Budget

Savings and Property tax rates 2027‌‌‌ to‌‌‌ 2028

The government will increase the rates of income tax applicable to savings income across the UK. From 6‌‌‌ April‌‌‌ 2027, the savings basic rate will be 24%, the savings higher rate will be 44%, and the savings additional rate will be 49%. 

The rates of income tax applicable to property income will also increase. From 6‌‌‌ April‌‌‌ 2027 the property basic rate will be 24%, the property higher rate will be 44% and the property additional rate will be 49%. The governments of Scotland and Wales have been provided with the ability to set property income rates in line with their current income tax powers. 

Individual Savings Account (ISA) Reforms

Cash ISA limit 

The government will retain the cash ISA limit at £20,000 for all savers over‌‌‌ 18‌‌‌ years old.

First time buyer ISA

From April‌‌‌ 2029, the government will introduce a new ISA to help people save for their first home. It will replace the Lifetime ISA for new accounts – existing Lifetime ISAs will continue under current rules.

Lifetime ISA withdrawals for properties above £450,000 

From 29‌‌‌ October‌‌‌ 2026, first-time buyers buying above the £450,000 cap can withdraw funds subject to a reduced 20% charge. The cap remains £450,000, and the 25% charge continues for other non-qualifying withdrawals.

Increase to the trading allowance from 2027‌‌‌ to‌‌‌ 2028 tax year

The government will increase the trading allowance for individuals from £1,000 to £3,000 from the 2027‌‌‌ to‌‌‌ 2028 tax year onwards. This change will increase the tax-free amount of trading or miscellaneous income, and at the same time increase the Income Tax Self Assessment reporting threshold to £3,000. This will take effect from 6‌‌‌ April‌‌‌ 2027. 

Reforming how taxpayers claim for employment expenses

From 6‌‌‌ April‌‌‌ 2028, the government will remove the £2,500 threshold that requires taxpayers to file a Self Assessment return to claim tax relief on employment expenses. Taxpayers with claims above £2,500 will be able to claim through PAYE using form P87 or the PAYE Expenses service, with supporting evidence.

Increase in rate of the Bank Corporation Tax surcharge for a temporary period

The government will temporarily increase the surcharge rate to 6% for 15‌‌‌ months, from 1‌‌‌ January‌‌‌ 2027 to 31‌‌‌ March‌‌‌ 2028, returning to 3% from 1‌‌‌ April‌‌‌ 2028.

Advance Tax Certainty Service

The government is reducing the minimum expenditure threshold for HMRC’s Advance Tax Certainty Service from £1 billion to £300 million, expanding access to the service from 4‌‌‌ November‌‌‌ 2026. The service gives businesses certainty on how UK tax rules will apply to major investment projects before they invest.

Modernising the administration of Corporation Tax

The government is publishing a Call for Evidence on the future administration of Corporation Tax, seeking views on how a modernised Corporation Tax administration system could better support companies to report and pay the right amount of tax first time. This follows a commitment in HMRC’s Transformation Roadmap, published in July‌‌‌ 2025.

Stamp Duty taxes on shares – modernisation

From late‌‌‌ 2027, Securities Transfer Tax will replace Stamp Duty and Stamp Duty Reserve Tax. HMRC will test a new portal for submitting returns in‌‌‌ 2027. Following the technical consultation, the government will not make agents jointly and severally liable for tax due, and agents will continue to submit returns for clients. Further guidance will follow. 

Research and Development (R&D) Tax reliefs

From 1‌‌‌ April‌‌‌ 2027, companies will no longer need to submit a claim notification form for R&D reliefs. HMRC will introduce a simplified and rationalised Additional Information Form for companies making claims in autumn‌‌‌ 2027. Further details will be published before its introduction to give stakeholders time to prepare. 

Capital Gains Tax (CGT) Founders’ Relief

The government announced a new CGT Founders’ Relief, providing a 10% CGT rate on up to £10 million of lifetime gains for qualifying founders of high-growth, innovative companies from 6‌‌‌ April‌‌‌ 2027. The technical consultation seeks views on how the relief will work in practice and closes on 30‌‌‌ November‌‌‌ 2026.

Business Asset Disposal Relief (BADR): lifetime limit

The government is reducing the lifetime limit for capital gains eligible for BADR from £1 million to £500,000 from April‌‌‌ 2027. This will ensure that three-quarters of BADR claimants will still receive relief on their entire gain. Special provisions will apply to certain pre-6‌‌‌ April‌‌‌ 2027 contracts, share reorganisations and exchanges of securities. 

Fuel duty

The government is extending the temporary 5 pence per litre (ppl) cut in the main rates of fuel duty from 1‌‌‌ January‌‌‌ 2027 until‌‌‌ 30‌‌‌ June‌‌‌ 2027. In addition, the legislation will extend the further 3.7ppl cut to the rebated rates for gas oil (red diesel), biodiesel, bioblend, and kerosene for excepted machines other than for heating, until 30‌‌‌ June‌‌‌ 2027.

Machine Games Duty: changing who is liable for the duty consultation

The government has published a consultation on implementing changes to Machine Games Duty (MGD) liability, closing on 20‌‌‌ January‌‌‌ 2027.

VAT on public electric vehicle charging

The government will introduce legislation in Finance Bill 2026‌‌‌ to‌‌‌ 2027 to clarify that electricity supplied through publicly accessible, and workplace electric vehicle charging points is subject to 20% VAT and is not considered domestic use for the Climate Change Levy. The legislation takes effect on 1‌‌‌ November‌‌‌ 2026.

Private hire vehicle operators

The government will deem the larger operators with annual fare turnover above a certain threshold are liable for 20% VAT on the full value of their fares from 2‌‌‌ January‌‌‌ 2028. The government will shortly publish a consultation to confirm the level of this threshold, with £50 million annual fare turnover as the lead option, and to support final policy design and implementation.

Carbon Border Adjustment Mechanism (CBAM)

The government has announced it intends to expand the scope of the CBAM to include refinery products in‌‌‌ 2030, subject to consultation on feasibility and impacts. The government has published a 12-week consultation which will close on 20‌‌‌ January‌‌‌ 2027.

VAT Tour Operators Margin Scheme (TOMS)

The government has published a call for evidence for the review on the VAT treatment of travel services, including the TOMS. It seeks views on whether the TOMS remains fit for purpose.

VAT treatment of cross-border services

From April‌‌‌ 2027, the reverse charge on cross-border supplies of services will be restricted to VAT-registered businesses. Where overseas providers make supplies of services to non-VAT-registered UK businesses, they will be required to account for VAT in the normal way.

Zero-rate on land sold to social housing providers

The government will implement a zero-rate of VAT for land sold to registered providers of social housing (relevant Housing Associations). This will be introduced through secondary legislation in early‌‌‌ 2027 and take effect from 1‌‌‌ April‌‌‌ 2027.

VAT Online Marketplace Liability (OMPL) extension

From October‌‌‌ 2027, VAT OMPL rules will be extended to UK businesses. Online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and any other UK business with a minimum annual sales threshold per platform of £90,000. The rules will not apply to non-business or personal sales, second-hand goods, or business-to-business transactions. 

Transformation and modernisation

Income Tax Self Assessment (ITSA) Timely Payments

From April‌‌‌ 2029, ITSA taxpayers who make Payments on Account will make smaller, more regular payments during the year they earn the income, rather than larger, infrequent amounts often many months later. Payments will be automated, for example by Direct Debit. This will help taxpayers to budget and manage their tax affairs, reduce the risk of tax debt, and move Self Assessment closer to the way many household bills already operate.

E-invoicing roadmap published

HMRC has published its roadmap for mandatory e-invoicing for VAT invoices from 2029. It explains the proposed approach and when more information will be available.

Requiring Direct Debit arrangements for VAT and PAYE return liabilities

From April‌‌‌ 2029, the government will require employers to have a Direct Debit instruction in place with HMRC for their PAYE and VAT return liabilities, while retaining flexibility to pay by other methods. Direct Debit will make it easier for customers to pay what they owe on time and help reduce debt caused by late payments and errors.

Intermediation Roadmap

HMRC will publish an intermediation roadmap in spring ‌‌‌2027 setting out how HMRC will work with tax advisers, software providers and digital platforms to make it easier for taxpayers to get their tax right. It will include a new GOV.‌‌‌UK route to report harmful intermediary activity, helping customers make informed choices when choosing a tax adviser and working with partners to help clients claim expenses correctly.  
 
There will also be action to improve the way software supports customers to pay the right tax. Working closely with industry partners HMRC will introduce a registration process for software providers, enhanced standards, and a proportionate enforcement framework for addressing non-compliance.