Spring Statement, 3 March 2026

3 March 2026 • HMRC

The government previously stated that the Autumn Budget would be its only annual fiscal event. Therefore, as expected, the Spring Statement was brief and included few policy changes or amendments.

Below, we summarise the statement’s key points and include a reminder of previously announced tax changes that will come into effect in the 2026/27 fiscal year:

Spring Statement – key points

• The Office for Budget Responsibility (OBR) indicated that GDP will increase by 1.1% in 2026, which is down from the 1.4% forecast provided in the 2025 Autumn Budget.
• Longer-term, the OBR’s forecast shows GDP per person is set to grow more than was expected, with growth of 5.6% over the parliament.
• The OBR projects that inflation will fall from 3.4% in 2025 to 2.3% in 2026, and then again to 2% from 2027 onwards, with inflation expected to return to target in late 2026.
• This means the UK would meet its target sooner than the OBR originally predicted following the Autumn Budget, when the rate of 2.5% was forecast for 2026.
• The Chancellor’s decisions in the last budget to ease the cost of living, including reducing energy bills by £150 and freezing rail fares, are expected to help to bring down inflation in 2026/27.
• The OBR’s forecast shows borrowing is down by nearly £18 billion compared to the autumn, with borrowing this year set to be the lowest in six years and falling below the G7 average.

Upcoming tax changes – 2026/27

Here is a reminder of the key tax changes that will come into effect in the 2026/27 fiscal year:

Personal income tax

Income tax thresholds are frozen for England, Wales and Northern Ireland until April 2031. However, in Scotland, basic and intermediate thresholds increase by 7.4%, with the higher, advanced and top rates frozen.

Inheritance tax

Changes originally proposed would have reduced both Business Property Relief (BPR) and Agricultural Property Relief (APR) to £1 million. However, on 23 December 2025, it was announced that the maximum 100% relief rate will instead apply to the first £2.5 million.

Spouses or civil partners will be able to pass on up to £5 million in qualifying agricultural or business assets between them before paying inheritance tax.

Dividend tax rates

From 6 April 2026, the basic rate and higher rate of tax on dividends will increase by two percentage points to:

10.75% for basic taxpayers

35.75% for higher rate taxpayers

Making Tax Digital

From 6 April 2026, landlords and self-employed individuals with qualifying income of £50,000 or more are obligated to join Making Tax Digital. Find out more about the scheme and how we can support your transition here.

Business asset disposal relief

From 6 April 2026, the reduced rate of Capital Gains Tax, available for disposal of assets falling within this category, is increasing from 14% to 18%.

Business rates relief

It was announced in January 2026 that for England only, a new business rate relief of 15% for pubs and live music venues can be claimed in addition to existing business rates relief schemes.

Capital allowances

The main rate of writing-down allowance for plant and machinery will decrease from 18% to 14%, with the new rate effective from 1 April 2026 for corporation tax and 6 April for income tax.

Corporation tax

From 1 April 2026, penalties for late returns (three months late) will be doubled, with the initial late-return penalty increasing from £100 to £200, through to the maximum £2,000 – up from £1,000 – for three late returns.

We are here to help. If you have any questions about the Spring Statement or the 2026/27 tax changes, contact your usual Warrener Stewart representative or email info@warrenerstewart.com.