The UK Parliament is reviewing the Finance Bill 2026-27, which proposes changes to corporate and personal taxation, capital allowances, cryptoassets, VAT, duties and environmental levies following Budget 2026. The Bill was introduced in the House of Commons on 3 November 2026 and, once passed, will become the Finance Act 2027.
The UK Parliament is reviewing the Finance Bill 2026-27 (Bill 173), which was presented for its first reading in the House of Commons on 3 November 2026.
The Bill legislates for the tax measures announced in Budget 2026, presented on 28 October 2026. Once passed, it will be cited as the Finance Act 2027. It covers significant changes to corporate and personal taxation, capital allowances, cryptoassets, VAT, duties and environmental levies. The proposed measures include a temporary increase in the banking surcharge, changes to capital gains tax treatment of cryptoassets, new vehicle and securities transfer taxes, and updates to the UK’s Pillar Two rules.
The Bill must clear several more stages in the Commons before moving to the House of Lords, where it will go through the same stages.
Corporate tax
The main rate of corporation tax remains 25% and the standard small profits rate stays at 19% for financial year 2028. The banking surcharge rises temporarily from 3% to 6% for accounting periods between 1 January 2027 and 1 April 2028.
The first-year allowance for main rate plant or machinery goes up from 40% to 50% for expenditure on or after 1 January 2027, while the main rate of writing-down allowances falls from 14% to 12% from April 2027. The trading allowance increases from GBP 1,000 to GBP 3,000 from 2027–28, and claim notification requirements for R&D reliefs are repealed.
The foreign permanent establishment exemption becomes compulsory rather than elective, and the UK’s Pillar Two rules are updated to reflect OECD administrative guidance on multinational top-up tax and domestic top-up tax.
Capital allowances and reliefs
The first-year allowance for main rate plant or machinery goes up from 40% to 50% for expenditure on or after 1 January 2027. The main rate of writing-down allowances falls from 14% t to 12%t from April 2027.
The trading allowance increases from GBP 1,000 to GBP 3,000 from 2027–28. Claim notification requirements for R&D reliefs are repealed.
Personal tax
Main income tax rates for the tax year 2027–28 stay at 20% (basic), 40% (higher) and 45% (additional). Property and savings rates are set at 24%, 44% and 49% respectively, while trust rates rise to 49%.
Image rights payments become taxable earnings, and valuation and percentage rules for classic and company cars are revised. Employer-paid visa sponsorship and immigration fees are exempt from tax.
New capital gains tax rules apply to cryptoasset lending and automated market making (AMM) liquidity pools. Disposals of eligible stablecoins are exempt from capital gains tax.
Cryptoassets and stablecoins
New capital gains tax rules apply to cryptoasset lending and automated market making (AMM) liquidity pools. Disposals of eligible stablecoins are exempt from capital gains tax. Stablecoins are also brought within the corporation tax loan relationship rules.
VAT
Free medicines are zero-rated, and the reverse-charge VAT rules on cross-border supplies are amended. Customs regulations are also set for low-value import consignments of up to GBP 135.
Duties
A per-mile eVED charge, with mileage-tracking requirements, applies to zero-emission and plug-in hybrid vehicles under Vehicle Excise Duty. Air Passenger Duty is set higher for business jets, and standard bands are uprated from April 2028.
A Securities Transfer Tax is charged on chargeable securities at 0.5% (main rate) or 1.5% (higher rate), replacing Stamp Duty and Stamp Duty Reserve Tax.
Levies
Soft Drinks Industry Levy rates rise to GBP 3.01 for higher sugar drinks and GBP 2.25 for lower sugar drinks. From 1 January 2028, the sugar threshold falls from 5g to 4.5g per 100ml.
Landfill Tax rises to GBP 136.70 per tonne, Aggregates Levy to GBP 2.26 per tonne and Plastic Packaging Tax to GBP 236.56 per tonne.
The Bill also establishes an Oil and Gas Revenue Levy on exceptional oil and gas revenues, and the Energy (Oil and Gas) Profits Levy Act 2022 is repealed on the energy profits levy cessation date. Under the International Student Levy, registered higher education providers pay GBP 925 for each international student per academic year.
Other measures
The Bill creates a High Value Council Tax Surcharge on high-value residential properties, administered by billing authorities.
Promoter restrictions and stop notices are extended to indirect taxes. HMRC must deduct income tax at source at the additional rate of 45% on informant rewards paid under official schemes.
The borrowing limit for local loans rises from GBP 115 billion / GBP 135 billion to GBP 155 billion / GBP 175 billion. For advance tax clearances, the minimum investment threshold for qualifying projects drops from GBP 1 billion to GBP 300 million.
The Bill’s progress through both Houses will determine when these measures take effect.
