A breakdown of the 2026 Spring Statement
On 3rd March 2026, Chancellor of the Exchequer, Rachel Reeves, delivered the Labour government’s Spring Statement, which acted as a fiscal update rather than a full Budget, following the Governments pledge to keep major policy changes to one per year.
The focus of the Spring Statement remained on providing economic context and setting out forward-looking signals, rather than announcing immediate changes to taxation, with Rachel Reeves stating that her economic plan is “the right one for Britain”.
However, with the start of the new financial year approaching, several measures announced in the 2025 Autumn Budget are due to come into effect from 6 April 2026, with potential implications for individuals and businesses alike.
What are the upcoming changes?
Making Tax Digital (MTD)
Making Tax Digital (MTD) is a government initiative led by HMRC to modernise the UK tax system by requiring digital record-keeping and submissions. Under MTD, individuals and businesses must keep electronic records, use compatible software to submit information to HMRC, and report figures quarterly rather than annually. This can be done through accounting platforms such as Xero, or by using bridging software where records are maintained on spreadsheets.
Following no new announcements from today’s Spring Statement, the rollout of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) will continue to come into effect from April 2026. This will impact the self-employed and landlords with annual incomes exceeding £50,000.
However, this figure will be reduced further from April 2027 and will impact self-employed individuals and landlords receiving annual incomes above £30,000.
No additional exemptions or deferrals were announced at this stage which reinforces the importance of those within scope beginning to review their systems, software options and record-keeping processes if they have not already begun to do so.
At Cooper Associates Accountancy, we have been assisting clients with the transition to MTD, ensuring they are compliant and prepared for these upcoming changes. If you are concerned about MTD, how it may impact you or would like guidance on selecting the appropriate software, our advisers are here to help.
Dividends, savings and property income tax increases
Dividend tax rates will rise by 2% for basic and higher rate taxpayers, rising from 8.75% to 10.75% (basic) and 33.75% to 35.75% (higher) from April 2026.
For example, a company director receiving £30,000 in dividends would currently pay dividend tax at 8.75%, resulting in a tax liability of £2,625. Following the planned 2% increase, the same level of dividend income would be taxed at 10.75%, increasing the tax due to £3,225.
This change will be followed by a 2% increase in the basic, higher and additional rates for both savings income and property income tax from April 2027. This will increase rates to 22% (basic), 42% (higher) and 47% (additional).
As a result, it is recommended that company directors review their remuneration and profit extraction strategies ahead of April 2026, considering the balance between salary, dividends, pension contributions and retained profits to ensure their approach remains tax-efficient and aligned with longer-term financial planning.
A freeze on Income tax thresholds
In addition, the personal allowance and tax thresholds will remain unchanged until the 2030/31 tax year. This means the thresholds will remain at their current rates:
| Tax band | Taxable Income (above the personal allowance) | Tax Rate |
| Personal allowance | £12,570 | 0% |
| Basic Rate | £12,570 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
As confirmed in the 2025 Autumn Budget, this approach continues to increase tax receipts through fiscal drag, as frozen thresholds mean a growing proportion of income is taxed at higher rates as wages rise over time.
How can Cooper Associates Accountancy help?
Although no new announcements were made in the Spring Statement today, it is important to be aware of the wider changes that may impact you in other areas. Please follow the links to explore how the announcement could impact your mortgage or personal finances.
If you have any concerns regarding any of the upcoming changes, our team of expert accountants is on hand to help. We can provide tailored advice based on your personal circumstances, ensuring you feel informed, supported and prepared as the new measures take effect.
Get in touch today to book an initial consultation and discover how Cooper Associates Accountancy can help you.
