2026/27 tax year – key changes.

April 6 2026 sees the start of a new tax year – which means some tax rules will change. While we work to get our website up to date, we run through the changes and how they might affect you. 

Personal allowance stays the same. 

The standard Personal Allowance will stay the same until 2031 at £12,570. This is the amount of income you can receive before you start paying tax. The amount you can earn before the higher and additional rates of tax apply also stay the same (in England, Wales and Northern Ireland). 

In Scotland, the six rates of income tax are the same as in 2025/26 but there is a small change to the basic and intermediate rate thresholds. 

Find out more about Personal Allowances. 

Small rise in dividend tax. 

If you get dividends from investments, the tax rate is going up by 2% for basic and higher rate taxpayers. The Dividend Allowance stays the same at £500 – so if you get dividends under this amount you don’t have to pay tax.  

Find out more about tax on savings and investments.  

Changes to working from home allowance.  

If you’re an employee who works from home, you may previously have claimed tax relief for working from home expenses (like phone, internet or energy costs).  

From April 2026, you won’t be able to claim tax relief on these from HMRC directly. However, where conditions are met, employers can still reimburse you for these costs without paying tax.  

Find out more about working from home allowances for employees.  

National Insurance and working outside the UK. 

This applies to employees who work outside the UK and don’t have to pay UK National Insurance (NI) contributions. If you want to make voluntary NI contributions, you’ll only be able to make Class 3 contributions going forward (rather than Class 2). You’ll only be able to do this if you’ve been resident in the UK continuously for 10 years or have made NI contributions for 10 years, which doesn’t include voluntary NI payments from abroad.  

Find out more about National Insurance.  

Making Tax Digital begins. 

Making Tax Digital is a new way of reporting income and expenses to HMRC. It is being introduced gradually from April 2026. 

The new system means that certain people will need to report their income and expenses every three months using digital software, as well as making a yearly final submission in January.  

From April 2026, self-employed people and landlords with turnover (gross income before expenses) over £50,000 a year will need to use the new system. 

Find out more about Making Tax Digital.  

What else does the new tax year bring?   

The new tax year is a good time to review your tax code(s). Let HMRC know if something doesn’t look right.