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This week’s Spring Statement was a relatively quiet affair. The Chancellor previously committed to keeping the Autumn Budget as the main tax event of the year, and Rachel Reeves stayed true to that approach – no major new tax announcements, and reassurance that the government's economic plan is on track.
The Office for Budget Responsibility (OBR) struck a more cautious note, downgrading growth forecasts to 1.1% for 2026 and flagging that the fiscal context heading into the next Budget will remain challenging. In short: don't expect tax cuts anytime soon.
Whilst the Statement itself contained few surprises, there are still pre-announced changes to the tax landscape that are worth an extra look. Three significant changes come into effect in April 2026, and if you haven't already started preparing, now is the time.
Making Tax Digital for Income Tax
From 6 April 2026, Making Tax Digital for Income Tax (MTD for ITSA) becomes mandatory for sole traders and landlords with qualifying income over £50,000. This means keeping digital records and submitting quarterly updates to HMRC through compatible software – a fundamental change to how income tax reporting works.
We've put together guidance on what MTD means for you and how we can help; visit our MTD page here.
Inheritance Tax: new rules for pensions and agricultural/business property
Two significant IHT changes land this spring. From 6 April 2026, the 100% relief for agricultural and business property is capped at £2.5 million per person – anything above that attracts a 50% relief rather than full exemption. The good news is that the allowance is now transferable between spouses and civil partners, but many business owners and farmers will still find themselves affected, and early planning is essential.
From April 2027 unused pension funds will be brought into the IHT net. For individuals who have built up significant pension savings with the intention of passing wealth to the next generation, this is a major shift in planning assumptions.
Dividend tax rises – act before 6 April
From 6 April 2026, the tax rates on dividends increase by 2% for basic and higher rate taxpayers, rising to 10.75% and 35.75% respectively. If you're a company director or shareholder who takes income through dividends, it's worth reviewing whether there's an opportunity to take dividends before the end of the tax year on 5 April – particularly if you have unused allowances to make use of.
What next?
The Spring Statement confirmed that while there are no fresh shocks, the cumulative impact of changes already in line is substantial. If you'd like to talk through how any of these developments affect you or your business, please get in touch.
For a full summary of all upcoming changes, click here.