The Spring Budget 2026 confirmed several changes affecting small businesses. We break down the key announcements and how they affect your software needs.
The Spring Budget 2026 delivered several measures relevant to small business owners and the accounting software they use:
The main Corporation Tax rate remains at 25% for profits over £250,000, with the small profits rate of 19% for profits under £50,000 confirmed for 2026/27. The marginal relief band (£50,000–£250,000) continues. This means your accounting software's Corporation Tax calculator should reflect these rates — QuickBooks, Xero, and FreeAgent have all been updated.
The merged R&D scheme introduced in 2024 continues unchanged. SMEs can claim an enhanced deduction of 186% on qualifying R&D expenditure. If you're claiming R&D relief, ensure your accounting software can track qualifying costs separately — Xero and QuickBooks both support this with appropriate chart of accounts setup.
Employer National Insurance contributions increased to 15% from April 2025 and remain at this rate for 2026/27. The Employment Allowance increased to £10,500. If you run payroll, ensure your accounting software's payroll module reflects the current rates — Sage Payroll and QuickBooks Payroll are both updated.
The Budget confirmed no further delays to MTD for Income Tax, which remains mandatory from April 2026 for sole traders and landlords with income over £50,000. See our full MTD guide for details.
The Budget changes don't fundamentally alter the accounting software landscape, but they reinforce a few key considerations:
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