The 2026/27 tax year marks a turning point for UK personal tax, even though headline rates remain unchanged.
The biggest development is the launch of Making Tax Digital (MTD) for Income Tax, starting from April 2026 for self-employed individuals and landlords with income over £50,000. This will fundamentally change how taxpayers report income, moving from an annual return to quarterly digital updates plus an end-of-year finalisation.
While income tax rates and thresholds remain frozen, this continues to create “fiscal drag”, pulling more taxpayers into higher bands over time. Dividend tax rates are also rising, increasing the cost of extracting profits from owner-managed businesses.
Another key change is the continued move toward tax-based benefit clawbacks, such as the Winter Fuel Payment recovery for higher earners—highlighting a broader shift toward means-testing via the tax system.
If you would like to discuss how any of the upcoming changes are likely to impact you, please contact a member of our team.