A guide to preparing for the 2026-27 tax year
The approach of a new tax year is always an important time for small business owners with finances to be reviewed and company performance assessed.
This year, many self-employed professionals will also need to prepare for the long-awaited arrival of Making Tax Digital.
With the 2026-27 tax year set to arrive on Monday, April 6, 2026, we look at the key deadlines you need to know and what you can to do to be ready ahead of the new financial year.
What needs to be filed and when?
Running from April to March every year, the financial year applies to all individuals, whether employed or operating as sole traders. It is also known as the tax year.
The situation is different for limited companies as the 12-month period governing their financial performance will align with their incorporation date – this is known as an accounting period. While limited companies can choose their financial year dates, HMRC usually bases the first year on that date of incorporation.
Limited companies must adhere to all tax deadlines regardless of what their accounting period is.
Sole traders
Sole traders only need to submit a self-assessment tax return and pay their taxes. The process of completing a tax return broadly involves stating your earnings and expenses for the year to produce your taxable income.
HMRC will then calculate your tax and National Insurance, which you will need to pay.
The following deadlines are for the 2026-27 tax year:
Register for self-assessment by October 5, 2026
Submit paper tax return by midnight on October 31, 2026, or
Submit online tax return by midnight on January 31, 2027
Pay any tax you owe by midnight on January 31, 2027
Limited companies
Limited companies must file documents with both HMRC and Companies House. These consist of your company tax return and your statutory accounts.
Your tax return will feature your company income, expenses and tax allowances. It will be used by HMRC to calculate the level of corporation tax you owe.
The statutory accounts must be sent to Companies House, as well as any shareholders you may have. They consist of a summary of your income and expenditure.
Limited companies must meet the following deadlines:
Their first company accounts must be filed with Companies House 21 months after having registered.
Annual accounts must be filed with Companies House nine months after the company’s financial year ends.
Corporation tax must be paid nine months and one day after the accounting period ends.
A company tax return must be filed 12 months after the end of the accounting period.
Preparing for the new tax year - a checklist
There are a range of items any self-employed professional should be on top of as the new tax year approaches, from new tax rates and the arrival of Making Tax Digital to reviewing your financial statements and chasing invoices.
This checklist will help ensure your ready for the 2026-27 financial year:
Making Tax Digital (MTD) for Income Tax
MTD for Income Tax will finally be introduced from April 6, but only for those earning more than £50,000 per year.
The new system will require taxpayers to maintain digital records using HMRC-approved software to make submissions electronically.
Earnings will need to be reported to HMRC on a quarterly basis. They will consist of summaries rather than a full tax return.
A final declaration will have to be made by January 31 each year.
Before the April 6 start date, people should:
- Check the criteria for MTD to establish if they will need to sign-up
- Calculate if they fall under or over the initial £50,000 threshold.
- Choose which compatible software they will use. It is worth noting that this will come with an additional cost.
- Prepare for their first quarterly submission on August 7, 2026.
Are you ready for Making Tax Digital? Our article outlines what the new system is, why it is being introduced, and what you can do to prepare
Review your finances
As you approach year-end, it makes sense to take some time to review your finances, making sure all your income and expenditure for the tax year is properly and accurately recorded, including any business assets, debts or equity that you may have.
This can include gathering all your receipts, purchase orders, and invoices to ensure you are prepared for any HMRC enquiries that may come down the line. It is a legal requirement to keep such records.
When calculating your expenses, be sure to do some research into exactly what you can claim. It may even be worth speaking to an accountant to ensure you are making the most out of your tax reliefs and are not paying more than you have to.
Be aware of new tax rates
The new year tax year generally brings some changes in tax rates that self-employed professionals will need to be aware of.
For 2026-27, these changes are centered around dividend tax rates. Notably, income tax rates will remain the same, while there will also be changes for those operating in the retail, hospitality, and leisure sectors.
The upcoming changes include:
- Dividend tax will increase by two per cent, up to 10.75% for those paying the standard rate and 35.75% for the higher rate.
- Lower business rates multipliers are being introduced for properties with rateable values under £500,000. This applies if you own the premises and work in retail, hospitality or leisure.
For those who take dividends out of their business, it is worth reassessing your finances ahead of April 6. The combination of the new rates and frozen allowances could mean you would be better off taking some earnings as a salary rather than as dividends.
Meanwhile, if you pay business rates, when preparing for the new tax year you should check your revaluation to see what you may have to pay.
Evaluate your business performance
As the new tax year approaches, it is a good time to assess how your business is performing against the targets you, hopefully, set the previous April.
This will involve assessing everything from your income and profitability levels to whether you hit your targets. You should take some time to analyse what things went to plan and what didn’t, how that has affected your bottom line, and what changes can be made to cut costs or bring in more income.
It is also a good idea to take some time to set financial goals and budgets for the following year, and to update your business plan and strategic aims.
