From 6 April 2026, a number of tax and policy measures announced across the 2023, 2024 and 2025 budget statements will take effect.
For business owners, company directors and family-run firms in and around Telford these changes could affect how you pay dividends, claim capital allowances, manage employee expenses and approach inheritance tax planning. Below we explain the key measures, why they matter and practical steps you can take now to stay compliant and keep your tax bill sensible.
Major changes coming into force in April 2026
Dividend tax rates will rise. The government confirmed increases to dividend tax rates that take effect from 6 April 2026, which will raise the rate payable by basic and higher rate taxpayers on dividend income. This is a significant point for owner-managed companies and individuals who rely on dividends for personal income. The new rate will be 10.75% for basic rate, and 35.75% on high rate. Additional rate will remain the same at 39.35%
The deduction for non-reimbursed homeworking expenses will be removed. From April 2026 employees will no longer be able to claim a tax deduction for non-reimbursed expenses of working from home. Employers can still reimburse eligible costs tax free where they choose to, so payroll and HR policies should be reviewed.
Inheritance Tax reliefs for business and agricultural property will be tightened and adjusted. Measures affecting Agricultural Property Relief and Business Property Relief are being implemented that change how reliefs apply and interact with estates from April 2026. These changes mean more estates could face a larger IHT liability unless planning is reviewed.
Permanent full expensing for qualifying plant and machinery becomes more certain. Measures introduced earlier that offered 100 percent writing down allowances for certain capital expenditure are being settled into longer term rules, which can materially improve cashflow for businesses investing in plant and equipment. If you were deferring replacement or investment decisions, the allowances available from 2026 make capital investment more tax efficient.
Other sector and duty changes. A handful of sector-specific changes are also due to land in April 2026, including some gaming and VAT measures and a new VAT relief for business donations of goods to charity. These are more specialised but can have a direct effect on retailers, hospitality operators and leisure businesses.
Why this matters for businesses and directors in Telford
- Cashflow and take-home pay: An increase in dividend rates changes the relative tax cost of paying yourself via dividends versus salary. For many small limited companies this will influence year-end planning and distributions.
- Payroll and benefits: With the removal of the non-reimbursed homeworking deduction, firms who have been relying on employees to claim will face pressure to offer reimbursements or rethink salary structures. Updating payroll processes before April 2026 will reduce the risk of payroll errors and employee dissatisfaction.
- Investment planning: The move to make full expensing more permanent is a chance to accelerate replacement cycles and capital projects. That can improve productivity while delivering immediate tax relief on qualifying purchases.
- Estate and succession planning: If your business forms part of personal estates or you are advising farming families, the IHT changes deserve urgent review. Simple actions such as revisiting wills, checking the eligibility of assets for relief and updating trust or succession plans can make a material difference to what beneficiaries receive.
Practical steps you should take now
- Review dividend policy and distribution timing
Model the effect of the new dividend rates for 2026 on director and shareholder take-home pay. In many cases a blended approach combining a modest salary and dividends will remain tax efficient, but the balance may shift. We can run tailored cashflow and tax simulations for your company.
- Update expense and payroll policies
Decide whether your business will reimburse homeworking costs. If so, put robust reimbursement rules in place and make sure payroll processes record those reimbursements correctly so they remain tax-free. If not, communicate changes to staff clearly and early to manage expectations. Consider formalising written expense policies.
- Reassess capital investment plans
If you have plant or machinery purchases in the pipeline, revisit timings and eligibility for reliefs. Claiming full expensing for qualifying assets from April 2026 can reduce taxable profits and improve after-tax returns on investment.
- Revisit inheritance tax and succession plans
Where family assets or business property reliefs are involved, carry out an IHT healthcheck now. This is particularly important for agricultural or owner-managed property that might previously have qualified for higher reliefs. Small planning adjustments now can mitigate larger tax liabilities later.
- Keep records and talk to HM Revenue & Customs early on compliance questions
Good record keeping will help with any transitional issues once measures apply. If you face particular complexity, consider seeking clearance or guidance from HM Revenue & Customs or specialist advice well before deadlines.
How Turas Accountants in Telford can help
At Turas Accountants we specialise in working with local small and medium sized businesses. We can help you by running dividend and payroll modelling, auditing capital expenditure plans to maximise qualifying reliefs, and carrying out bespoke succession and IHT planning reviews.
We will also update your bookkeeping and payroll systems to reflect the April 2026 rule changes and provide plain-English guidance for staff and stakeholders.
Get in touch with us today to find out how we can help you and your business.