There are several rules and regulations small business owners need to be aware of 2026. Read our regularly updated guide.
1 February 2026: Increases to Companies House fees
Several Companies House fees increase, including the cost of incorporation doubling from £50 to £100. Read more details here.
1 April 2026: Increases to National Minimum Wage and National Living Wage
The rates increase as follows:
- 21 and over: From £12.21 to £12.71 an hour
- 18-20: From £10 to £10.85 an hour
- Under 18: From £7.55 to £8 an hour
- Apprentice: From £7.55 to £8 an hour
It’s a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records.
Read government guidance here.
1 April 2026: Business rates in England
A new revaluation introduced with business rates based on values on 1 April 2024.
Temporary pandemic-era business rates relief removed but a new 15% relief for pubs and live music venues introduced.
‘Supporting small business relief’ applies if a business property’s bill increases due to the new revaluation on 1 April 2026 and a business loses some or all of its small business rate relief, rural rate relief, retail hospitality and leisure relief or 2023 supporting small business relief.
Business rates multipliers expand from two to five rates as follows:
- small business retail, hospitality and leisure (RHL) multiplier: 38.2p, rateable value under £51,000
- small business multiplier: 43.2p, rateable value under £51,000
- standard RHL multiplier: 43p, rateable value £51,000 to £499,999
- standard multiplier: 48p, rateable value £51,000 to £499,999
- high value multiplier: 50.8p, rateable value £500,000 or over
6 April 2026: Making Digital for Income Tax
From 6 April 2026, Making Tax Digital for Income Tax replies to sole traders and landlords with an annual income from self-employment and property that is over £50,000.
HMRC describes it as the biggest change since the tax authority launched Self Assessment more than 30 years ago.
Sole traders and landlords need to use software that works with Making Tax Digital for Income Tax to:
- create, store and correct digital records of self-employment and property income and expenses.
- send quarterly updates to HM Revenue & Customs (HMRC) by 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027.
- submit a tax return and pay tax due by 31 January the following year.
Read government guidance here.
6 April 2026: Increases in statutory sick, maternity, paternity, adoption, shared parental and parental bereavement pay
Statutory sick pay (SSP) increases from £118.75 to £123.25 per week.
Statutory maternity pay, paternity pay, adoption pay, shared parental pay, and parental bereavement pay increaes £187.18 to £194.32 per week.
6 April 2026: Employment Rights Act changes
The Employment Rights Act, which applies to England, Wales and Scotland, gives workers a wide range of expanded and new employment rights. Changes are being rolled out over the next few years.
Changes introduced on 6 April 2026 are:
Statutory Sick Pay (SPP) from day one
The three-day “waiting period” for SSP is abolished and employees entitled to sick pay from the first day of absence. The lower earnings limit is also removed.
Right to paternity and parental leave from day one in a job
The requirement to have 26 weeks of service in a company to qualify for paternity leave and one year of service to qualify for unpaid parental leave is scrapped.
The restriction on taking paternity leave after shared parental leave is removed.
Collective redundancy protective award
The maximum period of the protective award is doubled from 90 days’ pay to 180 days’ pay.
Whistleblowing protections for sexual harassment
Sexual harassment becomes a ‘qualifying disclosure’ under whistleblowing law which meansprotection from detriment and unfair dismissal for whistleblowers making a sexual harassment disclosure.
Holiday records
Employers must keep records of annual leave and holiday pay, including:
- annual leave taken
- annual leave carried over from previous years
- holiday pay
- payments in lieu of holiday
Employers must keep the information for a minimum of six years from the date it was recorded and manage records in line with UK GDPR.
Gender pay gap and menopause
Employers with 250 or more employees encouraged to voluntarily publish the steps they are taking to reduce their gender pay gap and support employees experiencing menopause. It will become mandatory at some point in 2027.
Trade union recognition
How a trade union can be recognised in a workplace is simplified.
On 7 April 2026, the Fair Work Agency is established. It brings together existing enforcement bodies and takes on enforcement of other employment rights, such as holiday pay and statutory sick pay. Read government guidance.
SMEWeb is covering the implementation of the Employment Rights Act throughout 2026 and beyond.
6 April 2026: Bereaved partner’s paternity leave
Employees in England, Scotland, and Wales can take up to 52 weeks of unpaid bereaved partner’s paternity leave if their partner or child’s mother dies within the first year of the child’s birth or adoption.
Read government guidance here.
6 April 2026: Dividend tax increases
The ordinary rate rises from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75%.
The additional rate remains unchanged at 39.35%.
Read government guidance here.
6 April 2026: Investment tax relief changes
For Enterprise Management Incentive (EMI) scheme, which lets SMEs to grant employees options to purchase shares, the gross assets test increases from £30 million to £120 million, and the employee limit and company share option limit increases from 250 to 500, and £3 million to £6 million, respectively.
The Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) lifetime company investment limits doubles to £24 million, and the annual company investment limits increases to £10 million. The gross assets test increases to £30 million before share issue, and £35 million after.
Income tax relief available for those investing in VCTs is reduced from 30% to 20%.
6 April 2026: Inheritance tax relief changes
A cap of £2.5 million will be introduced on Agricultural Property Relief (APR) and Business Property Relief (BPR).
The allowance will be transferable between spouses, a surviving spouse or civil partner, so they will be able to pass on up to £5 million of qualifying agricultural and business assets tax-free.
The cap was originally going to be £1 million but the government increased it following protests from farmers and business groups.
Read government guidance here.
October 2026: Employment Rights Act changes
According to the government’s implementation timetable, the following changes will be introduced in October 2026:
- Fire and rehire
- Bringing forward regulations to establish the Fair Pay Agreement Adult Social Care Negotiating Body
- Procurement – two-tier code
- Tightening tipping law
- Duty to inform workers of their right to join a trade union
- Strengthen trade unions’ right of access
- Requiring employers to take “all reasonable steps” to prevent sexual harassment of their
employees - Introducing an obligation on employers not to permit the harassment of their employees by third parties
- New rights and protections for trade union reps
- Employment tribunal time limits
- Extending protections against detriments for
taking industrial action
SMEWeb is covering the implementation of the Employment Rights Act throughout 2026 and beyond. Read government guidance here.
Autumn 2026: Digital Markets, Competition and Consumers Act 2024 (DMCCA)
This legislation will introduce changes to rules for subscription contracts, introducing mandatory clear pricing, cooling-off periods, renewal reminders, and straightforward cancellation. The aim is to stop “subscription traps” for consumers.