Is Your Business Ready for 2026/27?

Three Key Tax Changes You Can’t Afford to Miss

With the new tax year now underway, many business owners are asking the same question: are we fully prepared for what’s changed?

From digital reporting requirements to shifts in tax relief and stricter compliance rules, 2026/27 brings some important updates that could directly impact how you run your business.

To help you stay ahead, here are three key changes you should have firmly on your radar.

1. Making Tax Digital Is Now in Motion

Making Tax Digital (MTD) for Income Tax is no longer something on the horizon - it’s here.

From April 2026, an estimated 864,000 sole traders and landlords have entered the new regime, with further phases coming in 2027 and 2028.

If your gross income exceeded £50,000 in 2024/25, you are now required to:

• Maintain digital financial records 

• Submit quarterly updates to HMRC using compatible software

• Complete a final end-of-year submission 
  

This represents a major shift from the traditional annual tax return - and preparation is key.

What you need to know:

• You won’t be automatically signed up for MTD

• HMRC should have contacted you if you’re affected

• Some exemptions may apply, but these often require action
  

If you’re unsure whether MTD applies to you - or you haven’t yet taken steps to comply - now is the time to act.

At SJC, Chartered Accountants, we’re helping businesses transition smoothly to MTD, ensuring systems are set up correctly and deadlines are met with confidence.

2. Changes to Capital Allowances

There’s an important shift in how tax relief is applied to business assets.

From April 2026:

• The main rate of writing-down allowance (WDA) has been reduced from 18% to 14% 

This means slower tax relief on certain capital expenditures over time.

However, it’s not all bad news.

Opportunities still available:

• A new 40% first-year allowance (FYA) (introduced January 2026)

• The continued availability of the Annual Investment Allowance (AIA) 

With the right planning, many businesses can still achieve efficient tax relief on new investments - but timing and structure are crucial.

If you’re considering a major purchase, getting advice early can make a significant difference to your tax position.

3. Stricter CIS Rules and Increased HMRC Powers

For businesses operating in construction, compliance under the Construction Industry Scheme (CIS) is becoming more critical than ever.

From 6 April 2026, HMRC has been given enhanced powers to tackle fraud-related activity.

If a business knew - or should have known - that a CIS payment was linked to fraud, HMRC can now:

• Immediately remove gross payment status 

• Recover lost tax directly from the business 

• Issue penalties to the business and its officers
  

In addition, the waiting period to reapply for gross payment status has increased from 1 year to 5 years.

What this means for you:

Even unintentional non-compliance could carry serious financial and operational consequences.

Strong processes, due diligence, and regular reviews are now essential.

Stay Ahead, Stay Compliant

The 2026/27 tax year brings a mix of new obligations and planning opportunities. Whether it’s adapting to MTD, navigating changes to tax relief, or ensuring compliance with evolving regulations, early action is key.

At SJC, Chartered Accountants, we work closely with businesses to:

• Prepare for Making Tax Digital 

• Maximise available tax reliefs 

• Maintain full compliance with HMRC requirements
  

If you’d like support navigating these changes - or want to explore ways to optimise your tax position - our team is here to help.

Get in touch today and make sure your business is ready for the year ahead.