Business News Round-Up: Key UK Tax, Employment and Regulatory Updates for 2026
Welcome to our latest round-up of business news, bringing together key updates and developments that may be relevant to you and your business.
Staying informed can help you anticipate changes, manage risk, and identify opportunities in good time. If you would like to discuss how any of the issues covered may affect your business, please do not hesitate to get in touch.
At Naseems Accountants, we are here to support you with clear, practical advice tailored to your circumstances.
Dividend Tax Rates Rising in April 2026: What Does It Mean for Profit Extraction?
The recent Budget confirmed that dividend tax rates will increase from April 2026, with both the ordinary and upper dividend tax rates rising by 2%.
For many small and medium-sized companies, dividends form a core part of how directors and shareholders extract profits. With higher tax rates on the horizon, it is sensible to review your remuneration and profit extraction strategy ahead of the 2026/27 tax year.
What’s Actually Changing
From April 2026:
- The dividend ordinary rate will increase from 8.75% to 10.75%.
- The dividend upper rate will rise from 33.75% to 35.75%.
- The dividend additional rate will remain unchanged at 39.35%.
- The tax-free dividend allowance will remain at £500.
The rate you pay depends on your overall income level and personal tax position. These rates apply only to dividend income, salary, bonuses and savings income are taxed under separate rules.
What the Changes Mean for Profit Extraction
Dividends have traditionally been more tax-efficient than salary, which is why many company owners choose a combination of a modest salary and higher dividend payments.
With dividend tax rates increasing, that advantage is narrowing. As a result, the most tax-efficient approach may vary more significantly depending on individual circumstances. Factors such as total income, other sources of earnings, pension contributions and company profitability will all influence the best strategy.
It may now be worth reviewing:
- Whether a different balance between salary and dividends would be more tax-efficient from April 2026.
- Whether it is appropriate to bring forward dividend payments before the new rates take effect.
- The impact on cash flow and National Insurance if you increase salary in place of dividends.
If you would like to review how you take money from your company, or understand how the upcoming dividend tax changes could affect your take-home pay, book your free consultation with Naseems Accountants.
We can help you plan, model the options available and ensure your remuneration strategy remains as tax-efficient as possible.
Chancellor Confirms 2% Inflation Target for Next 12 Months
The Chancellor has formally written to the Bank of England’s Monetary Policy Committee (MPC) to reconfirm that the UK’s inflation target will remain at 2% for the next 12 months, as measured by the Consumer Prices Index (CPI).
In the letter, the Chancellor noted that inflation has fallen sharply from its October 2022 peak of 11.1%, with underlying inflationary pressures continuing to ease. It was also highlighted that measures announced in the recent Budget are expected to reduce inflation by around 0.4 percentage points in 2026/27.
While confirmation of the inflation target essentially maintains the existing policy framework, it provides welcome clarity and reassurance for businesses and financial markets.
What This Means for Businesses
Although it remains to be seen whether the Budget measures will deliver the full reduction in inflation the Chancellor anticipates, current expectations suggest inflation will continue to ease over the coming year.
As inflationary pressures soften, many commentators are increasingly confident that the Bank of England base rate may continue to fall, with some economists viewing a further rate cut later in December as a realistic possibility.
Lower interest rates could help reduce borrowing costs, improve cash flow and encourage investment, but businesses should continue to plan cautiously while economic conditions stabilise.
If you would like to understand how inflation trends or potential interest rate changes could affect your business finances, planning or borrowing decisions, book your free consultation with Naseems Accountants. Our team is here to provide clear, practical advice tailored to your circumstances.
See:
https://www.gov.uk/government/publications/monetary-policy-remit-budget-2025
Self Assessment Deadline Approaching – Are You Ready?
The deadline for filing your 2024/25 Self Assessment tax return is fast approaching. You must submit your return and pay any tax due by 31 January 2026 to avoid late filing penalties and interest charges.
To ensure you are fully prepared, you should check that you have the following information available:
- Full details of your income, including employment, pension, self-employment, dividends, rental income and savings interest.
- Accurate records of allowable expenses and any tax reliefs you are claiming.
- Information relating to pension contributions and eligible charitable donations.
Submitting your return well ahead of the deadline can significantly reduce last-minute stress. It also gives you time to review your figures carefully and plan for any tax payments that may be due, helping you manage your cash flow more effectively.
If you would like professional support with preparing and submitting your Self Assessment tax return, book your free consultation with Naseems Accountants as soon as possible. We can ensure your return is accurate, complete and filed on time, giving you peace of mind as the deadline approaches.
High-Value Council Tax Surcharge: Next Steps
The government has announced plans to introduce a new levy, the High-Value Council Tax Surcharge (HVCTS), which will apply to owners of residential properties in England valued at £2 million or more.
The surcharge is expected to come into effect from April 2028, with a public consultation on the detailed design scheduled for early 2026.
At present, the HVCTS will apply only to residential properties in England. It is not yet clear whether the devolved administrations in Scotland, Wales and Northern Ireland will introduce similar measures.
Not Based on Council Tax Bands
Following the Budget, the government confirmed that the surcharge will not be calculated using existing council tax bands. As a result, being in bands F, G or H, which are based on 1991 property value, does not automatically mean a property will fall within the scope of the new surcharge.
Instead, a new valuation process will be introduced. The Valuation Office Agency (VOA) will undertake a targeted valuation exercise in 2026 to assess properties against current market values. Properties valued at £2 million or more will then be placed into one of four new HVCTS bands.
Importantly, existing council tax bands will remain unchanged. A property’s eligibility for the HVCTS will be assessed separately and will not require a rebanding for standard council tax purposes.
What to Do Next
If you own property in London or other high-value areas of England, this proposed surcharge may be a significant concern. Once implemented, the HVCTS could represent a substantial ongoing cost from 2028 onwards.
Because the surcharge relies on up-to-date market valuations rather than 1991 values, properties that previously avoided higher council tax classifications could now be brought into scope if their current value meets the £2 million threshold.
With consultation still to come, this is a sensible time to begin considering the potential impact on your long-term finances and property plans.
If you would like to discuss how the proposed High-Value Council Tax Surcharge may affect you, or if you would like personalised advice on preparing for the changes, please get in touch with Naseems Accountants. We would be happy to help you understand your position and plan with confidence.
See: https://www.gov.uk/government/news/high-value-council-tax-surcharge
Seafood Industry Urged to Prepare for New EU Traceability Rules
With only a few weeks remaining before new EU import traceability requirements come into force, businesses in the seafood industry are being urged to act now.
These changes will apply from 10 January 2026 and will affect businesses involved in catching, buying, processing and selling fish and seafood products destined for EU markets. Without the additional information required through the Fish Export Service (FES), exports of fish and seafood products to the EU will not be permitted.
What’s Changing
From 10 January 2026, additional documentation will be required for seafood products caught by a UK vessel and processed in the UK after landing.
In these cases, consignments exported to the EU will need to include:
- A catch certificate covering the landed weight being exported, and
- A processing statement that references the relevant catch certificate.
To support this, businesses will be required to provide more detailed traceability information. The government is currently updating the Fish Export Service (FES) to ensure the system can generate the enhanced processing statements, catch certificates and other documentation being introduced under the new EU rules.
Without properly completed documentation generated by the updated FES, exports will not proceed.
How to prepare
The Fish, Trace, Ship campaign website provides comprehensive guidance on the new traceability requirements and outlines the practical steps businesses should take to ensure compliance.
In addition, the government is hosting a series of webinars to help seafood businesses understand and prepare for the changes. The subsequent webinar sessions are scheduled for 10 December and 17 December 2025.
To register for the webinars and access detailed guidance, visit the Fish, Trace, Ship campaign website.
If your business exports seafood to the EU and you would like support in assessing how these changes affect your operations, record-keeping, or compliance processes, please get in touch with us. We can help you prepare in advance and avoid disruption to your exports.
Free Food Safety Resources to Help with the Festive Rush
With Christmas approaching, many food businesses are gearing up for one of the busiest and most demanding trading periods of the year.
To support businesses during this time, the Food Standards Agency (FSA) is providing a range of free training materials, checklists and practical guidance as part of its Safer Food Means Better Business campaign. These resources are designed to help small and micro businesses maintain high standards of food safety and hygiene throughout the festive season.
Extra Attention at Christmas
The run-up to Christmas can place added pressure on food businesses. Increased footfall, extended opening hours, larger or more complex menus and the use of temporary or seasonal staff can all increase the risk of errors.
Common pressure points during this period include food-handling procedures, allergen management, and general hygiene standards. Even minor oversights can lead to complaints, enforcement action or reputational damage, disruption most businesses can ill afford at this critical time of year.
Taking time to revisit food safety processes now can help reduce risks and support smoother operations during the festive rush.
Practical Steps to Take
Practical actions you may wish to consider include:
- Training seasonal and temporary staff on basic food hygiene principles and allergen awareness.
- Reviewing allergen information for Christmas menus, festive specials and buffet offerings to ensure it is accurate and clearly communicated.
- Checking temporary or seasonal setups, such as Christmas market stalls or pop-up venues, to confirm they meet all required food safety standards.
The FSA’s resources are designed to be practical and easy to implement, making them particularly useful for smaller businesses with limited time and staff.
To review the FSA’s guidance for food businesses, see here.
If you would like support reviewing your compliance processes, updating procedures or ensuring your business is ready for the festive trading period, book your free consultation with Naseems Accountants. We are happy to help you stay compliant and focused on serving customers with confidence during your busiest season.
Employment Rights Bill: Key Updates on Unfair Dismissal and Worker Protections
The government has recently brought together trade union leaders and business representatives to discuss progress on the Employment Rights Bill. These discussions have helped clarify how the legislation will move forward, supporting its path to Royal Assent and enabling the proposed changes to be implemented as planned.
Below is a summary of the key decisions and confirmed proposals.
Unfair dismissal qualifying period reduced
The qualifying period for employees to claim unfair dismissal will be reduced from 24 months to six months. This shortens the timeframe within which employers must demonstrate fair procedures and valid reasons for dismissal.
Importantly, existing day one protections remain unchanged. This means that employees will continue to be protected from discrimination and automatically unfair dismissal from their first day of employment.
Day one employment rights
From April 2026, it is planned that employees will gain new day-one rights, including:
- Statutory sick pay
- Paternity leave
These changes will remove qualifying service requirements and are intended to provide greater security for workers from the outset of employment. Employers may wish to begin reviewing their policies and onboarding processes ahead of these changes.
Fair Work Agency
The government has also confirmed plans to introduce a new Fair Work Agency in April 2026.
This body will be responsible for:
- Enforcing employment rights
- Providing guidance and support to both employers and workers
- Investigating non-compliance
- Taking action against businesses that fail to meet their legal obligations
The Agency is expected to have strong investigative and enforcement powers, increasing the importance of compliance with employment law.
What this means for your business
The reforms set out in the Employment Rights Bill represent a significant shift in employment law. Shorter qualifying periods and expanded day-one rights will require businesses to take a closer look at their employment contracts, dismissal procedures, and wider HR practices.
Now is a good time to:
- Review contracts and staff handbooks
- Assess probationary and dismissal processes
- Plan for changes taking effect from 2026
If you would like help understanding how these reforms could affect your business, or support in reviewing your employment practices, please get in touch with Naseems Accountants. We can work alongside your advisers to help you plan confidently for the changes ahead.
See: https://www.gov.uk/government/news/an-update-on-the-employment-rights-bill
Charity Trustees Gain New Powers for Moral Payments
Charity trustees in England and Wales now have expanded legal powers when considering moral payments (also known as ex gratia payments). These are payments made where there is a moral obligation to transfer some of a charity’s property, even though there is no strict legal requirement to do so.
This change marks the final provision of the Charities Act 2022 coming into force. It is intended to provide greater clarity and flexibility for trustees in the limited circumstances where moral payments arise.
Such situations are relatively rare and most commonly occur in legacy cases, for example, where there is evidence that a will does not reflect the donor’s final intentions.
Key Changes to Moral Payments
The Charity Commission has updated its guidance to reflect the new legal framework. The main changes, which took effect on 27 November 2025, are outlined below.
- Objective legal test: Previously, trustees had to personally believe there was a moral obligation to make a payment. The law now requires an objective assessment, whether trustees can reasonably be regarded as under a moral obligation, rather than relying solely on personal views.
- Self-authorisation: Charities can now make small moral payments without seeking prior Charity Commission approval, provided certain conditions are met. This allows trustees to deal with straightforward cases more efficiently.
- Scaled financial limits: The maximum amount that can be paid without Charity Commission consent is now linked to the charity’s gross annual income from the previous financial year. Any payment above the relevant threshold will still require formal approval.
- Delegation of decisions: Trustees may delegate decisions relating to moral payments to staff members or committees. However, trustees remain ultimately responsible for ensuring the decision is lawful and reasonable.
Practical Implications for Trustees
Whether these new powers can be used will depend on the individual charity and the proposed payment. Some charities, including certain national museums and galleries, may be restricted from making moral payments due to their governing documents or other legislation.
Trustees should also be aware that:
- The new powers cannot be applied retrospectively.
- Any applications for approval already submitted to the Charity Commission will continue to be considered under the previous legal framework.
- Where a payment exceeds the permitted threshold or circumstances are unclear, Charity Commission consent must still be obtained.
The Commission will continue to assess applications on a case-by-case basis, ensuring that decisions are reasonable and comply with charity law.
Commission Guidance
Christine Barker, Head of Regulatory Authority at the Charity Commission, commented:
“Few charities ever face decisions over ex gratia payments, but for those that do, these legislative changes provide greater clarity and flexibility and allow them to make in-house decisions for small sums. Our updated guidance is designed to help charity trustees know how to apply the law and whether they need to apply for our permission.”
Trustees are also encouraged to refer to the Charity Commission’s general guidance on trustee decision-making (CC27) when considering the use of these powers.
How We Can Help
If you are a charity trustee and are unsure whether a proposed payment qualifies as a moral payment or whether Charity Commission approval is required, seeking professional advice early is essential.
At Naseems Accountants, we support charities with governance, compliance and trustee decision-making. If you would like tailored advice or help reviewing your charity’s position, book your free consultation with our team. We would be happy to help.
2026 Business Rates Revaluation Completed
If your business is based in England or Wales, you can now view the future rateable value of your property ahead of the following business rates revaluation.
The Valuation Office Agency (VOA) has finished updating the rateable values for all commercial and non-domestic properties, with the new values taking effect from 1 April 2026.
Business rates revaluations take place every three years to reflect changes in the property market. Local councils use a property’s rateable value to calculate business rates bills. It’s worth noting that the rateable value is not the same as the amount you pay, as the final bill depends on the government-set multiplier and any reliefs you may be entitled to.
Updates to English multipliers and reliefs were announced in November’s Budget. The Welsh Government is expected to confirm its multipliers and reliefs in its January Budget.
Estimate Your Future Business Rates Bill
You can use the GOV.UK “Find a Business Rates Valuation” service to check your property’s future rateable value.
- For England, the service can also provide an estimated business rates bill (note this does not factor in any reliefs).
- For Wales, bill estimates will be available once multipliers and reliefs are confirmed.
If your bill is likely to increase, it may be worth exploring the reliefs announced in the Budget, including:
- Supporting Small Business Scheme
- Transitional Relief scheme
What to Do Now
You can sign in to your business rates valuation account to:
- Check your property details
- See how your valuation was calculated
- Compare your rateable value with similar local properties
- Report any errors in the valuation
At present, you can only challenge your current rateable value. Any request to change this must be submitted by 31 March 2026. From 1 April 2026, you will only be able to challenge your future rateable value.
How We Can Help
If you are concerned about how the new valuation could affect your cash flow, profitability or budgeting, we’re here to help. Book your free consultation, our team can support you in understanding the impact and exploring available reliefs.
For questions about your bill or payment arrangements, contact your local council in the first instance.
See: https://www.gov.uk/government/news/business-rates-revaluation-2026
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