Changes to expect in the new tax year (2026/27)

The 2026/27 tax year begins on 6th April 2026, and while that date may feel a long way off, early awareness can make a real difference to how well your business adapts to upcoming changes.

Each new tax year often brings updates to rates, thresholds, reporting requirements and compliance rules, all of which can affect how much tax you pay and when you need to pay it.

In this blog post, we will outline the key tax changes expected to affect businesses in the 2026/27 tax year, explain how they could impact your day-to-day operations, and share practical steps you can take now to prepare.

We will also look at how professional support can help you stay ahead of regulatory changes and plan with confidence as April 2026 approaches.

Key tax changes affecting businesses in 2026/27

Below, we’ve outlined the main developments expected to impact UK businesses in the new tax year, and what they mean for you in practice.

Making Tax Digital for Income Tax developments

Making Tax Digital (MTD) is HMRC’s initiative to move tax reporting online, requiring businesses to keep digital records and submit updates using compatible software.

From the new tax year, MTD for Income Tax will apply to self-employed individuals and landlords with combined income over £50,000.

Those affected will need to submit quarterly updates during the year, followed by a final declaration after the tax year ends.

This marks a significant change in how income is recorded and reported, particularly for those who have not previously been required to comply.

Corporation Tax penalties

HMRC is increasing penalties for late Corporation Tax returns. The fixed late-filing penalty will double from £100 to £200, with higher charges applying for returns that are more than three months late and for companies that file late repeatedly.

These tougher penalties sit alongside HMRC’s wider move towards stricter compliance and enforcement, increasing the cost of missed deadlines or errors.

Business rates reforms

The UK business rates system is being reformed alongside a full revaluation of commercial properties.

The current two business rates will be replaced with five different rates, based on the type and value of the property. Retail, hospitality, and leisure premises will generally pay lower rates, while very high-value properties (£500,000+ rateable value) will pay more.

This means your business rates bill could go up or down depending on your property’s classification and value.

To help businesses adjust, a £4.3 billion transitional relief package will cap large increases over the next three years, and some sectors (like pubs and live music venues) are receiving targeted discounts and freezes on bills following recent policy updates.

Capital Gains Tax update

The rate on Business Asset Disposal Relief and Investors’ Relief rises to 18 %, up from 14 %. This means that business owners selling a company, shares, or other qualifying assets will face a higher tax bill on gains that were previously eligible for the relief.

Relief for disposals into Employee Ownership Trusts will also be reduced, so fewer gains will be exempted under these schemes. For businesses, this could affect succession planning or restructuring strategies.

Venture capital and investment incentives

The government is increasing the investment limits for Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS).

This means that companies looking to raise early-stage capital can potentially attract larger investments from private investors while allowing investors to benefit from the associated tax reliefs.

For businesses, this could make it easier to secure funding for growth, research and development, or expansion plans.

How to prepare before April 2026

Getting ahead now can save stress later and leave your business in a much stronger financial position. Here are our tips for preparing for the new tax year:

Review your current financial position

Start by reviewing your latest financial performance, focusing on profitability and overall cash flow.

A clear understanding of where your business stands now makes it easier to assess how upcoming tax and compliance changes may affect you and where adjustments may be needed.

Plan ahead for future tax liabilities

Creating a forward-looking tax forecast can help you anticipate the impact of upcoming changes and understand what your future tax position is likely to look like.

This supports more accurate cash flow planning and allows you to make informed decisions around investment, recruitment and growth with greater confidence.

Ensure systems and processes are fit for purpose

As reporting and compliance requirements continue to evolve, it is important to review whether your payroll and accounting systems are capable of meeting new expectations.

Updating software and improving record-keeping processes can significantly reduce the risk of errors, penalties and missed deadlines.

Strengthen digital record-keeping and reporting

With greater emphasis on digital submissions and more frequent reporting, businesses should assess how well their current systems capture and store financial data.

Moving to compliant software and embedding good digital habits now will help ensure a smoother transition as requirements expand.

Revisit remuneration and profit extraction strategies

Changes to tax rates and thresholds can affect how income is taken from a business.

Reviewing salary, dividend and wider remuneration strategies ahead of the new tax year can help ensure they remain efficient and aligned with both personal and business goals.

Build reserves for upcoming liabilities

Setting aside funds in advance for known or expected tax liabilities can help protect day-to-day cash flow and reduce financial pressure when payments fall due.

This proactive approach supports better budgeting and long-term financial stability.

Seek professional advice early

Early planning with an accountant provides the opportunity to assess how upcoming changes may affect your business and ensure you are fully prepared for new compliance requirements.

Reviewing your accounts in advance can also help ensure your records are accurate and up to date ahead of April.

How an accountant can support you through 2026/2027 tax year changes

The 2026/27 tax year brings a combination of new requirements that will significantly affect the way many businesses operate. Navigating these changes without professional support can increase risk and uncertainty.

An accountant helps you prepare in advance and adapt confidently as the new rules take effect. Here’s how:

Preparing for expanded digital reporting requirements

With digital record-keeping and more frequent submissions becoming the norm, an accountant can help assess whether your systems and processes are ready.

This includes recommending suitable software and ensuring your reporting approach aligns with HMRC expectations from the outset.

Managing the impact of stricter compliance and penalties

As HMRC increases penalties for late or incorrect submissions, accuracy and timeliness are more important than ever.

An accountant helps put controls in place to meet deadlines, maintain accurate records and reduce exposure to fines, interest and compliance issues throughout the year.

Planning for 2026/27 tax liabilities

An accountant can model the likely impact of 2026/27 tax changes on your business, helping you understand future liabilities and plan cash flow accordingly.

This forward planning supports better decision-making around investment, staffing and profit extraction during the year.

Adapting financial strategies to new thresholds and rates

Changes to rates, thresholds and reliefs can affect how businesses structure remuneration, dividends and long-term plans.

Reviewing these strategies ahead of and during the 2026/27 tax year ensures they remain efficient and aligned with current legislation.

Supporting business decisions amid wider reforms

Reforms such as changes to business rates, capital gains treatment and investment incentives can influence property decisions, succession planning and funding strategies.

An accountant helps interpret how these reforms apply to your specific circumstances and supports informed, commercially sound decisions.

Providing ongoing guidance throughout the tax year

Rather than a one-off review, an accountant offers continuous support as the 2026/27 tax year progresses.

This allows your business to respond quickly to further updates, address issues early and stay on track as requirements evolve.

Why choose One Two One Accounts

At One Two One Accounts, we have extensive experience supporting SMEs and owner-managed businesses through the changes that come with each new tax year.

We understand that tax legislation can feel complex and, at times, overwhelming, which is why we focus on providing practical, tailored advice that reflects the real needs of your business.

Our approach is proactive rather than reactive. Instead of waiting for deadlines or issues to arise, we work with you throughout the year to plan ahead, forecast liabilities and identify opportunities to reduce your tax burden in a compliant way.

This forward-planning mindset helps you avoid surprises, protect your cash flow and make informed financial decisions as the 2026/27 tax year approaches.

We pride ourselves on offering clear, jargon-free advice. You will not be left trying to interpret technical guidance or navigate HMRC requirements alone.

Whether you need support with tax planning, payroll, compliance or reporting, our team is here to provide straightforward guidance and reliable support at every stage.

Get in touch today to ensure your business is fully prepared for the changes ahead.