With the Autumn Budget scheduled for 28 October 2026, many taxpayers are wondering whether tax rates, allowances or reliefs could change in the future.
While no one knows exactly what the Chancellor will announce, there are several legitimate tax planning opportunities available under the current rules that may be worth reviewing before Budget Day.
If you pay tax at the higher rate, there is often more than one way to keep your bill down. Pensions, ISAs, capital gains planning and childcare support are all worth reviewing together, as the right mix will depend on your personal situation.
1. Make the Most of Pension Tax Relief
Pension contributions remain one of the most tax-efficient ways to save.
Many individuals can contribute up to £60,000 into a pension each tax year, subject to earnings and any restrictions that may apply.
If you've received a bonus, inheritance or other lump sum, contributing some or all of it into a pension could provide valuable tax relief at your highest marginal tax rate.
For example, a £10,000 gross contribution attracts £2,000 of basic-rate relief added to the pension for all taxpayers. Higher-rate taxpayers can claim an additional £2,000 through their Self Assessment tax return, giving total relief of up to £4,000.
Before making large contributions, it's important to consider your annual allowance and personal circumstances.
2. Review Your Regular Pension Contributions
Tax efficiency doesn't only come from lump-sum payments.
If you've recently received a pay rise, changed jobs or reviewed your household budget, it may be worth considering whether you can increase your ongoing pension contributions.
Even relatively small monthly increases can generate additional tax relief while boosting long-term retirement savings.
3. Consider Using Your Capital Gains Tax Allowance
If you hold investments outside an ISA or pension, it may be worth reviewing any unrealised gains.
Individuals currently have an annual Capital Gains Tax allowance of £3,000, and some investors choose to realise gains within the allowance each tax year to reduce future tax exposure.
Where appropriate, investments can often be moved into an ISA through a process commonly referred to as "Bed and ISA", helping to protect future growth and dividends from tax.
Anyone considering this approach should take advice from their financial advisor where necessary, particularly as specific anti-avoidance rules apply when repurchasing investments outside an ISA.
4. Don't Overlook Cash ISAs
Cash ISAs continue to provide tax-free interest on savings.
From 6 April 2027, the annual Cash ISA subscription limit for individuals under 65 will reduce to £12,000, while the overall ISA allowance remains at £20,000. Clients who prefer to hold cash may therefore wish to make full use of their 2026/27 allowance before the change takes effect.
The ISA wrapper is particularly valuable for higher-rate taxpayers, whose Personal Savings Allowance is £500, compared with £1,000 for basic-rate taxpayers and nil for additional-rate taxpayers. Where clients are part of a couple, we recommend reviewing how both partners’ ISA allowances are being used, as well as which partner holds savings outside an ISA.
It may be worth adding that from April 2027, income tax rates on savings income will also rise by two percentage points, which strengthens the case for using the ISA allowance now. A two percentage point increase applies from April 2027 to income that is not classified as earned income.
5. Review Stocks and Shares ISA Opportunities
Stocks and Shares ISAs protect investments from both Capital Gains Tax and tax on dividends. Although a £20,000 investment is unlikely to produce a Capital Gains Tax bill straight away, dividends received outside an ISA can become taxable once the £500 dividend allowance has been used.
Over time, investing through an ISA can therefore offer significant tax savings, especially for those with larger portfolios or a meaningful level of dividend income.
6. Check Whether Tax-Free Childcare Is Available
Tax-Free Childcare remains an often-overlooked relief for eligible families.
The scheme can be used towards:
- Childcare
- Wraparound care
- Holiday clubs
For every £8 paid into a Tax-Free Childcare account, the government adds £2, up to certain annual limits.
However, eligibility restrictions apply. In particular, a parent or partner with adjusted net income above £100,000 will generally not qualify.
A Practical Reminder Before Budget Day
While Budget speculation often dominates headlines, the biggest opportunities are often the existing allowances and reliefs that taxpayers have not yet fully used.
Reviewing pension contributions, ISA allowances, Capital Gains Tax planning and childcare support before the Budget may help ensure you're making the most of the rules currently available.
As always, any planning should be based on your own circumstances rather than Budget rumours.
Useful GOV.UK Links
Pension Tax Relief Guidance (GOV.UK)
Individual Savings Accounts (ISAs) Guidance (GOV.UK)
Capital Gains Tax Guidance (GOV.UK)
Tax-Free Childcare Guidance (GOV.UK)
Source
This article has been adapted from Six tips for higher rate taxpayers ahead of the Budget by Sarah Coles, published by Business & Accountancy Daily.
Original article: Read the original article