Upcoming tax changes
Your 2025-26 return (due 31 January 2027) uses the rates you know. But several changes have already been announced for later years. They matter most if you let property, have savings or dividends, or run a side business.
From 6 April 2026 (the 2026-27 tax year)
These already apply to income you're getting now. They'll first show on the 2026-27 return, due by 31 January 2028.
- Dividends taxed more: the dividend ordinary rate goes from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75%. The additional rate stays at 39.35%, and the £500 dividend allowance doesn't change.
- Working from home relief ends: employees can't claim the £6 a week relief for 2026-27 onwards. You can still claim it for 2025-26 and earlier years if you had to work from home.
- Mileage rate up: HMRC's approved rate for cars and vans goes from 45p to 55p a mile for the first 10,000 business miles. It stays at 25p after that.
- Voluntary Class 2 National Insurance: £3.65 a week, for self-employed profits under the new small profits threshold of £7,105.
- Making Tax Digital starts: sole traders and landlords whose qualifying income was over £50,000 in 2024-25 must keep digital records and send HMRC quarterly updates.
From 6 April 2027
- Rental profits taxed at higher rates: property income gets its own rates of 22% (basic), 42% (higher) and 47% (additional). That's 2 percentage points more than other income. This applies in England, Wales and Northern Ireland. The Scottish and Welsh governments can set their own property rates.
- Mortgage interest relief goes up to 22%: the tax reduction for residential finance costs is worked out at the new property basic rate.
- Savings interest taxed more: savings rates rise to 22%, 42% and 47% across the whole UK. The £1,000/£500 Personal Savings Allowance and the £5,000 starting rate for savings stay the same.
- Allowances used on earnings first: the Personal Allowance and other reliefs will be set against wages, pensions and business profits before property, savings and dividend income.
- Making Tax Digital widens: you'll need to join if your qualifying income was over £30,000 in 2025-26.
What counts as "qualifying income" for Making Tax Digital? Your self-employment turnover plus your rental income, before expenses, added together. Wages, pensions and savings don't count. If you own a property jointly, only your share counts. HMRC writes to people who need to join, but it's your responsibility to check.
From 6 April 2028
- Making Tax Digital widens again: the threshold drops to qualifying income over £20,000, based on your 2026-27 income.
Frozen until 5 April 2031
- The Personal Allowance stays at £12,570, and the higher rate starts at £50,270 (England, Wales and NI), until 5 April 2031.
- The starting rate for savings stays at £5,000 over the same period.
- Because the thresholds don't rise with pay, more of any pay rise is taxed, and more people move into the higher rate.
Had a "You have a tax code change" email?
If you've chosen paperless, HMRC emails you whenever your tax code changes. For security, the email doesn't say what changed. To see the new code and the reason, sign in to your personal tax account on GOV.UK (or the HMRC app) and look in the PAYE / "Check your Income Tax" section.
GOV.UK lists common reasons, including:
- starting a new job or pension, or getting income from a second one
- benefits from your job starting or stopping
- savings interest going over your Personal Savings Allowance
- owing tax because you were on the wrong code
- claiming Marriage Allowance or job expenses
- paying the High Income Child Benefit Charge through your wages
If you file your Self Assessment online by 30 December and owe less than £3,000, HMRC also collects it through your tax code for the following tax year. How paying through your tax code works.
Watch out for scams. HMRC never emails, texts or calls to tell you about a tax rebate or penalty, or to ask for your personal or payment details. If a message seems odd, don't click links or reply. Go to GOV.UK yourself instead. Forward suspicious HMRC emails to [email protected], then delete them.
See what applies to you. The calculator works out your 2025-26 return, and its results show which of these changes affect your income.
Work out my figures - freeSources
- HMRC technical note: changes to tax rates for property, savings and dividend income
- GOV.UK: maintaining Income Tax thresholds until 5 April 2031
- GOV.UK: tax on dividends
- GOV.UK: Making Tax Digital for Income Tax and working out qualifying income
- Working from home relief, mileage rates, self-employed NI rates
- GOV.UK: why your tax code might change and identifying HMRC scams
General guidance, not tax advice. Announced changes can still be amended before they take effect.