What the New Tax Year Means for Small Business Owners (2025/26 Update)
The new tax year begins on 6 April 2025, and with it comes a few key changes that small business owners need to be aware of. Whether you're a sole trader, a limited company director, or running a growing team, staying on top of these updates can save you time, money, and unnecessary stress down the line.
At RGR, we like to break things down simply—so here’s what is changing for 2025/26, and what you should do next.
1. Personal Allowance & Tax Bands
The personal allowance (the amount you can earn before paying income tax) remains £12,570, and the basic, higher, and additional rate thresholds haven't moved this year. That means your income tax might stay the same unless your income has changed.
Tip: If your income fluctuates year to year, a quick review with your accountant can help you make the most of allowances and avoid surprise tax bills.
2. National Insurance Changes
From April 2025, the Class 4 National Insurance rate for self-employed people has been reduced slightly, while Class 2 contributions have been scrapped altogether for most self-employed individuals.
What this means for you:
If you're self-employed, you may see a slight drop in your NI bill.
You still need to check your records for qualifying years if you're building up your state pension.
3. Making Tax Digital (MTD): Are You Ready Yet?
While MTD for Income Tax doesn't kick in until April 2026 for most, now is the perfect time to get your systems in place. MTD is all about good bookkeeping—which is where we come in.
We’re already helping clients:
Choose the right software (you don’t have to overcomplicate it!)
Set up digital records
Stay ahead of HMRC deadlines
4. Changes for Employers
The National Minimum Wage and National Living Wage increased from 1 April 2025. If you have employees, make sure your payroll reflects the new rates.
Key new hourly rates include:
National Living Wage (age 21+): £11.44
18–20-year-olds: £8.60
Apprentices: £6.40
Not sure if you're paying the right rate? We can check that for you—before HMRC does!
5. Get Ahead, Stay Ahead
The start of a new tax year is a great time to review your bookkeeping, check your software setup, and make a plan for the year ahead. If your finances felt messy last year, you don’t have to do it alone this time.
Need a Hand?
We’re here to help make this tax year simpler—from day-to-day bookkeeping to planning ahead for MTD.
Drop us a message or book a free discovery call to see how we can support you this year.
