Business Tax changes April 2026

A round up of the changes to the tax rates and rules affecting businesses…

Capital Allowances: From 6 April for income tax and 1 April for corporation tax the main rate of capital allowances will reduce to 14%.

A new 40% first year allowance for main rate assets was introduced from April 2026 for businesses unable to full expensing.

The 100% first year allowance for zero emission cars and EV charge points was also extended to April 2027.

Corporation Tax Penalties: From 1 April 2026 the late filing penalties will be doubled. £200 penalty for missing the filing deadline and a further £400 for those over three months late. Three successive returns more than three months late will incur a penalty of £2,000.

Closure of Free HMRC Corporation Tax filing portal: Commercial software will be needed by all businesses needing to file company tax returns from 1 April 2026. This includes any changes or amendments to previously submitted corporation tax returns or any rejected returns.

Vehicle Excise Duty:  From 1 April 2026, the standard tax rate for all petrol, diesel or hybrid cars registered after 1 April 2017 rises to £200. For expensive cars, priced over £40,000 (£50,000 for electric cars) when new, the VED rate is £640.

Electric cars will pay a first-year rate of £10, then will pay the standard rate of £200.

Vans under 3,500kg will pay £360 per annum and Motorcycles between £27 and £125 depending on cc, with zero emission bikes paying the base rate.

Business rates: Following the revaluation of commercial properties most business will see an increase in rates. However, from 1 April 2026 permanently lower business rate multipliers will apply for retail, hospitality, and leisure properties with rateable values below £500,000,

For 2026/27 only, targeted support for pubs and live music venues in England will provide 15% business rates relief. No other hospitality venues are covered by the measure.