New tax laws for UK businesses in 2026

The 2026 tax year brings substantial changes: the Making Tax Digital for Income Tax rollout, higher dividend tax rates, and capital gains modifications. Here's what shifts, and what each change means for cash flow.

Making Tax Digital for Income Tax, from April 2026

From 6 April 2026, Making Tax Digital for Income Tax Self Assessment becomes mandatory for many self-employed people and landlords, described by government as the most significant reform since Self Assessment was introduced in 1997.

Who's affected. Sole traders or landlords with combined qualifying income above £50,000 from April 2026. Those between £30,000 and £50,000 follow in April 2027, with lower thresholds addressed by 2029.

What it requires. Digital records, HMRC-compatible software, quarterly updates, and an end-of-period declaration by 31 January.

The cash flow effect. Quarterly reporting brings earlier visibility of tax liabilities, which can strain reserves.

Dividend tax rates are rising

• Basic rate: 8.75% → 10.75%
• Higher rate: 33.75% → 35.75%
• Additional rate: unchanged at 39.35%

Capital gains on business asset sales

From 6 April 2026, capital gains tax on qualifying business disposals rises to 18%, with direct implications for exit planning and succession.

Business rates

Retail, hospitality and leisure properties valued up to £500,000 receive a 5p standard multiplier discount. All properties face revaluation, which may push costs up for asset-heavy businesses.

Common questions

When does 2026-27 start? 6 April 2026, running to 5 April 2027.

What else is coming? Self Assessment threshold increases, landlord tax reforms, and a new property tax from April 2028.

None of this is tax advice, talk to your accountant about your own position. If the cash flow impact is the concern, that's the part we can help with.

For an independent, no-obligation review of your options, call 0330 0438 011.