Business rates can be one of the largest overheads for businesses, particularly those operating on the high street.

However, the recent Budget has brought in measures designed to support these businesses and reduce the burden through business rate savings.

What are the changes to business rates?

The headline announcement in the Budget has been the increase in the Small Business Rates Relief threshold for qualifying retail, hospitality and leisure (RHL) establishments in England.

From April 2027, the threshold for 100 per cent small business rates relief will increase from £12,000 to £18,000, while the threshold for tapered relief will increase from £15,000 to £21,000.

Eligibility is based on the property’s rateable value, not the size of the business itself. Therefore, some smaller traders operating from high-value premises may still not qualify, while others could see substantial savings.

For qualifying RHL properties that sit above the new thresholds, business rate bill increases will be capped by Consumer Price Index (CPI) inflation until 31 March 2029.

In addition to this, eligible pubs, social clubs and all but the largest live music venues will receive a 35 per cent reduction in their business rates for the 2027/28 and 2028/29 financial years. This is an additional 20 per cent discount on top of the 15 per cent relief framework established earlier in the year.

Although these measures do not take effect until April 2027, now is the time to assess how they may affect your business.

Businesses should review their rateable value and the reliefs available to them, then forecast their costs to understand if they can benefit from the rules.

The changes may also be worth factoring in if a business is considering relocation or expansion, as they could affect its financial planning.

How can we help?

Business rates relief can be a valuable source of savings, but eligibility and calculations are not always straightforward.

Our team of accountants can help you review your financial forecasts to reflect the upcoming changes to business rates.

With business costs continuing to rise in many areas, making sure you claim every relief available could make a meaningful difference to your bottom line.

Selling a business is often the end of many years of hard work. However, the amount that you will receive from a sale is not only determined by the purchase price, but also by the tax treatment of the sale.

With Business Asset Disposal Relief (BADR) already less generous than it once was, business owners looking for an exit may want to look for support sooner rather than later as the Government restricts the lifetime limit from April next year.

What is BADR?

BADR allows qualifying individuals to pay a reduced amount of Capital Gains Tax (CGT) when selling all or part of their business.

It can also apply to qualifying shares in a trading company, provided that certain conditions are met.

To qualify, you must have owned the business, or your interest in the partnership, for at least two years up to the date of disposal.

If you are selling shares, you must also have held at least five per cent of the ordinary share capital and five per cent of the voting rights throughout that period, as well as being an officer or employee of the company.

If you hold Enterprise Management Incentive (EMI) shares, you do not need to meet the five per cent shareholding rule, provided the option was granted at least two years before the disposal.

The business must be a trading business rather than a non-trading or investment business, and the business assets must be sold within three years of the business ceasing to trade.

Over recent years, the relief has become much less generous and the BADR rate was increased to 18 per cent in April 2026.

However, the Autumn Budget has confirmed a further change, halving the lifetime limit on qualifying gains from £1 million to £500,000 from April 2027.

Why does timing matter?

For business owners planning to sell in the coming years, timing could have a significant impact on the amount of tax payable.

Under the current rules, qualifying gains of up to £1 million can benefit from BADR. For higher rate taxpayers, this means they pay Capital Gains Tax at a rate of 18 per cent rather than 24 per cent.

However, disposals taking place on or after 6 April 2027 may only qualify for relief on the first £500,000 of lifetime gains. Any gains above this amount will be taxed at 24 per cent if you are a higher rate taxpayer.

While the Government has stated that the change will not affect around three-quarters of claimants, owners expecting larger gains could face a higher tax bill if they delay their exit strategy.

Depending on individual circumstances, going through with a sale before the new rules take effect could preserve the higher relief limit, but it is best to seek professional advice beforehand.

How can we help?

If you’re considering selling your business within the next few years, it is important to understand how this change may affect you.

For support with exit planning, get in touch with our team.

The National Living Wage (NLW) and National Minimum Wage (NMW) are now due to rise by 3.9 per cent in April 2027.

It is often the case that payroll is one of the biggest expenses for employers, meaning that any increase can place significant pressure on working capital and profits.

While April 2027 may seem like a long way off, businesses should start planning for the increase now to avoid cash flow struggles come April.

How does the increase in the NLW and NMW affect businesses?

The new NLW and NMW wage rates will be as follows:

The continued increase in these rates is likely to create cash flow pressures for businesses, which include:

• Increased payroll costs
• Heightened National Insurance and pension payments
• Upward pressure on other pay bands for those not on the NLW and NMW rates
• Increased holiday costs
• Pressure on profit margins

Some of the most affected sectors include those that work predominantly with lower-paid workers, including care, hospitality, retail and manufacturing.

However, the wider impact on wages may be less obvious, as workers paid just above these rates may also request pay rises to reflect their roles.

What can I do to prepare?

The best way to prepare for an increase in the NLW and NMW is to conduct a cash flow forecast.

You should begin to review employment costs and run scenarios to establish what impact it will have on your operations after April 2027.

Additionally, businesses may need to consider if it may be appropriate to increase prices to cover staff costs or make cost savings in other areas, if possible.

Business owners should also consider how their competitors are responding to ensure that they retain talent, while managing costs.

It could also be beneficial to review staffing structures and identify areas that could be automated.

How can we help?

Receiving professional advice is the best way to ensure that your cash flow stays protected during a rise in NLW and NMW rates.

While April 2027 may seem like a while away, planning ahead is imperative to ensure that your business can adapt smoothly to an increase in NLW and NMW wage rates.

For support with cash flow forecasting, get in touch with our team.

Within the Autumn Budget, the Government has amended the Making Tax Digital timetable, with overhauls for the way the self-employed and landlords record and pay Income Tax.

MTD for Income Tax (MTD for IT) was rolled out on 6 April 2026 for sole traders and landlords with qualifying gross income above £50,000, with the next phase arriving in April 2027 for those with qualifying income above £30,000.

The Government, however, is delaying MTD requirements to several other taxpayer groups until further notice. In addition, there will be additional flexibility for those joining MTD in April 2027.

As with the first phase of MTD for IT, taxpayers entering the second phase will not receive penalty points for late submission for their first four quarterly submissions, for the 2027/28 tax year.

While this may seem like more breathing space, late payment penalties will still apply and all four quarterly submissions will need to be submitted before HMRC accepts a tax return.

Be aware that this grace period is not available to those already complying with MTD for IT and they will receive penalties from April 2027 if they do not follow the rules.

How do changes to ITSA interact with MTD?

From April 2029, taxpayers who make payments on account will be required to make more regular, automated in-year payments towards their final tax bill, such as by direct debit.

Eligible taxpayers with sufficient PAYE income, such as from employment or a pension, will be able to opt in to making these payments through PAYE instead.

Payments will be based on a forecast of the taxpayer’s liability, which can be updated if circumstances change, and there are plans to introduce new digital tools to help people estimate their liabilities.

The ITSA shakeup and quarterly reporting under MTD means HMRC will be given a continuous report of income and regular tax payments.

While the traditional tax year is anchored around the 31 January Self Assessment deadline, it will soon become a year-round process.

A core implication is that businesses that report income via Self Assessment will need to budget for payments made throughout the year, so money set aside for tax is not used for working capital.

This may initially lead to a restricted cash flow, as businesses make their final traditional payment on account and adapt to the new system.

Need help with MTD and the changes ahead?

Landlords and the self-employed should prepare for the move to quarterly updates, if not already affected, while reviewing how cash flow may be impacted by regular tax payments.

Are you set to be included in the next stage of MTD? Speak to our accountants for help with MTD and cash flow forecasting.

Businesses investing in equipment may soon face a more complex capital allowances regime, following the staggered implementation of changes announced in the 2025 and 2026 Autumn Budgets.

As the Government introduces highly targeted tax reliefs for varying kinds of investments, accompanied by stricter compliance, capital allowances are becoming increasingly complex.

Writing Down Allowance

In April 2026, the main rate of Writing Down Allowance (WDA) for plant and machinery was reduced from 18 per cent to 14 per cent.

Where WDAs are the only relief available to a business, tax relief may arrive more slowly and investment may become a greater cost burden over time.

To offset the potential fallout, the Government introduced a 40 per cent First Year Allowance (FYA) on 1 January 2026, for qualifying main rate expenditure.

This allows businesses to claim 40 per cent of the cost of eligible plant and machinery in the first year, with the remaining 60 per cent entering the main pool at 14 per cent.

The relief is particularly valuable to unincorporated businesses and leasing businesses that cannot make use of full expensing, though it does not apply to cars or second-hand purchases.

Further changes in the Autumn Budget

Chancellor John Healey announced further changes to capital allowances in his Autumn Budget on 28 October 2026, building on the reforms introduced earlier this year.

The main rate of WDA will be cut again, from 14 per cent to 12 per cent. The lower rate will apply from 1 April 2027 for companies paying Corporation Tax and from 6 April 2027 for businesses paying Income Tax.

At the same time, the FYA for qualifying main rate expenditure will rise from 40 per cent to 50 per cent for expenditure incurred on or after 1 January 2027.

For example, a business spending £100,000 on qualifying new equipment in 2027 could claim £50,000 in the first year, compared with £40,000 at the current rate.

The remaining £50,000 would then enter the main pool and attract WDAs at the new lower rate.

Full expensing remains in place for companies and the Annual Investment Allowance is unchanged.

The changes continue the Government’s shift towards giving more relief up front on new investment, while relief on balances left in the main pool is becoming slower.

Businesses carrying large unrelieved main pool balances or buying second-hand assets that do not qualify for the FYA are likely to feel the effect of the lower WDA most.

Why does this make capital allowances more complicated?

As the FYA began in January 2026, followed by the reduction in the main rate of WDA in April, the timing of expenditure has become increasingly critical. With further rate changes due in January and April 2027, this will remain the case for some time.

The changes are being introduced on various dates, which means businesses may have investment subject to different rules and rates, making accurate record keeping essential.

Where an accounting period straddles one of these dates, a hybrid WDA rate may need to be calculated for that period.

Instead of claiming 14 per cent WDA on the full cost of an asset, businesses must first calculate a 40 per cent FYA and then transfer the remaining 60 per cent into the main pool for ongoing WDAs.

Businesses may also need to consider which relief is the most beneficial for the expenditure.

The Annual Investment Allowance (AIA) permits relief of 100 per cent for up to £1 million of expenditure per year.

In addition, companies can claim full expensing on qualifying new main-rate plant and machinery, which may allow a business to deduct the full cost from taxable profits.

However, if spending exceeds the AIA or falls outside full expensing, the relief claimed can have significant implications for a tax bill.

Time to review your tax strategy

It is important for businesses considering major purchases to review the timing of each purchase, as well as how each asset is owned and classified, to assess which relief delivers the best result.

Wondering which capital allowance to claim and in which order? Speak to our accountants for expert tax planning guidance.