The spring statement delivered by Rachel Reeves earlier in March 2026 did not announce any significant tax changes beyond those already made in the 2025 Autumn statement.
As a reminder, before the imminent end to the current tax year, we have included below some of the key announcements made in Autumn 2025 that may impact you.
Income Tax
No changes were announced to current rates or thresholds, but these thresholds are remaining frozen until April 2031.
Changes to tax on Property Income
Effective from April 2027
All rates will be increased by 2%.
Current RateRate from April 2027Basic Rate20%22%Higher Rate40%42%Additional Rate45%47%
Finance cost relief will be set at the separate property basic rate of 22%.
Applies to properties in England, Wales and Northern Ireland.
Changes to tax on Dividend Income - consider pros and cons of interim dividends before your rate changes
Effective from April 2026
The basic and higher rates will be increased by 2%
Current RateRate from April 2026Basic Rate8.75%10.75%Higher Rate33.75%35.75%Additional Rate (Unchanged)39.35%39.35%
There will be no change to the £500 tax free dividend limit
Changes to tax on Savings Income
Effective from April 2027
The basic and higher rates will be increased by 2%
Current RateRate from April 2027Basic Rate20%22%Higher Rate40%42%Additional Rate45%47%
The current tax-free savings interest thresholds will be frozen meaning the £1,000 basic rate and £500 higher rate limits will remain in place.
Capital Gains Tax
CGT rates – the main rates of CGT will remain at 18% and 24%
For both business asset disposal relief (BADR – formerly Entrepreneurs Relief) and investors’ relief (IR), the 14% rate for the current tax year will increase to 18% from 6 April 2026.
For assets qualifying for BADR, the lifetime limit of £1,000,000 of gains has not changed. BADR applies to the disposal of certain business assets, including the sale of a business or the sale of a qualifying shareholding (5% or qualifying enterprise management incentive shares) in a trading company/holding company of a trading group, in which you are an officer or employee.
CGT – Incorporation relief claims
From April 2026 individuals and trustees transferring a business to a company will need to make a claim for incorporation relief through self-assessment.
Previously the relief had been applied automatically.
Salary Sacrifice for pensions
From April 2029 the amount that is exempt from national insurance contributions will be capped at £2,000 a year per employee for employees who make contributions via salary sacrifice. There are no changes to the income tax treatment for contributions.
Tax relief for homeworking expenses
Employers who reimburse their employees can continue to do so at the current rate of £6 per week without having to deduct income tax and national insurance. From April 2026 employees who are not reimbursed by their employer will no longer be able to claim tax relief from HMRC.
Workplace benefits relief
From 6 April 2026 the reimbursement of costs for eye tests, home working equipment and flu vaccinations will be exempt from income tax and national insurance.
National Insurance Contributions
Thresholds and re-rating
All NI thresholds will remain at their current level for a further three years from April 2028 to April 2031
The Primary Threshold and Lower Profits will remain at £12,570
The Upper Earning Limit and Upper Profts will remain at £50,270
The Lower Earnings Limit and Small Profits Threshold will be increased by the September 2025 CPI rate of 3.8% effective from 2026/27
The Lower Earnings Limit will be £6,708 per annum (£129 per week)
The Small Profits Threshold will be increased to £7,105
Individual Savings Accounts (ISAs)
Effective from 6 April 2027
Cash ISAs
The annual ISA cash limit will be reduced to £12,000 – although an overall ISA limit of £20,000 remains, therefore allowing the remaining £8,000 to be invested in stocks and shares
For anyone aged 65 or over, the £20,000 cash ISA limit will remain
Other ISA Products – no changes to the annual investment limits that will remain in place until 5 April 2031 for
ISAInvestment LimitStocks and Shares / Innovative Finance ISAs£20,000Lifetime ISAs (*)£4,000Junior ISAs / Child Trust Fund£9,000
(*) A new simpler ISA product to support first time buyers will be consulted on in early 2026
National living and minimum wages
The National Living Wage for employees aged 21 and over will increase to £12.71 per hour from April 2026 (currently £12.21 per hour). The National Minimum Wage for 18-20 year olds will rise to £10.85 per hour.
Corporation Tax late-filing penalties
The flat rate late filing penalties for returns filed after 1 April 2026 will be doubled.
Capital allowances
From April 2026 the main rate of writing down allowance will be reduced from 18% to 14% pa.
From 1 January 2026 a new 40% FYA has been introduced for main rate assets. This does not include cars, second hand assets and assets for leasing overseas.
The FYA of 100% for zero emission cars and EV charge points will be extended for another 12 months to the end of the 2026/2027 tax year.
No changes were made to the Annual Investment Allowance which allows you to claim 100% capital allowances on most plant and machinery up to £1m.
Making Tax Digital for Income Tax
If your turnover and / or rental income was greater than £50k in the 2024/2025 tax year you should have received a letter from HMRC confirming that you must comply with MTD from April 2026. Your letter may not arrive until later this month if your 2025 Tax Return was not submitted until after 30 November 2025.
If we haven’t done so already, we will be contacting clients on an individual basis to discuss what action needs to be taken. If we haven’t contacted you by the end of the month and you think MTD is relevant to you at this time, please do not hesitate to let us know.
HMRC have confirmed that late submission penalties for quarterly submissions will not apply during the 2026/2027 tax year for taxpayers joining MTD for IT.
IHT
Inheritance Tax Thresholds
The inheritance tax threshold provides a tax-free allowance of £325,000 - the Chancellor extended the freeze of the threshold from April 2028 to April 2030. Together with the residential nil rate band (RNRB) of up to £175,000 (when available) this provides a maximum, total tax-free allowance of up to £500,000, which combines to £1m with spouses and civil partners, providing the family home passes to direct descendants. The RNRB remains subject to claw-back for estates above £2m.
In place until April 2031
The IHT nil rate bands will stay in place at their current levels until April 2031 rather than the planned April 2030.
The combined allowance for the 100% APR / BPR will also be fixed at £2.5million for a further year until 5 April 2031
IHT - business relief and agricultural relief reforms
From 6 April 2026, the first £2.5 million of combined agricultural and business property will continue to receive 100% relief, with 50% relief on amounts over £2.5 million (increased from the original £1m threshold).
Business relief for shares that are not listed on a recognised stock exchange, which includes AIM shares, will reduce to 50%. The £2.5m threshold does not apply to these shares.
Assets that receive 50% relief are subject to an effective IHT rate of 20%, as opposed to the main rate of 40%, where no relief is available.
The £2.5m will effectively be a ‘lifetime allowance’, covering the estate on death, failed gifts in the 7 years before death and lifetime transfers into trust.
Trusts will receive a combined £2.5million allowance. However, where a settlor has settled multiple trusts before 30 October 2024, each of those trusts will have its own £2.5million allowance.
APR/BPR unused allowances
Effective from 6 April 2026
Following the changes announced in the last Budget that saw changes to the availability of APR/BPR:
Any unused £2.5million allowance for the 100% rate of APR/BPR will now be available for transfer between spouses/civil partners
This will also allow for a first death taking place before 6 April 2026
IHT – unused pension funds and death benefits
From 6 April 2027, the government will bring in unused pension funds (including death benefits payable from a pension) into a person's estate for IHT purposes.
Effective from 6 April 2027
Personal representatives will be able to direct pension scheme administrators to withhold 50% of taxable benefits for up to 15 months and pay the IHT due in certain circumstances.
This delay will ensure that enough money can be held back to cover any potential IHT liability.
Personal representatives will also be discharged from a liability for payment of IHT on pensions discovered after they have received clearance from HMRC.
Reminder – Verifying your identity with Companies House – please take action if you haven’t already.
From 18th November 2025, it became compulsory for required individuals to verify their identities directly with Companies House. The aim is to reduce the risk of fraud, improve transparency, trust and accuracy of information on the Companies House register.
Verify your identity for Companies House - GOV.UK
Directors need to verify their ID within 14 days of the Confirmation Statement date and the code will be provided when filing the Confirmation Statement.
For PSCs but non-director of the same company - you must provide your personal code within 14 days of your birth month. If you become a PSC after 18th November 2025 you can provide your personal code when you’re first added to the Companies House register.
Many thanks to those that have provided us with their personal codes thus far – further details of the process can be found on our website:
https://www.barnettandturner.co.uk/resources
Support and guidance:
We hope that the above summary provides you with a view of some of the latest developments and key areas within the current UK tax environment that may affect you and your families now and into the future – as always, it is not intended to be a comprehensive list of all changes, or a substitute for comprehensive tailored advice and so if you have any queries or concerns, please call the office to arrange a meeting to discuss your specific circumstances and plans.
Barnett & Turner Accountants Ltd
Chartered Accountants
Cromwell House
68 West Gate
Mansfield
NG18 1RR
Nottinghamshire
Tel: 01623 659659