As we move into April 2026, a series of significant UK statutory, tax and benefit changes are coming into force that will affect employers, employees, families and taxpayers. From increases to key rates to important welfare reform and tax compliance changes, this guide explains in clear terms what’s changing, and what it means for you.
Whether you are an employee checking your take-home pay, a family planning your finances, or a business owner preparing for new obligations, it’s crucial to understand these changes and how they could impact you.
National Minimum Wage & National Living Wage Increase
From 1 April 2026, the UK Government has confirmed increases to both the National Minimum Wage (NMW) and National Living Wage (NLW) across age bands. The changes are part of ongoing efforts to support low-paid workers and help meet living costs.
- The National Living Wage (for those aged 21 and over) rises to £12.71 per hour, up by around 50p.
- Other age-specific National Minimum Wage rates also increase, including £10.85 per hour for 18- to 20-year-olds.
These increases mean higher wage bills for employers, but more money in workers’ pockets. It’s important for businesses to update payroll systems to reflect the new rates.
Statutory Sick Pay (SSP) Gets a Boost
Big improvements to Statutory Sick Pay will take effect on 6 April 2026, making sick pay more accessible and fair for working people.
Key changes include:
- Increased SSP rate: rises from about £118.75 to £123.25 per week.
- No minimum earnings threshold: SSP will be available regardless of how much you earn.
- No waiting days: Employees will be entitled to SSP from their first full day of sickness (rather than after three days).
- SSP will be paid at the higher of 80% of normal weekly earnings or the new statutory rate (whichever is lower).
This reform widens protection for low-paid and new employees, but could increase costs for employers, especially smaller businesses.
Two-Child Limit (Benefit Cap) Removed
One of the most headline-grabbing welfare changes from April 6 2026 is the abolition of the two-child limit on Universal Credit and Child Tax Credit.
Under the previous rules, families could only receive the child element of Universal Credit for two children. From April, this limit is removed, meaning families will receive additional support for every child they are responsible for, not just the first two.
The Government estimates this change will lift hundreds of thousands of children out of poverty and provide families with essential financial support automatically through Universal Credit systems.
Dividend Tax Rates Increase
For company directors, shareholders, and investors, dividend tax rates are going up from 6 April 2026, a change announced in the 2025 Budget.
From this date:
- The basic-rate dividend tax increases by 2 percentage points (from 8.75% to 10.75%),
- The higher-rate increases to 35.75%.
- The additional rate threshold remains unchanged.
- The dividend tax-free allowance remains at £500.
This could affect tax planning for individuals who take income from limited companies via dividends, especially where dividend income forms a substantial part of earnings.
Making Tax Digital (MTD) Becomes Mandatory for Income Tax
A key compliance shift is the mandatory rollout of Making Tax Digital (MTD) for Income Tax from 6 April 2026 for self-employed individuals and landlords with gross annual income above £50,000.
What this means:
- Affected taxpayers must keep digital financial records,
- They will submit income and expense summaries quarterly via approved software,
- The previous system of one annual Self Assessment return no longer applies for eligible taxpayers.
The income threshold is planned to lower further in future years, so even more taxpayers will need to prepare.
At GLP Solicitors, we understand how complex legal and financial changes can feel, and we are here to help you navigate them with confidence. Whether you need advice for your business, employment matters, benefits or tax planning, our expert team is ready to support you every step of the way.
GLP Solicitors — we are here to help you.