Budget update

Information

The Spring Statement 2026 was brief, with few new policy changes.

Below is a summary of the main confirmed changes affecting the 2026/27 tax year.

🔹 Personal Tax Changes

Income Tax – Frozen Thresholds (England, Wales & NI)

• Thresholds frozen until April 2031
• More people will move into higher tax bands due to fiscal drag

Scottish Income Tax

• Basic and intermediate band increases confirmed in the Scottish Budget 2026

Inheritance Tax (IHT)

• APR and BPR 100% relief capped
• Allowance increased to £2.5 million per estate
• Transferable between spouses and civil partners

Fuel Duty

• No further extension of the 5p cut announced
• Future changes may still follow depending on fuel prices

🔹 Business Tax Changes

Making Tax Digital (MTD) for Income Tax

From 6 April 2026:

• Self-employed & landlords with £50,000+ income must comply
• Quarterly digital updates to HMRC required

From:

• April 2027 – £30,000+ income
• April 2028 – £20,000+ income

Dividend Tax Rates (from 6 April 2026)

• 10.75% – Basic rate (up from 8.75%)
• 35.75% – Higher rate (up from 33.75%)

➡️ Limited company owners should review salary/dividend mix.

Business Asset Disposal RelieF

• CGT rate increases from 14% to 18% from 6 April 2026
• Anti-forestalling rules applY

Business Rates Relief (England)

• 15% relief for pubs and live music venues
• Can be added to existing relief schemes

Capital Allowances

• 40% First Year Allowance from 1 January 2026
• Writing Down Allowance reduces:
  
  • From 18% to 14% (companies)
  • From 18% to 14% (sole traders & partnerships)

Corporation Tax – Late Return Penalties

From 1 April 2026:

• Initial penalty increases from £100 to £200
• Maximum increases to £2,000 (previously £1,000)