The 2026/27 UK tax year began on 6 April 2026. This page tracks every confirmed tax change for the year: what it is, the specific number, when it takes effect, and what it means for your household. Sources are listed at the bottom and include HMRC and gov.uk primary guidance alongside analyses from the major accounting firms. The page updates every time HMRC, HM Treasury, or an equivalent authority announces or amends a rule.
Dividend tax: up by 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 you can receive tax-free) is unchanged. HM Treasury expects the increase to raise £280 million in 2026/27, rising to £1.39 billion by 2030/31.
Who it hits: anyone receiving dividends above the annual allowance. Most affected: limited-company directors who pay themselves in dividends, and investors holding UK shares outside an ISA.
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 £2.5m receive 50% relief instead of 100%.
- The £2.5m allowance is transferable between spouses and civil partners, allowing 100% relief on up to £5 million for couples.
Who it hits: owners of farms and family businesses passing estates to the next generation. Estates under £2.5m (or £5m for couples) are unaffected.
Making Tax Digital for Income Tax begins
Making Tax Digital (MTD) for Income Tax entered its first phase on 6 April 2026. From that date:
- Sole traders and landlords with business receipts over £50,000 must keep digital records.
- They must submit quarterly updates to HMRC using compatible software.
- An annual End of Period Statement and Final Declaration replaces the old Self Assessment return for those in scope.
Who it hits: an estimated 780,000 sole traders and landlords. Further thresholds roll down in later years.
State pension: up 4.8%
The UK state pension rose by 4.8% in April 2026, confirmed by Chancellor Rachel Reeves in the Budget. The uprating follows the triple lock formula.
Working from home allowance: removed
The £6-per-week working-from-home tax allowance (the flat-rate employee deduction claimable without receipts) has been removed from April 2026. Employees working from home can still claim actual costs, but must now evidence them.
Writing-down allowance cut
The main rate of writing-down allowance on plant and machinery has been cut from 18% to 14% from April 2026. Small and medium businesses depreciating equipment for tax purposes receive less relief per year.
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.
If you are a sole trader or landlord over the £50,000 MTD threshold and not yet on compatible software, HMRC has a list of approved providers. Set up before the first quarterly deadline in your accounting period.
If you claimed the working-from-home £6/week last year, switch to the actual-costs method and start keeping receipts.