Every spring in the UK, something quietly but powerfully happens: the tax year flips over. Unlike New Year’s Eve, there are no fireworks or parties, but for anyone with a job, a pension, a savings account, or a business, the new tax year matters a lot more than most realise.
It’s the point where HMRC resets allowances, reviews codes, and sets the tone for how much of your money you keep over the next 12 months.
But here’s the catch: the UK doesn’t follow the January–December calendar like most countries. Instead, our financial year begins on 6 April — which means the 2026/27 tax year officially starts on 6 April 2026 and runs until 5 April 2027.
So, what does that mean for your payslip, your ISA, or your next tax return? Let’s break it down.
Why the UK Tax Year Starts on 6 April (Not 1 January)
It feels strange. Most of the world kicks off its tax year on 1 January, but the UK takes a detour into April.
The reason goes back to the 1752 calendar reform, when Britain switched from the Julian to the Gregorian calendar. To “catch up” with Europe, 11 days were chopped out of September that year. At the time, the tax year ran from 25 March (Lady Day), but to make sure the Treasury didn’t lose out on revenue, the end of the year was pushed forward — eventually landing on 5 April, and later 6 April.
Fast forward nearly 300 years, and we’re still living with that quirky system. Outdated? Maybe. Changing anytime soon? Highly unlikely.
Key Dates for the 2026/27 Tax Year
If you want to stay ahead, these are the dates to keep in your diary:
- 5 April 2026 – Last day of the 2025/26 tax year. Final chance to use your ISA, pension, and CGT exemptions.
- 6 April 2026 – First day of the new 2026/27 financial year. Fresh allowances, new codes, and updated rules kick in.
- 31 January 2027 – Self-assessment deadline for the 2025/26 tax year. Also, the deadline to pay any balancing tax owed.
- 5 April 2027 – End of the 2026/27 tax year.
Think of it like closing the books on 5 April, then opening a brand-new chapter on 6 April.
What Changes With the New Tax Year?
Every April, HMRC resets allowances and thresholds. Even if the Chancellor freezes numbers (as has often been the case in recent Budgets), the reset still matters because of how your income interacts with the tax system.
Here’s what to watch:
1. Personal Allowance
This is how much you can earn before paying income tax. It has been stuck at £12,570 for years, and unless the government changes course, it’s expected to remain frozen in 2026/27.
That freeze creates fiscal drag — where inflation and pay rises push more people into higher tax bands without the thresholds moving.
Example: If your salary increases from £30,000 to £33,000, the extra £3,000 might feel like a win. But since the personal allowance hasn’t budged, more of your income falls into taxable territory. Over time, it eats into your real take-home pay.
2. Tax Bands
For most of the UK (England, Wales, Northern Ireland), the main bands are:
- 20% basic rate – up to £50,270
- 40% higher rate – £50,271 to £125,140
- 45% additional rate – above £125,140
In Scotland, the system is different, with starter, intermediate, and top bands. For anyone north of the border, checking the updated Scottish tax bands each April is essential.
3. National Insurance (NI)
National Insurance often changes in April, sometimes with big consequences for pay packets. Rates and thresholds are at the mercy of political decisions, and a 1% cut or rise can mean hundreds of pounds more (or less) each year for employees.
4. ISA & Pension Allowances
- ISAs reset on 6 April. If you’ve used your full £20,000 ISA allowance by 5 April 2026, you get a brand-new £20,000 limit the very next day.
- Pensions also reset. The annual allowance has been higher in recent years (£60,000 for many), but rules can change, and April is when the slate wipes clean.
5. Capital Gains & Dividends
Capital Gains Tax (CGT) and dividend allowances have been shrinking in recent years. From April, lower allowances typically take effect — meaning investors, landlords, and business owners need to plan carefully.
Why the New Tax Year Actually Matters
You might be thinking, “Okay, so HMRC resets a few numbers. Why should I care?”
Here’s why the April reset affects almost everyone:
- Your payslip changes. A new tax code in April could mean more or less take-home pay.
- ISAs are ‘use it or lose it.’ Miss the 5 April deadline, and you can’t carry over unused allowance.
- Pension planning resets. Miss the window, and you lose a year’s worth of efficient saving.
- Self-employed deadlines bite. If you freelance or run a business, these dates decide when you file and pay HMRC.
In short: ignore the reset, and you risk losing money. Pay attention, and you can use it as a financial spring-clean.
The Hidden Impact of Frozen Thresholds
One of the biggest ongoing issues is the freeze on tax thresholds. On paper, nothing changes. In reality, inflation means millions of people drift into higher tax bands.
Let’s put numbers on it:
- In 2021, someone earning £48,000 was safely in the basic rate.
- By 2026, with pay rises, that same worker might earn £52,000. Even though the higher-rate threshold hasn’t moved, they now pay 40% on £1,730 of their income.
That’s fiscal drag in action — a “stealth tax” that eats into your pay without the government ever announcing a tax rise.
Tips to Prepare for the 2026/27 Tax Year
Here are some smart moves to make before and after 6 April:
- Check your code. If HMRC gets it wrong, your payslip suffers.
- Use your ISA allowance. Even a last-minute contribution before 5 April protects savings from tax.
- Top up your pension. Contributions before the deadline can shrink your tax bill.
- Plan gains wisely. Selling shares or property across two tax years can help keep you within allowances.
- Keep records tidy. Receipts, invoices, and statements make the January 2027 deadline far less stressful.
Real-Life Example: The Payslip Shock
Take Sarah, a marketing manager earning £42,000.
- March 2026: She’s on the standard 1257L tax code, taking home around £2,700 after tax and NI.
- April 2026: HMRC updates her code because she has a taxable benefit (a company car). Her personal allowance drops, and suddenly her take-home is £50 less.
Sarah didn’t get a pay cut — it’s simply the new tax year adjusting her code. Without checking, she might never realise why her pay feels lighter.
Looking Ahead
The 2026/27 tax year probably won’t bring huge headline reforms unless the Chancellor announces a major shake-up. But even without a dramatic change, 6 April remains a financial reset button.
Employees, business owners, savers, and retirees alike can all benefit from seeing it as a chance to tidy up, plan, and protect more of their money.
FAQs
Q: When does the new tax year 2026/27 start and end?
The UK financial year runs from 6 April 2026 to 5 April 2027. The cycle has been in place since the 18th century.
Q: Why doesn’t the UK tax year start on 1 January like other countries?
The odd date comes from Britain’s switch to the Gregorian calendar in 1752. To avoid losing tax revenue, the Treasury shifted the year-end to April, where it has stayed ever since.
Q: What are the key changes for 2026/27?
The personal allowance (£12,570) and higher-rate threshold (£50,270) remain frozen, dragging more earners into higher tax bands. NI, ISA, pension, and CGT allowances reset from 6 April.
Q: What should I do before 5 April 2026?
- Use your £20,000 ISA allowance.
- Top up pension contributions.
- Make charitable donations for revenue relief.
- Double-check your tax code.
Q: How can self-employed people prepare?
Update your accounts before 6 April, set aside money for the July 2026 payment in advance, and review your pension contributions. Claim all allowable expenses to reduce taxable profit.
Final Words
The new tax year begins on 6 April 2026 — a historic date that still shapes your take-home pay, savings, and HMRC contributions. Ignore it, and you risk missing allowances, overpaying tax, or scrambling to meet deadlines. Pay attention, and the new tax year becomes less of a headache and more of an opportunity — a reset button for your finances.
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