ICAEW’s Tax Faculty provides an overview of the key provisions of Finance Bill 2025-26, including commencement dates and links to further information.
Finance Bill 2025-26 was published on 4 December 2025 and is now making its way through Parliament. The Bill gives effect to announcements made at the Autumn Budget 2025 and earlier. It is possible that amendments will be made to the Bill before it receives Royal Assent and becomes law. The Bill’s progress can be tracked on the Parliament website.
The tables below give a brief summary of the key provisions and include links to ICAEW articles for further information, including references to policy papers published by the government. We will continue to update the tables as the Bill progresses through Parliament.
Part 1: Income tax, capital gains tax and corporate taxes
Measures affecting individuals
| Clause/Schedule | Effective from* |
| The setting of income tax rates, including: increases in the rates of tax on savings and dividend income; the introduction of new rates of tax on property income; and the extension of the freeze on the personal allowance and income tax thresholds (cl1-10, Sch 1 and 2). Further information: ICAEW article. | 6 April 2026 for dividend ordinary and upper rates; 6 April 2027 for property and savings income; 2028/29 to 2030/31 for the freeze on the allowance and thresholds. |
| New power for HM Treasury to make regulations establishing a new settlement scheme for people liable to the loan charge who are yet to pay their liability (cl25-27). Further information: ICAEW article. | On or after Royal Assent of the Finance Bill 2025-26. |
| Measures affecting non-UK residents, including: the abolition of the notional tax credit on distributions; amendments to the residence-based tax regime legislation introduced in Finance Act 2025; and the PAYE notification process (cl42-45, Sch 3 and 4). Further information: ICAEW article. | 6 April 2026 for abolition of the tax credit and the PAYE notification process; various for the residence-based tax regime amendments. |
| Introduction of a new winter fuel payment charge (cl55, Sch 10). Further information: policy paper; ICAEW article. | 2025/26. |
| Reform of the rules for taxing carried interest (cl56, Sch 11). Further information: policy paper; ICAEW article. | 6 April 2026. |
Measures affecting employers and employees
| Clause/Schedule | Effective from* |
| Measures affecting employee share schemes, including changes to the thresholds for enterprise management incentives (EMI) and with regard to a private intermittent securities and capital exchange system (PISCES) trading event (cl13 and16). Further information: ICAEW article. | 6 April 2026 for EMI; 15 May 2025 for PISCES. |
| Amendments to the rules for employee car benefits including car and van ownership schemes (cl17-19). Further information: policy paper; ICAEW article. | Various. 6 April 2030 for car and van ownership schemes. |
| Changes with regard to other employment income, including: the introduction of miscellaneous exemptions; and the removal of the deduction from earnings for additional household expenses (cl20-23). Further information: ICAEW article. | Various. 2026/27 for miscellaneous exemptions and changes affecting deductions for household expenses. |
| Recruitment agencies (or the client, where there is no agency) made jointly and severally liable for amounts payable under PAYE where workers are supplied via umbrella companies (cl24). Further information: ICAEW article; policy paper. | 6 April 2026 |
Measures affecting businesses
| Clause/Schedule | Effective from* |
| Corporation tax charge and rates (cl11 and 12). No changes made, in accordance with the government’s corporation tax roadmap. Further information: ICAEW article. | 1 April 2027. |
| Changes to the rate of relief for venture capital trusts (VCTs) and the amounts and asset requirements for VCTs and for the enterprise investment scheme (EIS) (cl14 and 15). Further information: ICAEW article. | 6 April 2026. |
| Changes to capital allowances, including: a reduction in the rate of the writing down allowance (WDA) of the main rate pools; and the introduction of a new 40% first year allowance (FYA) (cl28-30). Further information: ICAEW article. | 1/6 April 2026 for the WDA; 1 January 2026 for the new FYA. |
| Technical changes to some of the creative industry tax reliefs and to research and development (R&D) tax relief to ensure the reliefs work as intended (cl31-34). | Various. |
| Restriction of the capital gains tax relief for disposals to employee ownership trusts (EOTs) (cl35). Further information: ICAEW article. | Disposals made on or after 26 November 2025. |
| Changes to the capital gains avoidance rules that apply to: share exchanges and company reconstructions; reconstructions of collective investment schemes; and company reconstructions involving the transfer of a business. (cl36-38). Further information: ICAEW article. | Arrangements that relate to an issue of securities, etc made on or after 26 November 2025, subject to transitional arrangements. |
| Introduction of a new requirement to claim incorporation relief (cl39). Further information: ICAEW article | Transfers of a business to a company occurring on or after 6 April 2026. |
| International matters, including: a new charge on unassessed transfer pricing profits; transfer pricing reform; and changes to the definition of “permanent establishment” (cl46, 47 and 49, Sch 6 and 7)). Further information: policy paper. | Chargeable periods beginning on or after 1 January 2026. |
| A new power for HMRC to make regulations requiring the reporting of information in connection with specified international controlled transactions (cl48, Sch 5). Further information: policy paper. | Royal Assent. Expected that the obligation will take effect for accounting periods beginning on or after 1 January 2027. |
| Amendments to the rules for the multinational top-up tax and the domestic top-up tax (together, the Pillar 2 taxes) (cl50, Sch 8). Further information: policy paper. | Various commencement dates, with the taxpayer having the option to elect for an earlier date. |
| A measure to ensure that companies affected by the 2019 European Commission State Aid Decision on the controlled foreign companies (CFC) rules are put in the position they would have been in had that decision not been made (cl51). | 2 December 2025. |
| Changes to the corporate interest restriction (CIR) to: simplify administration in relation to reporting companies; and ensure that the rules in respect of certain capital expenditure work as intended (cl58 and 59). Further information: ICAEW article. | Reporting companies: periods of account ending on or after 31 March 2026; Capital expenditure: accounting periods ending on or after 31 December 2021. |
Miscellaneous provisions
| Clause/Schedule | Effective from* |
| Changes to the taxation of charities, including: bringing legacies to charities within scope of tax; tightening the approved charitable investment rules; and replacing the purpose test in the tainted charity donations rules with an outcome text (cl52-54, Sch 9). Further information: policy paper; ICAEW article. | 6 April 2026. |
| Other miscellaneous provisions, affecting: collective money purchase schemes; avoidance schemes involving certain non-derecognition liabilities; and decommissioning relief agreements (cl57,60 and 61). | Various. |
Part 2: Inheritance tax (IHT)
| Clause/Schedule | Effective from* |
| Reform of agricultural property relief (APR) and business property relief (BPR), including limiting 100% APR/BPR to a combined £1 million of qualifying property (cl62, Sch 12). As announced at the Autumn Budget 2025, the £1m allowance will be transferrable between spouses and civil partners. Further information: ICAEW article. | 6 April 2026, subject to transitional provisions. |
| Most unused pension funds and death benefits brought within the value of a person’s estate for IHT purpose (cl63-68). The government set out further detail on the process to implement these changes at the Autumn Budget 2025. Further information: ICAEW article. | Deaths on or after 6 April 2027. |
| Nil rate band, etc frozen (cl69). Further information: ICAEW article. | 2030/31. |
| Provisions relating to the residence-based regime for IHT introduced by Finance Act 2025 (cl70-73). Further information: ICAEW article. | Various. |
| Extend the relief from IHT for infected blood compensation payments (cl74). Further information: ICAEW article. | In part, operative from 26 November 2025 with retrospective effect. |
| Measures relating to gifts to charities and registered clubs, including: restricting IHT relief to gifts made directly to UK charities and community amateur sports clubs; and providing a transitional easement in connection with a measure affecting charities (cl75 and 76). Further information: ICAEW article. | Lifetime transfer: 26 November 2025; transfer on death: 6 April 2026. |
Part 3: Other existing taxes
| Clause/Schedule | Effective from* |
| VAT: restriction of zero-rating for disability vehicle leases (the motability scheme) so that customer top-up payments become standard-rated (cl77). In addition, insurance premium tax relief is restricted to adapted vehicles only (cl78). Further information: ICAEW article. | Leases that begin on or after 1 July 2026. |
| VAT: exclusion of taxi and private hire services from the VAT tour operators’ margin scheme, except where they are ancillary to other travel services (cl79). Further information: ICAEW article. | 2 January 2026. |
| VAT: introduction of a new relief for business donations of goods to charity (cl80). Further information: ICAEW article. | Donations made on or after 1 April 2026. |
| Introduction of a new relief from the charge to stamp duty reserve tax (SDRT) on agreements to transfer securities of a company for three years from when the company first lists its shares on a UK regulated market (cl82). Further information: policy paper. | 27 November 2025. |
| Plastic packaging tax: Authorisation of a mass balance approach to allow chemically recycled plastic to count towards the 30% recycled content threshold (cl102). Additionally, the definition of recycled plastic is tightened to exclude pre-consumer waste, restricting relief to post-consumer material only (cl 103). Further information: policy paper. | 1 April 2027. |
| Removal of the time limit to claim relief under the annual tax on enveloped dwellings (ATED) for companies holding property for qualifying commercial purposes (cl111). Further information: ICAEW article. | Royal Assent. |
Part 4: Vaping products duty
| Clause/Schedule | Effective from* |
| New duty on vaping products (cl112-138, Sch 14). Further information: policy paper. | 1 October 2026. |
Part 5: Carbon border adjustment mechanism
| Clause/Schedule | Effective from* |
| Introduction of a new environmental tax – the carbon border adjustment mechanism (CBAM) (cl139-155, Sch 15-18). Further information: ICAEW article. | 1 January 2027. |
Part 6: Avoidance
| Clause/Schedule | Effective from* |
|
Measures targeting the promotion of tax avoidance schemes, including:
Further information: ICAEW article; policy paper. |
Royal Assent. |
| New powers for HMRC to tackle perceived fraud in the construction industry scheme (cl217-219). Further information: ICAEW article. | 6 April 2026. |
Part 7: Tax advisers
| Clause/Schedule | Effective from* |
| Introduction of a new requirement for all tax advisers to register with HMRC if they wish to interact with HMRC on behalf of a client (cl220-246, Sch 19 and 20). Further information: ICAEW article; policy paper. | May 2026, with at least a three-month transition period. |
| Measures intended to strengthen HMRC’s ability to take action against tax advisers who facilitate non-compliance in their clients’ tax affairs (cl247-250, Sch 21). Further information: ICAEW article; policy paper. | 1 April 2026 (for acts or omissions on or after that date). |
Part 8: Miscellaneous
| Clause/Schedule | Effective from* |
| New provisions for HMRC to acquire data from specific third parties to be used for risk assessment, tax administration and compliance (cl252, Sch 22). Further information: ICAEW article. | April 2028. |
| Miscellaneous provisions to facilitate the introduction of Making Tax Digital (MTD) for income tax (cl253-256). | MTD for income tax is being phased in from April 2026. |
| Powers to allow HMRC to transition taxpayers to ‘digital by default’ more flexibly (cl257-258). | |
| Increase in penalties for a failure to deliver a company tax return (cl262). Further information: ICAEW article. | Filing date is on or after 1 April 2026. |
| New power for HMRC to issue advance tax clearances to entities undertaking large investment projects in the UK (cl263-271). Further information: ICAEW article; draft HMRC guidance. | July 2026. |
| UK reporting cryptoasset service providers required to report on their UK tax resident customers under the cryptoasset reporting framework (CARF) (cl272 and 273). Further information: policy paper. | The first report, which will cover the period from 1 January 2026 to 31 December 2026, must be submitted to HMRC by 31 May 2027. |
*Complex commencement arrangements apply in some instances. Only a broad indication is given here.
National insurance contributions
Separate to the Finance Bill 2025-26, the National Insurance Contributions (Employer Pensions Contributions) Bill gives HM Treasury the power to charge employer and employee class 1 national insurance contributions on salary sacrificed pension contributions over £2,000 from April 2029, as announced at the Autumn Budget 2025. The government says that it will consult on the design and operation of the £2,000 cap, to be set out in regulations, in due course.
