Budget 2026: Key takeaways and insights for UK accountants, and what to do next

• Budget 2026 in summary
• Key takeaways from Budget 2026 
• What does Budget 2026 mean for accountants? 
• E-invoicing: what’s been confirmed
• Personal tax announcements and what they mean for MTD 
• Making Tax Digital: penalty easements and deferrals 
• Changes for corporate tax teams and BEPS Pillar Two compliance
• Actions you can take today

Budget 2026 in summary  

The headline rates of Income Tax, National Insurance, and VAT are unchanged, and the main Corporation Tax rate stays at 25%. Elsewhere, the government has announced measures across personal and business taxation.  

The Budget sets out changes to how tax information is created, exchanged, paid, and checked. These include mandatory e-invoicing and greater use of taxpayer data by HMRC.  

For context, the Office for Budget Responsibility has lowered its growth forecast for 2027 from 1.6% to 1.0%. It expects inflation to average 3.4% in 2027, then fall to around 2% from 2028, assuming energy prices decline. Government debt is projected to rise to 97.3% of gross domestic product by the end of 2028/29. 

“For accountants, the most important Budget measures are not necessarily the ones that will dominate front pages.” 
Ben Cunliffe, Head of Product, Compliance Tools, Wolters Kluwer Tax & Accounting UK 

As accountants respond to Budget 2026, this blog covers the key measures and the practical steps to take next. 

Key takeaways from Budget 2026 

Here are the main measures to know about:

Mandatory e-invoicing:

• From 1 April 2029, VAT-registered businesses and organisations will need to issue and receive VAT invoices as structured e-invoices, unless a specific exemption applies. Peppol will be the UK’s core interoperability framework. Detailed requirements are due between October 2027 and April 2028.

Making Tax Digital (MTD):

• The Budget didn’t announce a fundamental change to the existing MTD for Income Tax timetable. Taxpayers joining in April 2027 benefit from a penalty easement, and certain groups are exempt until further notice.

Personal tax:

• Higher rates for savings and property income take effect from 6 April 2027.

Corporate and business tax:

• Updates cover capital allowances, research and development (R&D) administration, Corporation Tax, and international tax rules.

VAT and indirect tax:

• From April 2027, the VAT reverse charge for services received from abroad will only apply where the UK recipient is VAT registered.
• Electricity supplied through publicly accessible electric vehicle charging points is confirmed as standard rated from 1 November 2026.
• The temporary 0% VAT rate for domestic electricity is extended until 30 June 2027.

HMRC updates:

• Taxpayers who pay on account will make more regular in-year Self Assessment payments from April 2029. HMRC is also strengthening its compliance activity. 

What does Budget 2026 mean for accountants? 

Your practice faces a series of changes over the next three years, including MTD for Income Tax and mandatory e-invoicing. 

Four areas stand out:

1. Capacity: Quarterly MTD reporting has to sit alongside your existing Self Assessment workload. Review which clients join in April 2027 and decide who owns their updates. Protect your year-end work from being squeezed.
2. Client advice: Several personal and business tax changes merit early conversations. Landlords may need updated tax forecasts and cash planning. For business clients, it’s worth refreshing capital expenditure models.
3. Data quality: HMRC will modernise its information and inspection powers and consult on expanded third-party reporting of property income. From 1 April 2028, taxpayers must correct inaccuracies in returns when they’re identified. Where data comes from, and how reliable it is, will matter more.
4. Workflows: Test whether your data collection, bookkeeping, tax, and document workflows can support more frequent digital compliance without creating duplicate work.

“Practices should review how information enters the firm, where evidence is retained, how corrections are recorded, and which systems are the authoritative record.”
Ben Cunliffe, Head of Product, Compliance Tools, Wolters Kluwer Tax & Accounting UK 

E-invoicing: what’s been confirmed

Mandatory e-invoicing from April 2029

From 1 April 2029, e-invoicing becomes mandatory for UK VAT-registered persons, including public sector bodies. Wherever a VAT invoice is required, it’ll need to be issued and received as an e-invoice, unless a specific exemption applies. Digitally excluded persons are among the limited groups expected to be exempt.  

E-invoicing means exchanging structured invoice data directly between buyers’ and suppliers’ financial systems. PDFs, word-processed documents, image files, HTML invoices, and faxed images don’t count as e-invoices.  

Peppol will let organisations using different software providers exchange invoices through certified Access Points.  

E-invoicing builds on MTD for VAT. Most VAT-registered organisations already use MTD-compatible software, and e-invoicing extends this to the invoicing process. According to the roadmap, moving to e-invoicing will support greater automation, improve data quality, and reduce manual processing and errors.

E-invoicing implementation timeline

The government will give at least 12 months’ notice of the detailed requirements. That leaves software providers and affected organisations time to get ready.

What you can do now:

• Identify VAT-registered clients that depend on PDFs, spreadsheets, or disconnected invoicing processes. Find out what software they use to raise and receive invoices.
• For larger clients, map finance, tax, procurement, and operational systems, including any ERP platforms. The implementation challenge may sit across several teams.

Read more:

• How should accountants prepare for electronic invoicing in the UK?
• Lessons learnt from e-invoicing in Europe: What’s next for the UK?  

Personal tax announcements and what they mean for MTD

Higher rates for savings and property income

From 6 April 2027, new Income Tax rates will apply to savings income across the UK:

• Basic rate: 24%
• Higher rate: 44%
• Additional rate: 49%

These rates will also cover property income in England, Wales, and Northern Ireland. The devolved governments of Scotland and Wales can set their own property income rates under their current Income Tax powers.  

You’ll see the impact in Self Assessment calculations and software, landlord tax planning and forecasting, and estimates produced through MTD for Income Tax.

Making Tax Digital: penalty easements and deferrals 

Late submission penalty points won’t apply to quarterly updates for the 2027/28 tax year for taxpayers required to join MTD for Income Tax in April 2027. This covers everyone using MTD for the first time from April 2027, including those with qualifying income over £30,000 and new trades or property businesses started in 2025/26. It also includes some who qualified for a temporary exemption from joining in April 2026. 

Quarterly updates must still be sent before the tax return can be submitted. Penalty points could still arise if the 2027/28 tax return is filed late.  

The easement doesn’t extend to taxpayers who joined MTD in April 2026. They can receive penalty points for late quarterly updates from the 2027/28 tax year onwards. 

The government will exempt three groups from MTD for Income Tax until further notice:

• Those eligible for qualifying care relief,
• Non-UK resident foreign entertainers and sportspeople.
• Expected non-resident customers.

Secondary legislation will be introduced before April 2027. A small number of insolvent customers who can’t currently sign up also won’t be required to use MTD for Income Tax, as the government set out previously.

Read more:

• AI and automation in MTD for Income Tax: How to save time and free up staff
• Making MTD profitable

What do you need to do?

• Pinpoint clients with material property or savings income and make the impact visible before the new tax year. 
• Keep preparing your April 2027 cohort. Check client records and reporting responsibilities, then weigh them against your Self Assessment capacity.

Changes for corporate tax teams and BEPS Pillar Two compliance

Corporation Tax and international tax changes

The main Corporation Tax rate remains 25%. Budget 2026 also introduces several changes to corporate tax calculations and administration.   

The key updates are:

• Pillar Two: Amendments to Multinational Top-up Tax and Domestic Top-up Tax will implement the Organisation for Economic Co-operation and Development (OECD) Side-by-Side package, together with further technical changes. These relate to the Global Anti-Base Erosion Model Rules (Pillar Two).
• International tax: The foreign permanent establishment (PE) exemption becomes mandatory for accounting periods beginning on or after 1 January 2027.
• Interest and leasing: From 1 January 2027, certain creative reliefs (Audio-Visual Expenditure Credits and Video Games Expenditure Credits) will be excluded from the calculation of taxable earnings for the Corporate Interest Restriction (CIR). Changes to some lease-and-leaseback arrangements apply from 28 October 2026.
• R&D tax relief: The Claim Notification Form requirement is removed for claims made on or after 1 April 2027, with a simpler Additional Information Form following from autumn 2027.
• Capital allowances: The main rate first-year allowance rises to 50%, effective 1 January 2027. Meanwhile, the main rate writing-down allowance falls to 12% from 1 April 2027 for Corporation Tax (6 April 2027 for Income Tax).

Read more: Understanding BEPS Pillar Two: Your complete compliance checklist eBook

How can you prepare?

Before clients commit to significant investment around the change dates, update their capital expenditure models and tax forecasts.

Actions you can take today

What should accountants do about Budget 2026? Most of these measures arrive between 2027 and 2029, so there’s time to plan. Use this checklist to prepare your practice:

• Review client exposure: Identify clients affected by the April 2027 personal and business tax changes. Then add anyone in the next MTD cohort.
• Communicate early: Talk clients through the relevant tax changes and upcoming deadlines, including new reporting requirements.
• Assess digital readiness: Check invoicing software, data collection, and compliance workflows ahead of MTD and mandatory e-invoicing.
• Plan workloads: Confirm your teams have the capacity and processes to handle the compliance changes ahead.

Over the next twelve months, it’s worth moving e-invoicing onto your technology and client advisory plans. Practices that redesign their processes early can help compliant data move once, reliably, through the whole workflow.