Welcome to our February and March Tax Update
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As we move through the early months of the year, now is a good time to stay ahead of upcoming tax deadlines and prepare for several important changes on the horizon. With February and March bringing a number of key compliance dates, along with new rules and reforms scheduled over the coming year, keeping informed and planning ahead can help you avoid penalties and make confident financial decisions.
In this edition, we highlight the latest tax diary deadlines, outline what the introduction of Making Tax Digital for Income Tax will mean in practice, and explain recent updates to Agricultural and Business Property Relief. We also cover important considerations around Capital Gains Tax when selling property and the latest changes to the Construction Industry Scheme.
We hope you find this month’s update helpful and informative. If you would like to discuss how any of these developments affect you or your business, please don’t hesitate to get in touch. We’re always here to help.
Oxford City FC and the Hoops Foundation
As sponsors of Oxford City Football Club, we are keen to shine a light on the work of the Hoops Foundation, the club’s official charitable arm, and the positive impact it continues to have across the local community.
The Hoops Foundation uses football as a way to engage, support and inspire people of all ages, with a particular focus on young people, inclusion and wellbeing. Through a wide range of programmes, the Foundation works with schools, community groups and local organisations to promote participation in sport, build confidence and encourage healthier, more connected communities.
Much of the Foundation’s work takes place away from the spotlight of matchdays, delivering grassroots initiatives that support education, mental health, physical activity and social inclusion. These programmes help extend the reach of Oxford City Football Club beyond the pitch and into the heart of the community it represents.
By sponsoring Oxford City FC, The MGroup values the wider role the club plays locally and the opportunity to highlight the important community work delivered through the Hoops Foundation.
Are You Ready for Making Tax Digital for Income Tax?
👉 [Download our Making Tax Digital for Income Tax guide]
Are you ready for Making Tax Digital for Income Tax (MTD for IT)? This new way of reporting will become mandatory in phases from April 2026. If you are self-employed or a landlord earning over £50,000, now is the time to prepare for digital record keeping, quarterly updates and the new penalty system that will apply under MTD for IT.
The date from which you must start using MTD for IT depends on your level of qualifying income. If your qualifying income exceeded £50,000 in the 2024–25 tax year, you will need to use MTD for IT from 6 April 2026. If your qualifying income exceeded £30,000 in the 2025–26 tax year, you will need to use MTD for IT from 6 April 2027. Where qualifying income exceeds £20,000 in the 2026–27 tax year, the government has confirmed that MTD for IT will apply from April 2028.
Qualifying income is defined as the total income you receive in a tax year from self-employment and property before expenses.
You are currently exempt from MTD for IT if you meet specific conditions that automatically exempt you from the service, such as reasons relating to age, disability or location, if you have applied for and been granted an exemption by HMRC, or if your qualifying income is £20,000 or less in a tax year.
HMRC’s guidance on MTD for IT has been updated and now includes further information on both permanent and temporary exemptions. Permanent exemptions generally apply automatically and continue unless circumstances change. Where you believe you are digitally excluded, an application for exemption may be required.
If you are not required to use MTD for IT, you must continue to report income and gains through the self-assessment tax return where applicable.
Changes to Agricultural and Business Property Relief Reforms
The government recently announced significant changes to the planned reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR). The threshold for 100% relief will increase from £1 million to £2.5 million when the changes take effect from 6 April 2026. The change will be introduced via an amendment to the Finance Bill 2025, with relief reduced to 50% on qualifying assets above the new level.
Spouses or civil partners will be able to pass on up to £5 million of qualifying agricultural and business assets between them free of inheritance tax, in addition to existing nil rate bands. The transferable allowance will also apply to surviving spouses or civil partners who were widowed before the new policy was announced.
These changes revise reforms first announced at Autumn Budget 2024, which attracted strong criticism from the farming community and rural businesses over their potential impact on small farms and family-owned enterprises. By raising the threshold, the government aims to reduce significantly the number of estates affected.
The government estimates that around 85% of estates claiming APR in 2026–27, including those also claiming BPR, will pay no additional inheritance tax as a result of these changes.
Shares designated as “not listed”, including those traded on AIM, will attract BPR at a flat rate of 50% from April 2026. This measure was unaffected by the latest announcement.
Selling a Second Property
Capital Gains Tax on UK residential property sales often carries a strict 60-day reporting and payment deadline, so early planning is important.
If you are selling a second property, such as a buy-to-let or a former home that is no longer your main residence, CGT will usually apply. This differs from selling your main home, which is often covered by Principal Private Residence relief and therefore exempt.
The annual exempt amount for CGT is currently £3,000. CGT is normally charged at 24% for most individuals, with a reduced rate of 18% applying where gains fall within the basic rate band. Where total taxable income and gains exceed the higher rate threshold, the excess will be subject to CGT at 24%.
Most homeowners do not pay CGT when selling their main family home. However, CGT commonly applies to gains on:
- Buy-to-let properties
- Second or holiday homes
- Business premises
- Land
- Inherited property, based on the increase in value since inheritance
Any CGT due must usually be reported and paid within 60 days of completion. Missing this deadline can result in penalties and interest.
Construction Industry Scheme, Tackling Fraud
Tackling fraud within the Construction Industry Scheme (CIS) was one of the measures addressed in the recent Budget. The changes aim to allow faster intervention where fraud is suspected, while also simplifying certain administrative aspects of the scheme.
From 6 April 2026, HMRC will be able to act immediately where a business makes or receives a payment that it knew, or ought to have known, was connected to fraud. In these circumstances, HMRC will have the authority to withdraw Gross Payment Status straight away, assess any related tax loss and impose penalties of up to 30%. Penalties may apply to the business itself or, in some cases, to its officers.
Where Gross Payment Status is removed due to fraud or serious non-compliance, the business will also be prevented from reapplying for five years, an increase from the current one-year restriction.
The government has also announced plans to simplify the CIS by exempting payments to local authorities and certain public bodies, while reinstating the requirement for contractors to submit nil returns. These measures are expected to take effect from 6 April 2026, following a period of technical consultation.
Partner Spotlight
Jordan Lyne, Partner
Jordan joined The MGroup in 2014 on the training programme, starting straight from school after completing his A-Levels. He progressed through AAT and ACCA qualifications and became a Partner in August 2024.
Jordan enjoys working closely with business owners, helping them explore practical strategies for growth and long-term development. His journey reflects The MGroup’s commitment to developing talent from within.
Ollie Squire, Partner
Ollie works alongside business owners and leadership teams across sectors including construction, manufacturing, hospitality and sustainable technologies. He supports organisations ranging from family-run firms to multinational groups, offering commercially focused guidance around growth, restructuring and succession planning.
Ollie has a particular interest in business valuations, ownership restructuring and exit planning. He is also closely involved in The MGroup’s community links, including our collaboration with Oxford City Football Club and The MGroup Stadium. Pictured below Jordan (left), Ollie (next to Jordan), Wendy and Chris.
Tax Diary, February and March 2026
- 1 February 2026 – Due date for Corporation Tax payable for the year ended 30 April 2025
- 19 February 2026 – PAYE and NIC deductions due for month ended 5 February 2026
- 19 February 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2026
- 19 February 2026 – CIS tax deducted for the month ended 5 February 2026 payable by today
- 1 March 2026 – Due date for Corporation Tax due for the year ended 31 May 2025
- 2 March 2026 – Self-Assessment tax for 2024–25 paid after this date will incur a 5% surcharge unless cleared by 1 April 2026 or covered by a Time to Pay agreement
- 19 March 2026 – PAYE and NIC deductions due for month ended 5 March 2026
- 19 March 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 March 2026
- 19 March 2026 – CIS tax deducted for the month ended 5 March 2026 payable by today