UK Tax Year 2025/26 Guide | Tax Year Dates, Deadlines & Key Information

When Does the UK Tax Year Start and End?

The UK tax year runs from 6 April to 5 April the following year. Unlike many countries that use a calendar year (January to December), the UK has this unique tax year structure.

Key Tax Deadlines 2025/26

Important dates you need to remember for the 2025/26 tax year:

2025/26 Tax Thresholds & Allowances

Income Tax Rates 2025/26

National Insurance Rates 2025/26

Tax Year vs Calendar Year: Understanding the Difference

The distinction between the UK tax year and the standard calendar year is a source of frequent confusion, particularly for people moving to the UK or those filing their first Self Assessment return.

Key Differences

Corporation Tax operates on an accounting period chosen by the company (often aligned to the calendar year or the company's incorporation anniversary), not the standard UK tax year. VAT returns can be quarterly, monthly, or annual, depending on the scheme. However, all personal tax matters -- Income Tax, Capital Gains Tax, National Insurance, and Self Assessment -- follow the 6 April to 5 April tax year.

PAYE vs Self Assessment: Which Applies to You?

Understanding whether you are taxed through PAYE (Pay As You Earn) or need to file a Self Assessment return is essential for managing your tax obligations correctly.

PAYE (Pay As You Earn)

PAYE is the system through which most employees pay their Income Tax and National Insurance. Your employer deducts tax from your wages before paying you, based on a tax code issued by HMRC. If PAYE is your only source of income and your tax code is correct, you should not need to file a Self Assessment return.

Self Assessment

Self Assessment is the system through which you report income that has not been taxed at source. You must register for and file a Self Assessment return if any of the following apply:

• You are self-employed as a sole trader with gross income over £1,000
• You are a partner in a business partnership
• Your total taxable income exceeds £150,000 (or £100,000 for Personal Allowance tapering)
• You have untaxed income of more than £2,500 (e.g., rental income, tips, commission)
• You receive income from savings and investments of £10,000 or more
• You are a company director (unless for a not-for-profit with no pay or benefits)
• You need to claim tax relief on pension contributions or Gift Aid donations (higher/additional rate)
• You have capital gains above the annual exempt amount (£3,000)
• You receive foreign income that needs to be reported
• You receive child benefit and your (or your partner's) income exceeds £60,000 (High Income Child Benefit Charge)

Self-Assessment Timeline for 2025/26 Tax Year

The complete timeline for managing your Self Assessment obligations for the 2025/26 tax year (6 April 2025 to 5 April 2026):

Key Allowances and Thresholds for 2025/26 in Detail

Personal Allowance: £12,570

The Personal Allowance has been frozen at £12,570 since the 2021/22 tax year and is set to remain at this level until at least April 2028. This means the real value of the allowance is eroded each year by inflation, effectively bringing more people into the tax system through what is known as "fiscal drag."

The Personal Allowance reduces by £1 for every £2 of adjusted net income above £100,000. This means the allowance disappears entirely once income reaches £125,140. The effective marginal tax rate between £100,000 and £125,140 is therefore 60% (40% Income Tax plus the 20% effect of losing the allowance).

Savings Allowances

In addition to the Personal Allowance, there are specific allowances for savings income:

• Personal Savings Allowance: Basic rate taxpayers can earn £1,000 in savings interest tax-free; higher rate taxpayers £500; additional rate taxpayers receive no allowance
• Starting Rate for Savings: Up to £5,000 of savings income can be taxed at 0% if your non-savings income (after deducting the Personal Allowance) is below £5,000. The band reduces by £1 for every £1 of non-savings income above the Personal Allowance
• ISA Allowance: £20,000 can be saved or invested each year completely free of Income Tax and Capital Gains Tax

Other Key Thresholds

• High Income Child Benefit Charge: If you or your partner earn over £60,000, the Child Benefit charge applies at a rate of 1% of the benefit for every £200 earned between £60,000 and £80,000. At £80,000, the charge equals the full benefit amount
• Student Loan Repayment Thresholds: Plan 1: £26,065/year; Plan 2: £28,470/year; Plan 4 (Scotland): £32,745/year; Plan 5 (post-2023): £25,000/year; Postgraduate: £21,000/year
• Blind Person's Allowance: An additional £3,070 can be claimed by registered blind individuals, which can also be transferred to a spouse

Tax Year Checklist

Before Tax Year End (5 April)

• Use your ISA allowance - £20,000 per year, use it or lose it
• Maximise pension contributions - Get tax relief while you can
• Use Capital Gains allowance - Bed and ISA/SIPP if needed
• Review Gift Aid donations - Claim higher rate relief
• Transfer Marriage Allowance - Up to £252 tax saving
• Check benefits-in-kind - Company car, medical insurance

After Tax Year End

• Gather P60s and P11Ds - From your employer(s)
• Collect bank interest certificates - For savings interest
• Compile dividend vouchers - For investment income
• Calculate rental income/expenses - If a landlord
• Prepare Self-Assessment - If required

Historical Origins of the 6 April Tax Year

The UK's 6 April tax year start date is one of the most unusual features of the British tax system. Understanding its origins helps explain why the UK is the only country in the world to use this date.

The Full Historical Timeline

Before 1752, the UK used the Julian calendar, and the official year began on 25 March, known as "Lady Day" -- one of the traditional English quarter days used for settling debts and rents. The tax year naturally aligned with this date.

In September 1752, Britain adopted the Gregorian calendar, which required skipping 11 days (Wednesday 2 September was followed by Thursday 14 September). The public was not happy about this change, and the Treasury was particularly concerned about losing 11 days of tax revenue.

To preserve the full year of tax collection, the Treasury moved the tax year start from 25 March to 5 April (adding 11 days). In 1800, another day was added when the Julian calendar would have had a leap year but the Gregorian calendar did not, moving the date to 6 April -- where it has remained ever since.

Various governments have considered aligning the UK tax year with either the calendar year (1 January) or the government financial year (1 April), but the administrative complexity and cost of such a change have always prevented it. The Office of Tax Simplification reviewed the issue in 2021 and concluded that the benefits did not justify the disruption.

Understanding Payments on Account

Payments on account are advance payments towards your next year's tax bill, and they cause significant confusion for people new to Self Assessment.

When Payments on Account Apply

You must make payments on account if your Self Assessment tax bill is £1,000 or more and less than 80% of your total tax liability was collected at source (e.g., through PAYE). Each payment on account is 50% of the previous year's Self Assessment liability.

How the Payment Schedule Works

For the 2025/26 tax year, the payment schedule is:

• 31 January 2027: Final "balancing payment" for 2025/26 (any remaining tax after payments on account) PLUS first payment on account for 2026/27 (50% of 2025/26 total bill)
• 31 July 2027: Second payment on account for 2026/27 (another 50% of 2025/26 total bill)

This means that on 31 January, you may face a "triple whammy" of: (1) any balancing payment for the previous year, (2) the first payment on account for the current year, and (3) any Class 2 National Insurance due. This can be a significant cash flow burden, particularly in your first year of Self Assessment.

Frequently Asked Questions

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