5 important things to keep in mind this financial year

Running a business is never dull. Just when you think you’ve got your finances mapped out, a new tax year rolls in, the government makes a few announcements, and suddenly there’s more to think about than what’s for lunch.

Falling foul of any important tax or regulation changes could lead to costly outcomes for your business, so it’s vital you stay up to date with major financial news.

The good news? You don’t need to become a tax expert overnight.

A few key insights — and some smart planning — can go a long way in helping your business stay steady and grow.

Read on to discover five important things to keep in mind this financial year.

1. The economic outlook has shifted this financial year (and it matters)

Earlier forecasts around inflation were starting to look more positive, but global events have complicated things.

The ongoing conflict in the Middle East has contributed to renewed uncertainty in energy prices and supply chains, which in turn can keep inflation higher for longer than expected.

What does that mean for your business?

In simple terms: costs may stay unpredictable. Whether it’s fuel, raw materials, or supplier pricing, fluctuations could continue throughout the year.

Don’t worry though, there are steps you can take to protect your business, such as:

• Building flexibility into your pricing where possible

• Reviewing supplier contracts regularly

• Keeping a close eye on your margins, not just revenue.

  
  

This isn’t about panic; it’s about being prepared. Businesses that stay agile tend to weather uncertainty far better than those that don’t.

2. Making Tax Digital is becoming more, well…Digital

Making Tax Digital (MTD) became compulsory for all VAT-registered businesses in 2025 and with the start of the 2026/27 tax year, it has now been rolled out to sole traders, the self-employed, and landlords.

The importance of keeping thorough digital records and having tax return compatible software has never been greater.

If it applies to you or your business, you’ll need to keep all your income and expense records in approved formats and submit financial updates to HMRC every quarter.

While this might feel like “just another admin task,” it’s actually an opportunity in disguise.

Digital record-keeping can:

• Give you a clearer, real-time view of your finances

• Reduce errors in reporting

• Make working with your accountant smoother (and often cheaper).

  
  

You might want to consider:

• Checking whether your current systems are MTD-compliant

• Switching to cloud-based accounting software if you haven’t already

• Setting aside time each week to keep records up to date (future you will be grateful).

  
  

It might take a little adjustment now, but it can save a lot of stress later, especially around deadlines.

3. Dividend Tax still needs careful planning

If you’re a director paying yourself through dividends, tax planning remains as important as ever.

Dividend allowances have been reduced in recent years, meaning more of your dividend income could now be subject to tax. While the system itself hasn’t dramatically changed this year, the impact is being felt more widely as thresholds tighten.

Here’s what you could do:

• Review how you’re paying yourself (salary vs dividends).

• Work with an accountant to ensure you’re tax efficient.

  
  

A little forward planning here can make a noticeable difference to your take-home income.

4. Corporation Tax and Capital Gains: know where you stand

Corporation Tax rates remain higher for many businesses compared to a few years ago, particularly for those with stronger profits.

At the same time, Capital Gains Tax (CGT) allowances have been reduced over the past few years (from £12,300 to £3,000). That means you may now be paying tax on gains that might previously have been tax free.

You should also be aware that the Business Asset Disposal Relief (BADR) — used when selling all or part of your business — has become less generous, with the tax rate increasing to 18%.

The combination of these changes means it’s more important than ever to understand your longer-term financial position, not just what’s happening this quarter. You might want to spend time:

• Forecasting your profits and expected tax liabilities early

• Speaking to a professional before making big financial decisions (like selling assets)

• Factoring tax into any growth or expansion plans.

  
  

Remember: It’s not about avoiding tax — it’s about avoiding surprises.

5. Employment and payroll changes add pressure

Employment costs continue to be a key consideration for small-to-medium enterprises (SMEs). With changes such as increases to the National Living Wage and adjustments to National Insurance, payroll expenses can quietly creep up.

For many businesses, your team is your biggest asset but can also be your biggest cost.

A few simple steps could help you avoid headaches down the line, such as:

• Reviewing your payroll regularly to understand your true costs

• Factoring wage increases into your pricing strategy

• Exploring productivity improvements or training that help you get more value from your team.

  
  

It’s a balancing act: supporting your people while keeping your business sustainable.

Be proactive: take steps to protect your business in the short term, so you can see success in the long term

Alongside these five key areas, there are a few fundamentals that can help protect your business, whatever 2026 might throw at you.

1. Build an emergency fund

Even a small financial buffer can make a big difference when unexpected costs arise or income dips.

Read more: How to Build a Cash Buffer to Prepare for Unexpected Expenses

2. Keep your cash flow front and centre

Profit is important, but cash is what keeps the lights on. A clear, regularly updated cashflow forecast helps you spot issues before they become problems.

3. Don’t wait too long to seek support

If you think you might need additional funding, it’s always better to explore your options early rather than when things become urgent. A well-timed Business Loan could be the solution.

We’re here to help you navigate problems and find the funding needed to succeed — get in touch today!

If the past few years have taught us anything, it’s that running a business requires resilience, adaptability…and occasionally, a really strong cup of coffee.

While economic headlines can feel daunting, they don’t define your business. The decisions you make, the plans you put in place, and the support you seek all play a much bigger role.

If you’re looking to strengthen your cash flow, invest in growth, or simply give your business a bit more breathing room, a Business Loan could be part of the solution.

Get in touch with one of our advisors today by completing our enquiry form or by giving us a call at 0345 602 7355.

We’re here to help you explore your options, talk things through in plain English, and find a path that works for you.

Please note:

This article is for general information only and does not constitute advice. All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All content is based on our understanding of HMRC legislation, which is subject to change.

We always recommend that you seek direct financial advice from a relevant expert or professional before making any financial decisions.

The Financial Conduct Authority does not regulate tax planning.

First Enterprise is a not-for-profit finance provider offering unsecured loans from £500 to £250,000 for start-ups and growing businesses across the UK.

We support businesses that struggle to access mainstream finance, with a focus on underrepresented groups. Funding is delivered through government-backed national and regional programmes. 

We offer human-made lending decisions, a dedicated advisor for every applicant, and no penalties for early repayment.