What the changes mean for you and your business — and how to prepare for April 2026

Running a business is already tough. You're juggling rising supplier costs, staffing pressures, and ever-increasing compliance obligations — all while trying to deliver great service and maintain profitability! 📊

The Autumn Budget brought a long list of changes that will directly affect you, from wage increases to tighter tax rules and more admin 📋

Here's what you need to know, what's changing, and how we'll help you navigate it all 🧭

💷 Minimum Wage Increases (from April 2026)

Wage costs are already one of the biggest pressures in some sectors, especially hospitality, and they're going to rise again in April next year.

New rates from 1st April 2026:

• 21 and over: up 4.1% from £12.21 → £12.71

• 18–20 year olds: up 8.5% from £10.00 → £10.85

• Under 18s & apprentices: up 6.0% from £7.55 → £8.00

  
  

What this means for you:

Expect your wage bill to rise. We'll review each team member's rate,make sure your payroll is compliant, help you forecast how these increases will impact your 2026 profit and how we can work together to manage that impact 🎯

💸 Tax Increases on Dividends & Property Income

If you're a director taking dividends - or you earn rental income from a property - your tax bill is going up.

Dividend tax (from April 2026):

• Ordinary rate: 8.75% → 10.75%

• Upper rate: 33.75% → 35.75%

  
  

What this means for you:

This 2 percentage-point increase will mean that there’ll be more tax to pay for company owners who take most of their pay via dividends.

We’ve run the numbers and found that for most of our clients, an annual salary at the basic rate (£12.5k per year) and dividends on top is still the most tax-efficient way to extract profits from your business.

We'll update your Personal Tax Plan for 2026-27 and confirm this is the best way of doing things, and how much additional tax there’ll be to pay in January 2028 🧮

Property & savings income tax (from April 2027):

• Basic rate: 20% → 22%

• Higher rate: 40% → 42%

• Additional rate: 45% → 47%

  
  

What this means for you:

If you personally own investment property, you may want to explore whether moving it into a Limited Company structure is worthwhile.

That said, because dividend taxes are also increasing from April 2026, the overall benefit of making this change next year rather than this year is fairly modest...

🔄 Salary-Sacrifice Pension Schemes Lose Their Advantage (from April 2029)

Salary sacrifice currently saves employers and employees National Insurance - a useful tax break for employees who want to take a lower salary and instead pay more cash into their pension pot.

From April 2029, employers and employees will pay NI on pension contributions over £2,000 per year via salary sacrifice.

What this means for you:

If you use salary sacrifice to reward key staff or boost your own pension, this becomes less tax efficient. But note this change is still three and a bit years away.

🎉 Good News: Permanent Business Rates Relief for Hospitality

Hospitality finally gets a win 🏆

From April 2026, smaller hospitality properties with a rateable value under £500,000 will receive permanently reduced business rates.

Plus — a major benefit for growing operators:

👉 A three-year grace period when opening a second site, meaning you won't instantly lose Small Business Rates Relief.

This is massive for independent operators looking to expand without being hit by a sudden rates jump 🚀

🔧 Less Tax Relief on Equipment, Assets & Business Sales

If you're planning to refurbish your kitchen, install new equipment, or thinking about selling your business — timing matters ⏰

Key changes:

• Capital allowances drop from 18% → 14% (April 2026)

  But you still get the £1m Annual Investment Allowance (AIA), so most of your equipment purchases can still be written off immediately.

  
  

• Business Asset Disposal Relief (BADR) rises from 14% → 18%

  Higher tax on business sales from April 2026, as previously announced in the Autumn 2024 Budget.

  
  

What this means for you:

If you're planning major capital investments (over £1m), or selling shares in your business - the dates matter more than ever. Careful timing could save you thousands 💰

🏠 The £6 per week flat rate WFH allowance is ending

From April 2026, the £6 per week flat rate tax relief for working from home (worth £312 annually) is being abolished. Employees and company directors will no longer be able to claim this allowance without evidence.

Instead, HMRC will require proof of actual costs incurred, effectively ending the current "no questions asked" approach. We’ll follow up shortly with practical guidance on how to calculate these expenses correctly, ensuring you maximise relief while protecting your home’s Capital Gains Tax exemption.

📝 More Admin, More Digital Rules & More HMRC Enforcement

More compliance changes are coming:

• April 2028: Mileage tax begins for EVs and hybrids (3p/mile & 1.5p/mile) 🚗

• April 2029: All VAT invoices must be electronic in a government-approved format 💻

• March 2029: Import duty-free threshold ends (affects hospitality suppliers from abroad)

  
  

🔍 HMRC is ramping up investigations

The government is investing money into more tax enforcement, hoping to raise £2.3 billion by specifically targeting small businesses.

They're setting up dedicated teams to tackle fraud and evasion.

What this means for you:

Make sure your books are spotless and you're not cutting corners on tax ✅

Obvs we'll make sure your record-keeping is up to date and meets all of HMRC's requirements.

And the good news is since you’re probably already using Xero, you’re already set up for e-invoicing five years ahead of time. Hurrah! 🙌

🤝 How we’ll work through these changes together

1️⃣ Minimum Wage Compliance

We'll review your entire team's pay structure and ensure everyone is moved to the correct rate from 6th April 2026

2️⃣ Salary vs Dividend Calculation

We'll update your Personal Tax Plan 2026-27 to calculate your new tax bill (and keep it as low as possible)

3️⃣ 2026 Annual Forecast Updates

We'll forecast your wage bill, margins, overheads and tax costs so you know what you’re aiming for and can be on the front foot - not reacting under pressure

4️⃣ HMRC Compliance

We'll ensure you stay compliant with the new VAT, payroll, bookkeeping, and digital invoicing rules - plus everything HMRC throws at you.

You focus on what you do best ⭐

We'll focus on keeping your finances strong, compliant, and prepared 💪

🎯 Next Steps

We'll reach out shortly to discuss how these changes affect your business specifically.

Let's navigate the next few years together — and keep your business thriving 💪🍽️🍻

If you're not yet a CloudCFO client and want support through these changes, we're here to help.

Drop us a line at enquiries@cloudcfo.uk