April Business Update: Tax Changes, MTD and Business Advice from Birmingham Accountants
As experienced chartered accountants in Birmingham, Barnett Ravenscroft works with business owners, family businesses, landlords, directors and individuals who want clear, practical advice on tax, accounting, business planning and compliance.
In this April business update, we cover some of the most important issues affecting businesses and taxpayers as the 2026/27 tax year begins. This includes valuing your business, preparing for Making Tax Digital for Income Tax, changes to dividend tax, new HMRC reporting requirements for company directors, VAT on electric vehicle charging, EV charge point grants, approved mileage rates and key tax deadlines for April and May 2026.
For business owners looking for accountants in Birmingham, Edgbaston accountants, or family business advisors in Birmingham, this month’s update is particularly relevant. Many of the changes below affect owner-managed companies, close companies, directors, landlords and small to medium-sized businesses.
Valuing your business: what buyers look for and what you can do about it
If you are thinking about selling your business, whether that is in six months or six years, one of the first questions you will probably ask yourself is “what is it worth?”
While there are formulas designed to calculate the value of a business, in the end the answer to that question comes from a judgement call made by a prospective buyer who will be weighing up the risk and return of buying your business.
As Birmingham accountants and family business advisors, we often speak to business owners who are focused on the headline profit figure. Of course, profit does matter, but it is only one part of the picture. Buyers focus on how sustainable those profits are, how dependent the business is on you personally, and how easy it will be for them to step in and run it.
For owner-managed companies, family businesses and SMEs, valuation is rarely just about one number. It is about the strength, resilience and transferability of the business. If you are considering a future sale, succession plan, management buyout or family transfer, it is worth understanding what buyers and advisers will look for well before you go to market.
Here we set out some of the main factors that typically affect the value of a business and some practical suggestions on steps you can take to improve your position before you go to market.
How profits are assessed
A common technique for valuing small and medium-sized businesses is based on a multiple of maintainable profits. In practice, this usually calls for adjustments to the operating profits of the business.
The keyword is “maintainable” profits.
If last year’s profit includes a one-off insurance payout or an unusually large contract that has since ended, a buyer will strip that out.
Equally, if you run the business via a limited company and pay yourself a low salary and take the rest as dividends, a common scenario for tax-effective pay, a buyer will factor in the cost of replacing you with a manager who is fully paid on the payroll.
The more normalised and repeatable your profits look, the more confidence a buyer will have that they can repeat the same results if they buy the business.
For this reason, good management accounts, clean bookkeeping and consistent financial reporting are essential. If you are looking for an accountant in Birmingham to help you prepare your business for sale, the starting point is often making sure your figures are accurate, explainable and commercially useful.
A buyer will want to understand:
whether profits are rising, falling or stable;
whether margins are sustainable;
whether the business relies on unusual one-off income;
whether costs are realistic;
whether the owner is being properly replaced in the numbers;
whether future profits are likely to continue after completion.
For business owners, this is where proactive business tax advice in Birmingham and clear financial reporting can make a real difference.
Quality and predictability of income
Two businesses with identical profit levels can be valued differently depending on the way the businesses generate revenue.
Buyers tend to prefer:
Recurring income, such as subscriptions, service contracts, and repeat orders.
A spread of customers rather than one or two large ones.
Long-term contracts.
They are likely to worry about:
Reliance on a single major customer.
Work that must constantly be re-won.
Handshake agreements rather than written contracts.
This means that a software business with annual licences that are renewed automatically will usually attract a higher multiple than a project-based agency earning the same amount of profit but from one-off jobs.
If a buyer fears that revenue could fall away six months after completing a deal, they will either lower the price or insist on an earn-out.
For family businesses and owner-managed companies, this is an important point. A strong customer base, written contracts, repeat revenue and reliable order patterns can all make a business more attractive. As Birmingham business advisors, we would encourage business owners to look carefully at customer concentration and recurring income as part of any long-term value-building strategy.
Reliance on the business owner
This can be one of the biggest killers of value.
If you are the main salesperson, the technical expert, the relationship manager and the final decision-maker, the business will be hard to sell. From a buyer’s perspective, they would not be buying a business; they would be buying you.
Questions that a buyer might ask could include:
What happens if the owner leaves on day one after the sale?
Are systems documented or are they all in the owner’s head?
Can staff run the business without needing constant input from the owner?
Reducing your business’s dependence on you will increase the value of your business in the mind of a buyer.
This is especially important for family businesses, where knowledge, relationships and decision-making can often sit with one or two key people. As family business accountants in Birmingham, we regularly encourage clients to think about whether the business could run without them for a month, three months or longer. The more resilient the business is without the owner, the more valuable it is likely to be.
Strength of the management team and staff
A capable second-tier of management is a major plus for a business. Even having a small leadership team can make a big difference.
Buyers are likely to look at:
Staff turnover.
Whether key employees are tied in with contracts.
Whether knowledge is shared across the business or siloed in departments.
Should the business struggle if one key employee left, then this is going to make a buyer nervous.
Good systems, documented procedures and reliable people help demonstrate that the business is not fragile. This can be particularly useful when negotiating a sale price, planning succession or considering whether a management buyout may be an option.
Assets and balance sheet health
Some businesses have tangible assets and that adds some comfort to a buyer. For instance, these might include property, specialist equipment, vehicles or valuable stock.
Other businesses may be asset-light. This is fine, but working capital often then becomes more important.
A buyer may want to know:
How much cash is needed to run the business.
Whether debtors are slow to pay.
Whether there are any hidden liabilities, for instance, with tax, warranties or leases.
A balance sheet that shows old customer debts, director loans that go back years or unexplained balances creates uncertainty, which reduces the value of your business in the mind of a buyer.
This is where good accounting support matters. If you are looking for chartered accountants in Birmingham to help you prepare for a business sale, it is important to review not only profit and loss, but also the balance sheet, working capital, tax liabilities, director loans, debtors, creditors and any unusual balances.
Legal and regulatory compliance
Buyers and their advisers are likely to want to scrutinise:
Whether the business is compliant with filing accounts and tax returns.
VAT and PAYE history.
Employment contracts.
Any licences or regulatory approvals.
Should non-compliance in areas be found, this will increase the perceived risk for the buyer and affect how much they are willing to pay.
Late filings, unresolved HMRC issues, weak payroll records or unclear VAT treatment can all create uncertainty. For Birmingham businesses, having a reliable Birmingham chartered accountant involved early can help identify and resolve these issues before they become a barrier to sale.
Steps you can take to improve the value of your business
It is unlikely that you need to transform your business overnight. However, there are some practical steps that can be taken over time that consistently help.
Clean up the numbers. Make sure that your accounts are up-to-date, consistent and explainable.
Reduce the business’s reliance on you. Consider how you can delegate decision-making. Document the processes in your business, even where they seem obvious to you. Introduce your customers or clients to other team members.
Secure income where possible. Consider the ways that you could move customers onto contracts, retainers or subscription models.
Diversify your customer base. If one of your customers accounts for more than 25-30% of turnover, look at how you could take on more customers before selling the business.
Invest in systems. Customer Relationship Management (CRM) systems and job-tracking software, as well as written procedures, can help reduce risk for a buyer and make the handover smoother.
Retain key staff. Make sure that you have the right employment contracts in place and consider what incentives might be needed to keep important people in place through a sale.
Plan tax early. The structure of the sale, whether shares or assets, and your and a buyer’s personal circumstances can materially affect what you take home and what they have to pay. Considering this early can help you to make sure you know what your options are and how they might affect a potential sale.
The best outcomes in selling a business tend to come where the owner has started to think like a buyer well in advance of the sale, even if they are not ready to sell yet.
If you would like a realistic view of how your business might be valued or want to identify the specific issues that might affect a future sale, please get in touch. As accountants in Edgbaston and Birmingham business advisors, we would be happy to help you in working towards a sale that will be profitable and help you achieve your goals.
Making Tax Digital for Income Tax: go live
The commencement of Making Tax Digital for Income Tax is now live. This is the new 2026/27 tax year regime for self-employed individuals and landlords if they have business and/or property income, meaning total takings rather than net profits, of more than £50,000 per annum.
MTD requires digital record-keeping and quarterly updates to HMRC, with the first such update due by 7 August 2026.
The final MTD Regulations were laid before Parliament on 24 March 2026.
If you are one of the 860,000 individuals moving into the new regime, HMRC are also keen to stress that a normal annual tax return will still be required for the 2025/26 tax year. This means that in addition to providing HMRC with quarterly updates during the year to 5 April 2027, your annual 2025/26 tax return will still need to be filed by 31 January 2027.
We have been assisting our clients with the move to MTD. Please do reach out if we are not already planning your transition into this new digital regime.
For landlords, sole traders and self-employed individuals looking for Making Tax Digital accountants in Birmingham, this is now a live compliance issue rather than something in the distant future. If you currently use spreadsheets, paper records or manual bookkeeping, it is important to check whether your current system will be suitable under MTD.
As Birmingham accountants supporting landlords and business owners, we can help with:
checking whether MTD applies to you;
reviewing your current bookkeeping process;
moving you to MTD-compatible software;
preparing quarterly updates;
making sure your annual tax return still ties together correctly;
reducing the stress of digital reporting.
The move to Making Tax Digital is one of the biggest changes to income tax reporting for many years. Getting organised early will make the process far smoother.
What else is changing in the 2026/27 tax year?
It can be hard to keep track of tax changes, with the start of a new tax year often bringing new rates, allowances and other legislative changes. To make things easier, here is a list of the key tax changes that will take effect from April 2026.
For business owners, directors, landlords and individuals looking for tax planning in Birmingham, these changes are worth reviewing carefully.
Income Tax
In 2026/27 income tax rates, thresholds and bands generally remain at their 2025/26 levels. One key change from 6 April 2026 is the rate of income tax that applies to dividend income.
For dividends falling within a taxpayer’s £37,700 basic rate band, the rate increases to 10.75% from 8.75%.
For dividends in the higher rate band, from £37,701 to £125,140, the rate increases to 35.75% from 33.75%.
The rate of income tax on dividends above the additional rate threshold of £125,140 remains unchanged at 39.35%.
This is a key change for company directors, shareholders and owner-managed businesses. If you run a limited company and use dividends as part of your remuneration strategy, this is a good time to review whether your profit extraction remains tax-efficient.
Corporation Tax
The rate of tax, known as the ‘s455’ tax charge, on loans to ‘participators’, broadly shareholders, in ‘close companies’, broadly companies controlled by five or fewer participators, is set according to the dividend upper rate.
This means that the tax charge on loans that remain unpaid 9 months and 1 day after the accounting period end will increase to 35.75% for loans and advances made on or after 6 April 2026.
Another key corporation tax change is the new penalty amounts applicable to late-filed corporation tax returns. For returns with a due date that is on or after 1 April 2026, the penalties are:
Missed filing deadline
Penalty at new rate: £200
3 months late
Penalty at new rate: £400
Third consecutive failure, missed filing deadline
Penalty at new rate: £1,000
Third consecutive failure, 3 months late
Penalty at new rate: £2,000
These increased penalties make timely filing even more important. If you are searching for corporation tax accountants in Birmingham, or need help keeping your company tax returns, accounts and statutory filings up to date, this is an area where proactive support can help avoid unnecessary penalties.
Capital Gains Tax
The CGT rates applicable to gains qualifying for both Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) are set to increase again to 18% on 6 April 2026. The rates previously increased to 14% from 10% on 6 April 2025.
This is particularly relevant for business owners considering a sale, share disposal, business restructuring or succession plan. Tax planning before a disposal can make a significant difference to the final amount retained after tax.
VAT
From 1 April 2026, a new relief will exclude most donations of business goods to charities from the deemed-supply VAT rules.
VAT remains an area where mistakes can be costly, especially for growing businesses, retailers, property businesses and companies with mixed supplies. As VAT accountants in Birmingham, we can help review the VAT treatment of your goods, services, transactions and business activities.
Dividends: HMRC are watching
HMRC are continuing to increase the level of information they collect on dividends and transactions between close companies and their shareholders.
New consultation on reporting company payments to participators
Returning to corporation tax, a new consultation, ‘Reporting company payments to participators’ has been published, inviting views on proposals to introduce new requirements to report transactions between close companies and their participators to HMRC.
The government believes that the risk of error and tax evasion is greatest in close companies, where the legal distinction between the company and its participators is sometimes misunderstood, and the level of control can enable tax avoidance. HMRC's investigations have concluded that they are not receiving the full picture on how close companies interact with their participators.
Under the proposals, close companies will be required to provide HMRC with detailed information on transactions between the company and its participators, including:
Payments, via cash, bank transfer or otherwise.
Loan repayments and write offs.
Sales of assets to the company.
Purchases of assets from the company.
Dividends or other distributions.
Any other transfer of value from the company to the participator.
Salary and wage payments would not need to be reported under any new mechanism introduced, as they are already captured as part of PAYE reporting.
We are monitoring this development closely and will keep you updated as plans develop.
New dividend data being collected via 2025/26 self assessments
Finance Act 2024 introduced powers to enable the collection of additional data on income tax self-assessment and allowed for HMRC to specify the particular information required.
HMRC now have powers to collect additional information from company directors and, as a result, the 2025/26 self-assessment tax returns will require the following information:
If the taxpayer was a director of a company;
If the company was a close company;
The company’s name and registration number;
Dividends the taxpayer received from the close company during the tax year; and
The highest percentage shareholding that the taxpayer held during the tax year.
Combined with the above consultation and more detailed disclosure requirements for company accounts, we can see that HMRC will have increased access to information on dividends and director transactions. It will pay to make sure that dividend procedures are tight, lawful and compliant.
For company directors looking for dividend tax advice in Birmingham, this is an important development. Dividends should be supported by the correct paperwork, distributable profits, board minutes and dividend vouchers. Director loan accounts should also be carefully monitored and reconciled.
Please do contact us if we can assist in this regard.
VAT on public electric vehicle charging
In a recent VAT case, Charge My Street Ltd v HMRC [2026] TC09802, the First Tier Tribunal found that electric vehicle charging supplied at public charging stations qualified for a 5% reduced rate VAT charge. This ruling contradicts HMRC’s long-held policy that electric vehicle charging at public charging stations is subject to a standard 20% rate of VAT.
Charge My Street Ltd supplied electric vehicle charging at charging stations in public places in the North of England, which were installed and operated by the company. Charge My Street Ltd considered that VAT was due on the supplies at the reduced rate of 5%, which applies to supplies of fuel and power for, or deemed for, domestic use.
VAT legislation allows ‘domestic’ supplies of fuel and power to be reduced-rated at 5%. ‘De minimis’ supplies of electricity below 1,000 kWh per month are classed as domestic supplies.
The Tribunal found that when supplies were made to individual customers, they were below 1,000 kWh per month and therefore qualified for the 5% reduced-rating.
This ruling effectively removes the VAT disparity between reduced-rated electricity used to charge vehicles at home and the standard-rated electricity used to charge vehicles at public charging stations.
Does this mean we can expect to see a reduction in price at public charging stations? Unfortunately, not, or not yet. The Tribunal finding does not carry force of law and it is expected that HMRC will appeal. We will watch the case progress with interest.
This case also demonstrates how complicated VAT can be. If you have any doubt about the VAT rate you should be applying to your products and services, please do get in touch.
For businesses needing VAT advice in Birmingham, especially where goods, services, fuel, energy, vehicles or mixed supplies are involved, professional advice can help avoid errors and unexpected HMRC assessments.
Diary of main tax events: April and May 2026
Below are some key tax dates for April and May 2026. These dates may be relevant for companies, employers, directors, landlords, self-employed individuals and business owners.
1 April
Corporation Tax for year to 30/06/2025, unless quarterly instalments apply.
1 April
National Minimum Wage rate increases take effect.
5 April
End of the 2025/26 tax year – many tax planning actions need to have been taken by this date, including making use of 2025/26 allowances.
6 April
Start of the 2026/27 tax year. Updated tax rates, thresholds and statutory payment rates take effect.
6 April
Commencement of the Making Tax Digital for income tax regime.
19 April
PAYE & NIC deductions, and CIS return and tax, for month to 05/04/2026, due 22 April if you pay electronically.
30 April
Annual Tax on Enveloped Dwellings (ATED) returns and payment for the chargeable period starting on 1 April 2026.
1 May
Corporation Tax for year to 31/07/2025, unless quarterly instalments apply.
19 May
PAYE & NIC deductions, and CIS return and tax, for month to 05/05/2026, due 22 May if you pay electronically.
Keeping on top of tax deadlines is a key part of good business management. If you are looking for business accountants in Birmingham to help with tax compliance, payroll, VAT, corporation tax and filing deadlines, Barnett Ravenscroft can help you stay organised.
Boost in grants for installing EV chargers
The government has announced an over 40% increase in charge point grant amounts that will mean businesses, landlords and renters could save up to £500 on installing an electric vehicle charge point. Previously, the grant provided a discount of £350.
The uplift could cover almost half the typical installation costs and make it easier for EV users to access cheaper electricity rates at home or work to charge their EV. Schools will also be eligible for grants of up to £2,000 per socket.
Updates to the scheme will also simplify the current EV charge point support schemes available by reducing eight grant types down to five, which should make the system easier to navigate.
The electric car grant, which provides a discount on buying an EV, continues to be available. This can offer savings of up to £3,750.
Support is also available through local authorities for residents who do not have driveways to install discreet, embedded pavement channels, meaning those with on-street parking can install an EV charge point. This is in addition to the £500 installation grant.
EVs continue to receive preferential tax treatment, and this can also be worth exploring if you are considering buying a new vehicle.
For employers, landlords and company directors, EV tax planning can involve several areas, including capital allowances, benefit-in-kind rates, VAT, charging costs, workplace charging and employee vehicle policies. As Birmingham accountants supporting businesses and individuals, we can help you review whether EV investment is commercially and tax-efficiently worthwhile.
Review of approved mileage rates promised
The government has confirmed that it will review its approved mileage rates before a future Budget.
Many businesses use HMRC’s approved mileage rates to reimburse directors and employees for the cost of using their own vehicle when travelling for business. The current rates have not changed since 2011, although motoring costs have increased significantly in that time.
There is no indication when a review will take effect, with the government’s statement simply specifying ‘a future Budget’.
In the meantime, to inform its work it appears that the government will meet with people struggling with increased costs.
As a reminder, the current mileage rates, which remain unchanged for now, are:
Cars and vans
First 10,000 business miles in the tax year: 45p
Each business mile over 10,000 in the tax year: 25p
Motor cycles
First 10,000 business miles in the tax year: 24p
Each business mile over 10,000 in the tax year: 24p
Bicycles
First 10,000 business miles in the tax year: 20p
Each business mile over 10,000 in the tax year: 20p
Approved mileage rates are a common issue for employers, directors and employees using their own vehicles for business journeys. If your business needs help reviewing mileage claims, payroll treatment, company car policy or tax-efficient vehicle options, please get in touch.
Need business tax advice in Birmingham?
April 2026 brings a wide range of tax and business changes. From Making Tax Digital for Income Tax and dividend reporting to VAT on EV charging, business valuations, capital gains tax and corporation tax penalties, there is a lot for business owners and individuals to keep track of.
Barnett Ravenscroft is a firm of chartered accountants in Birmingham supporting businesses, families, directors, landlords and individuals with clear, practical and proactive advice.
Whether you are looking for:
accountants in Birmingham;
Birmingham accountants;
Edgbaston accountants;
a chartered accountant in Birmingham;
family business advisors;
Birmingham business advisors;
business tax planning in Birmingham;
VAT advice in Birmingham;
Making Tax Digital support in Birmingham;
company director tax advice;
family business accountants in Birmingham;
our team is here to help.
If any of the topics in this April business update affect you or your business, please get in touch. We would be happy to help you understand the rules, plan ahead and make confident decisions.