Tax Update – What’s Changing in the Coming Months

As we approach the end of the tax year and look ahead to the Spring Statement on 3 March 2026, several UK tax changes are expected to impact individuals, landlords, and business owners.

Spring Statement – 3 March 2026

The Chancellor will deliver the Spring Statement on 3 March 2026, offering economic forecasts and potential minor tax adjustments. While this event usually avoids large tax changes, it can still signal policy direction for the new tax year.

Income Tax Thresholds Remain Frozen

The Personal Allowance (£12,570), basic‑rate band, and higher‑rate threshold remain frozen until at least April 2031.

Dividend Tax Rates Increasing (from 6 April 2026)

Dividend tax for basic and higher‑rate taxpayers increases by 2 percent:

Basic rate: increases from 8.75% → 10.75%

Higher rate: increases from 33.75% → 35.75%

Additional rate remains 39.35%

These changes apply from 6 April 2026.

Capital Gains Tax on Business Asset Disposal Relief

CGT on qualifying Business Asset Disposal Relief increases to 18% in the 2026/27 tax year.

End of Home Working Tax Relief (employees)

The temporary home‑working tax relief, available since the pandemic, is removed from April 2026.

Inheritance Tax: New £2.5m Relief Cap

A cap of £2.5 million will apply to the combined value of Business Property Relief and Agricultural Property Relief from 6 April 2026. This will impact larger estates and family businesses.

Making Tax Digital (MTD) – Phased Introduction from April 2026

MTD will begin applying to some sole traders and landlords from April 2026. Early preparation (digital records + compatible software) is strongly recommended.

What You Should Do Next

• Review your dividend strategy before 6 April
• Check whether MTD will apply to you from April
• Consider potential CGT and IHT impacts if planning disposals or succession