Every HMRC tax increase from Monday, April 6 – full list and amount you’ll pay | Personal Finance | Finance

A new tax year begins on Monday and with it comes an unwelcome array of new tax hikes, as it does most years. This coming tax year, starting on April 6, will be dominated by several key tax increases – namely the so-called ‘family farm tax’ via an Inheritance Tax increase, an increase on stocks and shares taxes and the scrapping of an annual allowance for working from home.

Alongside all this, a massive change to the way tax is collected for landlords, known as Making Tax Digital, will also begin on Monday. The Chartered Institute of Taxation (CIOT) has in its online guidance set out which taxes will be increased from Monday, as HMRC implements rules set by Chancellor Rachel Reeves and HM Treasury.

Ellen Milner, CIOT Director of Public Policy, said: “Spring is a time of fresh starts, and for taxpayers it also marks the arrival of a new tax year and new tax rules.

“The most contentious change being made this April is bringing business and agricultural assets into the scope of inheritance tax, albeit with an additional allowance and being taxed at a lower rate. This will mean many more valuations of estates will be required. Farmers and business owners potentially in scope will need to pay careful attention to their tax planning.

“However, for many, the most significant tax event of this new tax year is the first phase of Making Tax Digital for Income Tax – bringing the government’s flagship initiative for digitalising the tax system to nearly 900,000 self-assessment taxpayers. Over the next three tax years HMRC plans to bring 2.9 million self-assessment taxpayers into the programme, requiring them to use compatible software to keep digital records and submit quarterly updates and an annual return.”

Below are the key HMRC tax increases set to impact households from Monday:

The CIOT says: “From 6 April 2026, digital record-keeping and quarterly submissions (in addition to an annual tax return) become mandatory for most sole traders and landlords with gross annual trading and/or rental income over £50,000 unless they fall into an exempt group. This, including the annual return, must be done using compatible commercial software. HMRC are not providing an online service to do this.”

Second, as mentioned, the Inheritance Tax changes for farmers. Previously planned to be set at £1M but increased to £2.5M, farmers are able to claim 100% Inheritance Tax relief on the first £2.5M they pass on in Inheritance, then the estate must pay 20% of every £1 over that threshold in Inheritance Tax, starting from Monday.

For a farm estate valued at under £2.5M, it won’t cost anything extra. For a farm valued at £3M, the tax bill would be 20% of £500,000, or £100,000.

Taxes on dividend income will increase from Monday, for both basic rate taxpayers and higher rate (those who earn £50,270 or more).

The lower rate will increase from 8.75% to 10.75%, while the upper rate increases from 33.75% to 35.75%.

CIOT says: “This adjustment will impact most of those who receive dividends, including business owners drawing part of their income from dividends, as well as investors who depend on shares and funds that pay dividends. For many directors of limited companies, dividends represent a substantial share of their earnings.”

Estimates issued by Seb Maley, CEO of tax compliance firm QDOS, say the changes will cost the average small business owner £600 per year, and for those earning over £100k, it could be as much as £1,400.

This HMRC allowance is being officially axed from April 6, after having being introduced by the previous government during Covid. It can only be claimed by those who are forced to work from home, and is not available to those who live within a commutable distance of their workplace. Around 300,000 people currently claim this allowance, which gave you £6 a week tax relief, or £62 a year for a typical basic rate taxpayer, rising to £214 for a higher rate taxpayer.