4 recent legislative changes that could affect your business planning

Running a business means you have to keep on top of ever-changing legislation that can affect your profits.

It’s important to stay up to date with any new laws and regulations to ensure your business and financial plan are prepared.

Here are four recent changes that you should be aware of.

1. Business rates have changed

Business rates are a local tax on non-domestic properties.

From 1 April this year, the business rates system in England and Wales saw some of its biggest reforms in years.

The previous two-tier multiplier system was replaced with different rates based on a property’s use and rateable value, which is the annual rent your commercial property could have been let for on the open market.

While there was previously a temporary 40% relief available for many retail, hospitality, and leisure businesses, these businesses now benefit from lower permanent multiplier rates. The new rates for businesses in this sector are:

38.2p for businesses with a rateable value under £51,000
43p for businesses with a rateable value of £51,000 to £499,999
50.8p for businesses with a rateable value of £500,000 and above.

For businesses outside retail, hospitality, and leisure, the new rates are:

43.2p for businesses with a rateable value under £51,000
48p for businesses with a rateable value of £51,000 to £499,999
50.8p for businesses with a rateable value of £500,000 and above.

Pubs, clubs, and live music venues now receive an additional 15% reduction on their business rates. However, this is set to rise to 20% from next year, under plans from the new prime minister, Andy Burnham.

Moreover, businesses that install electric vehicle charging points can now benefit from 100% business rates relief for up to 10 years.

2. The Business Asset Disposal Relief rate has increased

Business Asset Disposal Relief (BADR) is a Capital Gains Tax (CGT) relief on certain business assets.

If you’re planning to sell your business or dispose of qualifying assets, it’s important to be aware of recent changes to BADR.

The government increased the BADR rate from 10% to 14% in April 2025 and again to 18% from 6 April 2026. This means that BADR is now equal to the CGT rate for basic-rate taxpayers.

So, while BADR can still offer tax savings, the benefit has shrunk significantly. As such, if you are a business owner considering a sale, careful timing has become even more important.

The lifetime limit remains unchanged at £1 million, with any gains above this threshold taxed at the standard CGT rates.

A financial planner can help you build the new BADR rate into your business plan to help ensure your sales and exit plan remain as tax-efficient as possible.

3. Employment rights have expanded

This April saw the introduction of several significant employment law reforms.

For instance, one of the biggest changes is to Statutory Sick Pay (SSP). Employees are now entitled to SSP from their first day of sickness, with both the previous three-day waiting period and the Lower Earnings Limit removed. This means many lower-paid and part-time workers who were previously ineligible can now claim SSP.

Family leave entitlements have also been expanded.

Paternity leave is now available from day one of employment, and employees can also take paternity leave even if they have already taken paid shared parental leave.

A new entitlement has also been introduced for bereaved partners, which allows eligible employees to take up to a year of unpaid leave following the death of their child’s mother or primary adopter.

If you are an employer, these changes may require updates to employment contracts, staff handbooks, and internal HR policies.

4. Making Tax Digital is here for many businesses

Making Tax Digital (MTD) for Income Tax Self Assessment has now been rolled out.

As of April, if you are a sole trader or landlord with qualifying income of over £50,000, you are required to keep digital records and submit quarterly updates to HMRC, followed by an end-of-year declaration. This replaces the old Self Assessment process.

Qualifying income refers to your combined gross income from self-employment and property before expenses are deducted.

Although the new reporting requirements are intended to modernise the tax system, they also mean businesses will need more accurate bookkeeping throughout the year rather than relying on an annual review.

If you’re likely to fall within the new rules, it’s worth ensuring your accounting software and record-keeping processes are up to date.

Get in touch

A financial planner can help you review your business plan to ensure you’re prepared for any new or upcoming rule changes while also making the most of any available reliefs.

To speak to a financial planner, get in touch.

Email [email protected] or call us on 01625 466360.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

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 contents are based on our understanding of HMRC legislation, which is subject to change.