UK Tax Planning Guide 2026/27

Do employer pension contributions count towards the allowance?

Yes. The usual £60,000 annual allowance includes contributions by you, your employer and others, plus relevant defined-benefit growth. High-income tapering or the money purchase annual allowance can reduce it. Personal contribution tax relief is also subject to relevant earnings rules; carry-forward has conditions.

How do ISA and gains allowances work?

The adult ISA subscription limit is £20,000 in total for 2026/27, not £20,000 per ISA type; the £4,000 Lifetime ISA limit is within that total. The individual CGT exemption is generally £3,000 and dividend allowance £500. Unused ISA, dividend and CGT annual allowances do not normally carry forward.

Are dividends always better than salary?

No. Consider Corporation Tax, employer and employee NI, personal dividend rates, pension eligibility and company distributable profits together. For 2026/27 dividend rates are 10.75%, 35.75% and 39.35%; the calculator estimates personal tax, not the best extraction strategy for your company.

Official sources

• GOV.UK: Pension annual allowance
• GOV.UK: Tax on dividends
• GOV.UK: Capital Gains Tax rates and allowances
• GOV.UK: ISA subscription limits