Source: GOV.UK
What's Changing in April 2026? The new tax year has brought a significant number of changes from government, affecting employers, sole traders, landlords, and business owners alike. Here's everything you need to know as of 21 April 2026.
What’s Changing in April 2026 — Employment & Payroll
New Day-One Employment Rights Now in Force- Statutory Sick Pay (SSP) is now payable from day one of sickness absence. The previous three-day wait no longer applies.
- New fathers and partners can take paternity leave from their first day of employment. The six-month qualifying period has been removed.
- Employees now qualify for unpaid parental leave immediately. The previous one-year service requirement no longer applies.
National Minimum Wage Rates Increased from 1 April 2026
Working From Home Allowance Removed
Small Employers’ Relief Rate Rises to 9%
Tax Changes
Making Tax Digital Is Now Mandatory for Income Over £50,000
MTD for Income Tax is mandatory from April 2026 for self-employed individuals and landlords with gross income over £50,000. You must keep digital records and submit quarterly income and expense summaries to HMRC via approved software. This replaces the single annual Self Assessment return. The threshold drops to £30,000 from April 2027. Sign-up is not automatic — contact your Everett King Single Point of Contact urgently if you are in scope.
Capital Gains Tax — BADR Rate Rises to 18%
The CGT rate for qualifying disposals under Business Asset Disposal Relief (BADR) rose to 18% on 6 April 2026, up from 14%. The £1 million lifetime limit stays in place. On a qualifying gain of £1 million, the tax bill has risen from £100,000 (at the original 10% rate pre-2025) to £180,000. If you are planning a business sale or exit, take advice now.
Inheritance Tax Relief Cap — What Business and Farm Owners Must Know
From 6 April 2026, 100% Inheritance Tax relief for Agricultural Property Relief and Business Property Relief has a combined cap of £2.5 million per individual. Assets above this threshold now attract 50% relief, creating an effective IHT rate of 20%. If you hold agricultural or business property, review your estate planning with us as soon as possible.
Dividend Tax Rates Up by 2%
Dividend tax rates have increased by 2% from April 2026. This brings investment income taxation closer in line with earned income. Review your dividend strategy with your adviser if you draw income this way.
Incorporation Relief — Now Must Be Actively Claimed
Businesses converting to a corporate structure no longer receive incorporation relief automatically. You must now claim it on your Self Assessment return. Missing this claim could result in an unexpected Capital Gains Tax charge.
Construction Industry Scheme Monthly Returns Reinstated
Following the Autumn Budget 2025, contractors must file a CIS return every month from April 2026. This includes nil returns in months where no subcontractors are used. Make sure your processes are updated to meet this obligation. gov.uk
How Everett King Can Support You?
Navigating this many changes at once is not something you should have to do alone. Our team watches everything coming out of GOV.UK so you don't have to. We turn complex government updates into clear, practical steps built around your business.
We can support you with:
Making Tax Digital registration — before HMRC chases you
Payroll compliance — ensuring your systems reflect the new day-one employment rights
Tax planning — understanding how CGT, dividend, and IHT changes affect your position
Estate planning — reviewing agricultural and business property relief ahead of the new caps
CIS obligations — keeping your monthly returns on track
Get in touch with your Everett King adviser today. A conversation now could save you significantly further down the line.