The Spring Statement 2026, officially called the Spring Forecast 2026, took place on 3 March 2026. Rather than introducing another major package of tax changes, the Chancellor used the statement primarily to respond to the Office for Budget Responsibility’s latest forecasts for the UK economy and public finances.
For business owners, however, that does not mean 2026/27 is a quiet tax year.
Several important changes announced previously have now taken effect, including higher dividend tax rates and the first mandatory phase of Making Tax Digital for Income Tax. These changes can affect limited company directors, sole traders, landlords and other business owners during the current tax year.
In this guide, we explain the key Spring Statement 2026 tax changes and economic updates, what has changed since April 2026 and what business owners should be considering now.
Updated August 2026: This guide reflects the position after the start of the 2026/27 tax year and has been updated to remove pre-April deadlines that have already passed.
Spring Statement 2026 at a glance
The most important points for businesses are:
- The government did not announce a major new package of business taxes at the Spring Forecast.
- The OBR forecast UK economic growth of 1.1% for 2026.
- The government’s forecast said inflation was expected to return to its target during the second half of 2026.
- Dividend tax rates increased from 6 April 2026 for basic-rate and higher-rate taxpayers.
- Making Tax Digital for Income Tax became mandatory from 6 April 2026 for qualifying sole traders and landlords with qualifying income above £50,000.
- Businesses should now focus on managing the tax rules already in force during the 2026/27 tax year, rather than preparing for changes that have already started.
The OBR’s March forecast put UK GDP growth at 1.1% for 2026 and an average of around 1.6% annually between 2027 and 2030. The government also reported increased fiscal headroom and lower forecast borrowing compared with the previous Autumn forecast.
Was it the Spring Statement or Spring Forecast 2026?
You may have seen the event described as both the Spring Statement 2026 and the Spring Forecast 2026.
The government’s official name was Spring Forecast 2026.
The Chancellor had previously committed to holding one major fiscal event each year, with the spring event providing an interim update on the economy and public finances rather than functioning as another full Budget.
That distinction matters.
Some of the most important tax changes affecting businesses from April 2026 were not newly announced on 3 March. They had already been announced and legislated for, but their effects are now being felt during the 2026/27 tax year.
For business owners, therefore, the useful question is not simply “what new taxes were announced?” but:
What tax changes are now affecting my business in 2026/27, and what should I do about them?
Were new taxes announced in the Spring Statement 2026?
There was no major new tax package announced at the Spring Forecast.
The focus was primarily on updated economic and fiscal forecasts.
However, several previously announced tax changes became effective shortly afterwards, making them highly relevant to businesses during the current tax year.
Two of the most significant are:
- higher dividend tax rates from 6 April 2026; and
- the first mandatory phase of Making Tax Digital for Income Tax.
Let’s look at those changes in more detail.
Key tax changes affecting UK businesses in 2026/27
1. Dividend tax rates increased from 6 April 2026
One of the biggest changes for owner-managed businesses is the increase in dividend tax rates.
For the 2026/27 tax year, dividend tax rates above the available dividend allowance are:
- 10.75% for basic-rate taxpayers
- 35.75% for higher-rate taxpayers
- 39.35% for additional-rate taxpayers
The basic dividend rate was previously 8.75%, while the higher rate was 33.75%.
The additional rate remains unchanged at 39.35%.
The annual Dividend Allowance remains £500.
What does the dividend tax increase mean for company directors?
If you operate through a limited company and take part of your income as dividends, you may now pay more personal tax on those dividends than you did in 2025/26.
That does not automatically mean dividends are no longer appropriate.
The most suitable way to extract money from a company depends on factors including:
- your salary;
- company profits;
- other personal income;
- available allowances;
- pension contributions;
- your Income Tax band; and
- your wider personal and business circumstances.
Rather than relying on a salary-and-dividend strategy that was designed for a previous tax year, company directors should review their remuneration planning for 2026/27 using the current rates.
Accounting People can help business owners assess salary, dividends and other tax-planning options as part of wider tax planning and tax services.
2. Making Tax Digital for Income Tax started in April 2026
Making Tax Digital for Income Tax is no longer simply an upcoming change.
The first mandatory phase started on 6 April 2026.
Sole traders and landlords generally need to use Making Tax Digital for Income Tax from the 2026/27 tax year if their qualifying income for 2024/25 was more than £50,000.
Qualifying income is broadly the total gross income from self-employment and property before expenses, rather than business profit after expenses.
Those who fall within the rules must use compatible software to maintain digital records and meet HMRC’s Making Tax Digital reporting requirements. HMRC states that users will need compatible software for digital records, quarterly updates and their tax return process.
The MTD thresholds are being introduced in stages
The current timetable is:
- More than £50,000 qualifying income: from 6 April 2026
- More than £30,000 qualifying income: from 6 April 2027
- More than £20,000 qualifying income: from 6 April 2028
HMRC assesses the relevant qualifying income by reference to an earlier Self Assessment tax return.
What should sole traders and landlords do now?
If you are already within MTD for Income Tax, your priority should now be making sure that:
- your bookkeeping records are being maintained digitally;
- the software you use is compatible with HMRC’s requirements;
- your business and property records are correctly organised;
- your reporting process is working throughout the year; and
- you understand what information needs to be submitted and when.
If your qualifying income puts you into the April 2027 phase instead, it is worth preparing during 2026/27 rather than waiting until shortly before the deadline.
For more detailed support, see our Making Tax Digital accountants service.
What the Spring Statement 2026 means for limited company directors
For many limited company owners, the most immediate personal tax change in 2026/27 is the higher rate of tax on dividends.
A director taking dividends should consider whether their existing remuneration strategy remains suitable under the new rates.
Important areas to review can include:
- salary and dividend levels;
- timing of dividend payments;
- expected company profits;
- pension contributions;
- Corporation Tax;
- personal Income Tax;
- available allowances; and
- cash needed personally versus cash retained within the company.
The right answer will differ from business to business.
Tax planning should therefore look at the company and the individual together rather than focusing only on the headline dividend tax percentage.
If you operate a limited company, it can be useful to review your position before making significant withdrawals from the business rather than waiting until the end of the tax year.
What the Spring Statement 2026 means for sole traders
For sole traders, Making Tax Digital is one of the biggest administrative changes currently affecting Income Tax reporting.
Sole traders with qualifying income above the relevant threshold may need to keep digital records and use compatible software under MTD.
Even if you are not yet within the mandatory threshold, good bookkeeping can make it easier to understand:
- how profitable your business actually is;
- how much tax you may need to pay;
- whether cash is available for upcoming liabilities;
- which expenses have been recorded correctly; and
- whether your business is approaching an MTD threshold.
The move towards digital reporting also makes it increasingly important to keep your records up to date throughout the year rather than trying to reconstruct everything shortly before the Self Assessment deadline.
What the Spring Statement 2026 means for landlords
Landlords receiving property income also need to pay close attention to Making Tax Digital.
If your combined qualifying income from self-employment and property exceeds the relevant threshold, you may be required to use MTD for Income Tax.
For example, the threshold is not necessarily assessed property-by-property or business-by-business. HMRC looks at qualifying income from relevant self-employment and property sources when determining whether the rules apply.
Landlords should consider whether their record-keeping system is suitable for:
- rental income;
- allowable property expenses;
- digital record keeping;
- MTD-compatible software; and
- future reporting obligations.
There are also further Income Tax changes affecting property income scheduled from April 2027, so longer-term tax planning remains important. GOV.UK states that separate property Income Tax rates are due to apply from the 2027/28 tax year in England, Wales and Northern Ireland under the announced measures.
What does the Spring Forecast mean for employers?
The Spring Forecast itself did not introduce a major new employer tax package.
However, the economic environment still matters to businesses employing staff.
Payroll costs are only one part of the picture. Employers also need to consider:
- wage costs;
- recruitment;
- staff retention;
- pension obligations;
- business cash flow;
- pricing;
- interest costs; and
- expected demand.
A business can remain profitable on paper while experiencing significant cash-flow pressure if payroll, tax and supplier costs fall due before customer payments are received.
That makes up-to-date management information and cash-flow forecasting particularly useful when economic conditions remain uncertain.
Spring Forecast 2026 economic outlook
Although tax changes are likely to be of greatest practical interest to many business owners, the Spring Forecast also provided an updated picture of the wider economy.
UK economic growth
The OBR forecast 1.1% real GDP growth in 2026.
It then forecast growth averaging approximately 1.6% a year from 2027 to 2030.
For individual businesses, national GDP figures do not tell the whole story. Conditions can be very different between industries, regions and customer groups.
However, weaker economic growth can influence customer demand, investment decisions and recruitment.
Inflation
The Spring Forecast projected inflation falling and returning to the Bank of England’s target during the second half of 2026.
HM Treasury said measures announced at the previous Budget were expected to reduce inflation by around 0.4 percentage points during 2026/27.
For businesses, lower inflation does not necessarily mean that previous cost increases are reversed.
It means prices are increasing more slowly.
Businesses should therefore continue to monitor supplier prices, wage costs, margins and pricing rather than assuming costs will automatically return to earlier levels.
Government borrowing and fiscal headroom
The government said forecast borrowing had fallen by nearly £18 billion compared with the Autumn forecast, while headroom against the stability rule had increased to almost £24 billion.
These figures provide context for future fiscal decisions, but they do not change the immediate need for businesses to work with the tax rules that already apply in 2026/27.
What should business owners do now?
The key difference between reading about the Spring Statement in March and reading about it today is that several April 2026 changes have already happened.
The focus should therefore move from preparation to implementation.
If you are a limited company director
Review how the 2026/27 dividend tax rates affect your expected personal tax bill.
Consider your wider remuneration strategy rather than assuming that last year’s salary and dividend approach remains optimal.
If you are a sole trader
Check whether you are already required to use Making Tax Digital for Income Tax.
If you are not yet required to join, check whether your qualifying income may bring you into the April 2027 phase.
If you are a landlord
Review your qualifying income and ensure that your property records are maintained in a way that supports your current or future MTD obligations.
If you employ staff
Update your cash-flow forecasts to reflect realistic payroll, supplier, tax and financing costs.
For all business owners
Do not wait until the end of the tax year to discover what your 2026/27 tax position looks like.
Regular management accounts, bookkeeping and tax planning can help identify issues while there is still time to act.
What happens after the Spring Forecast 2026?
The March event was designed as an interim fiscal and economic update rather than the government’s main annual tax event.
That means businesses should be careful when reading speculation about future tax changes.
A useful distinction is:
Confirmed rules are changes that have been announced and enacted or have a confirmed implementation timetable.
Forecasts are expectations about the economy and public finances and can change as economic conditions change.
Future Budget speculation should not normally be treated as confirmed tax policy.
For planning purposes, businesses should base decisions on current legislation and confirmed HMRC rules while monitoring future government announcements.
How Accounting People can help
Changes to tax rates and reporting rules can have different consequences depending on how your business is structured.
Accounting People supports business owners with areas including:
- business and personal tax planning;
- Corporation Tax;
- Self Assessment;
- Making Tax Digital;
- bookkeeping;
- payroll;
- management accounts;
- cash-flow forecasting; and
- HMRC compliance.
If you are unsure how the 2026/27 tax changes affect you, we can review your circumstances and explain the practical steps that may be appropriate.
You can learn more about our tax services or contact our team for advice tailored to your circumstances.
Frequently Asked Questions
What was announced in the Spring Statement 2026?
The 3 March 2026 event was officially called the Spring Forecast. It primarily provided updated forecasts for the UK economy and public finances rather than introducing another major package of tax measures. For businesses, several previously announced tax changes nevertheless took effect from April 2026.
Did taxes increase in April 2026?
Some taxes changed from April 2026. In particular, the basic dividend tax rate increased from 8.75% to 10.75% and the higher dividend rate increased from 33.75% to 35.75%. The additional dividend rate remains 39.35%.
What is the dividend tax rate for 2026/27?
For dividend income above the relevant allowances, the 2026/27 rates are 10.75% for basic-rate taxpayers, 35.75% for higher-rate taxpayers and 39.35% for additional-rate taxpayers. The Dividend Allowance remains £500.
Who has to use Making Tax Digital for Income Tax from April 2026?
Generally, sole traders and landlords registered for Self Assessment whose qualifying self-employment and property income for 2024/25 exceeded £50,000 need to use MTD for Income Tax from 6 April 2026, subject to the detailed rules and any applicable exemptions.
When does the Making Tax Digital threshold reduce to £30,000?
The next mandatory phase starts on 6 April 2027 for people whose qualifying income for 2025/26 is more than £30,000. The threshold is then scheduled to fall to more than £20,000 from 6 April 2028 based on 2026/27 qualifying income.
What does the Spring Statement 2026 mean for small businesses?
For many small businesses, the immediate impact comes less from measures newly announced on 3 March and more from tax and reporting changes now operating during 2026/27. Limited company owners should consider the increased dividend tax rates, while affected sole traders and landlords need to comply with Making Tax Digital for Income Tax.
Should company directors review their salary and dividends in 2026/27?
It can be sensible to review remuneration because dividend tax rates have changed. However, the most tax-efficient approach depends on the director’s personal income, company profits, Corporation Tax position, pension planning and other circumstances. A salary-and-dividend strategy should therefore be considered on an individual basis.
Need help with your 2026/27 tax position?
The tax rules affecting business owners continue to evolve, and the right approach will depend on your circumstances.
Whether you run a limited company, operate as a sole trader, receive property income or employ staff, Accounting People can help you understand your responsibilities and plan ahead.
Speak to our team about tax planning, Making Tax Digital, Corporation Tax or your wider 2026/27 accounting requirements.
