HMRC changes April 2026 arrived in force on 6 April 2026, reshaping tax rules for workers, investors, landlords and family businesses. The updates, confirmed in HMRC’s April 2026 Employer Bulletin, mark the biggest day of UK personal tax change in years.
Key figures at a glance:
- Dividend basic rate up from ~8.75% to ~10.75%; higher rate up from ~33.75% to ~35.75%.
- Business Asset Disposal Relief CGT rate rising from ~14% to ~18% on qualifying disposals.
- Making Tax Digital for Income Tax now live for sole traders and unincorporated landlords with gross income above ~£50,000.
- Agricultural and Business Property Relief at the top rate capped at ~£2.5 million per person.
- National Living Wage rising to £12.71 an hour for workers aged 21 and over from 1 April 2026.
Why these HMRC changes April 2026 matter
Most of the reforms were announced at Autumn Budget 2024 and then refined at Autumn Budget 2025. They were designed to raise additional revenue while tightening reliefs seen by the Treasury as overly generous.
The result is an unusually dense package of measures taking effect on or around 6 April 2026. Income types, asset disposals, inheritance planning and payroll compliance are all affected together.
What the tax rate changes show
Dividend income faces the sharpest rate shift of the package. Figures reported in the Autumn Budget show the ordinary rate rising from 8.75% to 10.75% and the upper rate from 33.75% to 35.75%.
The additional dividend rate stays at 39.35%, leaving only top-band earners unaffected by the hike. Business Asset Disposal Relief has risen too.
The qualifying CGT rate moves from 14% to 18% for disposals on or after 6 April 2026. Investors’ Relief tracks the same path, ending the long-standing 10% CGT rate business sellers have relied on for years.
Inheritance tax reliefs saw the most dramatic redesign of the lot. From 6 April 2026, the top rate of Agricultural Property Relief and Business Property Relief is capped at a combined £2.5 million per person.
Assets above that cap get 50% relief, and AIM-listed shares drop to 50% regardless of value.
What has changed for workers and small businesses
Payroll rules have shifted too. Making Tax Digital for Income Tax is now mandatory for sole traders and landlords whose 2024 to 2025 gross income topped £50,000.
Those affected need quarterly digital updates plus a final year-end declaration, replacing the old annual Self Assessment return. Umbrella company PAYE liability has also been redrawn from 6 April 2026.
Recruitment agencies or end clients could now be liable where an umbrella underpays tax or National Insurance. New workplace benefit exemptions cover reimbursed eye tests, flu vaccinations, and homeworking equipment.
National Living Wage rates rose on 1 April 2026, with £12.71 an hour for those aged 21 and over. Reported figures also show £10.85 for 18 to 20 year olds and £8.00 for 16 to 17 year olds and apprentices in their first year.
What to do next
Millions of taxpayers may need to review their position, their records, or their software. Getting ahead of the updates could reduce the risk of mistakes during the first full year under the new rules.
If you are affected by the April 2026 HMRC updates:
- Check whether your 2024 to 2025 qualifying income placed you inside MTD for Income Tax from 6 April 2026.
- Review your tax code on your first 2026 to 2027 payslip against HMRC’s P9X notice for the new tax year.
- Speak to an adviser about dividend, CGT or inheritance planning if you run a company, hold shares, or expect to pass on assets.
Could you be owed a rebate?
Many workers end up overpaying tax in years when rules change, codes shift, or employment circumstances move.
HMRC tends to issue P800 tax calculations later in the year, though taxpayers can often start checking their position sooner.
If the latest rule changes or a new tax code could leave you out of pocket, our MTD qualifying income guide may help.
The guide explains how HMRC defines qualifying income for Making Tax Digital and whether the £50,000 threshold applies to you.
Key Takeaways
- Dividend tax rates rose by 2 percentage points at the ordinary and upper bands from 6 April 2026.
- Making Tax Digital for Income Tax went live for sole traders and landlords with gross income above £50,000.
- BADR Capital Gains Tax jumped to 18%, ending the long-standing 10% rate era.
- Agricultural and Business Property Relief at the top rate is capped at a combined £2.5 million per person.
- National Living Wage increased to £12.71 an hour for workers aged 21 and over from 1 April 2026.
