It may feel odd to celebrate tax awareness week when tax season already haunts many people’s calendars.
However, taking time to understand what is shifting and what is not will make the year ahead far less stressful.
We are here to help you use this week to get clear about the rules that will affect you, so you head into the new tax year with confidence.
The biggest upcoming reform that will affect landlords, sole traders and the self-employed in particular.
2026 sees the beginning of the phased implementation of Making Tax Digital (MTD) for Income Tax.
From April, those with eligible earnings above £50,000 will need to keep digital records and submit quarterly updates in addition to the usual annual return.
HMRC is allowing a period without penalties for missed deadlines in the first year, but this is not a reason to be casual about the transition.
Instead, you can take this time to get familiar with the process so you are not caught out by penalties.
For business owners disposing of assets, Business Asset Disposal Relief (BADR) is being adjusted to an 18 per cent rate, increasing the likely Capital Gains Tax (CGT) payable on qualifying disposals.
Estate planning is also affected, meaning that you may find yourself more exposed to Inheritance Tax.
Reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) mean that the former 100 per cent relief will only apply up to £2.5 million, with amounts above that threshold receiving only 50 per cent relief.
Even when taxes are not set to change materially, this does not mean that more people will not be affected by them.
When thresholds do not change, this is often at the expense of acknowledging changing financial realities.
As wages and prices rise, more people are dragged into tax bands through the process of fiscal drag.
Inflation pushes incomes up without an increase in real-world value, so taxpayers can find themselves worse off even without rate rises.
This is most typified by the ongoing debate around the student loan crisis that is currently being discussed in the media and by politicians.
Even if you are not impacted by it, it serves to illustrate how existing thresholds fail to keep pace with changing economic concerns.
Even someone earning the National Living Wage will have to repay student loans on two of the four existing plans, despite being sold the loan based on repaying with a graduate salary.
This issue is further reflected by those on the National Living Wage soon having over half of their salary exposed to Income Tax for the first time.
These examples are clearly indicative of a failure for thresholds to keep pace with economic realities, resulting in more people facing tax burdens they previously never worried about.
If you would like a hand interpreting the changes and preparing for 2026, our team can review your position and suggest practical steps to improve tax efficiency.
We are using Tax Awareness Week to help you feel more confident approaching your upcoming obligations.
Speak to us today and get tax confident for the year ahead.
