Updated 7 November 2026: The Autumn Budget on 28 October 2026 changed the property income rates from 6 April 2027 to 24%, 44% and 49%. These replace the 22%, 42% and 47% rates shown below. It also announced that the main writing-down allowance falls from 14% to 12% from April 2027, and that the Business Asset Disposal Relief lifetime limit falls from £1 million to £500,000 for disposals from 6 April 2027. See our post on the Autumn Budget 2026.
The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. Several changes announced in last November's Budget now apply, and Making Tax Digital for Income Tax has begun.
This post sets out what is changing and what stays the same.
For sole traders and landlords
Making Tax Digital for Income Tax has started. If your qualifying income (self-employed and rental income before expenses) was over £50,000 in 2024/25, you now keep digital records and send HMRC updates every quarter, unless you are exempt. Your first update is due by 7 August 2026.
The main capital allowance rate is lower. The writing-down allowance on the main pool is 14% from 6 April 2026, down from 18%. If your accounting period spans the change, a blended rate applies. The £1 million Annual Investment Allowance is unchanged.
Landlords: rental income rates rise next year. From 6 April 2027, property income will be taxed at 22%, 42% and 47%. Nothing changes this year, but it is worth planning for.
For company owners
Dividend tax is higher. The basic rate rises from 8.75% to 10.75%, and the higher rate from 33.75% to 35.75%. The additional rate stays at 39.35%. The £500 dividend allowance is unchanged.
Business Asset Disposal Relief is 18%. This is the Capital Gains Tax rate on qualifying business sales from 6 April 2026, up from 14%.
The main capital allowance rate is 14% from 1 April 2026 for companies.
Corporation Tax late filing penalties have doubled for returns due on or after 1 April 2026. The first penalty is now £200.
Business property relief for Inheritance Tax is capped. From 6 April 2026, 100% relief applies to the first £2.5 million of qualifying business and agricultural property combined, and 50% above that. Unused allowance can pass to a spouse or civil partner. If you own a business, review your will and succession plans.
For employers
Minimum wage rates are higher from 1 April 2026.
Aged 21 and over: £12.71 an hour
Aged 18 to 20: £10.85 an hour
Under 18, and apprentices under 19 or in their first year: £8.00 an hour
Statutory Sick Pay is paid from the first day of sickness. The rate is £123.25 a week, or 80% of the employee's average weekly earnings if that is lower.
Statutory Maternity and Paternity Pay is £194.32 a week, or 90% of average weekly earnings if lower. Maternity Pay is still 90% of average weekly earnings for the first six weeks.
Employer National Insurance is unchanged: 15% on pay above £5,000 a year, with an Employment Allowance of £10,500.
Business rates (England): eligible retail, hospitality and leisure properties with a rateable value under £500,000 now pay lower rates. With the 2026 revaluation, some bills may still rise, so check your new bill.
What stays the same
Personal allowance: £12,570
Higher rate starts at £50,270 (outside Scotland)
Capital Gains Tax allowance: £3,000
Corporation Tax: 19% and 25%, with marginal relief in between (limits depend on your accounting period and any associated companies)
VAT registration threshold: £90,000
Summary
For sole traders and landlords with higher incomes, Making Tax Digital is the biggest change this year. Company owners pay more tax on dividends and on business sales. Employers face higher minimum wage rates and new sick pay rules.
If you would like us to check how these changes affect you, book a call or contact us.