according to GOV.UK, and has been since 4 January 2011, when it rose from 17.5%. A reduced rate of 5% applies to some goods and services, such as home energy and children's car seats, and a zero rate applies to things such as most food and children's clothes.
Some supplies, including postage stamps and many financial and property transactions, are exempt from VAT altogether, which is different from being zero-rated. HMRC's guidance lists the rate for each type of goods and services.
VAT is one of the largest taxes, and monthly receipts are in HMRC's tax receipts statistics. When a claim mentions a "VAT cut" or "VAT rise", check whether it means the standard rate or the rate on one product.
Related: How much tax revenue does the UK collect? · How do UK taxes compare with other countries?
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge claws back Child Benefit when either parent's adjusted net income is over £60,000. You repay 1% of the Child Benefit for every £200 of income above £60,000, so it is all repaid at £80,000 or more, according to GOV.UK.
The thresholds have applied since 2024-25; before that the charge started at £50,000 and was fully repaid at £60,000. The charge falls on the higher earner in a couple, even if the other partner receives the benefit. Families can choose not to receive the payments to avoid the charge, but it can still be worth claiming to protect National Insurance credits.
The test is on each individual's income, not household income, so two parents each earning just under £60,000 pay no charge.
Related: What is the personal allowance, and is it frozen? · What are the income tax bands in England, Wales and Northern Ireland?
How many people pay higher-rate tax in the UK?
HMRC's income tax liabilities statistics, published 15 July 2026, project 7.7 million higher-rate taxpayers in 2026-27, 18.9% of all income taxpayers, and 1.29 million additional-rate taxpayers. The latest actual figures, for 2023-24, are 5.76 million higher-rate and 893,000 additional-rate taxpayers out of 36.7 million in total.
HMRC projects 40.8 million income taxpayers overall in 2026-27, and attributes the rise mainly to income growth combined with frozen thresholds. Table 2.1 breaks the numbers down by age and sex, and Table 2.2 by country and region.
Figures after 2023-24 are projections, not counts, so they are revised each year. Scottish taxpayers on the higher and advanced rates are grouped into HMRC's higher and additional categories, which matters when comparing Scotland with the rest of the UK.
Related: What is fiscal drag, and how much does the tax threshold freeze raise? · What are the income tax bands in England, Wales and Northern Ireland? · How much income tax does the UK raise?
These answers say where official figures are published and how they are defined. They give no verdict on any claim. To report an error, send a correction request.