A new tax year brings a new compliance reality. April 2026 is a landmark month for UK businesses as Making Tax Digital goes live, the Construction Industry Scheme tightens, and the Employment Rights Act 2025 starts reshaping the workplace. Here is what you need to know, and what to do about it.
1. New Tax Year 2026/27: Rates, Wages and SSP
Income tax thresholds remain frozen until 2028, with the Personal Allowance at £12,570, the basic rate ceiling at £50,270, and employer NICs holding at 15% with the secondary threshold at £5,000. The National Living Wage rises to £12.71 per hour for workers aged 21 and above, and Statutory Sick Pay is now payable from day one, with lower earners receiving 80% of average weekly earnings and those above the threshold receiving £123.25 per week.
2. Making Tax Digital for Income Tax: Now Mandatory
MTD for Income Tax Self Assessment is live from 6 April 2026 for sole traders and landlords with qualifying gross income above £50,000, requiring digital records and four quarterly updates plus a Final Declaration by 31 January. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028, with a penalty-free period for quarterly updates applying throughout 2026/27.
3. Construction Industry Scheme: Tighter Rules from 6 April
The CIS has been tightened to tackle fraud across construction supply chains. Three key changes are now in force.
- Mandatory NIL returns reinstated: contractors with no subcontractor payments in a tax month must file a NIL return unless HMRC has been pre-notified.
- Public body payments exempt: payments to local authorities and qualifying public bodies are fully removed from CIS.
- Strengthened anti-fraud powers: HMRC can act where a contractor knew or should have known a payment was linked to non-compliance, with immediate loss of Gross Payment Status, a five-year reapplication ban, and personal liability for directors.
4. Employment Rights Act 2025: April 2026 Changes
From 6 April 2026, paternity leave and unpaid parental leave become day-one rights, removing the previous 26-week service requirement. The protective award for collective redundancy failures doubles to 180 days’ pay, sexual harassment now qualifies as a whistleblowing disclosure, and further reforms on zero-hours workers follow in 2027.
Managing this level of change demands capacity. At Agility Outsourcing, we provide skilled, flexible support across payroll, bookkeeping, HR administration and compliance, so UK businesses can absorb new obligations without adding permanent headcount. Get in touch to find out how we can help.
