From the tax treatment of State pension income above the frozen personal allowance threshold to company car and van tax, a range of measures featured in the Budget Red Book.
The State pension
The basic and new State pension will each increase by 4.8 percent from April 2026. The Pension Credit Standard Minimum Guarantee will also be uprated by the same amount from the same date.
Pensioners whose sole income is the basic or new State pension (without any increments) have been told they will not have to pay small amounts of tax via Simple Assessment from 2027/28 if the new or basic State pension exceeds the personal allowance from that point. How this will work operationally is currently being explored with more detail expected next year.
Company car and van tax
The van benefit charge and the car and van fuel benefit charges will increase by Consumer Price Index inflation from 6 April 2026.
A temporary benefit in kind tax easement for plugin hybrid electric vehicles will be included in the benefit in kind (BIK) system to prevent their tax charge increasing significantly due to new emissions standards. This easement will apply from 1 January 2025 to 5 April 2028.
At Autumn Budget 2024, the Government announced that it would bring employee car ownership schemes into the scope of the BIK rules from 6 April 2026. To allow more time for the sector to prepare for and adapt to this change, implementation is being delayed to 6 April 2030, with transitional arrangements to apply until April 2031.
Oil and gas price mechanism
The temporary Energy Profits Levy (EPL) will be replaced by the permanent Oil and Gas Profits Mechanism (OGPM). This will be a revenue-based mechanism which only operates in times of high prices and will replace the EPL when it ends in 2030, or earlier if the EPL price floor is triggered. The rate will be 35 percent with thresholds of $90/barrel (oil) and 90p/therm (gas).
Share Incentive Plan (SIP)
A summary of responses to the 2023 Call for Evidence on the SIP and Save As You Earn were published alongside the Budget which sets out the next steps.
Infected Blood Compensation Payments
Updated legislation will confirm that payments made under the Blood Interim Compensation Payment Scheme are relieved from inheritance tax (IHT) in cases where the original infected or affected person eligible for compensation died before the compensation is paid.
First living recipients of compensation payments will also have two years in which to gift some or all of the compensation payment without an IHT charge. This is being legislated for in Finance Bill 2025/26 and will apply to compensation payments made before or after 26 November 2025 and to gifts made on or after 4 December 2025.
Charity compliance
Finance Bill 2025/26 contains legislation which aims to strengthen the charity tax rules on tainted donations, approved investments, and non-charitable expenditure. These changes will take effect from 6 April 2026.
Tax offer for high-talent new arrivals
The Government will explore how to further develop its tax offer for high-talent new arrivals, to build on the success of the existing regime and bolster the ambition for the UK to remain a competitive destination for growth-driving global talent and support internationally mobile individuals to establish themselves and their businesses in the UK. The Government will seek views in due course to inform the design and scope of any potential enhanced offer.
Climate change levy (CCL)
The main rates of the CCL for gas, electricity and solid fuels will be uprated in line with RPI inflation from 1 April 2027. The main rate for liquefied petroleum gas will continue to be frozen. The reduced rates will remain at an unchanged fixed percentage of the main rates.
Following a consultation at Spring Statement 2025, both electricity used in electrolysis to produce hydrogen and natural gas used as a source of CO2 in the production of sodium bicarbonate will be exempt from the CCL. Subject to parliamentary approval, these amendments will be in force by Spring 2026.
Carbon price support
Carbon price support rates in Great Britain have been frozen at a level equivalent to £18 per tonne of CO2 in 2027/28.
Winter fuel payments
The £35,000 threshold will be maintained for this Parliament.
Visitor levy
The Government will give Mayors in England powers to raise a visitor levy on overnight accommodation and explore the option for this power to be extended to the leaders of other strategic authorities. A consultation has therefore been launched on the design of the levy.
Cryptoasset loans and liquidity pools
A summary of responses to the ‘Taxation of decentralised finance (DeFi) involving the lending and staking of cryptoassets’ consultation has been published.
Annual tax on enveloped dwellings (ATED)
The ATED legislation will be updated to reflect the policy intent that relief from the ATED is available to companies holding property for qualifying commercial purposes. This includes relief claims within late ATED returns.
Stamp Duty Land Tax (SDLT)
The Government will amend SDLT rules so that property transferred within Local Government Pension Schemes are subject to a SDLT relief. This will be legislated in Finance Bill 2026/27.
Capital allowances
The 100 percent first year allowance (FYA) for qualifying expenditure on zero emission cars and on plant or machinery for electric vehicle charge points is extended a further year. The FYA will now be in place until 31 March 2027 for corporation tax purposes, and 5 April 2027 for income tax purposes.
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