Today marks the start of a new tax year, and with it comes a cascade of changes that expose Labour's deeply anti-growth, anti-work agenda. From dividend tax increases to the "farmer tax" capping inheritance relief, these aren't minor adjustments—they're a systematic raid on the people and businesses that drive Britain forward. The government is strangling economic growth at precisely the moment when we need more investment and more jobs, not fewer.

The Dividend Tax Raid: Hitting Savers and Business Owners

Starting today, dividend tax rates are rising by 2 percentage points across the board. The basic rate jumps from 8.75% to 10.75%, while the higher rate climbs from 33.75% to 35.75%. This might sound modest, but it's a direct attack on savers, small business owners, and those trying to build wealth through investment.

Why does this matter? Because millions of British people depend on dividend income—whether from pension portfolios, modest investments accumulated over a lifetime, or small businesses structured as limited companies. These aren't the super-wealthy oligarchs Labour pretends to target; they're plumbers, electricians, shop owners, and nurses with share portfolios. Labour claims to be pro-growth, yet it systematically punishes the people who save, invest, and take entrepreneurial risks.

The dividend tax rises join an already hostile tax environment. Capital Gains Tax relief for business owners—the Business Asset Disposal Relief—is rising to 18%, making it even more expensive to sell a business or investment. If you've built something over decades and want to retire, Labour has made sure you pay more when you finally cash out.

Fiscal Drag: The Silent Tax on Everyone

But perhaps the most insidious change is the one nobody's talking about: the Personal Allowance remains frozen at £12,570. It's been frozen since 2021, and Labour isn't raising it. While wages slowly increase with inflation, the amount you can earn before paying tax stays the same. This is fiscal drag—a stealth tax that pulls more and more working people into the tax net without a single vote for a tax rise.

This isn't accidental. It's deliberate. Labour is using bracket creep to squeeze working families without having to politically justify a tax rise. It's cowardly economics. A government genuinely committed to supporting workers would raise the Personal Allowance in line with inflation. Instead, Labour is raiding the wallets of everyone earning above a frozen threshold. Teachers, nurses, engineers—all being taxed more while Labour pretends it hasn't touched tax rates.

The "Farmer Tax": Inheritance Relief Catastrophe

Then comes the move that should enrage everyone who understands where food comes from: the combined cap on Agricultural Property Relief and Business Property Relief at £2.5 million, with only 50% relief available on assets above the threshold. This effective 20% inheritance tax rate on farming assets is a direct attack on family farms.

Farm families have built multi-generational businesses with land, equipment, and livestock worth millions—but not in cash. When a farmer passes the business to their child, under these new rules, they'll face a catastrophic tax bill on assets they can't easily liquidate. Many families will be forced to sell land to pay the tax, breaking up farms that have existed for centuries. Labour is destroying rural Britain to fill a budget hole.

This isn't targeting billionaires; it's targeting families. A farmer with £3 million in land and equipment—which provides employment and food security—will face effective tax rates that make inheritance genuinely impossible without selling up. Reform UK warned about this, and Labour did it anyway.

Capital Allowances Cut: Strangling Business Investment

For businesses trying to modernise, invest in machinery, and remain competitive, there's more bad news: capital allowances for plant and machinery are being cut from 18% to 14%. This means businesses get less tax relief when they invest in new equipment, vehicles, and technology.

In a competitive global economy, this is economic self-sabotage. Countries around the world are cutting corporate tax rates and improving investment incentives. Britain is going in the opposite direction. The message Labour is sending is clear: invest elsewhere. Don't modernise in Britain. Don't create jobs here. Go to countries that want your capital.

Making Tax Digital: More Bureaucracy for the Self-Employed

Making Tax Digital becomes mandatory for self-employed people earning over £50,000. While digital tax submission isn't inherently bad, it's another compliance burden on the people already squeezed hardest by this government—freelancers, traders, and small business owners who are juggling multiple responsibilities.

Adding another layer of administrative complexity doesn't make the tax system fairer; it makes life harder for people trying to earn a living. A truly pro-growth government would be reducing red tape, not adding to it.

The Underlying Problem: A Budget Deficit of £116 Billion

Why is Labour doing all this? Because the government is running a £116 billion budget deficit—3.6% of GDP. Rather than cutting wasteful spending or tackling the genuine inefficiencies that plague public services, Labour is choosing to raise taxes on the people and businesses that fuel the economy.

This is backwards economics. A government running a deficit should be cutting spending, not raising taxes on workers and savers. Tax rises in a weak economy slow growth further, reduce revenue, and trap us in a cycle of declining prosperity. Yet that's exactly what Labour is doing.

What Reform UK Would Do

Reform UK has a fundamentally different approach to the economy. We believe in lower taxes, less regulation, and trusting people and businesses to allocate resources more efficiently than government bureaucrats. Here's what we'd do:

  • Cut spending relentlessly—not by slashing frontline services, but by eliminating waste, quangos, and duplication in the public sector
  • Raise the Personal Allowance to £20,000—putting thousands of pounds back in the pockets of working people immediately
  • Reverse the dividend tax increases—removing barriers to investment and saving
  • Protect family farms—scrapping the inheritance tax cap on agricultural relief
  • Incentivise business investment—increasing capital allowances to attract manufacturing and modernisation to Britain
  • Simplify the tax code—making it easier for small businesses to comply without hiring accountants

The choice is stark: more taxation, more regulation, more decline—or lower taxes, less state interference, and genuine growth. April 2026's changes show which road Labour has chosen. Reform UK offers a different path: one that trusts working people, rewards enterprise, and builds prosperity.

The damage starts today. We have to change course before Britain falls further behind.