A round up of the latest business news – are you up to date?
Today’s blog post contains a wide range of topics related to the latest business news – from dividend tax rates to a reminder of the upcoming self-assessment deadline – we’ve got it all covered!
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. The ordinary and upper rates of dividend tax will both rise by 2%.
For many small and medium-sized companies, dividends are central to how owners pay themselves. With the tax rates rising, your pay and profit extraction strategies will likely need a fresh look for 2026/27.
What’s Actually Changing
From April 2026:
- The dividend ordinary tax rate increases from 8.75% to 10.75%.
- The dividend upper tax rate rises from 33.75% to 35.75%.
- The dividend additional tax rate remains at 39.35%.
- The tax-free dividend allowance remains at £500
The rate you pay on your dividends will depend on the amount of your total income and the source of your income. These rates apply only to dividends – salary, bonuses and savings are taxed differently.
What the Changes Mean for Profit Extraction
As dividends have usually offered a tax advantage over salary, many directors/shareholders adopt a mix of a low salary and higher dividend income.
However, with dividend tax rising, the balance is shifting slightly. The best extraction strategy for one director may look quite different for another, especially when factors like income levels, other earnings, pensions and company profits are taken into account.
It may therefore be worth reviewing:
- Whether a different mix of salary and dividends is now more efficient for you.
- Bringing forward dividends before April 2026, where appropriate.
- The impact on cash flow if you switch to taking a larger salary instead of dividends.
If you want to review how you take money from your company, or see how the upcoming dividend tax changes could affect your take-home pay, get in touch. We can guide you through the options and help you make sure your remuneration is 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 the UK’s inflation target at 2% for the next 12 months, as measured by the Consumer Prices Index (CPI).
The letter notes that inflation has fallen significantly from its October 2022 peak of 11.1%, and underlying inflationary pressures continue to ease. The Chancellor also highlighted that measures announced at the recent Budget are expected to further reduce inflation by around 0.4 percentage points in 2026-27.
Overall, while the confirmation of the target for the MPC is largely status quo, it does provide clarity for businesses and financial markets.
Whether the Budget announcements will achieve the desired decrease the Chancellor hopes for remains to be seen. However, the expectation is that inflation will ease and the Bank of England base rate will continue to reduce over the next 12 months, with many considering a rate cut later in December a possibility.
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 penalties and interest.
To meet the deadline, you will need to make sure you have:
- All income details, including any employment, pension, self-employment, dividends, rental and savings income you received.
- Records of allowable expenses and reliefs.
- Details of any pension contributions or charitable donations.
Filing early not only helps avoid last minute stress but also gives you time to check your figures and plan for any tax payments you need to make.
If you would like help preparing and submitting your tax return, please get in touch as soon as possible. We can help you ensure that your tax return is accurate, complete and filed on time.
High-Value Council Tax Surcharge: Next Steps
The government has announced plans to introduce a new levy, the High-Value Council Tax Surcharge (HVCTS), for owners of residential properties in England valued at £2 million or more.
The surcharge is expected to come into effect in April 2028. A public consultation on the details will be held in early 2026.
HVCTS currently only affects residential properties in England. Whether the devolved administrations in Scotland, Wales and Northern Ireland will follow suit remains to be seen.
Not Based on Council Tax Bands
In information published following the Budget, the government confirmed that the surcharge will not be calculated based on council tax bands. So, if your property is currently in say bands F, G, or H (which were set based on 1991 values), this does not necessarily mean your property will be subject to a surcharge.
Instead, there will be a fresh valuation process. The Valuation Office Agency (VOA) will carry out a targeted valuation exercise in 2026. Properties assessed at £2 million or more will be slotted into one of four new HVCTS bands.
As far as council tax is concerned, existing council tax bands will remain in place, and a change in council tax band will not affect HVCTS eligibility.
What to Do Next
Especially if you own a property in London or other high-value areas in England, the new surcharge will be a concern.
- The surcharge could add a significant recurring cost from 2028.
- As the surcharge uses up-to-date property valuations (not 1991 values), properties that escaped high “band” classification under the old system could now be subject to it if their current market value is high.
If you have concerns about how the new surcharge will affect your situation, please do get in touch. We would be happy to provide you with personalised advice.
See: https://www.gov.uk/government/news/high-value-council-tax-surcharge
Free Food Safety Resources to Help with the Festive Rush
With Christmas approaching, food businesses are looking forward to one of the busiest trading periods of the year.
As part of its ‘Safer Food Means Better Business’ campaign, the FSA is offering free training, checklists and practical guidance to help small and micro businesses stay on top of food safety and hygiene.
Extra Attention at Christmas
The festive season often brings increased pressure to food businesses. Higher demand, expanded menus and the use of temporary or seasonal staff all raise the risk of mistakes – especially around food handling, allergens and hygiene standards.
Even small slip-ups can lead to problems for your business and unnecessary disruption at a time when margins matter most.
Practical Steps to Take
Practical steps to consider at this time of year could include:
- Training seasonal and temporary staff on the basics of food hygiene and allergen management.
- Reviewing allergen information for Christmas menus, festive specials and buffets to ensure accuracy.
- Checking that temporary setups, such as stalls at Christmas markets or pop-up events, meet all food safety requirements.
To review the FSA’s guidance for food businesses, see here.
Employment Rights Bill: Key Updates on Unfair Dismissal and Worker Protections
The government has recently brought together trade unions and business representatives to discuss the Employment Rights Bill. These talks have led to conclusions that will assist the Bill to reach Royal Assent and allow the changes it proposes to take effect as planned.
Here we summarise the decisions made.
- Unfair dismissal qualifying period reduced: The qualifying period for unfair dismissals will be cut from 24 months to six months. Existing day one protection against discrimination and automatically unfair dismissal will be maintained.
- Day one rights: It is planned that from April 2026, employees will gain day one rights to sick pay and paternity leave.
- Fair Work Agency: The government also plans to launch the Fair Work Agency in April 2026. This new body will take on a role in enforcing the rules and providing advice to workers and employers. It will also have strong powers to investigate and take action against businesses that flout the law.
The package of reforms included in the Employment Rights Bill marks a significant shift in employment law. It is well worth keeping up to date with how these changes may affect your business’ policies, contracts, and workplace practices from 2026 onwards.
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 new legal powers when considering moral payments: payments made because there is a moral rather than strictly legal obligation to transfer some of a charity’s property.
This is the final provision in Charities Act 2022 to come into effect.
Few charities encounter situations where a moral payment is relevant. Typically, these arise in cases involving legacies where there is evidence that a person’s will does not reflect their final wishes.
Key Changes to Moral Payments
The Charity Commission has updated its guidance to help trustees navigate these changes. The main changes, which came into force on 27 November 2025, are:
- Objective legal test: Previously, trustees needed to personally feel a moral obligation (a subjective test). The law now requires an objective assessment -of whether trustees can reasonably be seen as being under a moral obligation.
- Self-authorisation: Charities may make small moral payments without needing the Commission’s approval, provided they meet certain criteria.
- Scaled financial limits: The maximum amount a charity can pay without Charity Commission approval is based on the charity’s gross annual income from the previous financial year. Payments above this threshold still require approval.
- Delegation of decisions: Trustees may delegate moral payment decisions to staff or committees, although they retain ultimate responsibility for the decision.
Practical Implications for Trustees
- The availability of these new powers depends on the individual charity and the proposed payment. Some charities, particularly national museums and galleries, are prevented from making moral payments by their governing document or other legislation.
- Trustees cannot apply these powers retrospectively. Applications for approval to make a moral payment that have already been submitted will be considered under previous legislation.
- When necessary, trustees should seek Charity Commission consent. The Commission will continue to evaluate applications on a case-by-case basis, checking that reasonable decisions have been made and legal obligations met.
Commission Guidance
Christine Barker, Head of Regulatory Authority at the Charity Commission, said, “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.”
The Charity Commission has encouraged trustees to refer to its general guidance on decision-making (CC27) when considering a moral payment.
2026 Business Rates Revaluation Completed
If your business is based in England and Wales, you can now view the future rateable value of your property.
The Valuation Office Agency (VOA) has completed updating the rateable values of all commercial and non-domestic properties in England and Wales. The new values take effect from 1 April 2026.
Revaluations happen every three years to reflect changes in the property market, and local councils use these values to calculate business rates bills. A rateable value is not the same as the amount you pay, as your bill depends on the government-set multiplier and any reliefs you may qualify for.
Information on the multiplier rates and reliefs available in England was updated during November’s Budget announcement. The Welsh government is likely to confirm multipliers and reliefs in its January Budget.
Estimate Your Future Bill
You can use the GOV.UK Find a Business Rates Valuation service to find your business property’s future rateable values.
For properties in England, the service can also provide an estimate of your business rates bill, though this won’t account for reliefs. The service for Welsh properties will be updated once the Welsh Government confirms multipliers and reliefs.
If you are facing a bill increase, some of the reliefs announced in the Budget would be worth exploring. These include a Supporting Small Business Scheme and a Transitional Relief scheme.
What to Do Now
You can sign into your business rates valuation account to check your property details, see how the valuation was calculated, and report any errors.
It is also possible to use your account to compare your rateable value with other properties in the area and check how the valuation was calculated.
At the moment, you can only request changes to your current rateable value. You must request any changes to this value by 31 March 2026. After 1 April 2026, you will only be able to make changes to your future rateable value.
If you have concerns about how the revaluation could affect your business’s profitability and budgeting for costs, please get in touch. We would be happy to help you. For any questions you have about rates or payments, contact your local council in the first instance.
See: https://www.gov.uk/government/news/business-rates-revaluation-2026