UK Budget 2026 - What You Need to Know

What the Budget Means for You

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• Savers & Landlords - tax on your income from property and savings is increasing by a further 2 percentage points from April 2027. That means that the basic rate will be 24%, higher rate will be 44%, and additional rate 49%
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• For Rental Property Owners this comes on top of the need to register your property with the Register your Rental Property service, and pay a £65 annual fee per property, which increases the administrative burden of being a landlord
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• For Savers, the blow is cushioned slightly by the restoration of the £20,000 Cash ISA allowance
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• A First Time Buyers' ISA is being launched, offering bonuses of up to £20,000 for savers, and LISA withdrawal charges are being scrapped. The Government is looking into incentives for new Starter ISAs for first time investors, and the plans to charge a 22% tax on uninvested cash within Stocks & Shares ISAs have been reversed
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• State pensions for low income pensioners will not be taxed
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• Founders Relief limits Capital Gains Tax on business disposals to 10% up to £10m, but Business Asset Disposal Relief is falling from £1m to £500k
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• Capital Gains Taxes, Dividend taxes, and all the main rates of income tax are unchanged

What You Should Do
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• Review any Cash Savings - from April 2027 these become less attractive, and tax efficient options like direct gilt holdings exist
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• Make a plan for your Rental Properties. Alongside the Renters' Rights Bill, the cost of being a landlord has increased again; there may be more suitable alternatives for income
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• Prioritise saving within your ISAs and Pensions for tax-free gains and income
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• Outside of tax-free wrappers, returns via dividends and capital gains are generally more tax efficient than direct income

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An understated budget

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This budget was more of a Political than a Tax related event. Chancellor Healey said in the lead up to this budget that his objective was to "Do No Harm", pushing aside more radical policies like steep increases in CGT and more pronounced bank taxes. Instead, Energy and Cost of Living took priority.

In financial terms, this was the smallest budget out of the last 6, with £7bn of gross spending and saving. It was  scrupulously balanced, emphasising fiscal responsibility, which is a contrast to the large handout budgets that characterised the later stages of the Conservative government.

But in terms of measures, this was the biggest, with 98 different small policies announced.

The Government has chosen to support less wealthy households via a direct £100 payment in January to households in Council Tax Bands A-D. We saw further energy measures with a scrapping of gas standing charges and a promise to only procure new energy generation which lowers bills.

Cost of living measures were more about extensions to existing policies, but decreases to tariffs on imported goods (famously "4p off gherkins", but more importantly cheaper kerosene) will cushion inflationary impacts very marginally.

Our Take

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• The Energy support payment is means tested with reference to Council Tax bands. This is the first such national measure that we know about which is administered in this way. Is Property wealth going to be the yardstick for tax fairness going forwards?
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• The Labour Party's commitment to Fiscal Stability is encouraging for UK gilt investors. This budget was balanced and fully funded.
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• Tough choices have been delayed. Part of the budget balance comes from real-terms cuts to government and civil service budgets. Will the government see through these promises into the next election?
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• The Chancellor reportedly thoroughly examined the case for big increases in Capital Gains Taxes and rejected them, suggesting that we will see more stability here under this Government.

• Banks and landlords appear to be the easiest targets, politically speaking, to raise significant tax revenues.

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If there's any items above that you think affect you, then get in touch.

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