The UK taxation tax rates and allowances

ACCA's examinable documents reproduce the supplementary instructions and the tax rates and allowances that are given in TX-UK exams from June 2026 to June 2027. Knowing what is in them, and what is not, saves time in the exam.

Income tax	Basic rate £1 to £37,700 at 20%, higher rate to £125,140 at 40%, additional rate 45%
Personal allowance	£12,570, transferable amount £1,260, income limit £100,000
Corporation tax	Small profits rate 19%, main rate 25%, limits £50,000 and £250,000
VAT	Standard rate 20%, registration limit £90,000, deregistration limit £88,000
Inheritance tax	Nil rate band £325,000, residence nil rate band £175,000
Capital gains tax	18% and 24%, annual exempt amount £3,000

In the tables

Income tax: the normal and dividend rates by band, the savings and dividend nil rate bands, the starting rate for savings, the personal allowance, residence status by days and ties, and the child benefit charge.
Employment: the car benefit percentages, the car fuel and van benefits, the approved mileage allowances and the official rate of interest.
Other income and reliefs: ISAs, rent-a-room relief, the pension annual allowance and its taper, and the cap on income tax reliefs.
Capital allowances: the main and special rate pools, cars by emissions, the annual investment allowance, the enhanced allowances for companies and the structures and buildings allowance.
Corporation tax: the rates, the limits and the marginal relief formula, with the quarterly instalments threshold.
VAT, inheritance tax with taper relief, capital gains tax with business asset disposal relief and investors' relief, national insurance, interest rates and the standard penalties for errors.

Not in the tables

The tables give rates and limits, not the rules for using them. They give the £100,000 income limit for the personal allowance but not how fast it is withdrawn, the inheritance tax nil rate band but not the exemptions, and the corporation tax limits but not when to divide them. Payment dates and filing deadlines are not there either. Learn these.

The supplementary instructions

Work to the nearest £, apportion to the nearest month, and show all workings in Section C. Every key in this course follows these instructions.

Try 3 questions

Question 1 · Section A · Syllabus B3(a) to (e)2 marks

Trading profit and capital allowances

Whether a person is trading is decided by looking at the badges of trade.

Which of the following is one of the badges of trade? (2 marks)

The person's ageWhether the person is VAT registeredThe amount of income tax the person would pay on the profitThe frequency of similar transactions

Question 2 · Section A · Syllabus B62 marks

National insurance

Penrith Ltd's only employee is its director, who is paid a salary of £60,000 a year.

Can Penrith Ltd claim the employment allowance for the tax year 2025-26? (2 marks)

No, because its only employee is a directorYes, against all its NICYesYes, every employer can claim it against employer's class 1 contributions

Question 3 · Section A · Syllabus D1(d), D2(a), D2(b) to (d)2 marks

Inheritance tax on death

A lifetime gift is taxed on death only if the donor dies within seven years of making it.

Chargeable transfers made in the seven years before a transfer reduce the nil rate band available to it.

Carys made two cash gifts to her children: £150,000 on 1 June 2020 and £380,000 on 1 October 2023. Both values are after exemptions, and she made no other lifetime gifts. Carys died on 1 March 2026.

What inheritance tax is payable on the gift of 1 October 2023 as a result of Carys's death? (2 marks)

Next step

Take the free diagnostic Start the free income tax lesson

ACCA's TX-UK examinable documents, June 2026 to June 2027 (PDF)

Questions people ask

Are tax rates given in the ACCA TX-UK exam?

Yes. ACCA's study guide says tax rates, allowances and information on certain reliefs will be given in the exam, and the examinable documents reproduce them.

Is the marginal relief formula given in TX-UK?

Yes. The tax rates and allowances include the standard fraction of 3/200 and the marginal relief formula, with the £50,000 and £250,000 limits.

Which Finance Act do the tables follow?

The Finance Act 2025: the tax year 2025-26 and the financial year 2025, for exams from June 2026 to March 2027 and in June 2027.

		Normal rates	Dividend rates
Basic rate	£1 – £37,700	20%	8·75%
Higher rate	£37,701 – £125,140	40%	33·75%
Additional rate	£125,141 and over	45%	39·35%
Savings income nil rate band – Basic rate taxpayers			£1,000
Savings income nil rate band – Higher rate taxpayers			£500
Dividend nil rate band			£500

Days in UK	Previously resident	Not previously resident
Less than 16	Automatically not resident	Automatically not resident
16 to 45	Resident if 4 UK ties (or more)	Automatically not resident
46 to 90	Resident if 3 UK ties (or more)	Resident if 4 UK ties
91 to 120	Resident if 2 UK ties (or more)	Resident if 3 UK ties (or more)
121 to 182	Resident if 1 UK tie (or more)	Resident if 2 UK ties (or more)
183 or more	Automatically resident	Automatically resident

The relevant base level of CO2 emissions is 55 grams per kilometre.
The percentage rates applying to petrol cars (and diesel cars meeting the RDE2 standard) with CO2 emissions up to this level are:
51 grams to 54 grams per kilometre	16%
55 grams per kilometre	17%
The percentage for electric cars with zero CO2 emissions is 3%.
For hybrid-electric cars with CO2 emissions between 1 and 50 grams per kilometre, the electric range of the car is relevant:
Electric range
130 miles or more	3%
70 to 129 miles	6%
40 to 69 miles	9%
30 to 39 miles	13%
Less than 30 miles	15%

Annual allowance – 2022–23	£40,000
– 2023–24 to 2025–26	£60,000
Minimum allowance	£10,000
Income limit	£260,000

Up to 10,000 miles	45p
Over 10,000 miles	25p

	£
Personal allowance	12,570
Transferable amount	1,260
Income limit	100,000

Plant and machinery
Main pool	18%
Special rate pool	6%
Cars
New cars with zero CO2 emissions	100%
Second-hand cars with zero CO2 emissions	18%
CO2 emissions between 1 and 50 grams per kilometre	18%
CO2 emissions over 50 grams per kilometre	6%
Annual investment allowance
Rate of allowance	100%
Expenditure limit	£1,000,000
Enhanced capital allowances for companies
Main pool first year allowance	100%
Special rate pool first year allowance	50%
Structures and buildings allowance
Straight-line allowance	3%

Financial year	2023	2024	2025
Small profits rate	19%	19%	19%
Main rate	25%	25%	25%
Lower limit	£50,000	£50,000	£50,000
Upper limit	£250,000	£250,000	£250,000
Standard fraction	3/200	3/200	3/200

Standard rate	20%
Registration limit	£90,000
Deregistration limit	£88,000

Days late	Penalty
Up to 15 days	None
16 to 30 days	3%
More than 30 days	6% plus a daily penalty at an annual rate of 10%

Nil rate band	£325,000
Residence nil rate band	£175,000
Rate of tax on excess – Lifetime rate	20%
– Death rate	40%

Years before death	Percentage reduction
More than 3 but less than 4 years	20%
More than 4 but less than 5 years	40%
More than 5 but less than 6 years	60%
More than 6 but less than 7 years	80%

Lifetime limit – business asset disposal relief	£1,000,000
– investors’ relief	£1,000,000
Rate of tax	14%

Class 1 Employee	£1 – £12,570 per year	Nil
	£12,571 – £50,270 per year	8%
	£50,271 and above per year	2%
Class 1 Employer	£1 – £5,000 per year	Nil
	£5,001 and above per year	15%
	Employment allowance	£10,500
Class 1A		15%
Class 4	£1 – £12,570 per year	Nil
	£12,571 – £50,270 per year	6%
	£50,271 and above per year	2%

Official rate of interest	3·75%
Rate of interest on underpaid tax	8·50%
Rate of interest on overpaid tax	3·50%

Taxpayer behaviour	Maximum penalty	Minimum penalty – unprompted disclosure	Minimum penalty – prompted disclosure
Deliberate and concealed	100%	30%	50%
Deliberate but not concealed	70%	20%	35%
Careless	30%	0%	15%