As expected, and in line with Labour’s manifesto pledge, no changes to Income Tax rates or thresholds were made by the Chancellor in the short term.
Reeves did announce, however, that once the current freeze on Income Tax thresholds comes to an end in the 2027/28 tax year, the personal tax thresholds will then be increased in line with inflation from April 2028 onwards.
Similarly, no changes were announced to the savings and dividend rates or allowances, all of which are to be maintained at the current rates and thresholds.
The Government has confirmed that they are still intending to proceed with Making Tax Digital for Income Tax self-assessment but that the timing for this will now be given at a future fiscal event. This could potentially mean that the initial implementation date of April 2026 may be pushed back further. The Government have, however, committed to bringing all individuals with incomes of over £20,000 within MTD before the end of this Parliament.
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