Key Changes from April 2026

From April 2026, a number of important legislative and tax changes will come into effect, impacting SMEs, business owners and individuals across the UK.

Many of these updates were announced in the Autumn Budget, with further refinements introduced later in the year. Below, we break down the key tax changes April 2026 and what they mean for you.

Changes to Statutory Sick Pay (SSP)

From April 2026, Statutory Sick Pay (SSP) is changing, with reforms designed to improve financial support for employees and reduce the risk of people returning to work too soon.

What’s changing?

• SSP will be available to all employees, with the removal of the Lower Earnings Limit
• Payments will start from the first full day of sickness, as the 3-day waiting period is removed
• SSP will be calculated at 80% of average weekly earnings (AWE) or the flat rate (£123.25), whichever is lower

These changes mean more employees will qualify for SSP and receive support sooner, increasing both employer responsibility and payroll impact.

👉 Read our full guide to SSP changes, including examples and what employers need to do: https://www.advaloremgroup.uk/changes-to-statutory-sick-pay/

National Minimum Wage and National Living Wage Increases

From April 2026, wage rates will increase, impacting employers across all sectors.

New rates from April 2026

Category	Rate	Increase (£)	Increase (%)
National Living Wage (21 and over)	£12.71	50p	4.1%
18–20 Year Old Rate	£10.85	85p	8.5%
16–17 Year Old Rate	£8.00	45p	6.0%
Apprentice Rate	£8.00	45p	6.0%
Accommodation Offset	£11.10	44p	4.1%

National Insurance Threshold Changes

While some thresholds are increasing slightly, others remain frozen, creating what is often referred to as a “stealth tax”.

Key points include:

• Employer NIC threshold remains frozen at £5,000 until 2031
• Lower Earnings Limit increases in line with inflation
• Upper Earnings Limit remains frozen

This means that as wages rise, more income is pulled into NIC, increasing the overall tax burden for both employers and employees.

Dividend Tax Increases

Dividend tax rates will increase from April 2026:

• Basic rate: 10.75% (up from 8.75%)
• Higher rate: 35.75% (up from 33.75%)

The dividend allowance remains at just £500.

Making Tax Digital for Self-Employed and Landlords

One of the most significant changes is the introduction of Making Tax Digital (MTD) for Income Tax from April 2026.

Initially, this applies to individuals with:

• Income over £50,000 from self-employment and/or property

Key requirements:

• Quarterly digital submissions to HMRC
• Use of compatible accounting software
• Digital record keeping

Although penalties are relaxed in the first year, this is a major shift in how tax is reported and managed.

👉 Find out more about Making Tax Digital for Income Tax and how to prepare:
https://www.advaloremgroup.uk/services/tax-services/making-tax-digital-for-income-tax-mtd-itsa/

At Ad Valorem, we can support you through the transition to MTD. We’ve already helped clients prepare for digital reporting, ensuring systems are compliant and processes run smoothly.
If you’d like support getting ready, get in touch with our team.

Inheritance Tax Changes for Family Businesses and Farms

Inheritance Tax (IHT) remains a key area of change from April 2026, particularly for family businesses and agricultural estates. A further announcement in December introduced more favourable thresholds, offering some welcome relief.

The government has confirmed that Agricultural Property Relief (APR) and Business Property Relief (BPR) thresholds will increase to £2.5 million per individual.

What this means in practice

• A married couple or civil partners can pass on up to £5.65 million tax free
• This includes:
  • Two £2.5 million APR/BPR allowances
  • Plus two £325,000 nil rate bands, transferable between spouses
• Relief applies to:
  • Farms and agricultural property
  • Shares in trading companies
  • Other qualifying business assets

This is a positive step for succession planning and provides greater flexibility for owner-managed businesses.

Important considerations

Despite the increase, relief is no longer unlimited:

• Relief is capped at £2.5 million per person (or £5 million for couples)
• Any value above this receives 50% relief, resulting in an effective 20% IHT rate on the excess
• AIM-listed shares and similar assets will also qualify for 50% relief regardless of value

These changes introduce potential IHT exposure where previously none existed.

What this means for you

Business owners should:

• Review succession and exit strategies
• Update wills and estate structures
• Consider future business valuations

With defined limits now in place, proactive estate planning is essential.

Get in touch with Ad Valorem Estate Planning, to discuss and review your plans.

What Should You Do Next?

There are a number of changes taking place from April 2026, many of which will impact both businesses and individuals in different ways.

Understanding how these updates apply to your specific circumstances is key to staying compliant and planning effectively.

If you are unsure how these changes may affect you, please don’t hesitate to get in touch. Our team is here to help you navigate the changes and provide practical, tailored advice.

(E) enquiries@advaloremgroup.uk (T) 01908 219100 (W) advaloremgroup.uk