Money Matters

Spring Statement 2026: What it means for your business

Learn what the Chancellor’s announcement on 3 March 2026 means for your business.

3 March, 20267 min read Share

The Chancellor’s Spring Statement on 3 March 2026 was deliberately low-key. Unlike a full Budget, it served as a progress check on the UK economy rather than a platform for sweeping new tax measures.

The government had already said it’s committed to one major fiscal event per year, reserving significant policy changes for the Autumn Budget in November.

However, “no new announcements” does not mean “nothing to prepare for.”

A raft of previously confirmed changes take effect soon, from April 2026. Together they add up to a notable shift in costs and compliance requirements for small businesses.

Here’s what we discuss in this article:

Making Tax Digital for Income Tax

From 6 April 2026, sole traders and landlords with qualifying income above £50,000—and who are currently using the Self Assessment system—must keep digital records and submit quarterly updates to HMRC using MTD-compatible software.

We’ve talked about MTD a lot here at Sage Advice so, rather than repeat ourselves, here are some in-depth resources where you can learn more (although you can also view our MTD topic tag):

• MTD for Income Tax: What it means for trades and skilled workers
• Free e-book: MTD for Income Tax—A guide to switching from Self Assessment
• Am I excluded or digitally exempt from MTD for Income Tax?

Research suggests that only around 30% of those affected are currently aware of MTD requirements.

With quarterly submissions and digital record-keeping becoming mandatory, the administrative burden is real, particularly for sole traders and landlords who manage their own books.

What this means for businesses

If your qualifying income exceeds £50,000, you probably already have HMRC-compatible software in place and should be keeping digital records.

If you’re not using software, you should find some as a matter of urgency (did you know Sage offers free MTD software?). Furthermore, make sure you use it to track income and expenses. With technology such as data entry automation, AI like the Sage Copilot digital assistant, and bank feeds, this has never been easier.

Speak to your accountant and bookkeeper now about the quarterly submission process. If they currently handle all of your accounting and tax for you, then they might be able to continue doing so—but you’ll need to hand them your paperwork every three months, rather than every twelve months.

If you fall into the £30,000–£50,000 bracket, use this year to get your systems ready ahead of the April 2027 deadline. Do not wait until the last minute. And if your qualifying income is £20,000 or more, then don’t forget you’ll have to use MTD for Income Tax as of April 2028.

Employer National Insurance contributions, and wage increases

The Spring Statement 2026 does not introduce any new National Insurance contribution (NIC) changes. The key employer NIC changes you need to be aware of were announced previously and apply from April 2026, so make sure you check the latest HMRC rates and thresholds for the 2026/27 tax year before running your first payroll of the year.

We’ve covered this already here on Sage Advice, and you might find the following two articles useful:

• Budget 2025: What your business needs to know, and do
• How to calculate UK payroll taxes in 2026: A step-by-step guide for small business owners

In summary, the employer secondary Class 1 NIC rate sits at 15%, and the secondary threshold stays at £5,000 per year until 5 April 2028.

Note that income tax and NIC thresholds for employees are frozen until April 2031.

From 1 April 2026, the National Living Wage for those aged 21 and over rises from £12.21 to £12.71 per hour, a ~4.1% increase. The rate for 18–20-year-olds rises to £10.85 per hour, and the rate for 16–17-year-olds and eligible apprentices increases to £8.00 per hour.

What this means for businesses

Update your payroll systems before April to reflect the new rates.

If you employ staff at or near the minimum wage, model the impact on your total wage bill. For businesses operating on tight margins, this is a good time to review pricing, scheduling, and productivity to absorb the increase.

Furthermore, check whether your business is claiming the Employment Allowance, which can reduce your annual employer NIC bill by up to £10,500.

Review your payroll costs in light of the lower threshold and consider how this affects hiring decisions. Budgeting for the full cost of employment, not just gross salary, is essential.

Business rates

New rateable values take effect from 1 April 2026, meaning business rates bills may change for many premises.

Pubs and music venues in England benefit from a 15% business rates discount for 2026–27, with rates capped at inflation for a further two years.

For most other small businesses, however, rates are expected to increase. Remember that rates are collected by local authorities, and they administer reliefs and exemptions. The government offers a service to calculate rates.

We covered all of this in depth in our Autumn Budget 2025 article here at Sage Advice.

What this means for businesses

Check your new rateable value on the Valuation Office Agency website and challenge it if you believe it is incorrect.

If you run a pub or music venue, confirm that the 15% discount has been applied to your bill. All businesses should factor the updated rates into their cash flow forecasts for the year ahead.

SME lending

Although not linked to the Spring Statement, the government has just announced an £11 billion SME lending package backed by five major banks: Barclays, Lloyds Banking Group, NatWest, HSBC UK, and Santander UK.

This is intended to support business growth and help small businesses access the finance they need to invest.

What this means for businesses

If you are planning capital investment, expansion, or need working capital to manage rising costs, explore the lending options available through these banks.

Prepare a clear business case and up-to-date financial records to strengthen any application. Some software, such as Futrli by Sage, makes it easier to prepare “board packs” for this kind of situation.

Business Asset Disposal Relief

The Capital Gains Tax rate on gains qualifying for Business Asset Disposal Relief (BADR) increases from 14% to 18% from 6 April 2026.

The lifetime limit remains capped at £1 million.

This is relevant to any business owner planning to sell or wind down their business, as it increases the tax payable on qualifying disposals.

What this means for businesses

If you are considering selling your business or transferring assets, review the timing with your tax adviser.

Transactions completed before 6 April 2026 will benefit from the lower 14% rate. For longer-term plans, factor the higher rate into your exit strategy.

Employment Rights Act changes

Major reforms under the Employment Rights Act are scheduled to start taking effect from April 2026, including changes to statutory sick pay and paternity leave. Some areas, such as the regulation of zero‑hours contracts, still depend on secondary legislation, so the detailed rules and exact start dates may shift.

We have discussed this in our payroll year end articles here at Sage Advice, so start there if this is new to you:

• Payroll year end checklist 2025/26: What your business needs to do
• How to calculate UK payroll taxes in 2026: A step-by-step guide for small business owners

What this means for businesses

Review your employment contracts and staff handbooks to ensure they are up to date. If you use zero-hours contracts, keep an eye on developments as secondary legislation for zero-hours is finalised.

Final thoughts: Looking ahead

The Spring Statement 2026 confirmed the government’s focus on economic stability, growth, AI adoption, and tackling youth unemployment.

While no new tax measures were announced, the cumulative weight of previously confirmed changes means April 2026 is a busy month for small businesses. Rising employment costs, new compliance obligations, and shifting tax reliefs all demand attention.

The most important step any small business owner can take right now is to review how these changes affect their specific circumstances. Speak to your accountant, update your systems, and plan ahead. A proactive approach will put you in the strongest possible position for the year ahead.