The Welsh Final Budget for 2026-27 was published on 20 January 2026. The Budget sets out the Welsh government’s revenue and capital spending plans, including detailed portfolio spending plans.

Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language confirmed that the Final Budget provides £27.5bn for people, public services and businesses across Wales. This is £1.2bn more than in 2025-26 and £400m more than at the Draft Budget. The additional funding includes resources for local government, the NHS and other Welsh Government priorities.

There have been no changes announced to the Welsh rates of Income Tax (WRIT) which will continue to be set at 10p for 2026-27. This means that the rates of Income Tax paid by Welsh taxpayers will continue to be the same as those paid by English and Northern Irish taxpayers in the new tax year.

The Budget also confirms no changes to the current residential and non-residential rates and thresholds for Land Transaction Tax (LTT) for 2026-27. Some changes to the Multiple Dwelling Relief (MDR) regime for LTT will take effect and a new limited refund provision for the higher residential rates of LTT aimed at supporting more affordable homes.

In addition, Landfill Disposals Tax (LDT) rates will continue to mirror UK landfill tax rates in 2026-27.

Scotland’s Finance Secretary, Shona Robison delivered her third Budget statement to the Scottish parliament on 13 January 2026. This is the final Budget before the Holyrood elections due to take place in May.

There were no changes announced to the Scottish Income Tax rates. Following the UK Government’s extension of personal tax threshold freezes, the Higher, Advanced and Top rate thresholds will also remain unchanged until 2028–29. The Starter rate band is set to increase by 40.3% and the Basic rate band by 13.6% in 2026-27. This means that a larger portion of people's income will be taxed at the starter and basic rates helping to protect lower income households.

The Scottish rates and bands for 2026-27 are as follows:

Starter rate – 19%	£12,571 – £16,537
Basic rate – 20%	£16,538 – £29,526
Intermediate rate – 21%	£29,527 – £43,662
Higher rate – 42%	£43,663 – £75,000
Advanced rate – 45%	£75,001 – £125,140
Top rate – 48%	Above £125,140

The standard personal allowance remains frozen at £12,570. 

No changes were announced to the residential and non-residential rates and bands for the land and buildings transaction tax (LBTT). The standard rate of Scottish landfill tax will rise to £130.75 per tonne and the lower rate to £8.65 per tonne from April 2026 maintaining alignment with the corresponding taxes in the rest of the UK. It was also announced that new council tax bands will be introduced from April 2028 for residential properties valued at £1m more. The Budget measures are subject to final approval by the Scottish parliament.

With so many online accounts now in daily use, including banking, shopping, email and HMRC services, password security has never been more important. A weak or reused password can lead to fraud, identity theft, or unauthorised access to personal and business information.

A good first step is to use strong, unique passwords for every account. Avoid using the same password across multiple websites, as criminals often reuse stolen login details from one breach to access other accounts. Strong passwords are usually at least 12 characters long and do not rely on obvious words or personal information. Many people find passphrases easier to remember than random characters.

A password manager is one of the easiest ways to improve security. It securely stores passwords in an encrypted vault, generates complex passwords for you, and can warn you if you are using weak or repeated passwords. This means you only need to remember one strong master password.

Where possible, enable two-factor authentication (2FA). This adds a second step when logging in, such as a code from an authentication app or a prompt on your phone. Even if someone obtains your password, they may still be unable to access your account without the second factor.

Be cautious with password reset emails and links. Your email account is often the gateway to all other accounts, so secure it with a strong password and 2FA. Also watch for phishing emails and fake login pages designed to steal your details. If unsure, type the website address directly into your browser rather than clicking a link.

Finally, avoid sharing passwords by email or text message, especially in a business setting. Where possible, use separate logins for each person and restrict access appropriately.

A person’s credit rating (often referred to as a credit score) is a measure used by lenders to assess how reliably someone manages borrowing and financial commitments. It can affect whether credit is offered at all, the interest rate charged and even the size of deposit required for certain products. Although each lender uses its own scoring system, most look at similar underlying factors.

One of the biggest influences is payment history. Missing payments on credit cards, loans, overdrafts, mobile phone contracts or buy now pay later agreements can have a negative impact. Even one late payment can reduce a score, while repeated late payments suggest ongoing financial pressure.

The level of borrowing also matters. Lenders consider overall debt, how much available credit is being used and whether borrowing is increasing over time. For example, using most of a credit card limit may indicate higher risk, even if payments are made on time.

A person’s credit history length can also affect their rating. Someone with a longer track record of managing credit sensibly often scores better than someone with little or no borrowing history, even if they are financially secure.

Frequent applications for credit can reduce a score in the short term. Multiple searches in a short period may suggest financial difficulty or over reliance on borrowing.

Another key factor is the stability of personal details. Being registered on the electoral roll at the current address can improve a credit profile, as it helps lenders verify identity. Regularly moving home or having inconsistent address records, can make a person appear higher risk.

Errors can also play a part. Incorrect information, financial links to another person (such as a former partner) or outdated details can damage a credit rating unfairly, so it is worth checking a credit report from time to time.

Finally, it is important to remember that credit scoring is not just about debt, it is about behaviour. A steady pattern of borrowing, prompt repayments and tidy records generally leads to a stronger credit rating over time.

If your business is planning a major UK investment, HMRC’s new advance tax certainty service could give you binding clarity on the tax position before you commit.

HMRC has recently published draft guidance on the new advance tax certainty service as part of the government’s Corporate Tax Roadmap at the Autumn Budget 2024, where the Chancellor set out plans for a new HMRC service to give major investment projects clarity on how tax law will apply in advance. As part of the Autumn Budget 2025 measures last November, it was confirmed that the new service is expected to open in July 2026.

Under the new advance tax certainty service, businesses investing at least £1 billion in the UK over the lifetime of a project can apply for a formal, binding position from HMRC on how various taxes will be applied to their specific circumstances. This applies to taxes such as Corporation Tax, VAT, Stamp Taxes, PAYE and the Construction Industry Scheme.

Unlike existing clearance routes, the advance tax certainty service is designed specifically for large and complex projects where uncertainty over tax outcomes could otherwise discourage investment. HMRC clearances issued through this service will bind the tax authority for up to five years subject to full initial disclosure of all material facts. The clearance may then be renewed for a further five years unless a material change in the law, or a court decision that clarifies its application, means that the prior clearance is no longer correct.

This service is intended to provide those investing significant amounts in the UK, confidence that the tax treatment of a project will not later be challenged.

Pre-tax year end planning is one of the most practical and controllable ways for UK businesses and higher rate taxpayers to reduce unnecessary tax exposure. Unlike long term restructuring, it focuses on decisions that can still be influenced before 5 April or, for companies, before the accounting year end. When done properly, it is not about aggressive schemes, it is about making sure allowances, reliefs and timing opportunities are not wasted.

Why timing matters

The UK tax system is sensitive to timing. Income, expenses, capital purchases and pension contributions can fall into one tax year or the next depending on when action is taken. Once the year end passes, many opportunities disappear completely.

For higher rate taxpayers, this can be particularly costly. Income drifting just over a threshold can trigger higher marginal rates, loss of allowances or reduced reliefs. Pre-year end planning allows income levels to be reviewed and steps taken to mitigate sharp jumps in tax, rather than reacting after the event.

Key benefits for businesses

For owner managed businesses, year-end planning often centres on profit extraction and investment decisions. Reviewing results before the year end allows directors to consider whether profits should be retained, extracted as salary or dividends or redirected into qualifying expenditure.

Capital allowances are a common example. If a business plans to invest in plant or equipment, bringing expenditure forward into the current year can accelerate tax relief and improve cash flow. Pension contributions made by the company can also be an efficient way to extract value, reducing corporation tax while building long term personal wealth.

Stock levels, bad debts and provisions also deserve attention. A timely review can ensure profits are not overstated simply because adjustments were overlooked.

Value for higher rate and additional rate taxpayers

Individuals paying tax at higher or additional rates face some of the steepest marginal tax charges in the system. Pre-tax year end planning can help smooth income and preserve reliefs.

Pension contributions are often central. Personal contributions can attract higher rate relief, while also reducing adjusted net income, which can help protect allowances that taper away at higher income levels. Charitable giving under Gift Aid can have a similar effect.

For those with investment income, reviewing disposals before the year end can allow better use of annual exemptions or losses, rather than triggering avoidable capital gains tax.

For many individuals and business owners, paying tax is one of the largest regular financial commitments they face. Yet tax bills often arrive as a shock, not because the amounts are unexpected, but because the funds have not been set aside in advance. Developing a disciplined approach to saving for tax can remove stress, protect cash flow and support better financial decision making.

The starting point is understanding when tax is due and how much is likely to be payable. For employees taxed through PAYE, liabilities are largely settled automatically. For the self-employed, company directors, landlords and investors, tax is often paid later, sometimes many months after the income is earned. This delay can create a false sense of affordability, leading to funds being spent rather than reserved.

A practical approach is to treat tax as a non-negotiable cost, similar to rent or wages. As income is received, a proportion should be transferred immediately into a separate savings account earmarked for tax. This creates a clear boundary between available funds and money that belongs to HMRC. For those with variable income, setting aside a conservative percentage can help ensure there is enough saved even if profits increase unexpectedly.

Using a dedicated tax savings account can be particularly effective. Keeping tax funds separate reduces the temptation to dip into them for day to day spending. Some people choose instant access accounts for flexibility, while others prefer notice or fixed term accounts if they are confident about timing and amounts. The aim is not high returns, but certainty and accessibility when payment deadlines arrive.

Regular reviews are also important. Changes in income, tax rates, or personal circumstances can affect how much needs to be saved. Reviewing figures quarterly or alongside management accounts allows adjustments to be made before problems arise. This is especially relevant where payments on account apply, as these can significantly increase cash outflows in certain months.

Saving for tax is not just about avoiding penalties or interest. It supports better planning and peace of mind. When tax funds are already in place, decisions about investment, expansion, or personal spending can be made with greater confidence. It also reduces reliance on short term borrowing or time to pay arrangements.

In simple terms, saving for tax turns a reactive problem into a controlled process. By planning ahead and treating tax as a priority, individuals and businesses can smooth cash flow, reduce anxiety and stay firmly in control of their financial position.

If you are considering an asset purchase and are unsure which funding route is most appropriate, we can help you review the options and assess the impact on your business. A short discussion at the planning stage can often lead to a more efficient and sustainable outcome.

The Bank of England’s Monetary Policy Committee (MPC) last met on 18 December and, in a narrow 5–4 vote, decided to reduce the interest rate by 25 basis points, bringing it down to 3.75%. All four dissenting members voted to keep the rate at 4%. This marks the sixth interest rate reduction since August 2024.

Inflation continues to fall, with the latest figure at 3.2%. While this remains above the 2% target, inflation is now expected to return towards target more quickly in the near term. The Bank of England’s next meeting to consider interest rates is scheduled for 5 February 2026.

Following the interest rate cut, the late payment interest rate applied to the main taxes and duties on which HMRC charges interest will decrease from 8% to 7.75%. This change took effect on 29 December 2025 for quarterly instalment payments and will take effect on 9 January 2026 for non-quarterly instalment payments.

In addition, the repayment interest rate paid by HMRC on main taxes and duties will fall by 0.25 percentage points, from 3% to 2.75%, from 9 January 2026. The repayment rate is calculated as the Bank Rate minus 1%, subject to a minimum of 0.5%.

The Financial Services Compensation Scheme (FSCS) has raised its savings guarantee for bank deposits, increasing the deposit protection limit from £85,000 to £120,000 per person. This change came into effect on 1 December 2025 and marks a significant increase in how your bank deposits are protected in the UK.

This new deposit protection limit ensures that qualifying UK bank and building society depositors are covered if their bank fails. The FSCS compensation limit is reviewed periodically by the Prudential Regulation Authority (PRA). Following a consultation in March 2025, the PRA confirmed the increase in November 2025. Prior to this, the £85,000 limit had been in place since January 2017.

The FSCS protection applies per person, per bank or building society, which means joint account holders are eligible for double the protection, or up to £240,000 in total. In addition, savers with certain types of temporary high balances such as proceeds from a house sale, insurance payouts or inheritances can also benefit from increased protection. This limit has increased from £1 million to £1.4 million per depositor per life event. This additional coverage is available for up to six months.

For most savers, the new £120,000 limit will provide adequate protection. However, those with deposits exceeding this amount should consider spreading their savings across multiple banks or building societies to ensure all their funds are covered. It is important to note that if you hold multiple accounts within a single banking group (i.e., banks that share the same banking licence), the £120,000 limit applies to the total amount across all accounts within that banking group, not to each individual account.

You do not need to take any action to benefit from the increased protection. If your bank or building society were to fail, the FSCS would automatically compensate you up to the new limits.

As we look ahead to 2026, there is growing speculation about how the Bank of England will manage interest rates during what many economists believe will be a period of calmer inflation, steadier wage growth and a more predictable economic backdrop. After several years shaped by sharp price rises, supply chain shocks and policy responses that required rapid increases to the Bank Rate, the outlook for the coming year appears more settled and this is creating a sense that borrowing costs may edge downwards rather than upwards.

The current Bank Rate stands at around four per cent following a series of cuts through 2024 and 2025 as inflation eased gradually. Policymakers have indicated that they remain alert to any resurgence in inflationary pressure, yet they also recognise that the period of high inflation is now behind us. If this trend continues and inflation drifts closer to the Bank’s long term target, it will give the Monetary Policy Committee more room to make modest reductions during 2026. Many forecasters expect something in the region of a quarter to half a percentage point of cuts during the year, although the timing will depend heavily on the data released each quarter.

For households and businesses, this would create a slightly more comfortable lending environment. Mortgage borrowers on variable deals may feel some relief as repayments fall a little and businesses that rely on flexible credit facilities could find that their financing costs ease. Fixed mortgage rates may also become more attractive if lenders anticipate further gradual reductions. However, the broader economic impact is unlikely to be dramatic, since the Bank is not expected to deliver large or rapid cuts. The emphasis is more likely to remain on steady adjustments that avoid disrupting confidence or encouraging excessive borrowing.

It is worth noting that a full return to the ultra-low interest rate environment seen before the pandemic is not expected. Structural changes in the UK economy, global supply conditions and the government’s fiscal position all point towards a future in which interest rates remain higher than the levels seen in the decade prior to 2020. Even so, a move towards slightly lower borrowing costs in 2026 would be consistent with a maturing recovery and a gradual balancing of supply and demand across the economy.

Overall, the most probable outcome for 2026 is a measured reduction in interest rates that supports economic stability without risking a renewed surge in inflation.