Ever feel like business compliance is a bit like trying to hit a moving target while blindfolded? Well, 2026 is shaping up to be another year where the goalposts shift just when you think you've got everything sorted. But here's the thing, staying on top of these changes doesn't have to give you a headache.
Whether you're running a plumbing business, freelancing as a graphic designer, or managing a small cleaning company, the compliance landscape is about to get some significant updates. Let's break down what's actually changing and, more importantly, what you need to do about it.
The big picture: why this matters for your business
Think of compliance like your car's MOT, ignore it at your peril, but stay on top of it and everything runs smoothly. The difference is, business compliance rules seem to change more frequently than your car needs a service.
For small businesses and freelancers, 2026 brings a mix of digital upgrades, tax tweaks, and some genuinely helpful simplifications (yes, really!). The key is knowing which changes affect your specific setup and getting ahead of them before they become urgent.
What's changing in tax and payroll compliance
Let's start with the stuff that directly hits your pocket. HMRC isn't standing still, and neither should you.
Making Tax Digital expands further
If you thought MTD was done expanding, think again. By April 2026, more businesses will need to submit VAT returns digitally, and there's talk of extending digital requirements to Corporation Tax for smaller companies. Here's what you need to know:
• Check if your current accounting software is MTD-compatible (spoiler: spreadsheets don't count)
• Start keeping digital records now if you're not already
• Consider cloud-based solutions that automatically sync with HMRC systems
Pay data reporting gets serious
This one's flying under the radar, but it's important. If you employ 100+ people, you'll need to submit detailed annual pay data reports. Even smaller businesses should prepare for this eventually trickling down. The focus is on pay equity and transparency, good news for fair employers, potentially tricky for others.
Flexible Spending Account limits increase
For those offering employee benefits, FSA limits are jumping to £7,500 in 2026. Sounds simple, but it's not automatic, you'll need to actively update your plan documents and inform employees during open enrollment.
Digital compliance: the cybersecurity reality check
Here's where things get interesting (and slightly scary). Cyber compliance isn't just for tech companies anymore, it's for anyone who uses a computer, which is pretty much everyone.
Small businesses are big targets
Here's an uncomfortable truth: small businesses get hit by cyberattacks four times more often than large companies. Why? Because hackers know you probably don't have a dedicated IT security team sitting around waiting for them.
For 2026, this means:
• Regular cybersecurity training for anyone who touches your systems
• Proper data backup procedures (and actually testing them)
• Understanding GDPR requirements if you handle any EU customer data
• Implementing basic cyber hygiene, think strong passwords, two-factor authentication, and keeping software updated
Industry-specific requirements
If you're in healthcare, finance, or manufacturing, the bar is even higher. HIPAA is getting its biggest update in years, with stronger requirements for encryption and access controls. The message is clear: if you handle sensitive data, you need to prove you're protecting it properly.
Brexit aftermath: ongoing compliance considerations
Yes, we're still dealing with Brexit compliance changes. For businesses trading internationally or handling EU customers' data, there are ongoing requirements to navigate.
Cross-border data transfers
If your business processes any data from EU customers (even just email addresses), you need to ensure your data handling meets EU standards. This isn't going away, and the requirements are getting stricter, not looser.
Import/export documentation
For businesses importing goods or materials, the paperwork requirements continue to evolve. Make sure your processes can handle the documentation without causing delays that cost you money.
The construction and trades compliance update
If you're in construction, electrical work, plumbing, or other trades, there are some specific changes coming your way.
CIS (Construction Industry Scheme) modernisation
HMRC is pushing for more digital integration in CIS reporting. This means:
• Monthly returns submitted online (no more paper)
• Better integration with payroll software
• Clearer tracking of subcontractor verification
Health and safety reporting
OSHA-equivalent requirements in the UK are getting more specific about incident reporting and prevention documentation. For trades businesses, this means better record-keeping and more proactive safety management.
Freelancers and micro-businesses: what you need to know
Running a one-person business doesn't exempt you from compliance: in fact, it sometimes makes things more complex because you're wearing all the hats.
IR35 continues to evolve
The off-payroll working rules aren't going anywhere, and HMRC is getting better at spotting arrangements that don't quite fit. If you're contracting through a limited company, make sure your working practices genuinely reflect being in business on your own account.
Simplified accounting options
Good news: there are new simplified accounting options for very small businesses. If your turnover is under £150,000, you might be able to use cash basis accounting, which is much simpler than traditional accrual accounting.
How to actually stay compliant without losing your mind
Here's the practical bit: what should you actually do about all this?
Start with a compliance audit
Take an honest look at your current setup:
• Review your record-keeping systems
• Check your software is up to date and compliant
• Assess your data security arrangements
• Review employee handbook and policies
Consider professional help
This isn't a sales pitch (well, not entirely), but here's some honest advice: trying to keep track of all these changes while running your business is like trying to rewire your house while the family's watching TV upstairs. It's possible, but it's stressful and there's a good chance something important gets missed.
Professional back-office support, like what we offer at 6 4 G Ltd, means having someone whose job it is to track these changes and make sure your business stays compliant. We handle the boring stuff so you can focus on what you do best: serving your customers and growing your business.
Quick-win action steps for 2026 prep
Don't overthink this. Here are five things you can do this week to get ahead:
- Update your accounting software: make sure it's MTD-ready and regularly backed up
- Review your cyber hygiene: change default passwords, enable two-factor authentication, update software
- Check your insurance covers cyber incidents: you'd be surprised how many policies don't
- Create a simple compliance calendar: mark key dates for returns, renewals, and updates
- Consider outsourcing your compliance headaches: life's too short to spend weekends reading HMRC guidance
The bottom line
Compliance changes might feel overwhelming, but remember: these rules exist for good reasons, and staying on top of them actually protects your business. The trick is having systems and support that make compliance feel less like a burden and more like business as usual.
Whether you tackle this yourself or get professional help, the important thing is starting now. 2026 isn't that far away, and getting ahead of these changes is much easier than scrambling to catch up later.
If you're feeling overwhelmed by all this, give us a call. We're real people who understand that compliance should support your business, not complicate it. Plus, we're based in sunny Worthing, so we understand the challenges facing local businesses.
Because at the end of the day, compliance is just another part of running a successful business: and with the right approach, it doesn't have to be the part that keeps you awake at night.