What actually changed in April 2026
A lot landed at once this year. Here is the short version, with links to the detail.
Dividend tax rates rose 2 percentage points at the basic and higher rates, to 10.75% and 35.75%. The additional rate stayed at 39.35%. The allowance is still £500.
Making Tax Digital for Income Tax went live for sole traders and landlords with qualifying income over £50,000. This is the one that has been promised and postponed since 2018. It is real now.
Business Asset Disposal Relief rose to 18%, up from 14%, and from 10% two years ago.
Umbrella company PAYE responsibility moved to the recruitment agency, or the end client where there is no agency.
Business rates were revalued in England, with five multipliers replacing two, and permanently lower rates for retail, hospitality and leisure.
The state pension rose 4.8% to £241.30 a week under the triple lock.
Income tax thresholds were frozen for a further three years, now to April 2031.
What it means depending on who you are
If you are a company director, the dividend rise plus the frozen thresholds means the salary and dividend mix that was optimal two years ago probably is not now. Worth modelling rather than repeating last year figures.
If you are a sole trader or landlord over £50,000, MTD is your year. Digital records and quarterly updates, with a penalty easement in the first year.
If you are an employee, the threshold freeze is quietly costing you. A pay rise that matches inflation leaves you worse off after tax, and more people are crossing into the 40% band each year without their real income changing at all.
If you are a pensioner, the state pension is now within about £22 of the entire personal allowance. Any other income at all makes you a taxpayer.
If you are selling a business, the BADR rate has moved twice in two years. Timing matters.
What is coming that you should plan for
April 2027: MTD extends to income over £30,000. Mandatory payrolling of benefits in kind starts. Late payment penalties rise from 3% to 4% at the day 15 and day 30 points, and the penalty regime extends to self assessment taxpayers outside MTD. Separate property and savings income rates are due. The cash ISA cap is expected at £12,000, with over 65s keeping the full £20,000.
April 2028: MTD extends to income over £20,000.
April 2029: National Insurance is due on salary sacrificed pension contributions above £2,000 a year.
The honest summary
There was no headline rate rise this year, and that is rather the point. The money is being raised through frozen thresholds, shrunken allowances and a broader reporting net, none of which produces a headline. The dividend allowance is down 75% in three years. The capital gains allowance is down 75%. Thresholds are frozen to 2031.
If you have not revisited how you take money out of your business, or whether your allowances are being used, in the last two years, the answers have probably changed underneath you.
This reflects the position as at July 2026, and announced measures are flagged as announced rather than in force. If you want to know what all this means for your own numbers, get in touch.