Keeping up with tax changes can feel overwhelming, especially when thresholds are frozen and small tweaks quietly increase the tax you pay. At A&C Chartered Accountants, our role is to help you see what’s coming, understand the impact, and make confident decisions before HMRC comes knocking.
Here’s what’s changing – and what you should be thinking about now.
Personal allowance: still frozen
Your tax-free personal allowance remains at £12,570 for 2026/27.
Once your income goes over £100,000, the allowance starts to reduce, disappearing entirely at £125,140. This remains one of the most punishing parts of the tax system, effectively creating a 60% tax rate in that band.
Planning here is critical – and pensions often play a big role.
Income tax bands: thresholds frozen, dividends more expensive
The income tax thresholds are staying exactly where they are until 2030/31. With wages rising, more people are being pulled into higher tax bands without technically getting richer.
For most income types, rates stay the same. However, from 6 April 2026, dividend tax rates increase:
-
Basic rate dividends: 10.75% (up from 8.75%)
-
Higher rate dividends: 35.75% (up from 33.75%)
-
Additional rate dividends: 39.35% (unchanged)
Your dividend allowance remains £500, which is now doing very little heavy lifting.
Big change ahead: property and savings income from April 2027
From 6 April 2027, the government plans to introduce separate income tax rates for property income and increase tax on savings income:
-
Basic rate: 22%
-
Higher rate: 42%
-
Additional rate: 47%
These new property rates will apply in England and Northern Ireland, with Scotland and Wales setting their own versions.
If you’re a landlord or rely on interest income, this is a clear signal to review your structure and long-term plans sooner rather than later.
Savings and dividends: allowances unchanged
You’ll still benefit from:
With inflation and interest rates where they are, many people are now exceeding these limits without realising it.
Self-employed National Insurance: no relief from the freeze
Class 4 NICs remain at:
Like income tax, these thresholds are frozen until 2030/31, quietly increasing the overall tax burden on sole traders and partners.
Voluntary National Insurance: more expensive and more restrictive
From April 2026:
If you live abroad, the rules tighten significantly:
If you’re relying on voluntary contributions to protect your state pension, this needs checking carefully.
ISAs: still valuable, but changing
For 2026/27, the overall ISA allowance stays at £20,000.
From April 2027:
-
The cash ISA limit drops to £12,000
-
Over-65s can still put the full £20,000 into cash ISAs
ISAs remain one of the simplest and most effective tax-free planning tools available.
Pensions: still one of the most powerful planning tools
Full income tax relief continues for qualifying pension contributions. With frozen allowances and rising tax rates elsewhere, pensions remain central to sensible long-term tax planning.
This is especially important for anyone earning over £60,000 or approaching £100,000.
Child Benefit: unchanged, but still catches people out
The High-Income Child Benefit Charge continues to apply where income exceeds £60,000, with full clawback at £80,000.
It’s calculated at 1% for every £200 over the threshold – and applies even if the child isn’t yours, as long as they live with you.
This is one of the most commonly missed tax charges we see at A&C Chartered Accountants.
Foster carers and Shared Lives carers
Qualifying Care Relief increases by 3.8% from April 2026, in line with inflation.
Self assessment penalties: tougher on late payment
From April 2027, HMRC will roll out a new penalty regime:
This makes cashflow planning and timely submissions more important than ever.
Venture Capital Trusts (VCTs): relief reduced
From April 2026, VCT income tax relief drops from 30% to 20%. They may still have a place in some portfolios, but the numbers need revisiting.
What should you do now?
These changes aren’t dramatic headlines – but they add up. Frozen thresholds, higher dividend tax, and new property income rates mean many people will pay more tax without changing their behaviour.