Yorkshire firms need to be proactive in the face of tax changes - Rebecca Davison

If you’re thinking about selling your business within the next year, there is no moment greater than now to speak to your accountant, particularly bearing in mind that the BADR tax rate will increase by another 4 per cent to 18 per cent from April 6, 2026.

In what is one of the largest tax-raising measures introduced by the government in recent history, another key change this month comes in the form of higher National Insurance Contributions (NICs). As of April 6, employers are now facing higher tax obligations with a 1.2 per cent rise in employer NICs (from 13.8 per cent to 15 per cent) combined with a reduction to the threshold at which employers start to pay NICs (from £9,100 to £5,000).

From the many family-run businesses to the growing tech and manufacturing firms in hubs like Sheffield, the increase in employer NICs will require a careful rethink of workforce planning by business owners. This could mean reviewing current workforce structure, salary bands and staffing levels to help ensure long-term viability for Yorkshire businesses most impacted by these measures

Finally, the recent Budget saw one of the biggest shake ups to inheritance tax in decades in the reform of Business Property Relief (BPR) and Agricultural Property Relief (APR). These tax reliefs are considered to provide significant benefit to the UK economy in the form of business continuity, ensuring that productive UK businesses don’t have to be wound up or sold simply to fund an inheritance tax cost.

Relief is currently available on qualifying business and agricultural assets at up to 100 per cent, meaning they can be completely protected from inheritance taxes, regardless of value.

However, from April 6, 2026, 100 per cent relief under BPR and APR will be capped at a lifetime allowance of £1m in combined qualifying assets. Any remaining, or surplus value, that falls to be taxed in the deceased’s estate qualifies for relief at only 50 per cent.

The above changes represent seismic shifts in the inheritance tax, and broader succession planning landscape. Whilst the changes do not take effect in 2025, we strongly recommend that those affected speak to their tax advisers at the earliest opportunity to consider what planning can be undertaken to mitigate the impact.

Yorkshire businesses have always been known for their resilience, innovation and pragmatism. With the sweeping tax changes now in full force and more potentially on the horizon, businesses owners will need to ensure this entrepreneurial spirit - alongside a new degree of flexibility and preparation - is at the forefront of how they operate.

Rebecca Davison is a partner at Xeinadin (North and Yorkshire).