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February Wrapped Up – Key Finance News
Following a busy January and Self Assessment season, February has been a great opportunity to pause, reset, and gently prepare for the changes coming later in 2026.
Here are the key updates and reminders from this month:
Year-End Tax Planning: Things You Should Do Before 5th April…
With the tax year ending soon, now is a good time to check you’re making the most of what’s available to you. You could look at…
Top tip: A short year-end review can often highlight simple opportunities to save tax or plan more efficiently. We have dived into some of these on our socials – click here to take a look and thank us later.
Making Tax Digital for Income Tax is Less than Two Months Away
Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is coming this April 2026, where many sole traders and landlords with income over £50,000 will need to:
- Keep digital records
- Use compatible software
- Submit quarterly updates to HMRC
This is a big shift from the current annual tax return, which is why many business owners feel unsure about what’s required.
If you have any unanswered questions, you can read our MTD blog here, plus we explain ‘Personal Tax Return vs Making Tax Digital’ in a video that you can view here. If you simply want to chat – you can contact us by clicking here.
Missed the 31st January Tax Return Deadline?
HMRC has confirmed that around one million people missed the Self Assessment filing deadline this year, and if you’re one of them, it’s important to act quickly.
This is your reminder that late filing leads to automatic penalties, starting with a £100 fine even if no tax is owed, and increasing the longer the return remains outstanding.
If you still need to submit your return, we can help you get this sorted promptly and calmly – click here.
VAT Flat Rate Scheme: Could It Work for Your Business?
If you’re VAT registered, it might be worth reviewing whether the VAT Flat Rate Scheme is suitable for your business.
Instead of working out VAT on every purchase and sale, the scheme lets you pay a fixed percentage of your turnover to HMRC. This can simplify admin and sometimes improve cash flow.
It often suits businesses with lower expenses, such as consultants or service-based companies. However, if you regularly incur lots of VAT on purchases, the standard VAT method may still be the better option.
A quick comparison can show which approach is more beneficial for your specific situation.
Business Confidence Falls but It’s Not All Negative…
Recent surveys show that business confidence has fallen again, with many owners concerned about rising taxes, regulations and costs.
However, there are signs that sales expectations are improving slightly, and exporters in particular are feeling more optimistic about future growth.
In practice, this suggests many SMEs are taking a cautious approach, keeping a close eye on costs while still looking for opportunities to grow where possible.
New Funding to Support Business Expansion
The government has announced a major £11 billion lending package to help UK businesses expand, particularly into overseas markets.
The loans will be provided by major banks and backed by a government guarantee, making it easier for businesses to access funding for growth, hiring or exporting.
For SMEs considering new markets or larger contracts, this could help ease cash flow pressure, especially where upfront costs are involved.
Managing Rising Staff Costs: Is Salary Sacrifice an Option?
With employment costs continuing to rise, many businesses are revisiting salary sacrifice schemes.
This allows employees to exchange part of their salary for benefits such as pension contributions, electric cars or cycle-to-work schemes. Because this happens before tax and National Insurance, both employer and employee can save money.
For SMEs, this can be a useful way to offer attractive benefits without significantly increasing payroll costs.
Check Your Business Rates Before 31st March
If your business has premises, now is a good time to make sure your business rates are correct. The deadline to request any changes to your property’s valuation is 31st March 2026.
Even small errors could mean you’re paying more than you need to, so it’s worth a quick review. If something doesn’t look right, you can ask the Valuation Office Agency (VOA) to check and update it before the new rating list starts on 1st April.
A little bit of time now could save you money for the whole year ahead.
Homeworking Tax Relief: Changes from April 2026
From 6 April 2026, employees will no longer be able to claim tax relief for working from home. This only affects voluntary homeworking.
For the 2025/26 tax year, relief is still available if an employee is required to work from home under their contract. After April, if the employer reimburses homeworking costs for required homeworking, these payments remain tax- and National Insurance-free.
If you reimburse homeworking costs or have employees working from home, it’s worth checking how this change affects you.
The Message is Clear Here: Preparation is Key!
Major changes like MTD are approaching, tax rates are shifting, and economic confidence remains mixed.
But there are positive signs – Sales expectations are improving, funding opportunities are expanding, and there are still valuable tax reliefs available for those who plan ahead.
Taking time now to review your records, tax position and business plans can put you in a much stronger position for the year ahead.
If you would like to discuss how any of these updates affect your business, we’re always happy to help – chat to us!
MAIN TAX EVENTS HAPPENING IN MARCH: GET AHEAD
DATE
WHAT’S DUE
1 March
Corporation tax for year to 31/05/2025, unless quarterly instalments apply.
19 March
PAYE & NIC deductions, and CIS return and tax, for month to 5/3/26 (due 22/3 if you pay electronically).
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