My predictions for small businesses in 2026: tax, tech and growth

CREATED BY ROGER EDDOWES Published: 05/01/2026 @ 09:00AM #predictionsforsmallbusinessesin2026 #SmallBusinessUK #BusinessTrends2026 #SMEForecasts #FutureOfSmallBusiness #DigitalAccounting

Here are my predictions for small businesses in 2026. I've been thinking about tax reporting changes, hiring incentives, cyber resilience, smarter AI use, sustainability data requests and new channels to market ...

Predictions for small, Businesses in 2026, Technology reigns

I think that 2026 does come with a lot of unpredictability, but my money is on preparation beating panic, and that frames my predictions today. The cost of living is still on everyone's minds, though I believe the advantage will go to firms that tighten their systems, protect their cash flow, and stay visible to their customers.

It's not about big, expensive leaps into the unknown, but many small, deliberate steps that compound!

One of the most consequential business trends 2026 will bring is the shift towards Making Tax Digital, and it is likely to feel like a culture shock rather than a simple software update. Many business owners will find that quarterly routines force better bookkeeping habits, which then improve forecasting and decision-making.

The winners will be those who treat compliance as an operational process: choose compatible accounting tools early, set a simple monthly-end rhythm, and reduce the year-end scramble into something calmer and more predictable.

Apprenticeships could become surprisingly
attractive for smaller firms!

New funding is available that may turn skills shortages into a manageable pipeline, especially in hands-on sectors like the trades, where capability matters more than credentials. I think that apprenticeship hiring is likely to be one of the most practical ways to grow capacity without committing to risky, immediate senior hires, as long as your business also designs a clear training plan and supervisor time is protected.

The apprenticeship levy means you could be eligible to get £1,000 for hiring an apprentice, training is funded, and you won't have to pay any employer's National Insurance. Wages must match the National Minimum Wage paid by you as the employer.

Security is no longer a 'nice to have' and
should become a priority!

We all saw what happened to Jaguar last year, but in this age of easy web searching, smaller firms are no longer beneath anyone's radar. 2026 means that more small business owners must treat cyber risk like fire risk: not a reason to be fearful, but a reason to be ready.

The firms that stay confident will be the ones that standardise the basics early, such as multi-factor authentication, backups that can actually be restored, and a rehearsed response for when a suspicious email slips through.

Artificial Intelligence is moving into the mainstream!

Although there are many people who fear AI, the tone around it has matured from hype to helpfulness. To me, AI has become a creative thinking aid: it can draft first versions of emails, summarise dense documents, and challenge my assumptions. But I always remain responsible for the final judgment on what it suggests. My experience is something that can never be replaced.

If you consider AI to be just another tool in your business arsenal, then you won't go far wrong. It can support you with many aspects of a business, but it will never replace the skills and experience of humans, so yes, use it, but no, don't let it replace those vital business relationships you've built with your suppliers over the years.

Will you be affected by sustainability reporting?

This is going to increasingly reach smaller suppliers who work with big businesses that need to report on their sustainability aspects. If you're part of their supply chain, this will quietly reshape how contracts are won.

A catering firm, trades business, or small manufacturer may find that 'prove it' questions arrive more often: everything from energy use to waste practices. The opportunity here is that credible documentation can become a differentiator in 2026, so you can expect early movers to turn compliance efforts into a sales advantage.

New ways for customers to find you!

Customer discovery is likely to diversify as shopping and search become more embedded in AI-led experiences and marketplaces. This does not remove the need for a good website or strong product pages, but it does raise the bar on clarity, consistency, and structured information so that tools can confidently recommend what a business offers.

The firms that benefit in 2026 will be those that keep their website well designed, accurate, informative and up-to-date, making it easy for AI bots to index their products and services. I'd even suggest adding a smart AI chatbot that can give the visitor quick answers and direct them deeper into their website when they want to know more.

And good marketing on social media, combined with blogging and regular customer outreach emails to keep yourself 'top of mind', still remains a good practice in 2026.

Finally, there is reason to expect renewed entrepreneurial
energy from younger founders!

Traditional routes feel slow or inaccessible, so when more people try self-employment, competition rises, but so does collaboration, innovation, and local demand for professional services that support new ventures. Young people are all over this, especially the likes of digital services, which fit in with the digital world they were born into.

As an accountant, I always see a steady flow of new microbusinesses starting, and more young people are starting side hustles, then building on their initial success. Established firms can gain by partnering with that young talent pool rather than viewing it purely as noise in the market.

I'm feeling rather optimistic for 2026!

Every small business can build a solid strategy built on systems, data, and sensible experimentation, taking small steps rather than giant, expensive leaps of faith. That is the thread running through all my predictions for 2026.

If business owners simplify, secure, and sharpen their offer, the year can feel less like turbulence and more like momentum. In that spirit, the most useful predictions for small businesses in 2026 are the ones that translate into a plan that can start this week.

Happy New Year!

Until next time ...

ROGER EDDOWES
Join our mailing list! Click here and be one of the first to know when we publish a new blog post!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #predictionsforsmallbusinessesin2026 #SmallBusinessUK #BusinessTrends2026 #SMEForecasts #FutureOfSmallBusiness #DigitalAccounting

About Roger Eddowes ...
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.

More blog posts for you to enjoy ...
		Why small businesses are dropping the green agenda as survival pressures rise Cashflow is getting tight for many small businesses, so dropping the green agenda is now a logical survival step. That's quite understandable. This blog post looks at why priorities are shifting and how firms can still move t...
		Can HMRC take money from your business bank account for unpaid tax? Wondering if HMRC can take money from your business bank account? They can, but only in limited cases, using the Direct Recovery of Debts process after repeated non-engagement, as long as key safeguards are in place. The opti...
		Scrapping Directors' Reports: More companies to become exempt Scrapping directors' reports is the government's latest push to simplify annual reporting. More firms could qualify for a strategic reporting exemption, and group accounts may cover more subsidiaries. This means less duplicat...
		Employment Rights Act Timeline for Employers: What's Changing in 2026 and 2027 The Employment Rights Act will be implemented in phases across 2026 and 2027. My blog post guides you through the changes that occur and what to prepare for. It's a practical, conversational timeline for staying confident and...
		Government Makes Further Concessions on Inheritance Tax reforms for Farms and Firms Here's the latest on Inheritance Tax reforms: the APR/BPR allowance is rising to £2.5m. That should narrow the impact to the biggest estates while keeping planning practical. Less cliff-edge, clearer options, and more time to...
		Business costs are rising, yet smarter workers' rights reforms could ease pressure Business costs are rising, and bosses can feel it in wages and energy bills. However, the latest concessions on workers' rights could mitigate the impact and give firms more time to adapt. It's a pragmatic tweak that keeps pr...
		Key payroll changes for 2026 every UK employer should plan for now Key payroll changes for 2026 are mainly about higher wage floors, tighter thresholds and better forward planning. My blog post today walks through what shifts in PAYE, National Insurance, and compliance mean in practice. Cons...
		What HMRC using AI on social media really means for you Here's the lowdown on HMRC using AI to review social media in criminal tax probes. It's about more intelligent fraud detection with human oversight, not bots running wild. Taxpayers should receive clearer guidance and fewer e...

Other bloggers you may like ...
		Renovating your home in Milton Keynes? Come and stay with us! Posted by Emily Freeman on https://blog.shortstay-mk.co.uk Renovating your home can be loud, messy, and surprisingly draining. You can sidestep the chaos by staying somewhere local that feels settled, private, ...
		What is the career landscape like right now? Posted by Dave Cordle on https://blog.davecordle.co.uk So, what is the career landscape like right now? It's faster, more flexible, and more skills-driven than it used to be. You'll do best by translating ...
		How an Online PA can help you with your professional document production Posted by Sarah Hannaford on https://blog.sarahpasolutions.co.uk If your pages look inconsistent, people assume your thinking is too. Professional document production signals competence before anyone reads a word. A ...
		Preparing to retire: practical advice for small business owners Posted by Jacky Sherman on https://www.jackysherman.com Thinking about retiring from your business can feel a bit surreal. For many small business owners in the UK, the line between 'work' and 'life' has be ...