Heads up, folks! Major tax changes are set to hit your wallet starting April 6, 2026. Here’s what’s coming your way:
1. **Dividend Tax Hike**: Investors, brace yourselves—expect a 2-percentage point increase in dividend tax. Basic rate jumps from 8.75% to 10.75%, and the higher rate rises from 33.75% to 35.75%. With the dividend allowance slashed to £500, more savers could be caught off guard.
2. **VCT Tax Break Reduction**: Venture Capital Trusts are taking a hit, with upfront income tax relief dropping from 30% to 20%. These changes might affect the appeal of these high-risk, tax-efficient investments.
3. **Capital Gains Tax Increase on Business Sales**: Entrepreneurs planning to sell up beware—Capital Gains Tax under Business Asset Disposal Relief will rise from 14% to 18%. Plan accordingly to avoid a heftier bill.
4. **Stealth Income Tax Grab**: The frozen income tax thresholds mean more of us will be dragged into higher tax brackets as salaries rise. That notorious 60% tax rate on earnings between £100,000 and £125,140 isn’t going anywhere.
But fear not! There are a few tricks up the sleeves to soften the blow. Experts suggest acting before April 5 to maximise your ISA allowance and boost pension contributions to shield income from these tax hikes. And if you’re eyeing VCTs, securing the 30% relief now might be wise.
The government argues these tweaks balance the playing field with other relief schemes. But if you’ve got finances on the brain, now’s the time to strategise and stay ahead of the curve!
Got thoughts on these changes? Share your views below! #TaxChanges #Budget2026 #MoneyMatters