It may feel odd to mark Tax Awareness Week when tax worries already hang over many people, but taking time now to understand upcoming changes will leave you better prepared for the year ahead.
We are here to use this week to help you gain a clearer understanding of the rules that will affect you, so you enter the new tax year with confidence.
As such, we are taking a look at what is set to change and what will stay the same so you can understand the impact of both.
What taxes are changing in 2026?
2026 features the largest overhaul to tax filing in decades will begin to affect landlords, sole traders and the self-employed.
This is the beginning of the implementation of Making Tax Digital (MTD) for Income Tax that will see individuals with eligible incomes above £50,000 have to keep digital records and submit quarterly updates, as well as their annual return.
HMRC are being kind in that penalties for missed deadlines will not take effect until 2027, but this is not an excuse to forgo your obligations this year.
For business owners looking at managing their assets, there may be a risk of paying more Capital Gains Tax (CGT) soon.
This is due to the change to Business Asset Disposal Relief (BADR), which will see its rate adjusted to 18 per cent.
Estate planning will also require some additional consideration if you are hoping to mitigate your Inheritance Tax (IHT) bill.
The controversial cap to Agricultural Property Relief (APR) and Business Property Relief (BPR) means that 100 per cent relief will apply only up to £2.5 million, while anything above that amount will receive a 50 per cent relief.
Which taxes are staying the same in 2026?
Many rates and thresholds are being left untouched in 2026, but frozen thresholds can be just as important to note as active changes.
When thresholds do not keep pace with inflation, more people are pushed into tax obligations through a process of fiscal drag.
This is further compounded by incomes increasing on paper without their real-world value meaningfully changing.
To understand how this works in practice, it is wise to consider two controversial issues that are currently being debated.
Student loans are currently under discussion as it will soon be the case that even the National Living Wage will be enough to trigger repayments on half of the existing plans.
These plans were sold on the promise that graduate salaries would trigger repayments, not the lowest legal salary.
The National Living Wage increase also means that those on it will find over half of their salary exposed to Income Tax for the first time.
These are clear signifiers that not enough has been done to make thresholds match the economic realities of the world.
If you would like help in understanding your obligations ahead of the new tax year, our team can review your situation and recommend sensible, practical measures to improve tax efficiency.
We want to use Tax Awareness Week to get you organised and more confident about tax planning this year.
Speak to our team today to take the stress out of the new tax year.
