The new tax year has officially begun, and with it comes a series of changes that were announced in previous budgets and are now fully in force. While some of these updates have been in the pipeline for a while, their impact will start to be felt from this month onward. Whether you are a business owner, landlord, investor or employee, the start of the 2026/27 tax year is an ideal moment to check where you stand and make sure you are planning ahead with the latest rules in mind.

Several of this year’s changes affect how dividends are taxed, how business sales are treated, how much inheritance tax relief is available, and what records certain taxpayers need to keep. These rules apply from 6 April 2026, so now is the time to settle in and get familiar with what has changed.

 

Key changes now in effect for 2026/27

Dividend tax rates have increased

The dividend tax rate has risen by two percentage points for basic and higher rate taxpayers from the start of this tax year. This change will influence how company directors and shareholders plan remuneration for the year ahead. Anyone who relies on dividends for income may want to revisit their strategy early in the year to understand the impact.

Capital gains tax is higher for certain business disposals

Business owners planning to sell shares or assets that qualify for Business Asset Disposal Relief will now face an 18% rate instead of 14%. This will affect decisions around business succession, restructuring or retirement planning. If you expect to sell within the next few years you may find it helpful to consider the timing and structure of your disposal.

Inheritance tax relief caps have arrived

A combined cap of £2.5m for full Business Property Relief and Agricultural Property Relief is now in place, with any excess eligible for 50% relief. This could significantly influence estate planning for business owners and families with agricultural holdings. Reviewing these plans early in the year gives you time to adjust long term strategies if needed.

Making Tax Digital applies to more people

Some sole traders and landlords now fall within the scope of Making Tax Digital for Income Tax. This requires maintaining digital records and submitting updates through compliant software. If your income levels bring you into the new system, this is the moment to get organised so you stay ahead of deadlines.

Income tax thresholds remain frozen

The personal allowance and the main tax thresholds remain unchanged and will continue to be frozen until at least 2031. This freeze increases the chance that more income falls into higher tax bands over time, especially as earnings rise. Known as fiscal drag, this quiet shift can have a noticeable effect on take‑home income. Reviewing your expected income for the year can help you prepare.

Capital allowances have changed

Businesses now face a reduced writing‑down allowance for plant and machinery, which has fallen from 18% to 14% as of April 2026. This affects how businesses plan investment and how quickly they can claim relief on capital expenditure. Early planning can help ensure investment decisions still align with tax‑efficient timing.

 

What these changes mean for individuals

The start of a new tax year is a good time to look at your personal finances from a fresh perspective. If you receive dividend income, the rate increase may affect your budget for the months ahead. Investors planning to sell shares or business assets may now face higher tax costs and should factor this into their plans. For anyone affected by Making Tax Digital, the shift to digital record‑keeping is now a practical requirement rather than something to prepare for in the future.

It may also be worth reviewing pension contributions, ISA savings or other tax‑efficient opportunities at the start of the year rather than waiting until next March. Taking action early allows more time for adjustments and reduces the usual last‑minute pressure.

 

What these changes mean for business owners

Business owners may feel the impact of the new rules more directly. The changes to capital gains tax, dividend tax and capital allowances all play a role in how businesses plan remuneration, investment and long‑term succession. If your business is family‑owned, the new inheritance tax relief caps could also affect how shares or assets pass to the next generation.

This is an excellent time to review the structure of remuneration packages, look at the timing of planned investments and evaluate how the new inheritance tax framework affects your future plans.

 

Practical steps to take early in the tax year

Starting the year with a clear view of your tax position can make the rest of the year far smoother. Reviewing your income projections, updating your financial forecast and checking whether you are now caught by Making Tax Digital are all worthwhile steps. If you expect significant changes in income or business activity, considering these factors now can help you avoid surprises later in the year.

Getting clarity at the beginning of the tax year helps you take advantage of opportunities as they arise, rather than reacting under time pressure next spring.

 

Making the most of the year ahead

The beginning of the 2026/27 tax year brings changes that affect a wide range of taxpayers, but with a bit of early planning the new rules can be managed confidently. Whether you need guidance on dividend planning, capital gains, inheritance tax or digital record‑keeping, we are here to help you understand what the changes mean for your circumstances and how to navigate the year effectively.

If you would like a review of your tax position or help adapting to the new rules, our advisers are ready to support you.

Get in touch