From 6 April 2026, new tax rules will expand workplace benefits relief. The changes will simplify the treatment of certain low-value workplace benefits-in-kind (BIKs), affecting both employers and employees.

The changes extend existing exemptions for eye tests, flu vaccinations and home working equipment to include reimbursements, aligning them with current provisions for direct supply.

Under current law, employers can provide these benefits tax-free, but reimbursements were excluded. The upcoming changes will ensure that reimbursed expenses for eye tests, flu vaccines and home office equipment are treated the same as where the employer provides the benefit directly for Income Tax and National Insurance purposes.

These changes aim to streamline the tax system, reduce administrative burdens and better reflect modern working practices. Employees will benefit by being able to claim reimbursements for minor work-related costs without tax or National Insurance implications.

The government announced at Budget 2025 that dividend income, property and savings income, will be subject to new tax rates. These changes will be legislated for through the Finance Bill 2025–26 and will be phased in between April 2026 and April 2027.

Dividend income

From April 2026, most dividend income will be subject to higher rates of tax. The ordinary and upper dividend tax rates will each increase by two percentage points, rising to 10.75% and 35.75%, respectively. The additional rate will remain unchanged at 39.35%.

Property income

From 6 April 2027, new tax rates will apply to property income with an increase of two percentage points in each tax band. This will mean that property income will be taxed at 22% for basic rate taxpayers, 42% for higher rate taxpayers and 47% for additional rate taxpayers from 2027-28. These rates will apply in England, Wales and Northern Ireland.

The government has stated that it will work with the devolved administrations in Scotland and Wales to facilitate their ability to set their own property income tax rates.

Savings income

Savings income will also be subject to revised rates from 6 April 2027. In line with the changes to property income, the basic, higher and additional rates applicable to savings income will increase by two percentage points to 22%, 42% and 47%, respectively.

The government has confirmed that the existing allowances for savings income will remain unchanged. Basic rate taxpayers will continue to receive up to £1,000 of tax-free interest, while higher rate taxpayers will retain the £500 allowance. The Starting Rate for Savings, which provides up to £5,000 of savings income tax-free for lower earners, will also remain in place.

The new rules will allow companies to raise more capital under the following schemes although investors will need to factor in reduced VCT Income Tax relief when assessing opportunities.

The Venture Capital Trusts (VCT) and Enterprise Investment Scheme (EIS) are designed to encourage private investment into trading companies. Both schemes help support business growth while at the same time encouraging individuals to fund these companies.

A number of changes to the schemes were announced at Budget 2025 and will apply from 6 April 2026.

The main changes are as follows:

• Gross assets limits: Companies’ gross assets will increase for EIS and VCT eligibility to £30 million immediately before the share issue (from £15 million) and £35 million immediately after the issue (from £16 million).
• Annual investment limits: Companies will be able to raise up to £10 million annually (from £5 million) and £20 million for knowledge-intensive companies (from £10 million).
• Lifetime investment limits: Companies’ lifetime limit will increase to £24 million (from £12 million), and £40 million for knowledge-intensive companies (from £20 million).
• VCT Income Tax relief: The rate of Income Tax relief for individuals investing in VCTs will reduce from 30% to 20%.

These increases in annual, lifetime and gross assets apply only to qualifying companies that are not registered in Northern Ireland and are not engaged in trading goods, or in the generation, transmission, distribution, supply, wholesale trade, or cross-border exchange of electricity. These companies remain eligible under the current scheme limits.

These changes are designed to encourage larger investments into qualifying companies. Investors should be aware of the reduced VCT Income Tax relief available and ensure that investments still remain worthwhile.

The June 2025 reforms introduce a £35,000 income limit for keeping the Winter Fuel Payment, with HMRC recovering the payment from those above the threshold.

The WFP is a tax-free payment provided by the government to help older people keep warm during winter. The amount of the payment depends on individual circumstances but ranges from £100 to £300. The amount you receive depends on a number of factors including your age and the age of other people living with you.

Pensioners whose taxable income exceeds £35,000 will still receive payment but this will be recovered in full by HMRC using the new WFP tax charge. The recovery will be handled through PAYE tax‑code adjustments or the self-assessment return, depending on the taxpayer’s circumstances.

The threshold applies to individuals, not household income. This means that in some couples, one person may keep their payment while the other has theirs reclaimed, depending on individual incomes. Individuals in receipt of certain social security benefits in the qualifying week for winter payments will not be liable to the charge, regardless of income. 

Agricultural and business property relief changes that were first announced at Autumn Budget 2024 will come into effect from 6 April 2026. These measures will introduce significant reforms to Business Property Relief (BPR) and Agricultural Property Relief (APR), which provide Inheritance Tax (IHT) relief on qualifying business and agricultural assets. These measures have faced significant criticism for their potential impact on small farms and rural communities.

From April 2026, a new £1 million allowance will apply to the combined value of property in an estate qualifying for 100% BPR or 100% APR. This means that the existing 100% rate of IHT relief will only apply to the combined value of property in an estate qualifying for 100% BPR or 100% APR. The rate of IHT relief will be reduced to 50% for the value of any qualifying assets over £1 million. Accordingly, any assets receiving 50% relief will be effectively taxed at 20% IHT (the full rate being 40%).

The government has also confirmed they will reduce the rate of BPR available from 100% to 50% in all circumstances for shares designated as 'not listed' on the markets of recognised stock exchanges, such as AIM. The existing rate of relief will continue at 50% where it is currently this rate and will also not be affected by the new allowance.

The option to pay IHT by equal annual instalments over 10 years interest-free will be extended to all qualifying property which is eligible for APR or BPR.