4th April 2026
From next week, the main rate of writing‑down allowance (the tax relief businesses claim on plant and machinery) drops from 18% to 14%.
Applies from 1 April 2026 for companies
Applies from 6 April 2026 for unincorporated businesses
This means businesses will receive tax relief more slowly, increasing taxable profits in the short term.
2. Business Asset Disposal Relief (BADR) - Tax Rate Rises to 18%
If you sell all or part of your business, the BADR Capital Gains Tax rate increases from 14% to 18% for qualifying disposals made on or after 6 April 2026.
This is a major rise — the same disposal that cost £100,000 in tax a few years ago will now cost £180,000.
3. Inheritance Tax Business Relief & Agricultural Relief - New £2.5m Cap
From 6 April 2026, the long‑standing 100% relief for Business Relief (BR) and Agricultural Relief (AR) is capped:
100% relief only on the first £2.5 million of qualifying assets
Anything above that receives 50% relief
This is a major shift for family businesses and farms planning succession.
4. Making Tax Digital (MTD) Becomes Mandatory for More Businesses
From 6 April 2026, MTD for Income Tax becomes compulsory for:
Self‑employed individuals
Landlords
With gross income over £50,000
They must keep digital records and file quarterly via MTD‑compatible software.
This is one of the biggest administrative changes hitting small businesses.
5. Dividend Tax Rates Increase (Affects Owner‑Managers)
Many small business owners pay themselves via dividends. From next week:
Basic rate rises from 8.75% → 10.75%
Higher rate rises from 33.75% → 35.75%
The dividend allowance stays at £500.
6. Business Rates Changes (England & Wales)
From 1 April 2026:
New permanently lower business rate for leisure, hospitality, and retail
But still higher than the temporary 40% relief ending this year
New multipliers:
38.2p for properties with RV ≤ £51,000
43p for RV £51,000–£499,999
Pubs get a 15% discount.
7. Employment Allowance Remains at £10,500
No change to the Employment Allowance — still £10,500 off employer NI bills.
But it cannot be claimed by companies with only one director and no employees.