Important UK Tax Changes from 6 April 2026 - What You Need to Know
As a trusted Surrey tax advisor, we’re committed to keeping you up to date with significant UK tax changes that could affect your finances, business planning and compliance. Several reforms take effect from 6 April 2026, with implications for dividend tax, Making Tax Digital for Income Tax (MTD ITSA), inheritance tax reliefs, Capital Gains Tax (CGT) and employee benefits. Preparing early can help you reduce your tax liabilities and avoid last-minute stress.
1. Dividend Tax Rates Increasing from April 2026
The Government has confirmed that dividend tax rates across the UK will rise for the 2026/27 tax year. This is important if you generate income from company dividends or investment portfolios.
New dividend tax rates:
Dividend ordinary rate: 10.75%
Dividend upper rate: 35.75%
Dividend additional rate: 39.35% (unchanged)
This increase may impact owner-managed businesses and investors. Early planning can help minimise the additional tax burden where possible.
2. Making Tax Digital for Income Tax (MTD ITSA) – Action Required Now
One of the most transformative reforms is Making Tax Digital for Income Tax, designed to modernise the way sole traders and landlords interact with HMRC. Instead of a single annual Self Assessment tax return, you will need to record and report information digitally throughout the year.
What this means:
✔ Keep digital records using recognised software
✔ Submit quarterly income and expense reports to HMRC
✔ Finalise your tax position with an annual declaration by 31 January
Phased implementation:
6 April 2026: Turnover above £50,000
April 2027: Above £30,000
April 2028: Above £20,000
If your annual income is £20,000 or less, you are currently exempt from MTD for Income Tax. HMRC will not automatically enrol you — it’s important to check eligibility and act now to avoid disruption.
3. Changes to Inheritance Tax Relief: APR & BPR Reform
The rules for Agricultural Property Relief (APR) and Business Property Relief (BPR) are being reformed from 6 April 2026 — with important consequences for business owners, farmers and family estates.
Key updates:
A new £1 million combined relief allowance applies to APR and BPR assets.
Assets over £1 million qualify at 50% relief (effective 20% IHT charge).
The allowance refreshes every seven years for lifetime gifts and ten years for trusts.
The allowance will be indexed to inflation from April 2031.
Shares in unlisted companies, including AIM and EIS investments, will only get 50% relief under the new regime.
Any unused relief allowance can be transferred between spouses/civil partners.
4. End of Tax Relief on Non-Reimbursed Homeworking Expenses
From 6 April 2026, HMRC will remove the flat-rate homeworking tax relief that allowed employees to claim a weekly deduction without receipts. This administrative easement has been widely used since 2011 and expanded during the COVID-19 pandemic, but it will no longer apply.
This change affects individuals who work from home and currently claim these deductions — and reinforces the need to review employer reimbursements and benefit strategies.
5. Capital Gains Tax (CGT) Updates
CGT is also changing for certain qualifying disposals:
Business Asset Disposal Relief and Investors’ Relief rates will increase:
From 10% to 14% from 6 April 2025
From 14% to 18% from 6 April 2026
The CGT rates on residential property (18% / 24%) remain unchanged.
6. Incorporation Relief
Incorporation Relief will no longer apply automatically when transferring a business to a company; taxpayers must make a claim to benefit.
7. Car & Van Benefit Charge Updates
From April 2026, the van benefit charge and car/van fuel benefit charges will be uprated in line with the Consumer Prices Index (CPI):
Flat-rate van benefit: £4,170
Car fuel benefit multiplier: £29,200
Van fuel benefit charge: £798
These increases could affect your taxable benefits if your employer provides vehicles for personal use.
Contact Us | Expert Tax Advisors in Surrey
These 2026 tax changes represent some of the most significant reforms in years. Whether you are an individual taxpayer, landlord, business owner, or investor, early tax planning is now more vital than ever.
At Surrey Hills Tax, we offer expert tax advice tailored to your circumstances — from self assessment, capital gains tax planning, and making tax digital support, to inheritance tax strategy and dividend tax optimisation.
Get in touch:
📧 hello@surreyhillstax.co.uk
📞 01483 970 410