Tax e-News February 2026
This Tax E-News focuses on critical year-end planning opportunities that individuals and businesses should address before the April 5 deadline. Key recommendations include maximizing the £20,000 ISA allowance and considering the 25% government bonus available through Lifetime ISAs. Pension contributions remain a powerful strategy, particularly for those earning between £100,000 and £125,140 who can benefit from an effective 60% tax saving. Businesses are also encouraged to review equipment spending to utilize the £1 million Annual Investment Allowance or the new 40% first-year allowance introduced in January 2026.
Significant legislative shifts are approaching in April 2026, including a two percentage point increase in dividend tax rates and a rise in Capital Gains Tax for certain reliefs to 18%. A notable government “U-turn” will increase the Inheritance Tax relief cap for qualifying agricultural and business assets to £2.5 million, potentially allowing couples to pass on £5 million tax-free. Furthermore, the newsletter outlines the upcoming Making Tax Digital (MTD) mandate for self-assessment taxpayers , the removal of employee tax relief for working from home , and the future requirement for mandatory payrolling of benefits in kind starting in 2027.