UK Business News Round-Up 2026: Valuations, MTD, CBAM & Key Regulatory Updates

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Welcome to our latest business news round-up. For questions about these updates, contact us today. We’re here to help you at every step.

Table of Contents

Valuing Your Business: What Buyers Look for and What You Can Do About It

If you are considering selling your business, now or years from now, one of your first questions will be: “What is it worth?”

There are standard ways to value a business, but buyers ultimately set the price by weighing risk against return.

Business owners often focus on profit. Profits matter, but buyers also assess sustainability, owner dependence, and ease of transition.

Below, we outline the key factors that influence business valuation, along with practical steps you can take to strengthen your position before going to market. These factors can differ by sector. For example, a retail business may be valued based on consistency of footfall, inventory management, and location, while a professional service firm often faces closer scrutiny of client retention, contract terms, and the expertise of the team. Manufacturing businesses, on the other hand, may be assessed for asset base and production efficiency. Brief sector-specific differences like these can shape both what buyers focus on and how you prepare for a sale. Let’s start by looking at how profits are assessed.

Thinking about selling? Book a free consultation to review your options.

How profits are assessed

A common approach to valuing small and medium-sized businesses is to apply a multiple to maintainable profits. In practice, this involves adjusting the business’s operating profits to reflect a more realistic and sustainable level of earnings.

The key concept here is maintainable profit.

For example, if your most recent figures include a one-off insurance payout or an unusually large contract that has since ended, a buyer is likely to exclude this from their assessment.

If you pay yourself a low salary and dividends, buyers will factor in the cost of hiring a replacement at a market salary.

Consistent, repeatable profits give buyers greater confidence in your business’s future.

Quality and predictability of income

Two businesses with the same profits can have different valuations depending on how they generate those profits.

Buyers generally favour:

Recurring income (e.g. subscriptions, retainers, service contracts)
A diversified customer base
Long-term contractual arrangements

They are more cautious where there is:

Heavy reliance on one major client
Income that must continually be re-won
Informal or unwritten agreements

For example, a software business with automatically renewing annual licences will typically command a higher valuation multiple than a project-based business generating similar profits from one-off work.

If buyers think income could drop after the sale, they may lower their offers or add earn-outs.

Reliance on the business owner

This is often one of the most significant factors affecting value.

If you’re central to sales, operations, or client relationships, buyers may feel they’re buying a job, not a business.

Typical questions a buyer may ask include:

What happens if the owner exits immediately after completion?
Are processes documented or retained informally?
Can the team operate independently?

Reducing your own involvement can make your business more attractive and valuable.

Exit planning? Book a free consultation with us to evaluate and improve your business.

Strength of the management team and staff

A capable management team can add considerable value.

A reliable leadership team reassures buyers that the business can operate after a sale.

Buyers will typically consider:

Staff turnover levels
Retention of key employees
Whether knowledge is shared or concentrated in specific individuals

Losing a key team member can introduce risk and affect valuation.

Assets and balance sheet health

Tangible assets such as property, equipment, vehicles or stock can provide additional reassurance to a buyer.

For asset-light businesses, working capital is crucial.

A buyer will often examine:

Cash requirements to operate the business
Debtor collection periods
Potential liabilities (e.g. tax, leases, warranties)

A balance sheet with unresolved items, such as directors’ loans or old debt, can raise concerns and erode confidence.

Legal and regulatory compliance

Buyers and their advisers will carry out detailed due diligence to ensure the business is compliant.

This typically includes reviewing:

Filing of accounts and tax returns
VAT and PAYE records
Employment contracts
Licences and regulatory approvals

Compliance issues can raise risk and lead to lower offers or added conditions.

Steps you can take to improve the value of your business

You don’t need a complete overhaul. Instead, these steps can strengthen your position over time:

Reduce reliance on yourself.
Delegate responsibilities, document processes, and involve your team in key relationships.
Secure recurring income
Consider introducing contracts, retainers or subscription-based services.
Diversify your customer base.
Reduce reliance on clients that generate turnover of 25–30%.
Invest in systems and processes.
CRM systems, workflow tools, and documentation can help with scalability and transferability.
Retain key staff
Put appropriate contracts and incentives in place to retain important team members through a transition.
Plan your tax position early.
How you structure a sale can strongly affect your net proceeds. Plan early to review your options.

Considering a sale? Book a free consultation with us now to plan for higher value and lower risk.

Final thoughts

The most successful sales result from owners preparing early and thinking like buyers.

Understanding how buyers see your business and making targeted changes can improve your results.

Want an accurate valuation? Request a professional assessment today.
Let us help you secure a successful, profitable exit. With that in mind, let’s turn to another recent business update: Making Tax Digital (MTD) and what recent HMRC communications may mean for you.

Switching gears, have you received a letter from HMRC about Making Tax Digital (MTD)?

With Making Tax Digital (MTD) for Income Tax coming into force from 6 April 2026, HM Revenue & Customs (HMRC) has been writing to taxpayers in recent weeks to notify them that they are being brought into the regime.

From 6 April 2026, MTD will become mandatory for sole traders and landlords with a total turnover exceeding £50,000 in the 2025/26 tax year, unless an exemption applies. Exemptions may be available to individuals who are digitally excluded, such as those with certain disabilities, age-related difficulties, or insolvency or other specific circumstances. To check whether you qualify for an exemption, consult the HMRC guidance or book a free consultation with us for advice. The new system requires businesses to maintain digital records and submit quarterly updates to HMRC.

In some cases, taxpayers have received their ‘mandation’ letters only shortly before the start of the new tax year.

If you’ve received a letter and this is your first notice that MTD applies, don’t worry.

What should you do next?

Importantly, the first MTD filing deadline is not until 7 August 2026.

This gives you time to:

Register for MTD
Choose suitable accounting software. Popular MTD-compliant options include Xero, QuickBooks Online, and Sage Business Cloud Accounting. These platforms are widely used, easy to integrate, and designed to help meet MTD requirements. We can recommend the best fit based on your business needs.
Begin maintaining your records digitally.

As long as your digital records are up to date for the three-month period starting in April 2026 by the time you submit your first update, you should be well-positioned to meet the deadline.

Are there penalties for late sign-up?

HMRC has confirmed that there will be no penalty for not signing up by 6 April 2026.

Delaying the digital transition may create more work and a greater risk of errors.

Taking action early ensures a smoother transition.

Free accounting consultation for business owners

How can you prepare effectively?

To stay compliant and reduce stress, it is advisable to:

Start keeping digital records as early as possible.
Ensure your bookkeeping is accurate and up to date.
Choose software that suits your business needs.
Understand your quarterly reporting obligations.

Need help with MTD? Book a free call to set up your digital system.

CBAM Rules: What Importers Need to Know

The government has published further draft legislation on the UK’s Carbon Border Adjustment Mechanism (CBAM), which will have important implications for businesses importing certain carbon-intensive goods into the UK.

The latest draft rules focus on how embodied emissions are calculated, an essential component of how CBAM charges will be determined, as well as the monitoring and verification of emissions data. The consultation on these measures is open until 21 May 2026.

Alongside the draft legislation, a policy summary has also been released, providing a helpful overview of how CBAM is expected to operate in practice.

What is CBAM and why does it matter?

CBAM is scheduled to come into force on 1 January 2027.

Its purpose is to apply a carbon price to certain imported goods from sectors considered at risk of “carbon leakage”. This refers to the possibility that, as the UK strengthens its environmental regulations, high-emission production could shift to countries with less stringent standards.

In effect, CBAM is designed to create a level playing field between:

UK producers who already face carbon costs
Overseas producers who may not be subject to equivalent environmental regulations

Which businesses are affected?

The CBAM rules are expected to impact UK businesses importing goods such as:

Aluminium
Cement
Fertilisers
Hydrogen
Iron and steel

In addition, downstream businesses that rely on these materials within their supply chains may also feel indirect effects.

If your business imports or uses these materials, now is the time to assess your exposure and plan ahead.

How will the rules be implemented?

The primary legislation for CBAM has already been introduced through the Finance Act 2026.

The government is now developing secondary legislation to set out the detailed administrative and operational framework for the CBAM’s day-to-day operations.

The first phase of this secondary legislation, covering administrative requirements, CBAM rates and carbon price relief, was consulted on earlier this year.

This latest consultation builds on that work, focusing specifically on emissions calculations and verification processes.

What should businesses do now?

Although CBAM does not come into force until 2027, early preparation is essential.

You may wish to:

Review your supply chain and identify affected goods.
Assess how emissions data will be collected and reported.
Engage with suppliers to understand their carbon reporting capabilities.
Consider the potential cost implications for your business. Direct costs may include investments in new monitoring or reporting systems, staff training, and other expenses. Indirectly, suppliers may raise prices to cover their CBAM-related expenses, thereby increasing your input costs. Taking these factors into account can help you plan and budget for both immediate and longer-term financial effects.

Taking proactive steps now can help you avoid disruption and manage future compliance requirements more effectively.

We’re here to support you.

CBAM represents a significant change for importers and supply chains, particularly for businesses operating in carbon-intensive sectors.

Need help understanding how CBAM will affect your business?
We can help you assess the impact, prepare for compliance, and plan for any financial implications.

Book a free consultation with us today for tailored advice and support.

See:
https://www.gov.uk/government/consultations/draft-regulations-carbon-border-adjustment-mechanism-cbam-emissions-and-verification

New “Right to Try” Legislation Removes a Key Barrier to Work for Disabled People

At the end of April 2026, new legislation will come into force to remove a significant barrier preventing disabled people from entering or returning to work.

For many individuals with disabilities or long-term health conditions, the fear of losing benefits support if a job does not work out has been a major concern. The risk of triggering a reassessment has often discouraged people from exploring employment or even volunteering opportunities, despite a willingness to work.

What Is Changing?

The new “Right to Try” legislation is designed to provide reassurance and encourage more people to test their ability to work without fear of immediate financial consequences.

From the end of April, starting a job will no longer automatically trigger a benefits reassessment for individuals receiving:

New-style Employment and Support Allowance
Personal Independence Payment
The health element of Universal Credit

In addition, volunteering activities will also be protected, meaning individuals can take initial steps towards employment without risking their existing support.

Why This Matters

This change represents a meaningful shift in how the system supports individuals transitioning into work.

It aims to:

Reduce financial uncertainty for those considering employment.
Encourage more people to explore job opportunities.
Support a gradual and confident return to the workplace.

For many, this could be the difference between remaining out of work and taking that first step towards employment.

What This Means for Employers

For employers, this development may widen the available talent pool.

Previously, some candidates may have ruled themselves out of applying due to concerns about their benefits. With this barrier reduced, businesses may now:

Access a broader and more diverse workforce.
Engage with candidates who are keen but previously hesitant.
Support inclusive hiring practices more effectively.

Looking Ahead

While the legislation removes a key obstacle, employers should remain mindful of providing appropriate support, flexibility and understanding for employees transitioning back into work. You can put inclusion into practice with practical steps, such as offering flexible hours, enabling remote or hybrid work, providing tailored workplace adjustments (such as accessible workstations or assistive technology), and ensuring clear communication about available support. Regular check-ins, mentoring, and an openness to feedback can also help disabled employees feel welcomed and empowered to succeed.

Creating an inclusive and supportive working environment will remain essential to making the most of this opportunity.

Looking to strengthen your workforce or review your employment policies?
If you would like advice on how these changes may impact your business, or support in adapting your hiring and payroll processes, book a free consultation with us. We are here to help you navigate these developments with confidence.

See: https://www.gov.uk/government/news/barriers-to-work-removed-for-disabled-benefit-claimants-as-landmark-legislation-introduced