The Spring Forecast: 2026 Summary

Go to the most recent Autumn Statement.

Our Spring Forecast 2026 summary explains the key announcements from this year’s Statement and what they mean for individuals and businesses.

With ongoing pressure on household finances and continued uncertainty around economic growth, many business owners and individuals were keen to see whether the Chancellor would use the Spring Statement to announce new tax measures.

However, in line with the government’s commitment to having only one major fiscal event each year, Rachel Reeves focused primarily on providing an update on the economy and public finances, rather than introducing new tax changes. The Chancellor emphasised that the government’s economic plan remains on track, highlighting falling inflation, lower borrowing, and modest growth forecasts.

Download our free 2026 Spring Forecast summary

5 Key Tax Updates That Will Affect You

No New Tax Changes Announced

Unlike some previous Spring Statements, there were no major tax cuts or increases announced in 2026. Instead, the Chancellor confirmed that previously announced measures will proceed as planned from April 2026 onwards.

For many taxpayers, this means stability in the short term, but continued pressure in the longer term due to frozen thresholds and rising rates in certain areas.

Income Tax Thresholds Remain Frozen

The personal allowance remains at £12,570, with higher and additional rate thresholds also frozen until 2031. While this helps maintain stability, it means that more people are likely to be drawn into higher tax bands over time as wages increase. This “fiscal drag” continues to increase the overall tax burden without formal rate rises.

Dividend and Savings Tax Increases

From April 2026, dividend tax rates increase by 2%, while savings tax rates are set to rise further from 2027. This represents another step towards increasing the tax burden on investment income and will particularly affect directors, shareholders, and higher earners.

National Insurance and Employment Costs

Employee and employer National Insurance rates remain unchanged for 2026/27. However, rising wage costs and the increase in the National Living Wage to £12.71 per hour from April 2026 will add further pressure on employers.

The Employment Allowance remains at £10,500, providing some continued support for smaller businesses.

Corporation Tax and Business Measures

Corporation Tax remains capped at 25%, with the small profits rate staying at 19%. While this provides certainty for companies, there are no new incentives or reductions for growing businesses. Late filing penalties for Corporation Tax returns will double from April 2026, making compliance more important than ever.

Changes to capital allowances and writing-down allowances will also affect how quickly businesses can obtain tax relief on investment.

What Did the Forecasts Show?

The government’s forecasts, prepared by the Office for Budget Responsibility, suggest:

• GDP growth of around 1.1% in 2026
• Inflation returning to target in late 2026
• Borrowing continues to fall
• Wage growth slowing
• A slight rise in unemployment

While these figures show gradual improvement, the OBR also warned that public finances remain under strain and future Budgets are likely to be challenging.

Tax Planning Following the Spring Forecast

Although the 2026 Spring Statement did not introduce major new tax measures, the continued freezing of thresholds and upcoming rate increases mean that many individuals and businesses will still see their tax bills rise over time.

With several important changes taking effect from April 2026 and beyond, early planning remains essential. If you would like to understand how these changes may affect you, or discuss ways to plan ahead, please get in touch with our team for tailored advice and support.