September business update: Budget 2026, Making Tax Digital, Benefits In Kind, cyber security and business cost planning
As experienced chartered accountants in Birmingham, Barnett Ravenscroft supports businesses, company directors, employers, landlords, sole traders and SMEs with practical accounting, tax and business advice.
In this September business update, we look at several important developments affecting UK businesses and taxpayers. These include the confirmed date of Budget 2026, the first quarterly statistics for Making Tax Digital for Income Tax, mandatory payrolling of Benefits In Kind, cyber security warnings for SMEs with internet-exposed systems, and wider economic pressures linked to borrowing costs, oil prices, Artificial Intelligence and inflation.
For anyone looking for accountants in Birmingham, Birmingham accountants, Edgbaston accountants, chartered accountants in Birmingham, business tax advice Birmingham, Making Tax Digital support Birmingham, payroll support Birmingham, company director tax advice, family business advisors or Birmingham business advisors, these updates highlight the importance of planning ahead and seeking timely advice.
Date of Budget 2026 announced
The Chancellor of the Exchequer, John Healey, has announced that Budget 2026 will be presented on 28 October 2026.
Announcing the date, the Chancellor said that the Budget will “move money and power out of Westminster, and into every postcode around Britain”. He also stressed that the government would continue to meet its fiscal rules, adding that the Budget would provide businesses and families with the stability they need to plan for the future.
Alongside the Budget, the Office for Budget Responsibility will publish its latest economic and fiscal forecast, reflecting its assessment of the government’s plans.
For business owners, company directors, employers and individuals, the Budget is always an important point in the tax calendar. Announcements may affect corporation tax, personal tax, National Insurance, VAT, capital allowances, business investment, payroll, employment costs and wider economic planning.
As chartered accountants in Birmingham, Barnett Ravenscroft will be monitoring the Budget closely and will provide full coverage and analysis of the announcements as details emerge.
Why Budget planning matters for businesses
A Budget can affect businesses in several ways. Even where tax rates do not change immediately, announcements can influence planning decisions, investment timing, cash flow forecasts and director remuneration strategies.
For owner-managed businesses, family businesses and SMEs, areas to watch may include:
Corporation Tax changes
Dividend tax and director remuneration
Employer National Insurance Contributions
Capital allowances and investment reliefs
VAT changes
Business rates
Payroll and employment costs
Pension and savings rules
Tax administration and HMRC compliance
Good planning before and after a Budget can help businesses understand risks, prepare for changes and avoid rushed decisions.
If you have concerns about how you may be affected by existing or proposed tax measures, please get in touch. We would be happy to discuss your circumstances and help you understand the implications.
Making Tax Digital for Income Tax: first quarter statistics published
Under Making Tax Digital for Income Tax, sole traders and landlords with income of more than £50,000 have been required to keep digital records and send quarterly updates to HMRC since 6 April 2026.
The first quarterly submission deadline, covering the first three months of the 2026-27 tax year, passed on 7 August 2026. HMRC have since confirmed that 436,000 taxpayers filed their first quarterly tax update by the deadline.
HMRC’s press release also confirmed that, as of 12 August 2026, more than 570,000 taxpayers had signed up for Making Tax Digital for Income Tax.
However, HMRC had previously estimated that around 864,000 taxpayers would need to sign up from April 2026. This means a significant number of taxpayers who should have registered for Making Tax Digital for Income Tax had still not signed up.
For sole traders, landlords and self-employed individuals, this is an important reminder that Making Tax Digital should not be ignored.
HMRC to begin signing up taxpayers
From September, HMRC will begin signing up taxpayers who are required to use Making Tax Digital for Income Tax for 2026-27, but who have not yet registered for the service themselves.
Taxpayers can avoid being signed up by HMRC by signing themselves up now and ensuring their Making Tax Digital details are correct from the outset.
If you receive a letter from HMRC about being signed up, please let us know. We can help you navigate the sign-up process and understand what needs to happen next.
As Birmingham accountants supporting sole traders and landlords, we know that Making Tax Digital represents a significant shift in how tax records are kept and submitted. Businesses and landlords need to make sure they have suitable software, accurate records and a clear process for quarterly updates.
Who needs to comply with Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is a legal requirement for sole traders and landlords earning more than £50,000 from self-employment and property, unless they are exempt.
Exemptions may apply in limited cases, for example where a taxpayer is digitally excluded.
Taxpayers should also remember that the threshold will reduce from April 2027. From that point, those earning more than £30,000 from self-employment and property will be required to comply.
This means many more landlords, sole traders and small business owners will come within the regime.
For anyone searching for Making Tax Digital support Birmingham, this is a good time to review whether the rules apply, whether your records are digital, and whether your software is suitable.
Making Tax Digital penalties
HMRC have confirmed that there will be no penalty points for late quarterly updates in 2026-27. However, penalties will still apply for late tax returns and late payments.
It is also important to remember that quarterly updates do not replace the Self Assessment tax return.
Taxpayers within Making Tax Digital for Income Tax must submit their quarterly updates in order to file their tax returns by 31 January.
A points-based penalty system will be introduced from 6 April 2027. Taxpayers will receive one point for each missed quarterly deadline and a £200 fixed penalty once four points have accumulated.
If you have not yet registered for Making Tax Digital for Income Tax and are concerned that it may apply to you, or if you receive a letter from HMRC about registering, please contact us as soon as possible so we can help you assess your obligations.
Benefits In Kind: mandatory payrolling from 6 April 2027
Mandatory payrolling of Benefits In Kind will begin from 6 April 2027, with a phased introduction designed to give employers and payroll providers time to adapt.
Under the first phase, covering the 2027/28 tax year, mandatory payrolling will apply to:
Company cars
Company car fuel
Vans
Van fuel
Private medical benefits
These benefits will need to be reported through payroll in real time rather than being reported after the end of the tax year on form P11D.
This is a major change for employers who currently deal with employee benefits through annual P11D reporting.
Phase two from April 2028
Mandatory payrolling will then be extended to most other benefits and expenses from April 2028.
HMRC has confirmed that employers will be able to register voluntarily from November 2026 to payroll other benefits not included in the first phase, such as beneficial loans and living accommodation.
The move to real-time reporting will affect both employers and employees. Employees who currently pay tax on benefits through adjustments to their tax codes will instead pay the tax in real time through PAYE.
Some employees may also be paying tax on Benefits In Kind from earlier years at the same time, which could create confusion about their take-home pay. HMRC is encouraging employers to communicate these changes well in advance.
For businesses looking for payroll support in Birmingham, this is an important area to prepare for early.
What should employers be doing now?
If you have employees receiving Benefits In Kind, now is the time to start preparing.
Employers should consider:
Compiling a complete list of all benefits currently reported on P11Ds
Reviewing whether payroll software can support real-time Benefits In Kind reporting from April 2027
Considering how joiners, leavers and changes in benefit values will be handled during the year
Establishing procedures for managing underpayments and overpayments
Developing an employee communication plan explaining how the changes will affect tax deductions and tax codes
Although the first mandatory reporting deadline is still several months away, employers that start preparing now are likely to face a much smoother transition when the new regime takes effect.
As Birmingham accountants and business advisors in Birmingham, Barnett Ravenscroft can help employers review payroll processes, Benefits In Kind reporting and P11D procedures.
SMEs warned on all internet-exposed systems
Small and Medium-Sized Enterprises have been warned that disruptive cyber attacks are going beyond computers and into manufacturing and processing systems.
The National Cyber Security Centre has seen a concerted and increased number of attacks on Operational Technology in numerous sectors, both globally and domestically. These attacks have had real-world effects.
Operational Technology includes the hardware and software systems that monitor, control and automate infrastructure and processes across a variety of sectors.
This may include systems used in manufacturing, engineering, production, processing, utilities and other operational environments.
Why Operational Technology matters for SMEs
Many businesses think of cyber security as an office IT issue. They may focus on email security, passwords, computers, cloud storage and financial systems.
However, the National Cyber Security Centre warning highlights that businesses also need to think about operational systems, connected equipment, older hardware, manufacturing technology and internet-exposed devices.
The National Cyber Security Centre is warning that organisations should not assume their equipment is not internet-exposed.
Without organisations testing legacy structures, older equipment or misconfiguration, systems can be easier to exploit for state and non-state actors.
For manufacturers and businesses using connected systems, this is a significant business risk. A cyber attack could disrupt production, halt operations, affect customer delivery, damage data, increase costs and threaten business continuity.
Practical cyber security steps for businesses
The National Cyber Security Centre has outlined a series of steps that businesses should consider.
Companies should examine all their:
Programmable Logic Controllers
Industrial Control Systems
Supervisory Control and Data Acquisition systems
External connections
Legacy equipment
Management interfaces
Web interfaces
Operational networks
Businesses should build a definitive view of their Operational Technology architecture, including all assets, communication pathways and external connections. This can help identify internet-exposed systems, unmanaged assets and legacy connectivity that may introduce risk.
Organisations should also ensure Operational Technology devices are not directly exposed to the public internet.
Default credentials should be changed, shared passwords should be avoided and unique administrator accounts should be used. Multi-factor authentication should be enabled wherever supported.
The National Cyber Security Centre also recommends segregated management networks, monitoring of connectivity to and within Operational Technology networks, and ensuring that Programmable Logic Controllers are not left in programming or maintenance modes.
Backups and recovery procedures should not only exist, but also be tested. Many organisations are diligent about backing up data but encounter problems when trying to restore it.
Cyber security as a business continuity issue
Cyber security should not be seen as only an IT department issue.
For many SMEs, it is a business continuity, risk management and financial planning issue. A cyber incident can affect trading, cash flow, supplier relationships, customers and reputation.
Businesses should consider whether cyber security risks are reflected in:
Risk registers
Insurance policies
Business continuity planning
Disaster recovery procedures
Supplier management
IT budgets
Operational planning
Board-level reporting
As business advisors in Birmingham, Barnett Ravenscroft encourages SMEs to think about cyber risk as part of wider business resilience and financial planning.
Bonds, oil and AI: planning for uncertainty
Recent economic signals suggest businesses should continue to plan carefully for the possibility of higher costs and borrowing costs.
The article notes that Andy Burnham’s first visit to take Prime Minister’s Questions in Parliament came as the country’s 10-year borrowing costs rose to levels only seen during the credit crisis.
It also notes that the yield on a 30-year gilt hit 5.89%, the highest level since 1998.
While Mr Burnham sought to reassure political opponents and the City of London that his government would maintain fiscal responsibility, pointing out that Britain was cutting its deficit faster than any other G7 country, the effective cost of borrowing is likely to grow.
For companies and households, higher borrowing costs can create pressure. The article notes that Mr Burnham did not rule out further tax rises in the upcoming October Budget, if only to maintain current government expenditure.
Government debt and borrowing costs
Debt levels are another concern highlighted in the article.
UK debt levels are said to stand at 98.2% of Gross Domestic Product, their highest since 1960. This can make bond buyers nervous.
The article also notes that wider market pressures are not limited to the UK. Debt levels in the US are at 120%, and many countries in the European Union have debt levels in excess of 100%.
The UK can no longer rely on the domestic pensions industry and insurers to be the same level of buyers of gilts that they once were. In 2000, nearly 70% of gilts purchased were bought by this sector. That has fallen to around 20%.
The global reality is that borrowing costs in US, Japanese and European bond markets have seen multi-decade highs in market interest rates. Investors have more choice when buying government debt and are becoming more selective when assessing macroeconomic risk.
For businesses, this matters because government borrowing costs, interest rates and investor confidence can affect wider lending conditions. Businesses with loans, overdrafts, finance agreements, property borrowing or planned investment may need to review the potential impact of higher borrowing costs.
Artificial Intelligence and financial risk
The article also highlights concerns around Artificial Intelligence.
Andrew Bailey, the Governor of the Bank of England, has warned G20 finance ministers that Artificial Intelligence could cause a global economic downturn.
Apart from cybersecurity risk to financial systems, the article notes that AI and AI-related projects have been attracting very high levels of investor funding. Much of this investment has come from credit markets and debt financing.
The article also refers to concerns about over-priced stock markets, increased borrowing by retail and institutional investors and a concentration of money into a small number of major technology companies.
These are described as elements of global economic risk.
For businesses, Artificial Intelligence may bring opportunities, but it may also contribute to volatility in investment markets, technology spending and financial conditions.
This reinforces the importance of sensible forecasting, careful borrowing and realistic business planning.
Oil, energy prices and inflation
Energy costs are another area to watch.
The article notes that the conflict with Iran has so far had little impact on the UK. Expected oil price rises have not been fully realised, as China has reduced demand and other producers have increased production.
However, the closure of the Strait of Hormuz is expected to begin to bite and affect UK energy prices.
The article also states that North Sea gas prices have more than doubled this year. The UK gets about half of its gas from the North Sea, with the rest from Norway and the USA. Currently, the price of natural gas in Britain is eight times higher than in the USA.
With rising energy costs, inflation may increase, followed by interest rates.
For businesses, higher energy costs can affect margins, pricing, cash flow, wages, transport costs, production costs and customer demand.
Why forecasting matters in uncertain conditions
Periods of uncertainty can create opportunities, but they also increase the need for careful planning.
Businesses should consider reviewing:
Cash flow forecasts
Cost forecasts
Borrowing costs
Energy contracts
Supplier pricing
Customer pricing
Profit margins
Working capital requirements
Investment decisions
Debt repayment plans
A business does not need to be large to benefit from forecasting. Small businesses, family businesses and owner-managed companies can often make better decisions when they have clear, up-to-date financial information.
As Birmingham accountants and family business advisors, Barnett Ravenscroft can help businesses review costs, understand margins, assess borrowing and plan ahead.
If you need help forecasting costs or exploring ways to reduce borrowing costs, please contact us. We would be happy to help.
What should businesses take from this September update?
This month’s update highlights several important themes for businesses.
Budget 2026 is now confirmed for 28 October 2026, so businesses should be ready to review any tax, payroll or economic announcements that may affect them.
Making Tax Digital for Income Tax is already live for many sole traders and landlords, and HMRC will begin signing up taxpayers who have not registered.
Mandatory payrolling of Benefits In Kind is approaching, and employers should prepare their payroll systems, employee records and communication plans.
Cyber security risks are increasing beyond office IT systems, with operational and internet-exposed systems now a particular concern.
Economic uncertainty around borrowing costs, debt levels, energy prices, oil, inflation and Artificial Intelligence means businesses should continue to review cash flow and forecasts carefully.
For businesses looking for accountants in Birmingham, Birmingham accountants, Edgbaston accountants, chartered accountants in Birmingham, business tax advice Birmingham, Making Tax Digital support Birmingham, payroll support Birmingham, corporation tax accountants in Birmingham or Birmingham business advisors, these updates show the value of proactive advice and year-round planning.
Need advice from Birmingham accountants?
Barnett Ravenscroft Chartered Accountants, based in Edgbaston, Birmingham, provides practical accounting, tax and business advice to companies, directors, employers, landlords, sole traders and family businesses.
Whether you need help with:
Budget 2026 planning
Making Tax Digital for Income Tax
Digital record keeping
Self Assessment
Landlord tax
Sole trader accounts
Payroll and Benefits In Kind
P11D reporting
Company director tax advice
Corporation tax
Business forecasting
Cash flow planning
Borrowing cost reviews
Business continuity planning
Family business advice
SME accounting and tax support
our team is here to help.
If any of the topics in this September business update affect you, your business or your employees, please get in touch. We would be happy to help you understand the rules, plan ahead and make confident decisions.