Calm & Confident - Making Tax Digital
A guide to the New Financial Year
As we approach the new financial year, there’s a lot shifting — tax, payroll, digital reporting and funding expectations.
At Perthshire Business Women’s Network, we recently welcomed Gavin Howie of Work Smarter Solutions, who shared clear, practical guidance on what’s changing and how small businesses can prepare calmly and confidently.
Here’s what matters most — and what to do now.
1. Making Tax Digital (MTD) – Sole Traders & Landlords
From April 2026, many sole traders and landlords will need to keep digital records and submit quarterly updates to HMRC.
This isn’t just a compliance shift — it’s a mindset shift. Yes, there are penalties for not complying. But there’s also opportunity: better visibility of cash flow, more accurate financial information, less year-end stress and more control over your numbers.
What to do now:
Check if your turnover meets the threshold.
Explore cloud accounting software.
Open a dedicated business bank account.
Separate business and personal spending.
2. Dividend Tax Changes – Limited Companies & CICs
From April 2026, dividend tax rates increase by 2 percentage points, while tax thresholds remain frozen. This means more income may drift into higher tax bands.
For many women running limited companies, this affects how you draw income from your business.
What to consider:
Reviewing your salary and dividend balance.
Checking whether dividend timing needs adjusted.
Budgeting for Companies House fee increases.
3. Employers – Minimum Wage & Employment Updates
Over the years minimum wage has contributed to creep up and it is worth noting the new rates as below.
April 2026 brings changes for employers, including increases to the National Living Wage and updates to employment rights such as Statutory Sick Pay from day one. The Employment Rights Act 2025 comes into force with notable clauses.
Key changes which may affect your business are:
• Statutory Sick Pay (SSP): from day 1 (no waiting days)
• Paternity & Parental Leave: become day-one entitlements
For small teams, even modest increases can affect your margins — so forward planning is essential.
Now is the time to:
Review contracts.
Forecast payroll costs.
Revisit pricing if needed.
Consider payroll software or outsourcing support.
4. CICs – Funding & Transparency
For CICs, the focus is increasingly on measurable impact and financial transparency. Funders now expect clear outcome tracking, strong governance and sustainable income streams.
Digital tracking tools are becoming essential for credibility and long-term resilience.
The Bigger Picture
Across all business types, digital compliance is becoming the norm. Cloud accounting is no longer just about HMRC — it’s about better decisions, reduced stress and stronger financial confidence.
A Simple Financial Year Checklist
Before 5 April:
Review your structure and income strategy.
Forecast staffing and wage increases.
Check your digital systems are fit for purpose.
Plan for additional compliance costs.
Schedule a financial planning session.
If you’d like continued support as you prepare for the year ahead, Perthshire Business Women’s Network runs regular events, expert sessions and peer learning opportunities designed to help women-led businesses grow with confidence. Keep an eye on upcoming PBN events and join us to stay informed, connected and supported – www.pbn.org .uk
Finally some further resources are below if you would like to find out more.
Additional Resources
FreeAgent 3-month Free Trial
This link offers a free 3-month trial of FreeAgent (even without connecting an eligible business bank account)
https://signup.freeagent.com/signup?referrer=BGD2024
Work Smarter Solutions Ltd YouTube Channel
https://www.youtube.com/@worksmartersolutionsltd
Making Tax Digital for Sole Traders & Landlords Video
https://youtu.be/fQg838_K4JA?si=2fCOlWaucySJfkI4
Companies House Changes
https://changestoukcompanylaw.campaign.gov.uk /changes-at-a-glance/
