A new tax year always brings a mix of changes, updates and, sometimes, confusion. While some rules have shifted, others (like income tax thresholds) remain frozen, which can still have a real impact over time. For business owners, it’s not just about knowing what’s changed, but understanding what it means in practice and what action (if any) you should take.
Income tax thresholds remain frozen, with the personal allowance staying at £12,570 and higher rate tax starting at £50,270. While this might sound like “no news”, it can actually result in more income being taxed at higher rates over time, particularly if your earnings increase. It’s therefore worth reviewing how you’re taking income from your business to make sure it’s still as efficient as possible.
The dividend allowance also remains at £500, meaning a greater proportion of dividend income is now taxable. For company directors who rely on dividends as part of their income, this can reduce overall tax efficiency compared to previous years. As a result, now is a good time to review your salary and dividend mix to ensure it still works for you.
There are also changes to Capital Gains Tax that may affect business owners. The rate applied under Business Asset Disposal Relief and Investors’ Relief has increased from 14% to 18%. This is particularly relevant if you are planning to sell your business or dispose of shares, as it may affect how much you ultimately take home. Even if an exit is not immediate, factoring this into your longer-term planning can make a significant difference.
Inheritance Tax has also seen changes, with a new £2.5 million cap introduced on full relief for Business Property Relief and Agricultural Property Relief. While this will not affect every business owner, it could have implications for those with higher-value businesses or estates. Where relevant, it is worth understanding how these changes may influence future planning.
Looking ahead, Making Tax Digital continues to roll out and represents one of the more significant structural changes. From April 2026, self-employed individuals and landlords earning over £50,000 will be required to follow new digital reporting rules, with those earning over £30,000 following from April 2027. This will involve more frequent submissions to HMRC and a move towards fully digital record-keeping. Even if you are not affected immediately, getting familiar with what is coming will make the transition much smoother.
While not every change will affect every business owner, the start of a new tax year is a good opportunity to take stock. Reviewing how you pay yourself, understanding what you are likely to owe and when, and checking whether your current setup is still working effectively can all help you stay in control. You do not need to overhaul everything, but a few small adjustments can make a meaningful difference over time.
Tax changes do not happen in isolation; they influence how you run your business, how you plan, and ultimately how much you take home. Staying informed is the first step, but using that information to make better decisions is where the real value lies.
At Sysum Howard Duggan, we work with business owners to make sense of changes like these, helping you understand what they mean in practice and supporting you to plan ahead with confidence. If you would like to talk through how the April 2026 changes affect you, we are always happy to help.