15/04/2026
The new tax year (2026/27) began on 6 April. Updated tax rates and allowances have been well-trailed by the government so there shouldn’t be any nasty surprises for taxpayers! That said, it pays to take note of how the adjustments, including new requirements for filing tax information, will affect your finances this year.
We’ve created a summary of the key tax changes for the 2026/27 tax year to help individuals and businesses with their tax planning:
📈 Dividend income
• The dividend ordinary rate has risen from 8.75% to 10.75% (for basic rate taxpayers), while the dividend upper rate has gone up from 33.75% to 35.75% (for higher rate taxpayers).
• The additional rate remains at 39.35%.
• The dividend allowance is unchanged at £500.
🌱 Venture capital trusts
• There has been a reduction on the income tax relief for investors in venture capital trusts (VCTs) from 30% to 20%.
• The tax relief will be withdrawn if the investor disposes of their VCT within five years.
• The annual allowance for VCT income tax relief remains at £200,000 for the 2026/27 tax year.
🏡 Work from home tax relief
• Employees who are required to work at home by their employer can no longer claim a deduction on income tax towards household costs, such as heating and phone bills.
• Previously people could apply based on their actual expenditure by showing evidence, or they could apply for the flat rate of relief, which was £6 per week, without providing receipts.
🏢 Business Asset Disposal Relief (BADR)
• For the new tax year (2026/27) the rate of capital gains tax when selling qualifying business assets will be 18%. This is an increase from the 14% charged in the previous tax year 2025/26, and the 10% charged prior to that.
• The total gains eligible for BADR, known as the lifetime limit, is unchanged at £1 million.
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief is dependent on individual circumstances.
