Business Owners: Planning for the new tax year
- Scotts, Hall & Birtles
- Apr 1
- 3 min read
With the new tax year starting on 6 April, most of us are busy tying up loose ends and preparing for the year ahead.
But this year, we aren't just looking at minor tweaks. There are some structural changes in how businesses and property owners are taxed that are worth a look before the deadline hits.
Here is how you can navigate the upcoming transitions to ensure your business remains efficient, and well-positioned for growth:
1. The new investment incentives
There is great news for businesses looking to buy new or upgrade their equipment. The government has introduced a permanent 40% First Year Allowance (FYA) for plant and machinery.
The benefit: This allows you to deduct a significant portion of your investment from your taxable profits immediately. And it isn't just for large corporations, it’s available to sole traders and partnerships too.
The strategy: If you’ve been considering new IT systems, machinery, or even specialized tools, timing those purchases can provide a significant boost to your cash flow by reducing your tax bill for the current year.
2. Thinking about dividends
With a 2% increase to dividend rates coming in April, now is the ideal time for directors to review their remuneration.
The opportunity: By working with your accountants to declare dividends before 6 April, you may be able to take a dividends payment at the current lower rates.
The strategy: It’s all about balance. It’s worth considering how you balance your take-home pay against any dividend payments.
3. The shift to digital
April 2026 marks the official start of Making Tax Digital (MTD) for many self-employed professionals and landlords. While new systems can sound daunting, the reality is a much clearer, real-time view of your finances.
The benefit: Moving to digital record-keeping replaces the January scramble with automated, quarterly check-ins. It gives you better data to make business decisions throughout the year.
4. Protecting the family business
The rules for Inheritance Tax (IHT) on businesses and farms are changing, with a new £2.5m cap on 100% relief.
The opportunity: The important thing to remember is that this allowance is transferable between spouses. If your Will is up to date and your assets are structured correctly, a couple can still protect up to £5m of agricultural and business value.
The strategy: If you haven't looked at your Will since the rules were announced, a quick 15-minute review could save your family a massive bill down the line.
5. The employer National Insurance (NI) increase
From April, the Employer NI rate has risen to 15%, and the threshold at which you start paying it has dropped to just £5,000.
The silver opportunity: To help smaller firms, the Employment Allowance has been increased to £10,500.
The strategy: Many small businesses will find the increased allowance covers their extra NI costs entirely. Now is the ideal time to check your eligibility to ensure you’re getting all the support you need.
Your March To-Do List
If you do nothing else this month, try to tick these five things off:
Review your equipment needs: Identify any plant and equipment needed. Can you make the most of the new 40% FYA?
Check your dividend levels: Is it worth taking a bit more out now at the current rates?
Get your software sorted: If you’re affected by the new MTD rules, get your digital records set up this week.
Look at your Will: Does it allow for the new transferable IHT allowances? Are you prepared for the future?
Update your records: HMRC is asking for more detail on Close Companies (small family firms) this year. Make sure your board minutes are written up and filed.
Check your Employment Allowance eligibility: Are you getting the support you need?
We’re here to help
Tax changes can feel complicated, but they don't have to be a headache.
If you're unsure how the new IHT caps affect your specific setup, or if you just want to make sure your Will is still fit for purpose, speak to our team. We’re always happy to help.
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