Tax changes in 2026

2026 is going to be an eventful year for personal and business taxes. Based on changes already announced this pace of change will also continue for the next few years. There will be legislative changes, shifts in policies and ongoing consultations – all of which will create complexities and challenges for individuals and businesses.

Our team is here to guide you through these changes, ensuring you stay compliant, identifying opportunities and minimising risks. Wherever you operate and regardless of whether you are managing personal wealth or concerned with employment and corporate taxes, our expertise and global reach mean you can rely on us to provide practical, insightful advice and support. 

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Employment Taxes

Managing HMRC's post-tax year reporting requirements is crucial for employers. Accurate data is essential to meet deadlines and avoid penalties. Read our top tips for Employers’ Year End reporting deadlines. Alongside the usual reporting deadlines, the key upcoming changes for employers to be aware of are:

From April 2026

The positive reforms to Enterprise Management Incentive (EMI) share option schemes are a welcome change. With eligibility and flexibility significantly expanding from April 2026 and administrative complexity reducing from April 2027.

Read about the increased limits here.

The National Living Wage for over-21s will increase by 50p per hour from April to £12.71. Alongside this the lower earnings limit and waiting period has been removed for Statutory Sick Pay. Paternity leave and unpaid parental leave are available from ‘day one’ of employment.

Read more about NMW.

The Fair Work Agency has also been established which has powers to inspect workplaces, impose penalties, start civil proceedings and recover costs from employers.

There are several immigration changes being made. The Global Talent route is expanding to welcome more top talent in design-related fields. However, there are increased expectations placed on all sponsor licence holders, including the scope of their compliance duties.

Get expert business immigration advice

To combat perceived tax loss, ‘joint and several liability’ is imposed on the business that is end user of the labour in certain scenarios. This puts any business or organisation that uses off-payroll workers (OPWs) at greater risk.

Read more about umbrella companies and IR35 rules.

HMRC is increasing the anti-fraud controls for the Construction Industry Scheme with new assessing and penalty powers where a business ‘knew or should have known’ that a payment, or a CIS deduction claimed, was connected to deliberate non-compliance by another party.

New legislation will also reinstate the formal requirement for CIS contractors to submit monthly nil returns where no subcontractor payments are made in a tax month and there will be automatic penalties for late filing.

Read more on the CIS rules

From April 2027 and beyond

All employers will be required to payroll benefits in kind from April 2027. We do not expect this to be delayed again, as such, all employers, payroll providers, and advisers should now be preparing. For some, this might include payrolling some or all of their benefits from April 2026 on a voluntary basis to test their systems.

Read our key takeaways and practical steps for employers here.

With effect from April 2029, pension contributions that are made using a salary sacrifice arrangement will be liable to employees and employers’ NIC above £2,000.

Read more about salary sacrifice for pension contributions and how it works here.

Business taxes

Use our business timeline to keep on top of the dates you need to be aware of, including tax filing and payment deadlines and reporting deadlines.

Don’t forget to check whether you are small or medium sized. The Companies Act size thresholds are increased for accounting periods beginning on or after 1 Apri 2025, so for December year-ends this impacts the accounting period that started on 1 January 2026. The SME definition affects such things as R&D relief and off-payroll/IR35. Read more about the small companies’ exemption for off-payroll rules .

Alongside the usual reporting deadlines, the key upcoming tax changes for businesses to be aware of are:

From April 2026

The limits on how much can be raised through these schemes and qualifying criteria for companies are doubled - £24m can be raised (£40m for knowledge intensive companies) and gross assets can be up to £30m. More companies will now be able to make use of these schemes.

Read our guide for companies here.

A number of changes take effect from April 2026. Firstly, there is a general three-yearly revaluation of properties which is likely to see many properties have a higher rateable value – although there is a transitional relief which limits how much a revaluation can increase your business rates bill in one year.

The Government is also introducing new ‘multipliers’ for properties of different values – applying higher multipliers for higher value properties. The multipliers for retail, hospitality and leisure (RHL) businesses will be lower for properties with a rateable value below £500,000 and are intended to be permanent.

However, the more important change for RHL properties is that the 40% discount on business rates that has applied since the pandemic will cease from 1 April 2026. A special ‘Supporting Small Businesses’ scheme will offset some of the lost relief for small businesses - see HMRC factsheet. Pubs and music venues will benefit from an additional 15% relief in 2026/27 and then have their bills’ frozen’ for the following two years – see MHCLG statement.

Full expensing is being maintained and the 100% allowance for zero emission vehicles is extend for another year to April 2027. A new 40% first year allowance for capital expenditure on assets for leasing and for unincorporated businesses was introduced in January 2026. However, on the flip side, the main rate of writing down allowance reduces to 14%.

Read more about Capital Allowances here.

Remote Gaming Duty increases to 40% and Bingo Duty is abolished. Registration is open for Vaping Products Duty, being introduced from October 2026.

Read more about VAT and other indirect tax changes in 2026 here.

Individuals and business owners

We undertook extensive research to explore the challenges facing the wealthy and their advisers. This told us that confidence in personal, financial and regulatory stability is weakening, and ultra-high-net-worth individuals (UHNWs) are facing a pressing challenge: how can they navigate succession, taxation, relocation and long-term planning when certainty is so scarce?

Only 2% of UHNWs thought UK tax levels are an ‘unreasonable burden’. If so many UHNWs in the UK are happy to pay their fair share, why have over two-thirds of them considered leaving?

Find out the underlying reasons for this, along with analysis and insights from the data, and expert opinion on how advisers and clients alike can work together to bridge the trust gap and build confidence in the future.

Read our Wealth report for 2026.

Alongside the global outlook, the key upcoming tax changes for individuals and business owners to be aware of are:

From April 2026

Only the first £2.5m of combined agricultural and business property will receive 100% relief, with 50% relief on amounts over £2.5m.

Read more about qualification and the impact for trusts here.

For those selling their business, the business asset disposal relief capital gains tax rate increases to 18%.

Making tax digital (MTD) applies to those with a turnover of £50,000 or more in the 2024/25 tax year, requiring quarterly reporting.

Read more about what MTD means here

Carried interest will be treated as trading profits and subject to income tax and Class 4 NIC. The amount of ‘qualifying’ carried interest subject to these taxes will be adjusted by applying a multiplier.

Read more about the reform here.

Dividend tax rates will increase by 2% to 10.75% and 35.75%. However, the additional rate remains unchanged. For VCT investors the income relief received falls to 20%.

Read our tax efficient investments guide for investors.

From April 2027 and beyond

The effective abolition of the inheritance tax (IHT) exemption for pensions from 6 April 2027 means that most individuals with significant pension funds should start reconsidering their wealth succession plans now.

Read more about retirement and inheritance planning.

Increased tax rates for property and savings income will apply from April 2027 of 22%, 42% and 47%.

The threshold for MTD reduced to £30,000 or more in the 2025/26 tax year from April 2027 and the Government has set out plans for a £20,000 threshold to apply from April 2028.

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