For therapists and mental health professionals, the 2026/27 tax year introduces changes that may quietly increase your tax bill if you’re not prepared.
The personal allowance remains frozen at £12,570. While this might sound like stability, it effectively means you could pay more tax over time as your income grows—especially if your fees increase to keep up with inflation.
Another key change is a 2% increase in dividend tax rates on non-ISA income. This is particularly relevant if you operate through a limited company and take dividends as part of your income.
Here’s what this means for your practice:
- Your tax-free personal allowance remains unchanged at £12,570
- Dividend income outside of ISAs will be taxed at higher rates
- Rising income could push you into higher tax bands
Many therapists balance clinical work with the administrative side of running a practice, and tax planning often gets left until the last minute. However, these changes make it more important to review your finances early.
With the right approach, you can:
- Structure your income more efficiently
- Use tax-free allowances such as ISAs where possible
- Plan ahead for increased liabilities
It’s also worth considering how your business structure affects your tax position. Sole traders and limited company therapists will experience these changes differently, so tailored advice is essential.
Working with an accountant who understands the therapy profession ensures you stay compliant while making the most of available tax reliefs. With a few proactive steps, you can reduce the impact of these changes and keep your focus where it matters most—supporting your clients.