Business · Economy · 1 hr ago
UK Budget raises tax on savings and changes support for small firms
Chancellor John Healey raised UK tax rates on savings and property income in the 2026 Budget.
The new rates are 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers, taking effect on 6 April.
The £20,000 annual cash Isa limit will stay, after Healey dropped a plan to cut it for people under 65.
Tax-free allowances, including the personal savings allowance, can still shelter some interest, but higher rates mean savers may need more interest just to keep pace with inflation.
Small firms will get wider business rates relief, with higher eligibility thresholds and a two-year real-terms freeze.
The Budget also raises the trading allowance from £1,000 to £3,000, while higher minimum wages will increase hiring costs for many businesses.
Self-assessment changes are planned for 2029, when the government wants to replace large annual or twice-yearly bills with smaller, more regular payments.
Chancellor John Healey’s 2026 Budget raises tax rates on savings and property income by two percentage points.
The new rates are 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.
The Budget keeps the £20,000 annual cash Isa limit, dropping a planned cut for people under 65.
Small firms will receive higher business rates relief thresholds and a larger trade allowance, but face higher wage costs.
The minimum wage for workers aged 21 and over will rise to £13.21 an hour.
- Who
- Chancellor John Healey announced the measures. Savers, landlords and small businesses are affected.
- What
- The Budget raises tax rates on savings and property income, changes business support and increases the minimum wage.
- When
- The Budget was delivered on Wednesday. The new savings tax rates take effect on 6 April.
- Where
- The measures apply in the UK.
- Why
- The sources describe the measures but do not state a specific reason for the savings tax changes.
This story does not have two clearly opposing sides.
Rachel Reeves had announced income tax increases for savers and landlords due to take effect in April 2027.
John Healey delivered the 2026 Budget and added two percentage points to each planned savings and property income tax rate.
The new tax rates on savings and property income take effect.
The previously announced income tax increases for savers and landlords were due to take effect.
- Basic-rate savings tax
- 24%
- Higher-rate savings tax
- 44%
- Additional-rate savings tax
- 49%
- Cash Isa annual limit
- £20,000
- Small business rates relief thresholds
- £18,000 and £21,000
- Trade allowance
- Increased from £1,000 to £3,000
3 sources
What people are saying
sting in the tail
It will take around 70,000 more shops, cafés and pubs out of business rates entirely, and a two-year real-terms freeze gives the rest some certainty,
But taken together, they don’t go anywhere near far enough.