The cumulative impact of several Budgets will make themselves felt on Easter Monday, when the 2026/27 tax year gets underway. Are you ready for the impact?

On income tax it almost goes without saying that the personal allowance and the thresholds for higher-rate tax and additional-rate tax (top rate in Scotland) will remain the same. What is changing is:

Dividend tax Unless you are an additional-rate taxpayer, the rate of tax you pay on any dividends above the dividend allowance (frozen at £500) will rise by two percentage points in 2026/27. That means if you are a UK basic-rate taxpayer, your dividend tax rate will be 10.75%, while if you are a UK higher-rate taxpayer a 35.75% rate will apply.

Tax administration Making Tax Digital (MTD) for income tax starts on 6 April. For 2026/27, you will be within its scope if:

• You are self-employed, a landlord or both;
• Your combined self-employment income and rental income (both before deductions for expenses) was more than £50,000 in the 2024/25 tax year; and
• You are not eligible for any of the strictly limited exemptions.

MTD for income tax requires affected taxpayers to use HMRC–approved software to submit quarterly income and expenses returns, with the first due by 7 August 2026. If you fall within the scope of MTD, you must have registered with HMRC by 5 April 2026.

Income tax relief for venture capital trust investments (VCTs) Investment in VCTs will only attract 20% income tax relief from 2026/27, down from the previous 30%.

Company cars The scale charge on most company cars will rise by one percentage point. It may feel more dramatic than that if you have an electric car (0g/km CO2), as the 1% translates into a one third increase in tax.

Capital taxes

Here again there are freezes applied to the main exemptions, alongside some changes:

Inheritance tax (IHT) reliefs The contentious reforms to agricultural and business IHT reliefs come into full effect on 6 April 2026, limiting the value that qualifies for 100% relief to a combined £2,500,000 per individual, with any excess qualifying for 50% relief, and cutting relief on all holdings of qualifying AIM-listed shares to 50%. While the changes have been watered down from the original proposals, they could still have a significant impact if you are a farmer or business owner.

Capital gains tax (CGT) There is no change to the main rates of CGT, but there is an increase to the rate on gains that qualify for business assets disposal relief from 14% to 18% in 2026/27. Other rates of CGT remain unchanged.

If any of these changes could affect you, the sooner you seek advice on what action you can take, the better.