How New Tax Regulations Impact Business Restructuring in 2026

To ensure businesses remain compliant with the evolving regulatory landscape of 2026, it’s crucial to stay updated on the latest and understand how the new tax impacts restructuring. The tax landscape in the UK and the US is changing significantly in 2026, and these updates are set to affect how businesses navigate corporate restructuring. Below, we explore the key regulatory changes for 2026, focusing on new tax regulations that impact restructuring strategies, including corporate tax changes, Making Tax Digital (MTD), VAT compliance, and employment tax adjustments.

How Changes in Tax Impact Business Restructuring

1. UK Corporate Tax Changes (Effective April 2026)

Several significant tax reforms are being introduced in the UK in 2026, many stemming from the Finance Bill 2025-26. These new tax impacts restructure strategies, particularly in relation to corporate tax rates, loss relief provisions, and dividend taxation.

• Inheritance Tax (IHT) Reliefs: Business and agricultural property relief will be capped at £1 million per individual. Any value exceeding this will only receive 50% relief, resulting in a 20% IHT charge on the excess. This legislation is particularly important for businesses undergoing restructuring with high-value assets.
• Capital Gains Tax (CGT) Business Asset Disposal Relief (BADR): Business Asset Disposal Relief (BADR) rate increased to 14% from 10% prior to April 2026. This affects asset sales in restructurings at the existing 14% rate.
• Dividend Tax: Increases in dividend income tax rates will affect small business owners who rely on dividend income. The ordinary rate will rise to 10.75%, and the upper rate will increase to 35.75%. This update is a key consideration for entrepreneurs restructuring their companies to maintain income tax efficiency.
• Capital Allowances: The main rate of writing-down allowances will decrease from 18% to 14%, while a new 40% First-Year Allowance (FYA) for main rate expenditure will be available from January 1, 2026. These changes will influence decisions about when to acquire new assets during the restructuring process.
• Venture Capital Schemes: The tax break for Venture Capital Trusts (VCTs) will go down from 30% to 20%, but the amount businesses can invest in both EIS and VCTs will increase, allowing more businesses to get funding during restructuring.

We assist businesses in navigating these changes by offering customised business structure guidance to guarantee compliance and enhance tax strategies during the restructuring process.

2. Making Tax Digital (MTD) UK (Effective April 2026)

From April 6, 2026, sole traders and landlords with over £50,000 in qualifying income for the 2024–25 tax year must use MTD-compatible software for digital records, quarterly updates, and self-assessment submissions. This phases in £30,000 from April 2027 and £20,000 from April 2028 (legislation planned).​

Restructuring Implications

Businesses restructuring in 2026 must ensure MTD-ready accounting systems handle transaction-level reporting across entities, especially for VAT (already mandatory for registered businesses) and incoming income tax rules. Non-compliance risks penalties, disrupting transitions like demergers or group formations.​

Compliance Steps

Update software for digital record-keeping, quarterly submissions to HMRC, and end-of-year final declarations by 31 January. Agents can assist, and exemptions exist (e.g., temporary for low digital capability); check eligibility via HMRC tools.

Apex Accountants supports businesses in transitioning to MTD-compliant systems, helping them integrate digital tax record-keeping smoothly into restructured operations.

3. VAT Compliance During Restructuring

In 2026, VAT regulations will become more complex, particularly for businesses involved in cross-border transactions, mergers, or supply chain restructuring. Key updates include more stringent VAT registration requirements, changes in the way VAT reliefs are calculated, and evolving rules governing VAT on digital goods and services.

During restructuring, businesses must ensure VAT compliance by:

• Meeting VAT registration requirements across new business structures or territories.
• Accurately calculating VAT on both domestic and international transactions.
• Claiming available VAT reliefs to mitigate tax liabilities.

Apex Accountants offers guidance on VAT registration, reliefs, and managing VAT challenges, ensuring that businesses remain compliant during restructuring and avoid unnecessary penalties.

4. Employment Tax Changes (Effective April 2026)

Restructuring frequently alters employment status, triggers redundancies, or requires contract revisions, each carrying tax implications. While major National Insurance Contributions (NICs) changes apply from April 2025—with employer rates at 15% above a £5,000 threshold—businesses face ongoing payroll and redundancy obligations into 2026.​

Key NIC and Payroll Updates

Employer secondary Class 1 NICs increased to 15% from 13.8% starting April 2025, alongside a secondary threshold drop to £5,000, raising costs for staff-heavy restructurings. Employment Allowance rose to £10,500 without a business size cap, aiding smaller firms; the Lower Earnings Limit remains at £6,240 annually for 2026-27, mainly impacting benefit entitlements.

Redundancy Tax Rules

No new 2026-specific redundancy tax changes exist—the £30,000 tax-free cap on termination payments and RTI reporting for injury payments remain standard. Restructurings must still address IR35 compliance for contractors and accurate P11D benefit filings to avoid penalties.​

Compliance Actions

• Review payroll systems for 2025 NIC rates, RTI submissions, and Employment Allowance eligibility.
• For redundancies or status changes, prepare settlement agreements and verify tax on benefits or ex gratia payments.
• Integrate MTD requirements for seamless reporting during transitions.​

We help businesses manage their payroll compliance during restructuring, ensuring that all employment-related tax obligations are met in accordance with the latest regulations.

5. International Tax Reforms (Effective January 2026)

The UK is modernising its international tax regulations with reforms to transfer pricing, permanent establishment, and Diverted Profits Tax rules. These changes, effective for chargeable periods beginning on or after January 1, 2026, will affect multinational businesses undergoing restructuring.

Businesses operating internationally must:

• Review transfer pricing arrangements to ensure they align with the new rules.
• Assess permanent establishment and diverted profits tax implications when restructuring global operations.

Apex Accountants assist multinational businesses in navigating these complex international tax reforms, ensuring compliance during restructuring and optimising cross-border tax strategies.

Key Considerations for New Tax Regulations and Businesses Restructuring in 2026

Considering how the new tax impacts restructuring, businesses should take the following steps:

1. Early Planning: 

Start tax planning early to ensure that all corporate tax liabilities, VAT obligations, and employee-related tax issues are addressed well before the restructuring takes place.

2. Seek Professional Advice: 

Working with experts like Apex Accountants ensures that all aspects of tax compliance are covered during restructuring. We help businesses optimise tax efficiency while adhering to the new regulations.

3. Leverage Available Reliefs: 

Identify and utilise available tax reliefs, such as Business Property Relief (BPR), Capital Gains Tax (CGT) relief, and First-Year Allowances, to reduce tax liabilities during the restructuring process.

4. Stay MTD Compliant: 

Ensure that digital accounting systems are updated to comply with Making Tax Digital regulations, minimising the risk of penalties for non-compliance.

5. Monitor International Tax Implications: 

Multinational businesses should pay close attention to changes in international tax rules, particularly in relation to transfer pricing and the Diverted Profits Tax.

By staying ahead of these regulatory changes, businesses can successfully navigate the challenges of restructuring in 2026, ensuring compliance while optimising tax strategies for long-term success. Partner with Apex Accountants today to ensure your business is fully compliant with the latest tax regulations and well-prepared for the complexities of restructuring. Our expertise in corporate tax planning, VAT, MTD compliance, and international tax reforms will help you navigate and understand how changes in tax impact business.