Tax rates 2027/28: a client update plan for UK practices

What changes for clients in the 2027/28 tax year?

For most employees, almost nothing. The main Income Tax rates stay at 20%, 40% and 45%, the Personal Allowance stays at £12,570 and the basic rate band stays at £37,700, according to Annex A of the Budget 2026 rates and allowances published on GOV.UK. The people who will notice are landlords, savers with interest above their allowances, small side traders and anyone selling a business.

Here is the short version of what the Budget 2026 papers set out for 2027/28, the tax year that starts on 6 April 2027:

• Property income gets its own rates of 24%, 44% and 49% for individuals in England, Wales and Northern Ireland. In 2026/27 property profits are simply taxed at the main rates.
• Savings income rises from 20%, 40% and 45% to 24%, 44% and 49% across the whole UK.
• Dividend rates stay at 10.75%, 35.75% and 39.35%, and the £500 dividend allowance does not move.
• The trading allowance goes from £1,000 to £3,000, with the Self Assessment reporting threshold for trading income moving with it.
• Business Asset Disposal Relief has its lifetime limit cut from £1 million to £500,000, while a new Founders' relief at 10% with a £10 million lifetime limit appears in the same annex.
• Class 2 voluntary contributions go from £3.65 to £3.80 a week, and the small profits threshold goes to £7,355.

Separately, Making Tax Digital for Income Tax reaches its second wave on 6 April 2027 for people whose qualifying income in 2025/26 was over £30,000. That is not a rate change, but it lands on many of the same clients in the same month.

Which clients should a practice contact first?

Contact clients in order of how much money is at stake and how soon they need to act. Landlords with sizeable profits and higher-rate savers come first because the rate rise is a real cost. Clients joining MTD in April 2027 come next because they need software and new habits. Small traders affected by the £3,000 allowance can wait for a lighter touch.

Most practices already hold the data to sort this. The 2025/26 returns you are finishing now show property profits, interest received and trading turnover for every Self Assessment client. Pull those three figures into one list before anyone writes a single email.

A sensible cut-off for the "call them" group is anyone whose extra tax looks like being £500 a year or more. Below that, a well-written email does the job, and nobody wants a 20-minute meeting about £60.

How do you segment the client list for 2027/28?

Sort each Self Assessment client into one primary segment, using figures from their latest return. Where a client fits two segments, put them in the one with the earlier action date and mention the other change in the same message. This table is the version we would build for a typical small practice.

Scottish clients need a footnote. The savings rates apply across the UK, but the HMRC policy paper notes that Scotland and Wales can set their own property income rates, so hold any Scottish landlord letters until the Scottish figures are published.

How much more will a landlord client pay in 2027/28?

A typical higher-rate landlord pays four pence more for every pound of property profit, because each band rises by four points. On £20,000 of profit that is roughly £800 a year. The exact figure depends on where the profit falls across the bands and on mortgage interest, so run each client's own numbers.

Worked example (illustrative figures)

Take a client in Leeds with a salary of £40,000 and rental profit of £20,000, before any finance costs. The salary uses the Personal Allowance and £27,430 of the basic rate band, leaving £10,270 of basic rate band for the rental profit. The other £9,730 of rent falls into the higher rate band.

1. 2026/27: £10,270 at 20% is £2,054, and £9,730 at 40% is £3,892. Tax on the rent: £5,946.
2. 2027/28: £10,270 at 24% is £2,464.80, and £9,730 at 44% is £4,281.20. Tax on the rent: £6,746.
3. Difference: £800 a year, assuming the same income in both years.

That figure is the one to put in the client's message. A landlord ignores "rates are going up"; they read "your rent will cost you about £800 more in tax from April 2027".

A saver works the same way. A higher-rate client with £8,000 of interest has a £500 savings allowance, so £7,500 is taxed. Four extra points on £7,500 comes to £300 a year, which is a good prompt to talk about ISAs or a spouse holding the deposits.

When will clients actually feel the higher tax?

Later than most of them expect. Payments on account for 2027/28, due on 31 January and 31 July 2028, are based on the 2026/27 bill, which was worked out at the old rates. The extra tax from the new rates usually turns up in the balancing payment on 31 January 2029, together with a larger first payment on account for the following year.

That delay is useful. It gives landlords two years of warning, but it also means a nasty double hit in January 2029 if nobody explains it. If your practice already sends notes on explaining payments on account to clients, add one line about 2029 now so the client hears it from you first.

Clients who prefer to budget monthly can be told the rough annual increase and asked to set aside a twelfth of it each month from April 2027.

What should the client message say?

Keep it to three points: what changes, what it means for them in pounds, and what they should do next. A message that runs past 150 words gets skimmed. Put the client's own figure in the first two lines and any planning ideas in a separate conversation.

A landlord message might read:

"From 6 April 2027 rental profits in England are taxed at 24%, 44% or 49% instead of the usual rates. Based on your 2025/26 figures, that adds about £800 a year to your tax. Most of it will be due in January 2029. We'd suggest a 15-minute call before the end of February to look at timing of repairs and how the property is owned. Book a slot here."

Avoid promising savings. Some ideas, like moving repair work into a later year or changing how a property is held, have costs of their own, including Capital Gains Tax and Stamp Duty Land Tax on transfers. The call is where you test whether anything makes sense for that client.

For side traders the message is shorter still: from April 2027 the first £3,000 of trading income may be covered by the allowance, and they should keep records anyway so the practice can confirm whether a return is still needed.

How should a practice schedule the work?

Run the campaign after the 31 January rush, not during it. January belongs to 2025/26 returns, and a rates letter sent in the middle of that will get lost. The one exception is the data pull, which you can do while each 2025/26 return is being finished.

• November to January: tag each client with a segment as their return is completed. Clients who will join MTD in April 2027 should be flagged straight away; our guide to MTD quarterly updates for accountants covers the onboarding side.
• First week of February: send landlord and saver messages with personal figures.
• February and March: hold the short calls, roughly 15 minutes each, and record what was agreed.
• March: send the side-trader email and the general newsletter paragraph.
• April: follow up anyone in the MTD cohort who has not yet chosen software.

Size the calls before you send anything. If a practice has 300 Self Assessment clients and a quarter are landlords or larger savers, that is 75 calls, or nearly 19 hours of partner or manager time. Spread across six weeks it is manageable. Bunched into one week it is not.

Should the advice be free? Many practices charge for anything that goes beyond a status update. A fixed fee for a planning call, quoted in the email, also filters out clients who only want a chat.

How Zaquil handles the 2027/28 client update

A rates campaign is mostly admin: sorting clients, sending the right message to each group, chasing replies and keeping a record of what was said. Zaquil is built for that kind of repeat work in a UK practice.

Client records and segments. Each client record holds contacts and history, so a manager can work through the landlord list, the saver list and the MTD list and see at a glance who has been contacted and who has replied.

One inbox for replies. Answers come back by email, SMS, WhatsApp, live chat or phone, and all of them land in one shared inbox against the right client, so a reply about a buy-to-let does not sit in one person's mailbox.

Questionnaires in the portal. Instead of asking a landlord to type figures into an email, the practice sends a short questionnaire through the branded secure client portal asking about planned repairs, ownership and expected rent for 2027/28. The client fills it in on a phone; the practice sees the answers on the record.

Automations for the chasing. Rules such as "if no reply in seven days, send a reminder, then create a task for the manager" keep the campaign moving without someone tracking it on a spreadsheet.

Approval and billing. After the call the practice sends a written summary for the client to approve or e-sign, with a signed PDF certificate kept on file, and issues the invoice for the planning fee for online payment.

See how this fits a practice on the accounting and tax solutions page, or compare Zaquil plans and pricing: a 14-day free trial with no card needed to start.