New tax year, new rules: what’s changing for businesses and landlords in 2026/27?

Another year has sped by, with a new tax year about to begin. It’s traditionally a time for change in tax rates and other fiscal policies… and this April is no different. 

The biggest shift for many will be Making Tax Digital (MTD) for Income Tax, which will eventually alter how most sole traders and landlords report their earnings to HMRC. Those with a qualifying income of more than £50,000 have to comply from 6th April. 

But that’s by no means the only change to watch - there are also rises to the National Minimum Wage and to fines for late payment of Corporation Tax. We’re here to help you navigate the new rules.

What’s changing from 1st April 2026?

National Living Wage and National Minimum Wage rise

The minimum wage for those aged over 21 (the National Living Wage) rises to £12.71 an hour - an increase of 50p. For under-18s and apprentices, the National Minimum Wage rate rises to £8, and for 18 to 20-year-olds it rises to £10.85. Businesses will have to factor in the resulting pay rises for nearly 2.7 million eligible workers.

UK business property revaluation

Business rates bills in England, Wales and Scotland will be updated to reflect changes in property values since the last revaluation in 2023. This may mean increased bills for some businesses whose property has increased in value. Northern Ireland’s revaluation has been paused following concerns from the hospitality sector.

Business rates changing across the UK

The business rates multiplier - the figure used to calculate the amount of business rates a non-domestic property owner must pay - will change across the UK. Here are the updated rates for England, Scotland and Wales. In Northern Ireland, rates vary by council area. The Northern Irish Executive has confirmed an increase of 3% for non-domestic properties.

Each of the UK nations has also put in place initiatives to help support small businesses and specific sectors. In England, small businesses and the retail, hospitality and leisure (RHL) sector will benefit from special rates (see our November Budget blog for details). In Scotland, smaller RHL businesses will be eligible for 15% relief. Wales will move from having two rates multipliers to five new bands, based on property type and rateable value. This list details the support available in Northern Ireland.

Increases to Corporation Tax late filing penalties

From 1st April 2026, the penalty for taxpayers submitting a late Corporation Tax return will double. This means initial penalties rise from £100 to £200, with further penalties for three-month delays increasing to £400. Repeat offenders face a fine of up to £2,000 for three successive late filings. You can find more information in the government’s policy paper.

What’s changing from 6th April 2026?

Making Tax Digital for Income Tax is here (for some)

Starting from 6th April 2026, most sole traders and landlords with qualifying income of more than £50,000 have to comply with Making Tax Digital (MTD) for Income Tax. For information on whether MTD for Income Tax will affect you, and how to get ready if it does, check out our collection of easy-to-understand information, deep-dive guides and webinars.

Changes to Class 2 National Insurance

The Small Profits Threshold - the profit level below which sole traders can opt to pay Class 2 National Insurance (NI) contributions voluntarily - will increase to £7,105, with the rate of Class 2 NI being £3.65 per week.

Tax rates on dividends rise

There will be a 2% increase to the basic and higher rates of Income Tax on dividend income, taking them up to 10.75% and 35.75% respectively. The additional rate remains unchanged at 39.35%.

What’s staying the same for the 2026/27 tax year?

Fuel duty frozen until August

Fuel duty will be frozen until 31st August 2027, extending the 5p cut. The main fuel duty rates are planned to increase by:

• 1 pence per litre (ppl) on 1st September 2026
• 2 ppl on 1st December 2026
• 2 ppl on 1st March 2027

Freeze on personal tax thresholds remains, pulling more into higher tax bands

Headline Income Tax and National Insurance (NI) rates on earned income are not changing. 

However, the current freeze on Income Tax and NI thresholds will also stay in place until 2030/31. When the thresholds at which people pay different rates of Income Tax and National Insurance stay static rather than rising with inflation, more people can be pulled into paying higher rates over time as their wages rise with inflation - this is known as ‘fiscal drag’.

You can see the current rates and thresholds on our UK tax rates tracker page including rates for Scotland, which sets its own bands. The Scottish Government recently confirmed its budget which will mean changes to the thresholds in three of the Income Tax bands from April.

The new tax year = the best time to start new accounting software

If you’re looking for better ways to track your business finances in the new tax year, FreeAgent can help. Switching over at the new tax year means there’s less data to bring over - and you’ll be ready to get MTD for Income Tax done. Try FreeAgent now with your first 30 days free.