The 2026/27 UK tax year began on 6 April 2026. This hub tracks every confirmed tax change for the year, alongside the unchanged thresholds that still bite (because most are frozen). What is the rule, what is the specific number, when does it take effect, and what does it cost a typical household. Primary sources: HMRC and gov.uk, alongside the spring 2026 Budget analyses from the major accounting firms. The page updates each time HMRC or HM Treasury announces or amends a rule.

Income tax bands and personal allowance: frozen

The personal allowance (the amount you can earn tax-free) and the income-tax bands stay frozen for 2026/27. They have been frozen since the 2021/22 tax year and the freeze was extended in the 2024 Autumn Statement to run through April 2028. The frozen thresholds for England, Wales, and Northern Ireland:

  • Personal allowance: £12,570 a year. Withdrawn at £1 for every £2 of income above £100,000.
  • Basic rate (20%): £12,571 to £50,270.
  • Higher rate (40%): £50,271 to £125,140.
  • Additional rate (45%): over £125,140.

Scotland sets its own income-tax bands. The Scottish Government held its bands at the 2025/26 levels for 2026/27. Six rates apply (starter 19%, basic 20%, intermediate 21%, higher 42%, advanced 45%, top 48%).

Why the freeze costs money: wage growth pushes more income through the higher bands without thresholds rising. The OBR estimates the freeze raises an extra £38 billion across the parliament. A typical full-time worker earning £35,000 with a 4% pay rise pays roughly £112 more income tax in 2026/27 than they would if thresholds had risen with inflation.

Dividend tax: up 2 percentage points

Dividend tax rates increased by 2 percentage points on 6 April 2026:

  • Basic rate: 8.75% → 10.75%.
  • Higher rate: 33.75% → 35.75%.
  • Additional rate: 39.35% → 41.35%.

The dividend allowance (the amount of dividend income receivable tax-free each year) is unchanged at £500. HM Treasury expects the rate increase to raise £280 million in 2026/27, rising to £1.39 billion by 2030/31.

Who it hits: anyone receiving dividends above £500 a year. Most affected: limited-company directors who pay themselves in dividends, and investors holding UK shares outside an ISA. A director taking £30,000 of dividends after the basic-rate band is filled pays roughly £590 more dividend tax in 2026/27 than 2025/26.

National Insurance: rate held, threshold frozen

The main rate of Class 1 employee National Insurance is held at 8% for 2026/27. The primary threshold (where NI starts being paid) is frozen at the 2025/26 level. The 2% additional rate above the upper earnings limit is unchanged.

  • Primary threshold: £12,570 a year (aligned with the personal allowance).
  • Upper earnings limit: £50,270 a year.
  • Self-employed: Class 4 NI at 6% on profits between £12,570 and £50,270, then 2% above. Class 2 NI is voluntary unless the self-employed person wants to qualify for the State Pension and contributory benefits.
  • Employer NI: held at 15% on earnings above the secondary threshold of £5,000.

Inheritance tax: APR and BPR capped at £2.5 million

From 6 April 2026, the 100% Inheritance Tax relief on Agricultural Property Relief (APR) and Business Property Relief (BPR) is capped at a combined £2.5 million allowance per individual.

  • Qualifying APR and BPR assets above £2.5 million receive 50% relief instead of 100%.
  • The £2.5 million allowance is transferable between spouses and civil partners, allowing 100% relief on up to £5 million for couples.
  • The standard nil-rate band stays at £325,000 and the residence nil-rate band at £175,000 (frozen).

Who it hits: owners of farms and family businesses passing estates to the next generation. Estates under £2.5 million per person (£5 million for couples) are unaffected by the APR / BPR cap.

Making Tax Digital for Income Tax: phase one begins

Making Tax Digital (MTD) for Income Tax entered its first phase on 6 April 2026. From that date:

  • Sole traders and landlords with combined business and property income over £50,000 must keep digital records of their income and expenses.
  • They must submit quarterly updates to HMRC using compatible software within one month of each quarter end.
  • An annual End of Period Statement (EOPS) and Final Declaration replaces the old Self Assessment return for those in scope.

Quarterly update deadlines on the standard tax year:

  • Q1 (6 April to 5 July): file by 5 August.
  • Q2 (6 July to 5 October): file by 5 November.
  • Q3 (6 October to 5 January): file by 5 February.
  • Q4 (6 January to 5 April): file by 5 May.

Who it hits in 2026/27: roughly 780,000 sole traders and landlords. Phase two (April 2027) brings in the £30,000 to £50,000 threshold. Phase three (April 2028) is expected to bring in the £20,000 threshold.

Capital Gains Tax: rates held, allowance held

The 2026/27 CGT rates are unchanged from the rates set in October 2024. They apply to gains realised on or after 6 April 2026:

  • Basic-rate taxpayer: 18% on gains from most chargeable assets.
  • Higher / additional-rate taxpayer: 24% on gains from most chargeable assets.
  • Residential property gains (e.g. a second home): same 18% / 24% as above. Reporting and payment deadline is 60 days from completion via the UK Property Tax service.
  • Annual exempt amount: held at £3,000 per individual. Trustees: £1,500.
  • Business Asset Disposal Relief: rate increased to 14% from 6 April 2026 (and rises again to 18% from 6 April 2027). Lifetime limit unchanged at £1 million.

Pension contributions and lump sum

The pension annual allowance for 2026/27 stays at £60,000. The Lump Sum Allowance (formerly the 25% tax-free element of pension drawdown, capped from April 2024) is held at £268,275. The Money Purchase Annual Allowance (which kicks in once you have flexibly accessed a pension) is held at £10,000.

The State Pension rose by 4.8% in April 2026. The new full State Pension rate is £230.25 per week; the basic State Pension rate is £176.45 per week. The uprating follows the triple lock (highest of inflation, average earnings growth, or 2.5%).

ISAs and savings allowances

The annual ISA subscription limit is held at £20,000 for 2026/27. The Junior ISA limit is held at £9,000. The Lifetime ISA limit is held at £4,000 (and counts toward the £20,000 main ISA cap).

The Personal Savings Allowance (the amount of interest earned tax-free outside an ISA) is unchanged: £1,000 for basic-rate taxpayers, £500 for higher-rate, and zero for additional-rate. The 0% starting rate for savings (for low earners) stays at £5,000.

Working from home allowance: removed

The £6-per-week working-from-home tax allowance (the flat-rate employee deduction claimable without receipts) was removed from April 2026. Employees working from home can still claim the actual additional costs of doing so, but must evidence them with bills or receipts. Employees on a hybrid pattern who work part-week from the office can no longer claim a tax deduction for home days at all.

Writing-down allowance cut

The main rate of writing-down allowance on plant and machinery was cut from 18% to 14% from April 2026. Small and medium businesses depreciating equipment for tax purposes receive less relief per year. The Annual Investment Allowance (which gives 100% relief on the first £1 million of qualifying investment) is unchanged, so most small businesses are unaffected unless they exceed the AIA cap.

High Income Child Benefit Charge

The threshold at which the HICBC begins is held at £60,000 of adjusted net income. The charge is 1% of the Child Benefit received for every £200 of income above £60,000, fully tapering at £80,000.

From 6 April 2026 HMRC's Pay As You Earn system can collect the HICBC through the tax code without the parent needing to file Self Assessment, provided they opt in via the Personal Tax Account. The charge can still be opted out of by stopping the Child Benefit payments instead, although the recipient should keep claiming and waive payment to preserve their National Insurance credits.

Self Assessment deadlines for 2026/27

  • 5 October 2026: register for Self Assessment if you started a new source of taxable income in 2025/26.
  • 31 January 2027: file the 2025/26 online return + pay the tax. First payment on account for 2026/27 also due.
  • 31 July 2027: second payment on account for 2026/27.
  • 31 October 2026: deadline for the older 2025/26 paper return.

HMRC penalties for late filing start at £100 immediately on a missed 31 January deadline, with daily penalties of £10 per day after three months, capped at £900. Late payment interest from 6 April 2026 runs at the Bank Rate plus 4 percentage points (so 7.75% with the current 3.75% Bank Rate).

What to do about it

If you are a limited-company director paying yourself in dividends, model the new rates against a salary-only or salary-plus-lower-dividend mix for 2026/27. The break-even point shifted with the 2 percentage point rise.

If you are a sole trader or landlord over the £50,000 MTD threshold and not yet on compatible software, HMRC publishes a list of approved providers. Set up before the first quarterly deadline in your accounting period; the first Q1 update is due by 5 August 2026 for standard tax-year filers.

If you claimed the working-from-home £6 per week last year, switch to the actual-costs method and keep receipts. The lost relief is roughly £62 a year for a basic-rate taxpayer.

If you own a farm or a family business with assets above £2.5 million per individual, take advice on the APR / BPR cap. Lifetime gifting strategies and life-assurance arrangements may now warrant reassessment.

Glossary

  • Personal allowance: the income each taxpayer can earn before income tax kicks in. £12,570 in 2026/27.
  • Frozen threshold: a tax band held at the same nominal value while wages rise. Sometimes called fiscal drag.
  • Dividend allowance: the amount of dividend income receivable tax-free each year, in addition to the personal allowance. £500 in 2026/27.
  • APR / BPR: Agricultural Property Relief and Business Property Relief. The two main reliefs that previously gave 100% IHT exemption to farms and businesses.
  • MTD: Making Tax Digital. HMRC's programme requiring digital records and quarterly filing for sole traders and landlords above income thresholds.
  • EOPS: End of Period Statement. The MTD-equivalent of the year-end Self Assessment return.
  • HICBC: High Income Child Benefit Charge. The clawback of Child Benefit when one parent's adjusted net income exceeds £60,000.
  • Lump Sum Allowance: the maximum tax-free pension lump sum. £268,275 in 2026/27.
  • Triple lock: the State Pension uprating formula. Highest of CPI inflation, average earnings growth, or 2.5%.

Where to check the live numbers