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The stealth tax taking £1,000s from UK workers — and it runs until 2031
8 min read
Each April, the UK tax year turns over — and with it comes a wave of changes that land silently on your payslip. The 2027/28 tax year starts on 6 April 2027. This year, there are several changes worth knowing about in advance so you're not caught out when your first April payslip arrives.
1. Check your tax code when April arrives
The single most important thing you can do every April is look at your tax code. HMRC issues updated tax codes to employers at the start of each tax year — but coding notices can be wrong, and many errors go unnoticed for months.
The standard code for most UK workers is 1257L, reflecting the £12,570 personal allowance. If your code is different and you don't know why — especially if it's lower, like 1057L or 857L — check your HMRC Personal Tax Account immediately. A code that's too low will cost you money every month.
Common reasons for a wrong code: HMRC estimating savings interest you don't owe, company car benefit-in-kind miscalculations, or a mid-year change from a previous employer that wasn't corrected. Our tax code checker explains every code format and what it means for your pay.
2. Student loan thresholds — expect an RPI uplift
Student loan repayment thresholds are typically uprated each April in line with the Retail Price Index (RPI). For 2026/27, the Plan 2 threshold is £29,385. The April 2027 figure will be confirmed by the Student Loans Company in early 2027, but based on RPI trends it could rise to around £30,000–£30,500.
What this means in practice: if you're close to the current threshold and not yet repaying, you could start repayments in April 2027 if your salary has risen. Conversely, if you're just above the threshold, an RPI rise could reduce your monthly repayment. Either way, check your payslip in April. Our student loan calculator lets you model different threshold scenarios.
3. Making Tax Digital threshold drops to £30,000
This is the big change for the self-employed and landlords in April 2027. Making Tax Digital for Income Tax (MTD ITSA) extended its reach from £50,000 to £30,000 qualifying income. That means anyone earning over £30,000 from self-employment or property — combined — must now keep digital records and file quarterly updates to HMRC.
The original £50,000 threshold launched in April 2026. The drop to £30,000 sweeps in a large additional group: many part-time sole traders, Airbnb hosts, and gig economy workers who sit between £30,000 and £50,000 in qualifying income. The threshold drops further to £20,000 from April 2028.
If you have any self-employment income alongside your PAYE job, check whether your combined qualifying income has crossed £30,000. Non-compliance carries an escalating points-based fine system — each missed quarterly submission earns a penalty point, and at four points, a £200 fine is triggered.
4. National Living Wage — another rise expected
The Low Pay Commission recommends the National Living Wage rate to the government annually, with increases typically taking effect in April. The NLW rose to £12.71/hour in April 2026. For April 2027, the Commission is expected to recommend a rate in the region of £13.00–£13.40/hour, following the government's commitment to keep the NLW at two-thirds of median earnings.
If you're on minimum wage or close to it, check your payslip in April to confirm your hourly rate has been updated. Employers who fail to apply the new rate are in breach of the National Minimum Wage Act. Use our take-home calculator to see how the new rate translates to monthly take-home.
5. Pension auto-enrolment qualifying earnings — watch for any changes
The auto-enrolment qualifying earnings lower limit has been held at £6,240 since 2021/22, and the upper limit at £50,270 (aligned with the NI upper earnings limit). These figures are reviewed annually by the DWP. For 2026/27 they remain unchanged — but April 2027 could bring adjustments, particularly if the government presses ahead with proposed reforms to extend auto-enrolment to lower earners and younger workers.
Watch for: a lower qualifying earnings threshold (currently £6,240) or a younger age threshold (currently 22). Either change would increase the number of workers automatically enrolled and could increase your pension contribution if you currently earn below the lower limit. Your payslip in April 2027 should be checked for any change to the pension line.
Your April 2027 payslip checklist
- Tax code: Should be 1257L unless you have a specific reason for a different code. Log in to HMRC online account to check.
- Student loan: Check whether a new threshold has started or changed your repayment amount.
- National Living Wage: If paid hourly, verify your rate has been updated if the NLW has risen.
- Pension deduction: Check nothing has changed in the qualifying earnings band that would alter your contribution.
- MTD compliance: If you have self-employment or rental income above £30,000, confirm you're enrolled with HMRC-approved MTD software before April.
Frequently asked questions
What changes on my payslip in April 2027?
The most likely changes are: a new tax code from HMRC, an updated student loan repayment threshold, and a new National Living Wage rate if you're hourly-paid. Your pension deduction will stay the same unless your employer changes their scheme or the government alters auto-enrolment rules. Check every line of your first April payslip against the previous month's.
Do I need to do anything when the tax year changes?
For most PAYE employees, the tax year rolls over automatically — you don't file a tax return. However, you should proactively check your tax code in your HMRC Personal Tax Account at the start of each new tax year, as HMRC doesn't always get it right. If you're self-employed or a landlord near the £30,000 MTD threshold, you need to take action before April 2027.
When will the 2027/28 tax rates be announced?
Income tax rates and thresholds are set in the Budget, usually in autumn. The Chancellor's Autumn Budget 2026 (expected October/November 2026) will confirm the 2027/28 income tax rates. Under current plans, all thresholds remain frozen until April 2028 at the earliest. We'll update our calculators as soon as the Budget confirms the rates. You can always check our take-home calculator for the latest confirmed figures.