Finance Act 2026 and the Draft Finance Bill 2026-27: What Accountants Need to Know

Two different documents are shaping how UK accountants advise clients right now, and it is easy to blur them together. Finance Act 2026 received Royal Assent on 18 March 2026 and is now settled law — its measures are confirmed and, in several cases, already in effect. The draft Finance Bill 2026-27, published on 13 July 2026 (so-called "L-Day"), is a different animal entirely: clauses out for technical consultation, several stages away from becoming law, and still open to change before they are formally introduced. Mixing the two up with clients — telling them something is "coming in" when it is still only proposed, or missing something that is already live — is one of the more common practical errors in year-end planning conversations. This post separates the two clearly: what is confirmed and actionable now, and what is still in the consultation pipeline and worth watching.

Finance Act 2026: what is now confirmed law

Finance Act 2026 (c. 11) received Royal Assent on 18 March 2026, following its passage as the Finance Bill 2025-26 and giving legal effect to most of the tax measures announced at the Autumn Budget 2025 (legislation.gov.uk; ICAEW). The headline points for practices advising individuals and owner-managed businesses:

Income tax on dividends, savings and property income

The main income tax rates for 2026-27 stay at 20% (basic), 40% (higher) and 45% (additional). Within that, dividend tax rates rise by 2 percentage points from April 2026 — the ordinary rate moves from 8.75% to 10.75% and the upper rate from 33.75% to 35.75% — while the personal allowance and basic rate limit remain frozen through to 2030-31 (House of Commons Library, CBP-10450). Separate rate structures for savings and property income follow from April 2027, with property income taxed at new standalone rates of 22%/42%/47% and savings income rising by 2 percentage points across each band — the starting rate limit for savings itself stays frozen at £5,000 through 2030-31. For clients with mixed income, this is a genuine planning point: the rate differential between now and April 2027 changes the arithmetic on timing dividend extraction or property income recognition.

Inheritance tax: agricultural and business property relief reform

The reshaped Agricultural Property Relief (APR) and Business Property Relief (BPR) regime is now in force from 6 April 2026. After sustained representation from the farming and business lobby, the government revised its original October 2024 proposal upward: the combined APR/BPR allowance for 100% relief now sits at £2.5 million per individual (announced 23 December 2025), with 50% relief applying above that threshold — giving married couples and civil partners scope for up to £5 million of qualifying assets passing free of IHT with correct planning. AIM-listed shares that previously qualified for BPR are now restricted to 50% relief regardless of value (GOV.UK, December 2025; Deloitte TaxScape). This is unfinished business for many client conversations — wills, partnership agreements and succession structures drafted around the old unlimited-relief assumption need revisiting now that the £2.5 million ceiling and the AIM restriction are live.

Capital allowances

The main-rate writing-down allowance on plant and machinery drops from 18% to 14% from April 2026, a change several advisory firms flagged as a meaningful shift for capital-intensive businesses reliant on the main pool rather than full expensing or the Annual Investment Allowance. Alongside the cut, a new 40% First Year Allowance has been introduced for certain qualifying expenditure. Businesses timing capital spend around year-end should model both the WDA reduction and the new FYA together rather than relying on last year's assumptions.

Corporation tax and business measures

The 25% main rate and 19% small profits rate are confirmed as continuing into financial year 2027, giving businesses certainty on headline CT rates for now. Incorporation relief no longer applies automatically — it must be actively claimed within the statutory time limit, which changes the compliance step for sole traders and partnerships incorporating. Company reconstruction rules have been tightened, and CGT anti-avoidance provisions now specifically target disposals into employee-ownership trusts and certain collective investment scheme reorganisations. The notional tax credit previously available to non-UK residents on distributions has also been abolished.

Mandatory registration for tax advisers

Perhaps the single most operationally significant change for the profession: Finance Act 2026 introduces mandatory registration of tax advisers with HMRC. Anyone who interacts with HMRC on behalf of another person in relation to their tax affairs has three months from 18 May 2026 to register (unless a later start date applies to their category), and will need to meet defined standards of competence and conduct set out in supporting regulations (ICAEW, ICAS, May–July 2026 coverage). This affects sole practitioners and firms alike and is worth confirming as done — not assumed — across every partner and associate who touches client tax work.

Draft Finance Bill 2026-27: what is still only proposed

On 13 July 2026, the government published draft clauses for the Finance Bill 2026-27 alongside a raft of new and continuing consultations — the traditional "L-Day" exercise that previews measures intended for next year's Finance Bill (Written Ministerial Statement, HLWS225; Hansard). None of this is law. It is technical consultation on drafting, published so that professional bodies and practitioners can flag problems before the measures are formally introduced to Parliament, and the substance of individual clauses can and does change between L-Day and enactment.

The package spans a wide range of areas grouped loosely as modernising the tax system, closing the tax gap, simplifying compliance, and "making the system fairer." Measures worth flagging to clients as "proposed, not yet law" include:

• Stamp taxes on shares modernisation — consolidating stamp duty and Stamp Duty Reserve Tax on UK share transfers into a single Securities Transfer Tax.
• Cryptoasset taxation — clarifying the treatment of stablecoins, crypto lending and liquidity pools, an area practitioners have long flagged as under-defined.
• Pillar Two changes — a "side-by-side" package modernising the multinational top-up tax rules for groups with global revenues above €750 million.
• Mandatory benefits-in-kind payrolling — moving toward compulsory real-time reporting of benefits in kind, with a proposed penalty easement for non-deliberate errors in the first year.
• ISA compliance reform — new digital reporting obligations and points-based penalties for ISA managers.
• HMRC information powers — reform of Schedule 36 Finance Act 2008 powers, including extending financial information notices to cryptoasset service providers.
• Defined benefit pension surplus extraction — a proposed tax framework for discretionary payments of scheme surplus to members.
• EMI, cultural gifts scheme and VAT deposit return scheme changes — a cluster of simplification measures affecting share schemes, museums/heritage bodies and retail respectively.

Several of these sit alongside standalone consultations with their own timelines — for example on withholding tax simplification for cross-border interest and on aligning National Insurance debt recovery time limits with income tax. Firms with clients in scope (multinational groups, ISA managers, crypto-exposed businesses, DB pension scheme sponsors) should treat this as the moment to make representations through their professional body, not the moment to start client advice as though the rules are settled — CIOT, ICAEW and ACCA are all expected to submit technical responses through the autumn.

What accountants should do now

• Separate "law" from "proposal" explicitly in client communication. APR/BPR reform, the dividend rate rise, the WDA cut and mandatory adviser registration are in force or imminent — they need action. L-Day clauses are consultation material and should be framed that way.
• Revisit IHT and succession planning for business and farming clients now that the £2.5 million APR/BPR threshold and the AIM restriction are live, particularly wills and partnership agreements drafted under the old rules.
• Confirm mandatory tax adviser registration status for every individual in the practice who deals with HMRC on a client's behalf, against the three-month window from 18 May 2026.
• Model capital expenditure decisions against both the reduced 14% WDA and the new 40% First Year Allowance rather than assuming last year's capital allowances position still holds.
• Flag exposure to L-Day measures for relevant clients — crypto holders, ISA managers, DB scheme sponsors, multinational groups — and consider a firm response to the open consultations rather than waiting for the next Finance Bill to land.
• Keep the April 2027 changes on the radar now. The new property income rates and the savings income rate rise are already legislated for April 2027, so tax year 2026-27 planning conversations are a natural place to start preparing clients for the change ahead of time.

Finance Act 2026 and the L-Day package together represent one of the busier stretches of UK tax legislative change in recent years, and getting the sequencing right — what is confirmed, what is proposed, what takes effect when — is central to giving clients accurate advice rather than premature or outdated guidance. It is also, inevitably, a lot to hold in your head alongside everything else a practice has to track this year, from the ongoing rollout covered in our Making Tax Digital guide for accountants to routine compliance deadlines. Learnsignal's CPD programme is built to keep practitioners current on exactly this kind of fast-moving legislative change without it eating into billable time — browse the latest CPD courses for accountants to find structured, verifiable updates on Finance Act 2026, the draft Finance Bill 2026-27 and the wider UK tax calendar as it develops through the rest of the year.