The start of the 2026/27 tax year brings a series of changes that UK businesses should review immediately. April is traditionally one of the most important planning points of the year, and this is especially true in 2026 due to adjustments to National Insurance thresholds, capital allowances planning, and ongoing compliance developments from HM Revenue & Customs.
One of the most important areas for employers is payroll planning. The annual uplift in thresholds and statutory payments means businesses must ensure payroll systems reflect new rates from the first pay run in April. Failure to update software correctly can lead to incorrect deductions, employee dissatisfaction, and possible compliance penalties.
The National Living Wage also typically changes at the start of April. For businesses in hospitality, retail, and care sectors, wage increases can significantly impact cost structures. Employers should consider not only the direct wage increases but also the knock-on effect on pay differentials. When entry-level wages rise, experienced staff often expect proportional adjustments, increasing overall payroll costs.
Capital investment planning is another key issue. The continuation of full expensing for qualifying plant and machinery means companies can deduct 100% of eligible investment from taxable profits. Businesses considering equipment purchases, IT upgrades, or machinery investments may benefit from accelerating these decisions into the current financial year to maximise relief.
Corporation tax planning remains important. With the main rate remaining at 25% for many companies, profit timing strategies become more valuable. Businesses may wish to review:
- Timing of income recognition
- Bonus payments before year-end
- Pension contributions for directors
- Capital allowance claims
Cash flow forecasting should also be updated. VAT quarters, PAYE liabilities, and corporation tax instalments may change depending on business performance in the previous year. Many businesses underestimate how April resets compliance schedules.
Beyond tax, April is also a strong time to review financial controls. The new financial year offers an opportunity to:
- Reset budgets
- Review pricing strategy
- Evaluate margins
- Reassess staffing plans
- Identify growth investments
The British Chambers of Commerce has recently emphasised that businesses entering 2026 continue to face cost pressures, making proactive planning essential. Firms that review costs and tax efficiency early in the year are better positioned to manage uncertainty.
Accountants often see April as the “financial health check” month. Reviewing tax efficiency, ensuring compliance, and planning investment early can significantly improve profitability across the full year. Book a new financial year tax planning review