A wave of UK tax increases announced at the 2024 Autumn Budget and topped up in 2025 is now landing in stages through to 2027. Employer National Insurance rose to 15%, Capital Gains Tax rates climbed to as high as 24%, Income Tax thresholds are frozen until April 2031, the non-domicile regime has been scrapped, Inheritance Tax relief on farms and businesses has been capped, private school fees now carry 20% VAT, and Stamp Duty thresholds have dropped back to lower levels. Here is what each change does and when it hits.
Income Tax Thresholds Frozen Until 2031
The Personal Allowance stays at £12,570 and the higher-rate threshold at £50,270, with neither figure moving until April 2031.1GOV.UK. Income Tax: Maintaining the Personal Allowance and the Basic Rate Limit Until 5 April 2031 The freeze was originally due to end in 2028 and was extended by three years at the Autumn Budget 2025.2UK Parliament. Fiscal Drag: An Explainer
Rates have not changed, but as wages rise with inflation, more of your pay lands in higher brackets. Economists call this fiscal drag. Over a decade-long freeze the effect compounds: a standard pay rise now hands a growing share of each raise to HMRC without any headline tax being touched.
One threshold moved the other way. The High Income Child Benefit Charge kicks in at £60,000 of adjusted net income for the 2026-27 tax year, up from £50,000.3GOV.UK. Child Benefit Tax Calculator Fewer families now face a clawback, though this threshold is itself frozen and will erode over time.
Employer National Insurance Up to 15%
From April 2025, the employer National Insurance rate rose from 13.8% to 15%.4GOV.UK. Rates and Thresholds for Employers 2025 to 2026 The earnings threshold at which employers start paying dropped from £9,100 to £5,000 per employee per year.5Croner-i. Changes to the Class 1 National Insurance Contributions Secondary Threshold, the Secondary Class 1 National Insurance Contributions Rate, and the Employment Allowance from 6 April 2025 Every employer pays a higher rate, and it now bites on the first £4,100 of each worker’s salary that used to be exempt.
The Employment Allowance rose to £10,500 per year as a cushion.6GOV.UK. Employment Allowance: What You’ll Get It works as a straight discount off the total employer NIC bill, so a small firm with a handful of staff may see the entire increase absorbed. Larger employers get little relative benefit from the allowance and carry most of the cost.
Capital Gains Tax Rates and Reliefs
For disposals on or after 30 October 2024, the main Capital Gains Tax rates rose. The lower rate went from 10% to 18% and the higher rate from 20% to 24%.7GOV.UK. Capital Gains Tax – Rates of Tax Those figures match the rates that already applied to residential property, so the previous gap between selling shares and selling a house has effectively closed.
Business Asset Disposal Relief
Business owners selling a qualifying trading business or shares held for at least two years used to pay Capital Gains Tax at 10% up to a £1 million lifetime limit. That rate rose to 14% from 6 April 2025 and climbs to 18% from 6 April 2026.8GOV.UK. Business Asset Disposal Relief By April 2026, the relief saves only six percentage points off the standard 24% higher rate. Someone selling a business at the full £1 million lifetime limit will pay roughly £80,000 more in tax than they would have two years ago.
Investors’ Relief, the parallel scheme for external investors in unlisted trading companies, saw its lifetime limit cut from £10 million to £1 million for disposals after 29 October 2024.9HM Revenue & Customs. Investors’ Relief (HS308) Investors who had been building gains toward the old £10 million ceiling lost that headroom overnight.
Inheritance Tax: Frozen Bands, Pensions, and Farms
The nil-rate bands are frozen at £325,000 (standard) and £175,000 (residence) through the end of the 2030-31 tax year.10GOV.UK. Inheritance Tax – Thresholds As property and other assets appreciate, more estates cross into IHT territory. Two bigger structural shifts sit on top of that freeze.
Pensions Brought Into Estates From April 2027
From 6 April 2027, most unused pension funds and death benefits will count toward the estate for IHT purposes.11GOV.UK. Inheritance Tax on Pensions: Liability, Reporting and Payment – Summary of Responses Pensions currently sit outside IHT, which has made them one of the most efficient ways to pass wealth on. That advantage disappears. If you have been deliberately leaving your pension untouched to pass it on tax-free, you have roughly a year to reassess before the rules change. The interaction with the residence nil-rate band taper, which reduces the extra allowance on estates over £2 million, will catch families who haven’t run updated numbers.
Agricultural and Business Property Relief Capped
From 6 April 2026, a combined £2.5 million allowance for 100% Agricultural and Business Property Relief applies.12GOV.UK. Changes to Agricultural Property Relief and Business Property Relief The cap was first announced at £1 million in the 2024 Autumn Budget and increased to £2.5 million in December 2025 after farming groups pushed back. Qualifying value above the allowance receives only 50% relief, producing an effective IHT rate of 20% on the excess rather than the full 40%.13GOV.UK. What Are the Changes to Agricultural Property Relief?
Farms and family businesses valued under £2.5 million keep full relief in practice. A farm worth £4 million would face IHT of around £300,000 on the portion above the allowance, where the entire value would previously have been sheltered. Spouses and civil partners can share the allowance.
Stamp Duty Land Tax
The temporary Stamp Duty thresholds in place since September 2022 expired on 31 March 2025. The nil-rate band for standard purchases reverted from £250,000 to £125,000, and the first-time buyer threshold dropped from £425,000 to £300,000.14GOV.UK. Stamp Duty Land Tax: Residential Property Rates Completing a purchase in April 2025 rather than March meant a noticeably larger tax bill on the same property.
Buyers of additional residential properties, including second homes, holiday lets, and buy-to-let investments, face a bigger increase. The surcharge rose from 3% to 5% on 31 October 2024, applying on top of standard rates at every band.15GOV.UK. Stamp Duty Land Tax Rates: 31 October 2024 to 31 March 2025 On a £300,000 second home, the surcharge alone adds £15,000 to the purchase cost, up from £9,000.16GOV.UK. Higher Rates of Stamp Duty Land Tax Combined with the lower thresholds, buying an additional property costs substantially more than it did in mid-2024.
The Non-Dom Regime Has Been Abolished
The remittance basis of taxation, which let UK residents domiciled elsewhere keep foreign income and gains offshore free of UK tax, was abolished on 6 April 2025.17GOV.UK. Reforming the Taxation of Non-UK Domiciled Individuals Domicile has been removed from the tax system and replaced with a residence-based regime.
The replacement is the Foreign Income and Gains (FIG) regime. New arrivals get a four-year window of 100% relief on foreign income and gains, provided they haven’t been UK tax resident in any of the previous 10 consecutive tax years. The relief is not automatic. You must claim it on your Self Assessment return each year you want it to apply, and unused years cannot be rolled forward.18HM Revenue & Customs. HS266 Foreign Income and Gains (FIG) Regime
Existing non-doms sitting on unremitted foreign wealth from before April 2025 have a Temporary Repatriation Facility. It allows those funds to be brought to the UK at a flat 12% rate for 2025-26 and 2026-27, rising to 15% for 2027-28. Without the facility, that income would be taxed at standard rates of up to 45%. The window is three years.
VAT on Private School Fees
From 1 January 2025, private school fees became subject to VAT at the standard 20% rate. The charge applies to both tuition and boarding. Schools in England with charitable status also lost eligibility for business rates charitable relief from April 2025.19HM Revenue & Customs. Applying VAT to Private School Fees
What families actually pay depends on how each school handles the charge. Some are partially absorbing the VAT to limit fee rises; others pass the full 20% through. The net effect for most parents using private education is a meaningful annual increase.
Fuel Duty: Cut Extended, Rise Scheduled for 2027
The 5 pence per litre fuel duty cut introduced in March 2022 has been extended through 22 March 2026, holding petrol and diesel duty at £0.5295 per litre.20GOV.UK. Extension to the Cut in Fuel Duty Rates to March 2026 The planned inflation-linked increase for 2025-26 was also cancelled.
After the cut expires, fuel duty is legislatively scheduled to return to pre-cut levels in stages during 2027, with unleaded petrol and diesel set to reach £0.5795 per litre by March 2027.21GOV.UK. Amended Fuel Duty Rates: 2026 to 2027 Final rates will be confirmed at Budget 2026, leaving room for another extension. As legislation stands, drivers face a roughly 5p per litre increase.