The new UK tax year begins on 6 April 2026, bringing a range of updates that could affect how individuals and businesses manage their finances. While many tax rates and thresholds remain unchanged, several targeted changes mean it is worth reviewing your tax position and planning ahead for the year.
One of the most significant features of the 2026/27 tax year is the continued freeze on most personal income tax thresholds. The personal allowance remains at £12,570, while the higher rate threshold continues to apply above £37,700 of taxable income. Although the headline rates have not changed, frozen thresholds mean that rising incomes could gradually push more taxpayers into higher tax bands over time.
Investors and company directors should also be aware of changes to dividend taxation. The dividend tax rate for both basic and higher rate taxpayers has increased by two percentage points, meaning dividend income may now attract more tax than in previous years.
Business owners planning to sell or transfer assets should also note the update to Business Asset Disposal Relief. The capital gains tax rate on qualifying disposals has increased from 14% to 18%, although the lifetime allowance of £1 million remains unchanged.
There are also important developments in Inheritance Tax (IHT) planning. Relief on agricultural and business assets will now provide 100% relief up to £2.5 million, with relief reduced to 50% on qualifying assets above that threshold. These rules may affect estate planning strategies, particularly for business owners and farming families.
For investors, the income tax relief available on new Venture Capital Trust (VCT) investments has reduced from 30% to 20%, although the size of companies eligible for the scheme has increased. Meanwhile, the annual ISA allowance remains at £20,000, continuing to offer a valuable tax-efficient savings opportunity.
Elsewhere, many major tax rates remain unchanged. Corporation tax, VAT and most stamp duty rules stay the same, providing a degree of stability for businesses and individuals planning ahead.
While many figures remain familiar, the combination of frozen thresholds and targeted tax changes means careful planning is more important than ever. If you would like to discuss how the new tax year could affect your personal or business finances, the Gilberts team would be happy to help.
