Navigating the 2026 Tax Shift

As we enjoy the first glimpses of spring, the 5 April deadline is looming and while the annual tax year-end ritual often feels like a race against the clock, this year feels particularly poignant. We are standing at the precipice of some of the most significant shifts in the UK tax landscape for a generation.

The Big IHT Shake-up

The most significant date on my calendar right now is 6 April 2026. This marks the implementation of the new Inheritance Tax (IHT) regime for business owners. For years, Business Property Relief (BPR) was the bedrock of succession planning, often allowing 100% relief on trading businesses.

From April, we move to a capped system. With the first £2.5 million of qualifying assets exempt and a 50% relief thereafter, many local family businesses may find themselves facing an effective 20% tax rate that simply wasn't there before. If you haven't reviewed your Will or considered lifetime gifting in the last few months, now is the window to act before the old rules vanish. FIND OUT MORE ABOUT IHT

A Note on Privacy: The Companies House 'U-Turn'

I know many of you have been concerned about the Economic Crime and Corporate Transparency Act. The initial proposal—to force even the smallest micro-entities to publish their full Profit & Loss accounts—sent shockwaves through the local business community. For many owner-managed businesses, your P&L isn’t just data; it’s a window into your personal income and commercial edge.

The update: Following significant pushback, there has been a pragmatic "re-calibration" (or U-turn, depending on who you ask) regarding the immediate public disclosure of these sensitive figures for micro-entities. While the move toward digital-only filing and mandatory ID verification for directors is still very much full-steam ahead for 2026, the immediate threat to your P&L privacy has been deferred. It is a welcome relief, but it serves as a reminder that the transparency net is tightening.

Your End-of-Year Essentials

Beyond the big headlines, the "bread and butter" of tax planning remains as vital as ever.

* Dividend Strategy: Dividend tax rates are set to rise by 2% for basic and higher-rate taxpayers from 6 April. If your company has sufficient reserves, it may be prudent to accelerate dividend payments into the current tax year to lock in the lower rates.

* The £60k Pension Push: Pensions remain one of the most efficient ways to mitigate the 45% additional rate of tax. With the annual allowance at £60,000, don’t forget to check if you have "carry forward" relief from the three previous years—it’s a case of use it or lose it.

* ISA & CGT Allowances: It’s easy to overlook but ensuring you and your partner have maximised your £20,000 ISA allowance and utilized your Capital Gains Tax annual exempt amount is the simplest way to protect your long-term wealth from the "fiscal drag."

FIND OUT MORE ABOUT TAX PLANNING

Looking Ahead

At Richardson Swift, we often say that the best tax planning isn't done in a hurry on 4 April. It’s a conversation that happens over coffee, looking at the next five to ten years of your life and business.

Whether you’re navigating the new IHT caps or preparing for the mandatory digital reporting of Making Tax Digital (starting for many this April), the goal is the same: clarity, compliance, and peace of mind. FIND OUT MORE ABOUT MTD