The tax system is about to change in several ways from 6 April 2026 for many self-employed people, including landlords. These reforms could affect how you record income, file tax returns, and plan your finances.
Below we've answered the key questions you need to understand about the relevant tax changes that come into effect from this April.
Reporting and filing self-employment and property income
What is Making Tax Digital (MTD) for Income Tax, and who will it affect from April 2026?
MTD for Income Tax is the new digital reporting system introduced by HMRC. From 6 April 2026, it requires many self-employed individuals and landlords to:
• Register for MTD
• Keep accurate digital records of income and expenses
• Send quarterly income and expense updates to HMRC
• Use only HMRC-recognised MTD software
• Continue to file an end-of-year submission through that software
This change marks a shift away from a once-a-year paper return to ongoing digital reporting.
Who must comply with MTD for Income Tax from April 2026?
You’ll need to comply with MTD for Income Tax if you’re a sole trader or landlord with total qualifying income over £50,000 from self-employment and/or property in the 2024-25 tax year onwards.
MTD requirements will expand in later years, reducing qualifying income thresholds to £30,000 in April 2027 and £20,000 in April 2028.
Income tax bands and personal allowances
Are the personal tax allowances going to increase from April 2026?
Unfortunately, not. The government announced that the tax bands and allowances have been frozen until April 2031 and so will remain at:
• Basic rate tax band - £37,700.
• Higher rate tax band - £50,270
• Additional rate tax band - £125,140
And the income tax personal allowance, above which tax is due, will remain at £12,570.
As a result of not increasing the income tax rates and allowances, more people will be brought into the tax system and/or face higher tax bills as their wages and salaries increase.
National Insurance Contributions (NICs)
Are there NIC changes from April 2026 that I should budget for?
Yes, especially if you’re self-employed or you run payroll.
If you have employees (or you’re on the payroll):
For 2026/27, the main employee Class 1 rates remain the same:
• Lower Earning Limit to Primary Threshold = 0%
• Primary Threshold to Upper Earnings Limit = 8%
• Above Upper Earnings Limit = 2%
The Lower Earnings Limit increases from £6,500 to £6,708 per year, and the Small Profits Threshold increases from £6,845 to £7,105.
Employer’s Class 1 NICs remain 15% above the Secondary Threshold.
If you’re self-employed (sole trader or partner) from April 2026:
• Class 2 voluntary contributions increase from £3.50 to £3.65 per week for those with profits under the Small Profits Threshold of £7,105.
• Class 3 voluntary contributions increase from £17.75 to £18.40 per week.
• Class 4 remains at 6% on profits between £12,570 and £50,270, then 2% above £50,270 for 2026/27.
If you pay yourself via payroll, make sure your payroll settings are updated for 2026/27 thresholds, so you don't get nasty surprises later.
National Living Wage (NLW) and National Minimum Wage (NMW)
What will the NLW and NMW be from April 2026?
The headline figures are:
• National Living Wage (age 21+) rises to £12.71 per hour
• National Minimum Wage:
- 18–20 rate rises to £10.85 per hour
- Under-18 rate rises to £8.00 per hour
- Apprentice rate rises to £8.00 per hour
If you employ staff, you’ll want to update wage budgets and check pay rates ahead of April payroll runs.
Van Benefit Charge and Van Fuel Benefit Charge
Are van benefit and van fuel benefit charges changing from April 2026?
Yes, these will increase to the following amounts:
• Van benefit charge increases to £4,170 (from £4,020)
• Van fuel benefit charge increases to £798 (from £769)
These matter if your business provides a company van that’s available for private use, and especially if fuel is provided for private mileage.
Company Dividends
If you’re considering restructuring your business to become a limited company, there are a couple of tax changes coming into effect from April 2026, which you should know:
Changes to dividend tax rates:
These are set to increase by two percentage points:
• Basic rate will increase to 10.75%
• Higher rate will increase to 35.75%
• Additional rate remains the same at 39.35%
This will affect company owners and directors who take dividends as part of their income.
However, the first £500 of dividends received is taxed at 0% under the Dividend Allowance.
What should I do now to prepare for the tax changes from 2026?
If you’re self-employed or a landlord:
1. Check whether MTD will apply to you from April 2026 and what your current record-keeping looks like.
2. Review your profit extraction and cashflow planning, because frozen tax thresholds can change your effective tax rate as profits rise.
3. If you employ staff, budget for the April 2026 wage increases and make sure payroll settings are correct for 2026/27 NIC thresholds.
How can DWilkinson&Company help?
With some big tax changes on the horizon, we can help you to make these changes manageable and with the least amount of disruption, including:
• MTD readiness: reviewing your bookkeeping process, recommending MTD software and helping with the setup, as well as reviewing your quarterly submissions and final declaration (tax return).
• Tax and profit planning: making sure you understand what the frozen tax thresholds and NIC rules mean for your actual take-home pay (and that of your staff).
• Owner-managed business advice: including benefits-in-kind implications like vans, and wider planning for disposals.
If you want a clear plan for April 2026, we can review your position and map out what needs to change, and when.
Summary
Tax changes from April 2026 represent a major milestone in how UK self-employed people and landlords report and manage their tax affairs. Discussions now can help you prepare and adapt to these changes whilst avoiding unnecessary penalties or cashflow surprises.
If you’re unsure about how these changes affect you, contact us at DWilkinson&Company for a personalised review and clear, professional support to make this transition as stress-free as possible.
