The Spring Statement 2026

The Spring Statement 2026 The Chancellor held the Spring Statement on 3 March 2026. The government has been keen to have only one tax event per year (the Budget) and so the Spring Statement was intended to provide an interim update on the economy and public finances. Page Content:- The Spring Statement 2026 Personal Tax Employment Capital Taxes Business The Spring Statement 2026 Whilst the Chancellor did meet the commitment not to make major tax announcements, there was plenty to say on the economy more generally. Looking back a year, the previous Statement focused on a commitment to increasing defence spending, cuts to the welfare state and economic growth. Over the last year, the majority of those cuts to welfare spending were not supported by backbench MPs and the economy has continued to grow slowly, so what did the Chancellor have to say a year on? The strap line was that current policies mean that the government has the right economic plan for Britain. The Chancellor stated that the ‘…Spring Forecast has shown that the government’s economic plan to cut the cost of living, cut national debt and grow the economy, is the right one.’ Whilst the speech was highly political, the Chancellor specifically referred to three particular areas to show that the government’s policies were working: Cutting the cost of living – the OBR’s forecast shows inflation, borrowing and debt interest are falling, whilst investment is rising. Cutting borrowing – the OBR’s forecast shows borrowing is down by nearly £18 billion compared to the autumn, with borrowing this year set to be the lowest in six years and falling below the G7 average.   Growing the economy – the OBR’s forecast shows GDP per person is now set to grow more than was expected in the Budget, with growth of 5.6% over the parliament. That was what the government said but what did the OBR have to say in its 125-page report? The start of the report stated that the fiscal context for the next Budget will remain challenging, so does this mean even more tax rises? It certainly does not appear that tax cuts are on the way anytime soon. Highlights of the report were summarised by the OBR: productivity growth will pick up to 1% in the medium term labour supply growth will decline, mainly due to lower net migration and population ageing GDP growth will slow down to 1.1% in 2026, before averaging 1.6% over the rest of the five-year forecast inflation will reach its 2% target in late 2026 public sector net borrowing is projected to fall from 5.2 % of GDP in 2024/25 to 4.3% of GDP this year and then to 1.6% in 2030/31 weekly wage growth will slow to around 3.5% in 2026 and then average 2.25% unemployment will rise from 4.75% in 2025 to a peak of 5.33% in 2026, primarily driven by new entrants into the labour market struggling to find work. Of course, the Spring Forecast is exactly that; for example, the effects of the current situation in the Middle East have not been factored into any of the data released by the OBR. The OBR also makes some other important points: the tax-to-GDP ratio is forecast to increase to a post-war high of 38% of GDP in 2030/31   there continue to be pressures on the government’s departmental spending plans there are concerns that the future costs of welfare spending may follow the sharp growth of disability and health caseloads since the pandemic. To summarise, not a great deal of growth appears to be around the corner. Public spending is one side of the equation but taxation is the other, so what does the tax system have to offer over the next year?   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Personal Tax Tax bands and rates The basic rate band remains at £37,700, with the higher rate threshold remaining at £50,270. The additional rate threshold remains at £125,140. The freeze of these thresholds will continue until April 2031. The NICs Primary Threshold and Lower Profits Limit remain at £12,570. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 up to April 2031. Other employer NICs relief thresholds aligned to the Upper Earnings Limit will also be maintained at this level. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish Income Tax rates and bands apply to income such as employment income, self-employed trade profits and property income. The rates and bands for 2026/27 are as follows: Band £ Rate % 0 – 3,967 19 3,968 – 16,956 20 16,957 – 31,092 21 31,093 – 62,430 42 62,431 – 125,140 45 Over 125,140 48 Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. Welsh residents Since April 2019 the Welsh Government has had the right to vary the rates of Income Tax payable by Welsh taxpayers (other than tax on savings and dividend income). For 2026/27 the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers.  The personal allowance The Income Tax personal allowance is fixed at the current level of £12,570 and will remain frozen until April 2031. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140. The government will increase the married couple’s allowance and blind

SPECIAL FOCUS – 2025 AUTUMN BUDGET

SPECIAL FOCUS – 2025 AUTUMN BUDGET In this month’s focus, we’re breaking down the key announcements from the 2025 Autumn Budget Page Contents:- INCOME TAX RATES INCORPORATION RELIEF SHARE REORGANISATIONS BUSINESS & AGRICULTURAL PROPERTY RELIEF MANSION TAX CAPITAL ALLOWANCES VENTURE CAPITAL SCHEMES ENTERPRISE MANAGEMENT INCENTIVE PENSIONS AND SALARY SACRIFICE ELECTRIC VEHICLE EXCISE DUTY INCOME TAX RATES What’s changing? Income tax thresholds will be frozen for a further three years, until 6 April 2031. As wages and taxable benefits increase, individuals may find themselves in a higher tax bracket as the thresholds at which the basic, higher and additional rates of tax bite stay the same. In addition, income tax rates for certain types of income are increasing by 2%. If you need more Help with any of these Budget Items, Please see our Accounting Services. or call us on 0161 872 8671.   Dividends Dividend tax rates for basic and higher rate taxpayers will increase by 2% from 6 April 2026 as shown in the table below. The additional rate will remain unchanged.   2025/26 2026/27 Ordinary rate 8.75% 10.75% Upper rate 33.75% 35.75% Additional rate 39.35% 39.35% The charge applying to loans to participators of close companies under s.455 Corporation Tax Act 2010 will also increase to 35.75% accordingly. Savings and property income From 6 April 2027, interest from savings will be taxed at a higher rate than income from employment and self-employment as tax on savings income will increase by 2%. A new property rate of tax will also be introduced from 6 April 2027, which will be 2% higher than the standard rates of income tax across all bands. The introduction of a specific rate of tax for income from property increases the possibility of further changes, i.e. a wider divergence from the rate of tax applied to other income. The changes to savings and property income tax rates are shown in the table below.   2025/26 (%) 2026/27 (%) 2027/28 (%) Basic rate 20 20 22 Higher rate 40 40 42 Additional rate 45 45 47 Currently, allowances and reliefs are allocated tax efficiently, to minimise the tax liability. A further sting in the tail is that these rules are to be changed so the personal allowance is first set against employment, trading and pension income, rather than property or savings income, which will be taxed at a higher rate. This greatly reduces the scope for escaping the tax increase. A person who has taxable savings/property income of £10,000 per year will pay £200 more tax on that income in 2027/28 than currently. The Budget documentation confirms that the income tax reducer, which replaced the deduction for financing costs, will increase to 22% from April 2027. Who will this affect? The changes affect all individuals who pay tax on their dividend income, whether from being a shareholder in a company they own or work in, or from holding shares as investments from 6 April 2026. The savings and property income tax hikes affect unincorporated landlords and savers who pay tax on their savings and/or property income from 6 April 2027. According to the Budget 2025 document, over 90% of taxpayers do not pay tax on savings income. This is largely due to the personal savings allowance. The savings and dividend tax rates will apply to the whole of the UK, but the property tax rates will not apply to Scotland. The government intends to work with the devolved governments of Scotland and Wales to enable them to set property tax rates. Can I have a practical example? Dividends Example Luke is the sole shareholder of Acom Ltd, which makes £75,000 per annum. Luke always extracts all available profit each year. In 2025/26, he takes a salary of £12,570 and the balance (£62,430) as dividends. His tax liability for 2025/26 is calculated as: Income (£) Tax rate Tax liability (£) 12,570 effectively 0% 0 37,700 8.75% 3,299 24,730 33.75% 8,346 Total   11,645 In 2026/27, once dividend rates increase, Luke’s tax liability will increase by almost £1,250 as shown below. Income (£) Tax rate Tax liability (£) 12,570 effectively 0% 0 37,700 10.75% 4,053 24,730 35.75% 8,841 Total   12,894 Savings income Example Dylan’s state and private pensions total £60,000 per annum and he has interest income of £1,000. He is entitled to the personal savings allowance, which is £500 for a higher rate taxpayer, so the remaining £500 is taxable. In 2026/27, Dylan will pay £100 income tax on the interest. In 2027/28, this will increase to £110. Are there any opportunities for savings? Dividends As the change to dividend tax rates is coming on 6 April 2026, those in control of their dividend income should accelerate dividends where possible before this date, whereas investors need to make the most of their ISA allowance. Dividends from shares held within an ISA aren’t taxable. You should therefore utilise your annual ISA allowance to shelter investments from income tax (and capital gains). Married individuals and those in a civil partnership should review how their shares are owned and transfer shares between them to minimise their combined tax bill. There are no capital gains tax (CGT) or inheritance tax (IHT) implications when assets are transferred between spouses/civil partners. Owners of trading companies can transfer shares to other individuals (such as their children over the age of 18) without triggering a CGT liability. This is done by claiming holdover relief. This does of course mean the owner manager has less income; if they are already supporting others it may be more tax efficient to pay dividends directly, e.g. to children at university. Owner managers should consider paying additional dividends prior to 6 April 2026 to take advantage of lower tax rates. Don’t forget about outstanding directors’ loans. If they are to be cleared with a dividend it will be more expensive to do so after 6 April 2026. Owner managers should also consider alternatives to larger dividends, such as a mixture of exempt benefits and pension contributions. Owner managers with cash

Budget 2025: the key announcements

Budget 2025: the key announcements The Chancellor announced many changes to the tax system, with some coming into effect immediately and others in several years. What are the headline changes? In order to meet her fiscal rules and plug the hole in public finances, without technically breaking manifesto pledges, the Chancellor has introduced a raft of changes to the tax system. There are so many changes, that you’re bound to be affected. First the bad news. The income tax rates that apply to property, savings, and dividend income are going up by 2% across all bands (except the additional dividend rate). Dividends will be affected from April 2026, with the hike in property and savings tax rates coming a year later. The cash ISA allowance will be cut to £12,000 as rumoured, but the full £20,000 will still be available by ringfencing £8,000 for stocks and shares, If you would like assistance with this Autumn Budget 2025  Anouncements or any other Accounting Services you can find them here. Or Call Us On:        0161 872 8671 Pensions were thankfully largely left alone. However, the maximum amount that can escape NI charges via salary sacrifice is to be capped at £2,000 from 2029. Drivers of electric vehicles and hybrids are to be slapped with a “per-mile” levy: 3p for wholly-electric vehicles and 1.5p for hybrids. While the Chancellor did not introduce a wealth tax, a council tax surcharge will apply to properties worth more than £2 million. The charge will range from £2,500 to £7,500 and will be payable alongside the existing council tax. However, there was one small bit of good news, as it was confirmed that the £1 million allowance for 100% business and agricultural property relief will be transferrable after all. This means any unused allowance on the death of the first spouse (or civil partner) can be claimed in the estate of the second in a similar way as the nil rate bands. Those are the highlights, but as ever there is much more that didn’t make it into the speech. We’ve summarised all of the main announcements below. Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk Stealth taxes It will come as no surprise that the majority of thresholds will be frozen for a further three years than planned, to 6 April 2031. This includes personal income tax and equivalent national insurance thresholds, the secondary threshold for employer NI contributions. The inheritance tax nil-rate bands are already set at current levels until April 2030 and will stay frozen at these levels for a further year until April 2031. The forthcoming combined allowance for the 100% rate of agricultural property relief and business property relief will also be fixed at £1 million for a further year until 5 April 2031.  Unusually, the threshold at which student loans under Plan 2 are repaid will be frozen for three years from 6 April 2027.  Capital allowances The main rate writing-down allowance will be reduced from 18% to 14% from April 2026 and a new 40% first-year allowance  will be introduced from 1 January 2026 Dividends In a blow to owner-managers, dividend tax rates for basic and higher rate taxpayers will increase by 2% from 6 April 2026. If you’re sitting on surplus profits now is the time to consider declaring higher dividends to take advantage of the current rates. The ordinary rate will rise from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75%. The additional rate will remain unchanged at 39.35%. Property income and savings income Savers and landlords were not spared from the tax increases, but they do have a longer grace period. Tax on savings income will increase by 2% points across all bands. The basic rate will rise from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47% from April 2027. The government is creating separate tax rates for property income.  These separate rates mean property income will have its own individual tax rates (as already occurs for the taxation of savings and dividend income). From April 2027, the property basic rate will be 22%, the property higher rate will be 42% and the property additional rate will be 47%. Finance cost relief will be provided at the separate property basic rate (22%). The amount under 65’s can save into a cash ISA will also be capped at £12,000 from April 2027, whilst the overall ISA allowance will remain at £20,000. This means you will need to invest in stocks and shares to get the benefit of the full ISA allowance.  Inheritance tax  Finally, something for the farmers. In respect of agricultural property relief and business property relief, any unused allowance for the 100% rate of relief to be transferable between spouses and civil partners from 6 April 2026. The unused allowance can be transferred even if one spouse died before 6 April 2026, which is a significant change to the previously announced policy.  Employees From 6 April 2026 the deduction from income tax for non-reimbursed home working expenses will be removed. Employers can still reimburse employees for these costs where eligible without deducting Income Tax and NI. From 6 April 2026 the income tax and NI exemption for employer-provided benefits will be extended to cover reimbursements for eye tests, home working equipment, and flu vaccinations.  The value of salary sacrificed pension contributions that can receive employee and employer NICs relief will be capped at £2,000 per year. An unpopular policy but at least it won’t come in until 6 April 2029.  At Autumn Budget 2024, the government announced it would bring employee car ownership schemes  into scope of the Benefit in Kind rules from 6 April 2026.  Implementation will now be delayed to 6 April 2030, with transitional arrangements until April 2031. Cars The Expensive Car Supplement threshold for zero emission vehicles will increase

Autumn Budget 2025 (Updated).

Chancellor of the Exchequer Rachel Reeves set out tax-raising measures worth up to £26 billion in the Autumn Budget on 26 November 2025.

The increases will be achieved through a range of measures, including extending the freeze on Income Tax thresholds for a further three years.

Hidden MTD news in Spring Statement documents

Hidden MTD news in Spring Statement documents Chancellor Rachel Reeves kept her pledge that there would be no more tax rises at the Spring Statement, but there are some important Making Tax Digital developments hidden away in the tax related documents. What do you need to know? The timetable for Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) includes mandating sole traders and landlords with revenue exceeding £50,000 from April 2026, then £30,000 the following year. The government has published a technical note alongside the Spring Statement documents that provide further details on the measures. The note includes the following key points: For more help with your Accounting need see our Services Page For Planning help see our Financial Page There is still no certainty of if and/or when taxpayers with income below £20,000 will be brought within MTD ITSA. The note simply says “As part of the ongoing rollout of MTD, the government will continue to explore how we can best bring the benefits of digitalisation to a greater proportion of the 4 million sole traders and landlords who have income below the £20,000 threshold.”

The Spring Statement 2025

The Spring Statement 2025 Chancellor of the Exchequer, Rachel Reeves, held the Spring Statement on Wednesday 26 March 2025. In the run up to the event, the Chancellor stated that she ‘remains committed to one major fiscal event a year to give families and businesses stability and certainty on upcoming tax and spending changes and, in turn, to support the government’s growth mission’. Table of contents. To see the Full Dunhams budget report download it here The Chancellor did meet her commitment that there would be no major tax announcements but tax is only one side of the equation. The other is spending and the Spring Statement confirmed a number of the measures recently announced, namely: There were also announcements about the rollout of the Making Tax Digital (MTD) for Income Tax project. Government spending announcements National security Reductions in the Official Development Assistance budget (overseas aid) will support an increase in NATO-qualifying defence spending to 2.5% of GDP by April 2027, with an ambition to increase to 3% in the next Parliament as economic and fiscal conditions allow. The Spring Statement accelerates towards this by providing an additional £2.2 billion of funding for the Ministry of Defence next year. Reform As announced by the Secretary of State for Work and Pensions, the government wants to create a more pro-work welfare system for those who can work and to protect those who cannot. These reforms are projected to save £4.8 billion from the welfare budget in 2029/30 and welfare spending will fall as a share of GDP in the medium term. This will include: The government is also looking for efficiencies from the state, including by bringing NHS England back into the Department of Health and Social Care. The Spring Statement announces a £3.25 billion Transformation Fund to drive efficiencies across government. Growth According to the government, growth is their central mission. The government will set out capital spending plans for the Parliament at the Spending Review in June. Ahead of that, the government has announced an additional £2 billion for social and affordable housing for 2026/27, as part of the government’s ambition to build 1.5 million homes in England in this Parliament, supported by reforms in the Planning and Infrastructure Bill. To ensure the construction industry has the capacity to deliver this government’s plan to get Britain building, the government has committed to a £625 million package for skills in construction, expected to provide up to 60,000 more skilled workers this Parliament. Personal Tax Tax bands and rates The basic rate of tax is 20%. For 2025/26 the band of income taxable at this rate is £37,700 so that the threshold at which the 40% rate applies is £50,270 for those who are entitled to the full personal allowance. The basic rate band is frozen at £37,700 until April 2028. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 for these tax years as well. The government has suggested that, from April 2028, these limits will then be uprated in line with inflation. For 2025/26 the point at which individuals pay the additional rate of 45% is £125,140. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. There are no changes to the taxation of savings and dividend income for 2025/26. Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish Income Tax rates and bands apply to income such as employment income, self-employed trade profits and property income. In 2024/25 a new 45% rate was introduced, making six Income Tax rates which range between 19% and 48%. The rates and bands for 2025/26 for taxable income are as follows: £ % 0 – 2,827 19 2,828 – 14,921 20 14,922 – 31,092 21 31,093 – 62,430 42 62,431 – 125,140 45 Over 125,140 48 Scottish taxpayers are entitled to the same personal allowance as individuals in the rest of the UK. Welsh residents Since April 2019 the Welsh Government has had the right to vary the rates of Income Tax payable by Welsh taxpayers (other than tax on savings and dividend income). For 2025/26 the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. The personal allowance The Income Tax personal allowance is fixed at the current level of £12,570 until April 2028. The government has suggested that, from April 2028, it will then be uprated in line with inflation. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140. The government will uprate the married couple’s allowance and blind person’s allowance for 2025/26. Pension tax limits For 2025/26: Non-UK domiciled individuals Significant changes are made to the tax regime relating to non-UK domiciled individuals. Broadly, from 6 April 2025, changes will be made to replace the remittance basis of taxation, which is based on domicile status, with a new tax regime based on residence. The new regime will provide 100% relief on foreign income and gains for new arrivals to the UK in their first four years of tax residence, provided they have not been UK tax resident in any of the ten consecutive years prior to their arrival. The protection from tax on foreign income and gains arising within settlor-interested trust structures will no longer be available for non-domiciled and deemed domiciled individuals who do not qualify for the four-year foreign income and gains regime. Transitionally, for Capital Gains Tax purposes, current and past remittance basis users will be able to rebase foreign assets they held on 5 April