Employer National Insurance Contributions
From April 2025, the employer NI rate increased to 15% (from 13.8%), and the Secondary Threshold at which employers start paying NI dropped to £5,000 per year (from £9,100). This remains unchanged for 2026/27.
- Employer NI rate: 15%
- Secondary Threshold: £5,000/year (£417/month)
- Upper Secondary Threshold (under 21s & apprentices under 25): £50,270/year
Employee National Insurance 2026/27
- Primary Threshold: £12,570/year
- Main rate (Class 1): 8% on earnings £12,570–£50,270
- Additional rate: 2% on earnings above £50,270
Employment Allowance 2026/27
The Employment Allowance is £10,500, increased from £5,000. From 2025/26, the previous £100,000 employer NI restriction was removed — all eligible employers can now claim it.
National Living Wage & Minimum Wage April 2026
| Category | Rate from April 2026 |
|---|---|
| National Living Wage (21+) | £12.71/hour |
| 18–20 years | £10.00/hour |
| 16–17 years | £7.55/hour |
| Apprentice rate | £7.55/hour |
IR35 / Off-Payroll Working Changes — April 2026
From 6 April 2026, the company size thresholds for IR35 off-payroll working rules are changing:
- Turnover threshold for a small company increases to £15 million (from £10.2m)
- Balance sheet total increases to £7.5 million (from £5.1m)
- Employee count remains at 50 or fewer
Impact: Some businesses previously classed as medium-sized will now be reclassified as small, meaning the contractor’s PSC (rather than the client) becomes responsible for determining IR35 status.
Making Tax Digital for Income Tax — From April 2026
MTD for Income Tax becomes mandatory for self-employed individuals and landlords:
- From April 2026: Those with qualifying income above £50,000
- From April 2027: Those with qualifying income above £30,000
- From April 2028: Those with qualifying income above £20,000
Quarterly digital returns plus an annual final declaration will be required. Contact us now to ensure your bookkeeping is MTD-ready.
Dividend Tax Rates 2026/27
Dividend tax rates increased from 6 April 2026:
- Basic rate: 10.75% (up from 8.75%)
- Higher rate: 35.75% (up from 33.75%)
- Additional rate: 39.35% (unchanged)
- Dividend Allowance: £500 (unchanged)
