2 publishers · first seen Mon, 26 Oct 2026 10:28 UTC · updated Mon, 26 Oct 2026 13:25 UTC
Income tax thresholds will remain frozen until 2031, the Office for Budget Responsibility confirms, extending the period of fiscal drag that has seen more people pay higher rates of tax due to inflation-linked pay rises. The personal allowance will stay at £12,570, and thresholds for the higher and additional rates of income tax will not change, affecting taxpayers across England, Wales and Northern Ireland. From April 2027, the tax rate on rental income will rise by a further 2 percentage points, with the basic rate increasing to 24% and the additional rate reaching 49%, Chancellor John Healey announced.
The government says 84% of income tax payers will be unaffected by the rental tax changes, which aim to raise revenue progressively from those with income from assets. Critics including the NRLA, Propertymark and Landlord Action warn the increases will reduce rental supply and push up rents. A new Pension Tax Allowance will protect low-income pensioners from paying income tax despite the state pension rising above the personal allowance threshold.
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