An unwelcome April Fool’s for business tax changes

April brings key tax and filing changes for businesses

The start of April has introduced a number of significant changes for businesses. These include reduced capital allowances, increased penalties for late filing of corporation tax returns, and the closure of HMRC’s free corporation tax return filing portal.

Capital allowances

Capital expenditure will often qualify for a 100% deduction. However, where expenditure does not qualify, an annual writing-down allowance (WDA) is applied.

For accounting periods commencing on or after 1 April 2026 (6 April 2026 for sole traders and partnerships), the main rate of WDA has been reduced from 18% to 14%.

This means:

• Most expenditure on cars does not qualify for a 100% deduction, so the reduction in WDA will result in more tax payable.
• Expenditure on new (not second-hand) zero-emission cars continues to qualify for a 100% deduction. However, this relief is due to end on 31 March 2027 (5 April 2027 for sole traders and partnerships).

A hybrid rate of WDA will apply for accounting periods that span 1/6 April 2026.

Penalties for late filing

Penalties for filing corporation tax returns late have increased significantly.

• The initial late filing penalty is now £200.
• This increases to £400 if the return is more than three months late.

Where a return has also been filed late for the two preceding accounting periods:

• The £200 penalty increases to £1,000.
• The £400 penalty increases to £2,000.

Corporation tax returns

HMRC closed its free online corporation tax filing service on 31 March 2026. While this will not affect businesses using an agent, it has important implications for others.

Going forward:

• All company tax returns must be filed using commercial software.
• Any changes or amendments to previously submitted returns must also be made using commercial software.

The closure of HMRC’s filing portal means that records previously held online are no longer available. Businesses should ensure that any historic records have been downloaded and are stored securely.

Looking ahead

Companies House had planned to require company accounts to be filed using commercial software from 1 April 2027. This requirement has now been postponed.

Further information

You can find the government’s guide to capital allowances on the GOV.UK website here.

Need support?
If you would like advice on how these changes affect your business, please email us imagine@hurst.co.uk or call 0161 477 2474.