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UK Tax Calculators & Financial Tools

The UK tax system covers income from employment, self-employment, investments, property, and inheritance. Whether you are an employee trying to understand your payslip, a sole trader estimating a quarterly tax bill, or a director structuring a salary and dividend mix, knowing precisely how much you owe is fundamental to sound financial planning. These free UK tax calculators apply the current HMRC rates for 2026/27 — covering income tax, National Insurance, capital gains, dividends, inheritance tax, and self assessment — so you can generate accurate estimates without needing an accountant for every scenario. All calculations use England and Wales rates unless otherwise stated; Scottish income tax rates differ and are not reflected in the income tax calculator. Use these tools to model different income scenarios, compare tax-efficient investment wrappers, preview your self assessment bill before January, or simply convert a gross salary figure to its net equivalent. Getting these numbers right early means fewer surprises when your tax bill falls due.

What This Section Covers

Understanding Tax in the UK

UK income tax is calculated on taxable income — that is, total income minus the personal allowance (£12,570 for 2026/27). Income within the basic-rate band (£12,571–£50,270) is taxed at 20%; income in the higher-rate band (£50,271–£125,140) at 40%; and income above £125,140 at the 45% additional rate. The personal allowance is progressively withdrawn at £2 for every £1 of income above £100,000, creating an effective marginal rate of 60% on income between £100,000 and £125,140. This is one of the most overlooked features of the UK tax system and can make pension contributions or salary sacrifice schemes particularly valuable at that income level.

National Insurance is a separate charge on earnings and is calculated independently of income tax. Employees pay Class 1 NI at 8% on earnings between £12,570 and £50,270, and 2% above that. Employers pay 15% on earnings above the secondary threshold of £5,000 per year. Self-employed individuals pay Class 4 NI at 6% on profits between £12,570 and £50,270 (2% above). Class 2 NI was abolished from April 2024. For directors, NI can be minimised by keeping salary below the secondary threshold — currently £5,000 — and taking additional income as dividends.

Capital Gains Tax applies when you dispose of assets at a profit. For 2026/27, individuals have an annual exempt amount of £3,000. CGT rates are 18% (basic-rate taxpayer) and 24% (higher- or additional-rate taxpayer) on all assets — residential property and other assets are now taxed at the same rates. Crucially, your CGT rate is determined by which income tax band your gains fall into after adding them to your taxable income — so gains that straddle the basic- and higher-rate boundaries will be split and taxed at different rates.

The dividend allowance for 2026/27 is £500. Dividends above this threshold are taxed at 10.75% (basic rate), 35.75% (higher rate), or 39.35% (additional rate). Director-shareholders often combine a salary just above the lower earnings limit (around £6,396) with dividends to access NI credits while minimising employer and employee NI. However, this strategy must be carefully modelled, as dividends drawn while in the higher-rate band attract a 35.75% tax rate — significantly higher than many assume.

Inheritance Tax applies to estates above the nil-rate band (£325,000), with an additional residence nil-rate band (£175,000) available when a main home passes to direct descendants. The standard IHT rate is 40% on the taxable portion of the estate. Unused allowances transfer between spouses, and the combined threshold for a married couple can reach £1,000,000 when both allowances are applied. A common mistake is underestimating IHT exposure: life insurance, certain business assets, and agricultural property can affect the calculation significantly, so running an estimate well in advance of any estate planning decisions is advisable.

A key principle across all UK tax planning is understanding how different taxes interact. Drawing a large salary to fund pension contributions, for example, can push income into the higher-rate band and reduce the net benefit. Crystallising large capital gains in a year of high income can trigger higher CGT rates that could have been avoided with careful timing. The tools in this section are designed to help you model these interactions so you can make informed decisions.

Available Tax Tools

How to Use These Tools Effectively

Start with the Income Tax Calculator to understand your baseline tax position, then run the National Insurance Calculator alongside it for a complete picture of your deductions from employment or self-employment income. If you are a company director, use the Dividend Tax Calculator together with the income tax tool to find the most tax-efficient salary and dividend combination — the optimal split depends on your total income and whether you have other sources of taxable income.

For property investors, pair the Capital Gains Tax Calculator with the Tax-Efficient Investment Tool to understand whether deferring a disposal — or sheltering future gains inside a pension or ISA — could reduce your tax exposure meaningfully over time. The Self-Employed Tax Planner is the most useful single tool for freelancers and sole traders, as it combines income tax and Class 4 NI into one estimate from a single profit figure.

For property-related tax questions — including Stamp Duty Land Tax on purchases and CGT on investment properties — see the property calculators section. For business-specific tax planning such as corporation tax, payroll, and business loans, the business calculators section provides the tools you need.

Frequently Asked Questions

What is UK income tax and how is it calculated?
Income tax in the UK is charged on taxable income above the personal allowance of £12,570 for 2026/27. The basic rate of 20% applies to income between £12,571 and £50,270; the higher rate of 40% applies between £50,271 and £125,140; and the additional rate of 45% applies above £125,140. The personal allowance is progressively withdrawn above £100,000, creating an effective 60% marginal rate on income between £100,000 and £125,140. Scottish taxpayers pay different rates set by the Scottish Parliament.
How is National Insurance calculated in the UK?
Employees pay Class 1 National Insurance at 8% on earnings between £12,570 and £50,270 and 2% on earnings above that. Employers pay 15% on all earnings above the secondary threshold of £5,000 per year. Self-employed workers pay Class 4 NI at 6% on profits between £12,570 and £50,270 and 2% above. Class 2 NI was abolished from April 2024. NI is calculated separately from income tax, though both are typically collected together through PAYE for employees.
What is capital gains tax and when do I need to pay it?
Capital Gains Tax (CGT) is charged when you dispose of an asset at a profit. It applies to shares, investment properties, second homes, and personal possessions worth over £6,000. For 2026/27, the annual CGT exempt amount is £3,000. All assets — residential property and other assets alike — are taxed at 18% for basic-rate taxpayers and 24% for higher and additional rate taxpayers. Gains on your main home are generally exempt under Private Residence Relief. Residential property disposals must be reported to HMRC within 60 days of completion.
How does the UK dividend allowance work?
The dividend allowance is the amount of dividend income you can receive each tax year without paying tax on it. For 2026/27, this allowance is £500. Dividends above this threshold are taxed at 10.75% for basic-rate taxpayers, 35.75% for higher-rate taxpayers, and 39.35% for additional-rate taxpayers. Dividends received inside an ISA or pension are completely free of tax. Director-shareholders of limited companies commonly combine a low salary (around the secondary NI threshold) with dividend payments to minimise total income tax and National Insurance.
What is the inheritance tax threshold in the UK?
Inheritance Tax (IHT) is charged at 40% on the portion of an estate that exceeds the available thresholds. The standard nil-rate band is £325,000 per individual. An additional residence nil-rate band of up to £175,000 applies when a main home passes to a direct descendant, giving a potential combined threshold of £500,000. Married couples and civil partners can transfer any unused nil-rate band to the surviving spouse, potentially doubling the combined threshold to £1,000,000. Gifts made more than seven years before death are fully exempt; those made within seven years may be drawn back into the estate on a sliding scale.
What is self assessment and who needs to complete it?
Self assessment is the system HMRC uses to collect income tax from individuals not taxed automatically through PAYE. You must file if you are self-employed, a company director, a partner in a business partnership, or have untaxed income above £1,000 (such as rental income). It is also required if your total income exceeds £100,000, as the tapered personal allowance must be accounted for, or if you have significant capital gains to report. The deadline for online returns is 31 January following the end of the tax year, and any tax owed is due on the same date.
What is the difference between gross and net salary?
Gross salary is your total earnings before any deductions. Net salary — your take-home pay — is the amount reaching your bank account after income tax and National Insurance have been deducted. Pension contributions and student loan repayments may also reduce net pay. The gap between gross and net widens significantly once income crosses £50,270, where the higher 40% income tax rate applies. A £60,000 gross salary typically results in a net take-home of around £43,000 once tax and NI are accounted for. The Net to Gross Salary Calculator shows the full deductions at any salary level.