What the Spring Budget means for Small Businesses?

Key Takeaways

For small businesses, the main things to keep in mind are:

• Minimum wage increases

• Frozen tax thresholds

• Slight changes to business rates

• Higher penalties for late company tax returns

• Digital tax reporting continuing to roll out

Below is a quick breakdown of what each of these means:

Wages Are Increasing

From April 2026, minimum wage rates will rise.

New hourly rates:

• Age 21 and over: £12.71

• Age 18–20: £10.85

• Under 18s and apprentices: £8.00

If you employ staff, it’s worth checking your payroll to make sure everything is updated.

Tax Thresholds Stay Frozen

There are no changes to Income Tax rates, but the amount people can earn before moving into a higher tax band will stay the same until 2030.

Over time this means more people may end up paying a bit more tax as wages increase.

Business Rates Are Changing

Business rates will change slightly across the UK, and some areas will continue to offer support for small businesses.

If you run a business from a shop, café or office space, it’s worth checking what applies in your area.

Late Company Tax Returns Will Cost More

From April 2026, penalties for sending a Corporation Tax return late will increase.

• Initial penalty: £200

• After three months: £400

So it’s even more important to get company accounts and tax returns filed on time.

Digital Tax Reporting Is Still Happening

Making Tax Digital for Income Tax is still going ahead.

This means many sole traders and landlords will need to keep digital records and submit updates to HMRC using software.