Budget 2026 is fast approaching, and while no one knows exactly what will land until the Chancellor speaks, early signs suggest big changes are coming - especially for small and medium-sized business owners.
At GrowFactor, we’ve been through every Budget cycle — and the pattern is always the same:
In this blog, we'll be covering what we’re watching closely this time.
Analysts are predicting that the Treasury may raise dividend tax rates to help plug the fiscal gap.
For directors who pay themselves primarily through dividends, this could mean a significant jump in personal tax bills.
WHAT TO DO NOW:
Run “what if” projections with your accountant — model the impact of 1–3% higher dividend tax and explore alternative remuneration strategies, like employer pension contributions or director loan structures.
Business and agricultural reliefs on inheritance tax (IHT) are being re-examined.
The government has signalled possible tightening of the 100% relief rules from April 2026.
WHAT TO DO NOW:
If you’re planning succession or gifting business assets, now is the time to review your estate plan. Changes here can have long-term effects on how family-owned businesses transfer wealth efficiently.
Following years of digitalisation and fraud clampdowns, VAT compliance is likely to tighten further — with new Making Tax Digital thresholds and stricter late-submission penalties expected.
WHAT TO DO NOW:
Revisit your bookkeeping and digital VAT records to ensure full accuracy. Automate wherever possible - the cost of errors is rising faster than the cost of software.
For businesses operating globally or considering expansion to the UAE or other low-tax jurisdictions, 2026 could bring updated OECD-aligned rules.
This will affect how UK-connected companies record and justify cross-border profit allocations.
WHAT TO DO NOW:
Document your management and control properly. Ensure your overseas operations stand up to HMRC scrutiny - not just on paper, but in practice.
Waiting until the Budget is announced is too late.
Smart founders are already:
✔ Running cashflow forecasts for multiple tax outcomes
✔ Reviewing structures for efficiency
✔ Talking to advisors about compliant international strategies
✔ Strengthening internal financial reporting
The goal isn’t just to minimise tax - it’s to protect growth, cashflow, and peace of mind.
“Every Budget reshapes the rules for entrepreneurs. The businesses that thrive are the ones that plan ahead — not the ones waiting for the headlines.
“This year, use the uncertainty to your advantage.
“Build flexibility into your structure, know your numbers, and get clarity before the changes land.”
Need help reviewing your structure before Budget 2026?
Book a free discovery call with GrowFactor and we’ll map out how potential changes could affect your business - and where you can stay one step ahead.
Book your review call here.
