We have pleasure in attaching our summary of the key announcements in the 2026 Budget.
Against a challenging background of high government debt, soaring energy prices related to a complex war and higher than predicted interest rates, Mr Healey presented over 95 different measures. The focus was on creating breathing space on cost-of-living pressures in an uncertain global climate and on incremental change within fiscal rules.
Among the wide range of measures were:
- An additional two percentage points increase for tax rates on savings income and property income from 2027/28 for basic, higher and additional rate taxpayers. Dividend tax rates will be unchanged.
- A new pensions tax allowance will be introduced for three years to remove pensioners with income equal to no more than the new state pension from the tax net.
- The restriction on the cash ISA limit for savers under 65 has been reversed from £12,000 back to £20,000.
- A new First Time Buyer ISA will be introduced from April 2029 and will replace the lifetime ISA (LISA) which will continue, with a small reduction in the penalty charge for property buyers who breach the £450,000 purchase price cap.
- To help with increased home energy costs, a one-off £100 energy payment will be given to households in council tax bands A to D.
- Standing charges on domestic gas use will be removed during 2027, or as soon as possible thereafter, with the fees shifting onto unit prices instead.
- The trading allowance will be tripled to £3,000 from 2027/28.
- Capital allowances will see an increase to the main first year allowance from 40% to 50% from 1 January 2027, but a cut to the main writing down allowance from 14% to 12% from April 2027.
- The business asset disposal relief limit will be halved to £500,000 from April 2027, while a new Founders’ Relief will be introduced with a £10 million limit “for qualifying founders of high-growth, innovative companies”.
We trust that you find the enclosed Budget Summary useful and that it is a helpful basis for a discussion with us about your financial future.