The 2026 tax changes are arriving in stages, and the biggest pressure points are dividends, capital gains, inheritance tax reliefs, and payroll costs. Individuals and business owners may have planning options before April 2026, so it is worth reviewing income, assets, and deadlines ...
Get ready for the upcoming 2026 tax changes with my guide for individuals and businesses
The 2026 tax changes may not have been a surprise to everyone, but they still deserve attention because several of them will affect day-to-day planning rather than just year-end paperwork. For many people, the practical question is not whether the rules are changing, but whether there is still time to act before HMRC starts applying the new rates and thresholds.
Here's my summary of what's going to change:
For company owners who take income through dividends, the timing is really important. From April 2026, the basic and higher dividend rates rise, while the dividend allowance remains unchanged. That means more tax will be due on income that once sat comfortably within a lower band, so it's sensible to review whether any dividend planning should be brought forward into the current tax year.
The same thinking applies to shareholders who are not UK residents. The familiar notional tax credit on UK dividends is being removed, which changes the way those payments are taxed. In plain terms, that can mean a less favourable outcome than before, so the 2026 tax changes may encourage some people to revisit how and when they extract value from UK companies.
Business owners should also keep an eye on Business Asset Disposal Relief. The rate is set to rise in April 2026, which makes qualifying disposals more expensive from a Capital Gains Tax perspective. For anyone already partway through a sale, or close to agreeing on one, the 2026 tax changes create a straightforward planning question: can completion happen before the higher rate applies?
Investors have reasons to pay attention to. Venture Capital Trust Relief is being reduced, which lowers the immediate income tax benefit of new subscriptions made after the change. EIS and SEIS continue to offer their existing reliefs, but they remain specialist areas where the detail matters. In other words, the 2026 tax changes do not just alter percentages; they change the maths behind the decision.
Families may notice changes as well. Child Benefit remains a useful support, but higher earners will still need to watch the High Income Child Benefit Charge. Once earnings move above the relevant threshold, some or all of the benefit is clawed back. That is why the 2026 tax changes can matter even for households that do not think of themselves as especially wealthy.
Property investors and sole traders are likely to hear more about Making Tax Digital as April 2026 approaches. Those with qualifying rental or self-employed income above the new threshold will need to keep digital records and submit quarterly updates, alongside the annual return. That means the 2026 tax changes are not only about more tax or less tax; they are also about more frequent reporting and tighter tax deadlines in 2026.
Cash savers under 65 may also want to note the planned ISA shift from April 2027, because the window before that change is limited. While the overall ISA limit remains unchanged, the split between cash and stocks and shares ISAs is due to be altered later. So, although it is not one of the immediate 2026 tax changes, it is still part of the broader planning picture for anyone who prefers certainty around cash savings.
Inheritance tax is another area where the rules are becoming less generous for some estates. Business Property Relief and Agricultural Property Relief will be restricted, which could increase the tax bill for families passing on qualifying assets. The reduced protection is still valuable, but the structure is more limited than before, so the 2026 tax changes may make will drafting and succession planning more important than ever.
Employers have their own set of pressures to consider. Wage increases, a lower national insurance threshold, and a 15% employer rate will all feed into labour costs, even if the Employment Allowance softens the blow for some. For many firms, this is where small business tax planning becomes practical rather than theoretical, because payroll, pricing, and investment decisions may all need to be revisited together.
Capital allowances are also shifting, with writing down allowances becoming less generous for existing pools. At the same time, the 40% first-year allowance offers a more immediate deduction for qualifying expenditure, which can be helpful for businesses planning an investment. That mix of incentives and restrictions is typical of the 2026 tax changes: one part encourages action, while another reduces the value of doing nothing.
Well, that's a lot to unpack! Taken as a whole, the 2026 tax changes reward early review and calm decision-making. Whether the issue is dividends, disposals, payroll, inheritance planning, or VAT and income tax compliance, the people most likely to benefit are those who check the numbers before the deadline rather than after it.
Time is running out, so reviewing now would be beneficial.
If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts about this 2026 tax update and why you need to get planning now, then do feel free to call me on 07434 287603 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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