The new tax year begins on Monday 6 April 2026, bringing with it a range of updates to tax and pension rules. These April 2026 tax changes will affect individuals, self-employed professionals, and businesses across Scotland. While some of these updates may not be welcome, understanding them now can help you prepare, and avoid any surprises.
Dividend Tax Increases
If you receive dividend income, you’ll see a rise in tax rates. For basic-rate taxpayers, the rate increases from 8.75% to 10.75%, while higher-rate taxpayers will pay 35.75% (up from 33.75%). The additional rate remains at 39.35%, and the dividend allowance stays at £500.
Making Tax Digital (MTD) for Income Tax
From April, Making Tax Digital (MTD) for income tax becomes mandatory for self-employed individuals and landlords with qualifying income over £50,000 in 2024/25. This means you’ll need to submit quarterly returns of income and expenses using HMRC-approved software. If you haven’t already, now is the time to get set up.
Inheritance Tax (IHT) Reforms
New rules for agricultural and business IHT reliefs take effect this April. Following updates announced in the Autumn 2025 Budget, the 100% relief allowance is now £2.5 million and can be transferred between spouses or civil partners. This change could provide significant relief for family businesses and farms.
Venture Capital Trusts (VCTs) Updates
Investors in Venture Capital Trusts (VCTs) will see a reduction in income tax relief, dropping from 30% to 20%. However, the size of companies eligible for the scheme will double, potentially opening up more opportunities for investment.
Capital Gains Tax (CGT) Adjustments
The rate of Capital Gains Tax (CGT) on gains qualifying for business asset disposal relief rises from 14% to 18%. Other CGT rates remain unchanged, and the annual exemption stays at £3,000.
National Insurance Contributions (NICs) for Expats
If you live or work abroad, you’ll no longer be able to pay voluntary Class 2 NICs (£3.65 per week) to build up your UK State Pension from 2026/27. Instead, you may qualify for Class 3 NICs, but these cost significantly more at £18.40 per week.
State Pension Age (SPA) Rises
The State Pension Age (SPA) begins its phased increase to 67 this April. If you were born between 6 April 1960 and 5 March 1961, your SPA will gradually rise to between 66 years 1 month and 66 years 11 months. For those born on or after 6 March 1961, the SPA will be at least 67.
How Will These Changes Affect You?
The April 2026 tax changes bring a mix of challenges and opportunities. Whether you’re a sole trader, a landlord, or a business owner, it’s worth reviewing how these updates might impact your finances. If you’d like personalised advice, get in touch, we’re here to help.