Tax and accounting round-up: developments shaping the year so far

The opening months of 2026 have already seen a range of tax and accounting developments across the UK, setting the context for the remainder of the year.

From April’s policy updates through to ongoing shifts in HMRC’s compliance approach, businesses, landlords, and individuals are operating within an evolving regulatory and reporting environment.

Rather than a single set of reforms, 2026 so far has been characterised by a series of incremental updates across different areas of the tax system.

At Verallo, we’ve been supporting clients in understanding and applying these changes in practice.

This summary sets out the key developments seen so far this year.

Dividend tax changes continue to affect owner-managed businesses

One of the most significant updates came into effect in April 2026, with dividend tax rates increasing across all bands.

For owner-managed businesses that use dividends as part of their remuneration structure, this has affected overall tax calculations and wider planning considerations. Combined with frozen tax thresholds and related policy updates, many directors are now reassessing the balance between salary, dividends, and retained earnings in line with current tax rates and allowances.

These adjustments form part of ongoing tax planning activity as businesses review how profits are extracted.

Frozen allowances continue to influence income tax outcomes

The Personal Allowance remains fixed at £12,570 for the 2026/27 tax year.

As income levels change over time, the fixed threshold results in a larger proportion of earnings being taxed at higher rates for some taxpayers. This is a direct consequence of the interaction between static allowances and variable income levels.

This has been a relevant consideration in personal tax planning and payroll structuring for both individuals and businesses.

Property, savings, and inheritance tax developments

From 2027 onwards, changes to the taxation of savings income and property-related profits will come into effect, seeing an increase in the tax rate by 2% across all tax bands.

These measures will increase tax charges for affected income streams and are expected to be most relevant for individuals with investment property portfolios or significant savings income.

Further developments include pensions falling into the remit of IHT from April 2027 and business and agricultural reliefs being set at £2.5 million allowance (up from the original proposal of £1 million) for unquoted business and agricultural assets from April 2026.

The end of homeworking relief signals a policy adjustment

The removal of the flat-rate homeworking allowance from April 2026 marked the end of a temporary measure introduced during the period of increased remote working.

Although relatively modest in value, the change reflects a shift back towards standardised expense rules and defined eligibility criteria for employee claims.

For employers operating hybrid working arrangements, this has required updates to expense policies and payroll processes where applicable.

HMRC enforcement is increasingly data-driven

HMRC continues to develop its use of data matching and analytics in compliance activity.

This includes cross-referencing information from financial institutions, employers, digital platforms, and other third-party reporting sources to identify discrepancies and support compliance activity.

The use of data-led systems has increased the level of automated review within the tax system, particularly in cases involving multiple income sources or complex reporting structures.

Making Tax Digital is progressing through implementation phases

Making Tax Digital (MTD) continues to be implemented across different taxpayer groups.

For sole traders and landlords, this involves a transition towards more frequent digital record-keeping and submission requirements compared with annual self-assessment processes.

The change also involves increased use of accounting software and structured digital reporting systems.

Compliance requirements and filing penalties have been updated

Penalties for late filing and certain compliance failures in relation to company tax returns have been increased in 2026.

This has been incorporated into standard filing and reporting requirements, reinforcing existing deadlines and submission processes.

As a result, businesses continue to place emphasis on maintaining timely financial records and meeting statutory filing dates.

Helping you to look ahead

For businesses and individuals, looking ahead involves ongoing review of tax positions and reporting processes in line with current legislation and administrative requirements.

At Verallo, we continue to support clients in interpreting and applying these updates within their wider financial and operational planning. Get in touch to discuss your position.