How Much Is Tax in Northern Ireland? Income, VAT, and Rates

Tax in Northern Ireland follows the same rates as the rest of the UK for income tax, National Insurance, VAT, capital gains, and inheritance, all set by Westminster and collected by HMRC. The one big difference is property tax: instead of council tax, homeowners pay domestic rates based on the capital value of the property. The figures below are for the 2025-to-2026 tax year, which runs from 6 April 2025 to 5 April 2026.¹

Income Tax

You pay no income tax on the first £12,570 you earn. That’s the standard Personal Allowance. Anything above it is taxed in bands:²

20% basic rate on taxable income from £12,571 to £50,270
40% higher rate from £50,271 to £125,140
45% additional rate above £125,140

If you earn more than £100,000, the Personal Allowance starts to disappear. It drops by £1 for every £2 above that mark, so by £125,140 it’s gone and every pound of income is taxable.²

National Insurance

National Insurance is a second charge on your earnings, separate from income tax, that funds the state pension and benefits. If you’re employed, it comes out of your pay under Class 1:³

Nothing on earnings up to £242 per week (£1,048 per month)
8% on weekly earnings between £242.01 and £967 (£1,048.01 to £4,189 monthly)
2% on anything above the upper limit

Self-employed workers pay Class 4 contributions instead: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.⁴

VAT on What You Buy

VAT is built into shop prices, so you rarely see it as a line item. The standard rate is 20% and covers most goods and services. A reduced 5% rate applies to a narrow set of items including children’s car seats and home energy. Most food and children’s clothing is zero-rated, meaning no VAT at all.⁵

Domestic Rates on Your Home

Northern Ireland doesn’t use the council tax bands you’ll see in England, Scotland, and Wales. Instead, your bill is a percentage of what your home would have sold for on 1 January 2005, known as its capital value.⁶

Two charges are added together. The regional rate is set by the Northern Ireland Executive and is the same across the country. For 2025-2026 it’s 0.5294 pence in the pound of capital value.⁷ The district rate is set by your local council, one of eleven, and varies by area. On a home valued at £100,000 in 2005 terms, the regional portion alone works out at roughly £529 a year, with the district rate on top.

Bills arrive in April. Most households pay by monthly direct debit spread across the year. Several reliefs can cut the total: the Lone Pensioner Allowance takes 20% off for people aged 70 or over living alone, Disabled Rate Relief takes 25% off homes adapted for a disabled resident, and a broader Rate Relief scheme helps low-income households.⁸

Stamp Duty When You Buy a Home

Buying property in Northern Ireland triggers Stamp Duty Land Tax. From 1 April 2025, the rates on a home you’ll live in are:⁹

0% on the first £125,000
2% on £125,001 to £250,000
5% on £250,001 to £925,000
10% on £925,001 to £1.5 million
12% above £1.5 million

First-time buyers pay nothing on the first £300,000 and 5% on the portion up to £500,000. Above a £500,000 purchase price the first-time buyer relief drops away and the standard rates apply.

Buying a second home or a buy-to-let adds a 5% surcharge on every band, so the first £125,000 is taxed at 5% rather than zero. If you’re replacing your main residence and sell the old one within 36 months, you can reclaim the surcharge. Buyers who are not UK resident pay a further 2% on top.¹⁰

Tax on Savings and Dividends

Bank interest has its own tax-free slice. Basic-rate taxpayers can earn up to £1,000 in savings interest a year before paying tax on it; higher-rate taxpayers get £500; additional-rate taxpayers get nothing.¹¹

Dividend income works the same way. The first £500 each year is tax-free. Above that, dividends are taxed at 8.75% for basic-rate taxpayers, 33.75% for higher-rate, and 39.35% for additional-rate.¹²

Capital Gains and Inheritance

Selling something for more than you paid can trigger Capital Gains Tax. The annual exempt amount is £3,000. Above it, basic-rate taxpayers pay 18% on gains from any asset type, and higher or additional-rate taxpayers pay 24%. Your main home is normally exempt if you’ve lived in it throughout the ownership period.¹³

Inheritance Tax hits estates worth more than £325,000 at death, charged at 40% on the amount above that threshold. This nil-rate band has been frozen since 2009 and will stay at £325,000 through at least April 2028.¹⁴ Leaving your home to your children or grandchildren adds a residence nil-rate band of £175,000, bringing the combined threshold to £500,000. Married couples and civil partners can pass unused allowance to the survivor, which can lift the effective threshold to £1 million. The residence element tapers off by £1 for every £2 the estate exceeds £2 million.¹⁵

Filing, Paying, and Late Penalties

Most employees never file anything. Income tax and National Insurance are deducted from your pay through PAYE, and you get a P60 at the end of the tax year showing what came off.¹⁶

You need to file a Self Assessment return if you’re self-employed, have significant property or investment income, or earn above £150,000. The deadline for filing online and paying any tax owed for the previous year is 31 January.¹

Miss it and the penalties climb fast:¹⁷

£100 the moment you’re late, even if you owe no tax
£10 a day after three months, up to £900
5% of the tax due or £300 (whichever is greater) at six months
Another 5% or £300 at twelve months

Late payment of the tax itself is charged separately, so filing on time but paying late still costs you. Domestic rates are handled by Land and Property Services, not HMRC, and are billed and paid independently of anything on your Self Assessment.

1
GOV.UK. Self Assessment Tax Returns: Deadlines
2
GOV.UK. Income Tax Rates and Personal Allowances
3
GOV.UK. Rates and Allowances: National Insurance Contributions
4
GOV.UK. Self-Employed National Insurance Rates
5
GOV.UK. VAT Rates
6
Legislation.gov.uk. Rates (Northern Ireland) Order 1977
7
Department of Finance. Rate Poundages
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nidirect. Housing Benefit and Rate Relief for Homeowners
9
GOV.UK. Stamp Duty Land Tax: Residential Property Rates
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GOV.UK. Higher Rates of Stamp Duty Land Tax
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GOV.UK. Tax on Savings Interest: How Much Tax You Pay
12
GOV.UK. Tax on Dividends
13
GOV.UK. Capital Gains Tax: Rates
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GOV.UK. Inheritance Tax Thresholds
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GOV.UK. Inheritance Tax Nil-Rate Band and Residence Nil-Rate Band Thresholds From 6 April 2026 to 5 April 2028
16
GOV.UK. Payroll: Annual Reporting and Tasks – Give Employees a P60
17
GOV.UK. Self Assessment Tax Returns: Penalties