The 2026/27 tax year brings a cluster of changes that, taken together, quietly raise the cost of being a UK business owner or investor. None is dramatic on its own; the planning lives in how they interact.

Dividend tax rose two points

From 6 April 2026 the ordinary and upper dividend rates increased by two percentage points to 10.75% and 35.75%, with the additional rate unchanged at 39.35%. The dividend allowance stays at just £500. For owner-directors, this narrows the long-standing salary-versus-dividend advantage further — the optimal mix is now a calculation, not a rule of thumb.

Capital gains: low allowance, higher rates

The annual exempt amount remains £3,000 — a quarter of what it was three years ago — and gains are taxed at 18% and 24% across almost all assets following the 30 October 2024 Budget. More disposals than ever now produce a bill, which makes timing, spousal transfers and loss harvesting genuinely valuable.

Thresholds frozen to 2030/31

The personal allowance (£12,570) and higher-rate threshold remain frozen, with the freeze extended to 2030/31. As wages rise, more people are pulled into higher bands each year — "fiscal drag" doing the work a rate rise would otherwise do.

Making Tax Digital for Income Tax is live

From April 2026, self-employed people and landlords with income over £50,000 must keep digital records and file quarterly updates, replacing the single annual return. The £30,000 tier joins in April 2027 and £20,000 in April 2028. If your bookkeeping isn't already digital and current, this is the change to act on first.

What to do now

  • Re-run your salary-and-dividend split for the new rates before drawing this year's profits.
  • Plan disposals around the £3,000 allowance — and use both spouses' allowances and any carried-forward losses.
  • Get MTD-ready if you let property or trade above £50,000 — quarterly filing has already begun.

Run your own numbers with our UK tax calculators — including the salary-versus-dividend optimiser and the capital gains calculator — then we'll make them defensible.

Questions People Ask

What are the new UK dividend tax rates for 2026/27?+
From 6 April 2026 the ordinary rate is 10.75% and the upper rate 35.75% (both up two points), with the additional rate unchanged at 39.35%. The dividend allowance remains £500.
What is the capital gains tax allowance in 2026/27?+
The annual exempt amount is £3,000. Gains above it are taxed at 18% within your remaining basic-rate band and 24% above it for almost all assets.
Who has to use Making Tax Digital for Income Tax?+
From April 2026, self-employed people and landlords with qualifying income over £50,000 must keep digital records and submit quarterly updates. The £30,000 tier joins April 2027 and £20,000 April 2028.