Spring Statement 2026: What It Means for Small Business Owners, Sole Traders and Landlords

What's Actually Changing from April 2026?

On 3 March 2026, Chancellor Rachel Reeves delivered her Spring Statement to the House of Commons. As expected, no new taxes were announced, and the Chancellor has committed to keeping the Autumn Budget as the single major fiscal event each year. Instead, this statement focused on updated economic forecasts from the Office for Budget Responsibility (OBR) and confirmed the direction of travel for the UK economy.

But "no new announcements" does not mean nothing is changing. A significant package of measures from the Autumn Budgets of 2024 and 2025 takes effect from 6 April 2026. Here at AccountingBliss, we have broken down everything you need to know.

Personal Tax Allowance Frozen until 2031

No change was announced to income tax rates or the personal allowance in the Spring Statement, but that is itself significant news and not good news.

The personal allowance remains frozen at £12,570 for 2026/27, a level it has been held at since April 2021. At the Autumn Budget 2025, the Chancellor extended the freeze for a further three years, meaning the allowance will now remain at £12,570 until at least April 2031. This means pay rises or higher profits extracted are more likely to push you into higher income tax bands, known as fiscal drag. 

Making Tax Digital (MTD) for Income Tax

This is arguably the biggest change for our clients this year. Making Tax Digital for Income Tax goes live from 6 April 2026. This means that if you are a sole trader or landlord with gross income above £50,000, you are now required by law to:

• Maintain digital records of your income and expenses

• Submit quarterly updates to HMRC using approved software

• File a final declaration at the year-end (replacing your Self Assessment tax return)

  
  

The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, so even if you are not yet affected, it is worth getting your digital bookkeeping in order now.

All your MTD questions can be answered here.

If you are not already on approved MTD compatible software, please get in touch with us immediately. We can help you get set up.

Dividend Tax Rates Increasing

For limited company directors and shareholders, dividend tax rates are rising by 2 percentage points from April 2026:

• Basic rate: rising from 8.75% to 10.75%

• Higher rate: rising from 33.75% to 35.75%

• Additional rate: unchanged at 39.35%

  
  

If you draw income through dividends as a director, this is a meaningful increase. Now is a good time to review your salary and dividend mix for the new tax year.

National Minimum and Living Wage Increases

New minimum wage rates apply from 1 April 2026 for most workers (6 April for those paid weekly). If you employ staff, make sure your payroll is updated:

• National Living Wage (aged 21 and over): £12.71 per hour (up from £12.21)

• Aged 18–20: £10.85 per hour

• Under 18s and apprentices: £8.00 per hour

Business Asset Disposal Relief

Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs' Relief, is a Capital Gains Tax relief that reduces the rate of tax you pay when you sell or close a qualifying business. From 6 April 2026, the CGT rate applying to qualifying BADR disposals is rising from 14% to 18%.

Capital Allowances

There have been two major changes to Capital Allowances.

• For businesses investing in plant and machinery, the main rate Writing Down Allowance (WDA) is reducing from 18% to 14% per year from April 2026. This means it will take longer to get full tax relief on capital investment.

• To soften this, a new first-year allowance of 40% has been introduced from 1 January 2026 for main-rate assets. Particularly useful for sole traders and partnerships who can’t access full expensing, and those with assets bought for leasing out.

Corporation Tax: Late Filing Penalties Double

From 1 April 2026, penalties for late Corporation Tax returns double. Initial penalties rise from £100 to £200, with three-month delay penalties increasing to £400.

Repeat late filers could face fines of up to £2,000 for three successive late filings. Corporation Tax rates themselves remain unchanged, 25% for profits over £250,000 and 19% for profits of £50,000 or less.

Inheritance Tax: Business and Agricultural Property Relief Changes

Significant reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) come into force on 6 April 2026. 100% relief will still apply, but only up to a combined cap of £2.5 million across both reliefs. Above that threshold, relief reduces to 50%. If you own farming land, a family business, or have business assets forming part of your estate, we strongly recommend reviewing your estate planning before these changes bed in.

What Should You Do Now?

The key actions for our clients ahead of 6 April 2026:

• MTD-affected sole traders and landlords: confirm you are set up on approved software and understand the quarterly reporting requirements.

• Limited company directors: review your salary and dividend strategy in light of the dividend tax rise and frozen thresholds.

• Employers: update payroll for the new National Living Wage rates from 1 April and check business rates bills at revaluation.

• Business and farm owners: review estate planning ahead of the Business Property Relief (BPR) and Agricultural Property Relief (APR) cap changes.

• Business owners planning an exit: take advice on the timing of any disposal before the BADR rate increase takes effect.

• Higher earners (£50,000+): review your tax position given frozen thresholds. Look into pension contributions, salary sacrifice, and other planning tools and tax wrappers that are worth revisiting.

• Capital expenditure: consider the timing of major purchases given changes to writing down allowances.

Need Help Navigating These Changes?

At AccountingBliss, we work with small business owners, sole traders and landlords across Derby, Coventry and the wider Midlands. We understand that keeping up with tax changes while running a business is genuinely hard. Our job is to make sure nothing catches you off guard.

Whether you need to get MTD-ready, review your tax structure or simply want a conversation about what April's changes mean for your specific situation, we are here. Get in touch today to book a free consultation.