News

Accounting rules have changed for financial years beginning on or after 1 January 2026. Discover what businesses need to know about leases, income recognition and company accounts.

HMRC has increased the approved mileage rate for cars and vans from 45p to 55p per mile for the first 10,000 business miles, effective from 6 April 2026. This long-awaited change helps employees, directors and business owners better offset rising vehicle costs. Businesses should review their expense policies, reimbursement rates and payroll processes to ensure they reflect the updated guidance and consider any backdated claims.

As of April 2027, income tax rates on savings interest and property income will increase, affecting landlords and individuals with taxable investment income. While the overall tax structure remains unchanged, higher rates will place greater pressure on net returns, particularly for higher and additional rate taxpayers.

Business owners and farming families should be aware of changes to Business Property Relief (BPR) and Agricultural Property Relief (APR), which took effect from 6 April 2026.

These reliefs have historically formed a key part of inheritance tax planning, allowing qualifying business and agricultural assets to be passed on with reduced — and in some cases no — inheritance tax liability.

Upcoming changes from April 2029 are set to reduce the tax and National Insurance advantages of salary sacrifice pension schemes, particularly for employers. Businesses may face higher costs and will need to reassess remuneration strategies, pension structures, and overall benefits packages. While details are still emerging, early planning—such as reviewing current arrangements and modelling potential impacts—will help employers adapt effectively.

From April 2028, owners of higher-value residential properties may face an additional council tax surcharge under proposed changes currently under consideration. While full details are yet to be confirmed, the move signals a broader shift towards taxing property wealth more progressively, particularly in areas such as London and the South East where property values have risen significantly. This change forms part of a wider trend in property taxation, including increased scrutiny of second homes and evolving stamp duty rules.

The Employment Rights Act reforms rolling out across 2026 and 2027 will introduce important changes for employers, including day-one rights for certain leave, updates to Statutory Sick Pay and stronger employee protections.

These developments mean businesses will need to review policies, contracts and internal processes to remain compliant and manage risk effectively. Ward Williams supports employers in aligning their HR, payroll and compliance processes with the evolving legislative landscape.

Companies House is introducing mandatory identity verification for directors, People with Significant Control (PSCs), and those filing on behalf of companies, as part of wider efforts to strengthen corporate transparency.

With a transition period underway from November 2025 and further enforcement from November 2026, individuals must verify their identity to act for a company. Businesses will also need to ensure records are accurate and processes are robust, as scrutiny increases.

These changes mark a shift towards greater accountability, making proactive compliance more important than ever.

From 6 April 2026, higher dividend tax rates will increase the tax burden on company directors and shareholders, with rates rising to 10.75% for basic rate and 35.75% for higher rate taxpayers. While the increases are modest, their cumulative impact can be significant, particularly for those relying on dividends as a main source of income. As part of a wider trend reducing the tax efficiency of dividends, many business owners may need to review how they extract profits, including the balance between salary, dividends and other planning strategies, to ensure continued tax efficiency.

From 6 April 2027, unused pension funds and certain death benefits will be included within an individual’s estate for inheritance tax (IHT), marking a significant shift in long-standing UK tax planning. Pensions, particularly defined contribution schemes, have historically sat outside the estate and been used as a tax-efficient means of passing on wealth; however, this reform brings them into closer alignment with other assets. As a result, some estates may face increased IHT exposure, and existing strategies may need to be reviewed, especially for those with substantial pension savings or estates near current thresholds. The change also introduces more complex interactions between IHT and income tax for beneficiaries, reinforcing the need for a more joined-up approach to retirement and estate planning ahead of the April 2027 implementation date.