The start of the new tax year in April 2026 has brought a wave of changes, but for business owners and the self-employed, this isn't just background noise; it directly affects how you operate, report and plan ...
As a new tax year begins, changes are being made to your taxes, reliefs and thresholds
The biggest shift by far is the rollout of Making Tax Digital for Income Tax. From 6 April 2026, sole traders and landlords earning over £50,000 will be required to keep digital records and submit quarterly updates to HMRC via compatible software.
This is not optional!
Over the next two years, this threshold will drop to £30,000, then to £20,000, bringing millions more into the system. For many, this is less about tax and more about process, so if your records are messy now, this change will quickly expose them.
There are also significant changes to business ownership and long-term planning. Inheritance tax relief on business and agricultural assets is being tightened, with a new cap of £2.5 million per person.
While relief still applies, anything above that threshold will receive reduced benefit, effectively introducing a tax charge where none may have existed before. For business owners considering succession or exit strategies, this is one you cannot afford to ignore.
Selling a business is also becoming more expensive. Business Asset Disposal Relief, which allows qualifying gains to be taxed at a lower rate, is rising again to 18%. This continues a trend of reducing incentives for entrepreneurs at the point of exit.
Similarly, changes to investor schemes, such as Venture Capital Trusts, reduce tax relief for investors, even though the qualifying investment limits have been expanded. In simple terms, raising money might look easier on paper, but it is less attractive in practice.
Dividend tax increases will hit many directors!
They usually pay themselves through a mix of salary and dividends. With higher rates now applying above a small allowance, this could reduce take-home income unless strategies are reviewed. It's another reminder that the traditional 'low salary, high dividend' approach is steadily less efficient.
There are also some smaller operational changes worth noting. New exemptions for certain employee benefits, such as reimbursed expenses and health-related costs, may slightly simplify administration. At the same time, changes to the taxation of carried interest will mainly affect those in investment and fund management, shifting it from capital gains to income tax treatment.
Overall, the direction is clear. More reporting, tighter reliefs and higher effective tax rates in key areas. If you run a business, this is the year to get organised, review how you extract income and think carefully about longer-term planning.
Although I'm focusing on the business and self-employed changes in this blog post, it's worth mentioning what's happening for individuals and households as well. The key changes include:
Council tax increases, with many councils raising rates close to the maximum,
Higher dividend tax rates for those with investment income,
Removal of tax relief for homeworking expenses if not reimbursed by employers,
Increases in Vehicle Excise Duty, including for electric vehicles,
Higher benefit-in-kind rates for electric company cars,
Air Passenger Duty is rising, increasing the cost of flights,
Inheritance tax relief on charitable giving is now limited to UK-registered organisations,
Inflation-linked increases to property-related taxes, such as ATED,
Abolition of bingo duty, aimed at supporting the industry rather than individuals.
These personal tax and cost changes might not seem dramatic in isolation.
But together, they quietly stack up. A few pounds extra on council tax here, slightly higher travel costs there, and a bit more tax on dividends can easily add up to a noticeable monthly impact.
For many businesses and households, it will feel less like a single change and more like a steady tightening of day-to-day finances. It's a good moment to take stock, review your outgoings and make small adjustments where possible.
None of these tax changes is likely to cause panic on its own. Combined, they can chip away at disposable income faster than you might expect.
If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts about the new tax year and the changes that come with it, then do call me on 01908 774320 and let's see how I can help you.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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