Budget season is always a tense time for business owners. You’re trying to plan ahead, and then the Chancellor stands up and changes the rules. The Spring 2026 Budget continued several measures announced in the Autumn 2025 Budget, with a few additional tweaks that NI businesses need to understand.
Here’s what matters, what you can safely ignore, and what you should be talking to your accountant about.
The big picture
This wasn’t a Budget of dramatic surprises. Most of the headline changes were announced in the Autumn 2025 Budget and are now being confirmed or fine-tuned. The overarching theme remains: the government needs revenue, and businesses (particularly employers) are bearing a significant share of the burden.
For Northern Ireland specifically, the Budget’s implications are filtered through the Barnett formula, which determines how much additional funding the NI Executive receives when Westminster increases spending in England. We’ll cover that below.
Employer National Insurance: the ongoing impact
The most consequential change for businesses didn’t happen in Spring 2026. It happened in April 2025, when employer NICs rose from 13.8% to 15% and the Secondary Threshold dropped from £9,100 to £5,000. But the full-year impact is now being felt across NI businesses, and the Spring Budget confirmed there are no plans to reverse these changes.
What this means in practice:
| Employee salary | Annual employer NIC (old: 13.8% above £9,100) | Annual employer NIC (new: 15% above £5,000) | Increase |
|---|---|---|---|
| £25,000 | £2,194 | £3,000 | £806 |
| £35,000 | £3,574 | £4,500 | £926 |
| £50,000 | £5,644 | £6,750 | £1,106 |
For a business with 10 employees on average salaries of £30,000, the additional annual cost is roughly £8,500. That’s real money, particularly for NI’s small and medium-sized businesses where margins are often tight.
Employment Allowance: the partial offset
The Employment Allowance increased to £10,500 from April 2025, and this remains in place. It eliminates the first £10,500 of your employer NIC bill entirely.
Check your eligibility. The Employment Allowance is available to most employers with an employer NIC bill below £100,000 in the previous tax year. Single-director companies with no other employees don’t qualify. If you have even one other employee, you likely do.
For smaller NI businesses (5-10 employees), the Employment Allowance goes a long way towards offsetting the NIC increase. For larger employers, it’s a drop in the bucket.
Corporation tax: no changes
The Spring Budget confirmed that corporation tax rates remain unchanged:
- Small profits rate: 19% (profits up to £50,000)
- Main rate: 25% (profits over £250,000)
- Marginal relief continues to apply between £50,000 and £250,000
Full expensing (100% first-year capital allowances on qualifying new plant and machinery) is also confirmed as permanent. This is genuinely good news for NI manufacturers and capital-intensive businesses planning equipment investment.
Capital gains tax changes
The Autumn 2025 Budget announced significant CGT changes, and the Spring Budget provided additional detail on implementation.
| Asset type | Previous rate (basic rate taxpayer) | Previous rate (higher rate) | New rate (from 30 Oct 2024) |
|---|---|---|---|
| Residential property | 18% | 24% | No change |
| Other assets | 10% | 20% | 18% / 24% |
The increase in CGT rates on non-property assets (from 10%/20% to 18%/24%) is now bedded in. For business owners considering selling shares, assets, or investments, this represents a meaningful increase in the tax on disposal.
Business Asset Disposal Relief (BADR), formerly Entrepreneurs’ Relief, still applies, but the rate is increasing:
| Period | BADR rate | Lifetime limit |
|---|---|---|
| To 5 April 2025 | 10% | £1 million |
| 6 April 2025 to 5 April 2026 | 14% | £1 million |
| From 6 April 2026 | 18% | £1 million |
If you’re planning to sell your business, the timing of the disposal now has significant tax implications. The difference between a 14% and 18% rate on a £500,000 gain is £20,000.
Planning to sell? If you’re thinking about an exit in the next 12 to 24 months, talk to us now. The interaction between BADR, the annual exempt amount (£3,000), and your overall income position needs careful planning.
Inheritance tax: business and agricultural property relief
This is the change that’s causing the most concern among family businesses and farming communities in Northern Ireland.
From April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) will be reformed:
- The first £1 million of qualifying business or agricultural assets will continue to receive 100% relief (effectively IHT-free)
- Assets above £1 million will receive 50% relief, meaning IHT at an effective rate of 20% (rather than the full 40%)
For NI farming families and family businesses with significant property holdings, this is a major change. A farm worth £2 million would previously have been fully exempt from IHT. Under the new rules, the first £1 million remains exempt, but the second £1 million attracts IHT at 20%, creating a potential bill of £200,000.
The Spring Budget confirmed that:
- The £1 million threshold is per individual (a couple can protect £2 million between them)
- The changes apply to deaths occurring from April 2026 onwards
- There will be an option to pay the IHT in instalments over 10 years, interest-free
This is an area where early planning can make a significant difference. Life insurance, trust structures, and succession planning all come into play.
Making Tax Digital: the timeline
The Spring Budget confirmed the MTD rollout timeline:
| Phase | Start date | Who it affects |
|---|---|---|
| MTD for VAT | Already live | All VAT-registered businesses |
| MTD for Income Tax (income over £50,000) | April 2026 | Self-employed and landlords |
| MTD for Income Tax (income over £30,000) | April 2027 | Self-employed and landlords |
| MTD for Income Tax (income below £30,000) | Under review | TBC |
| MTD for Corporation Tax | Not before 2028 | Companies |
If you’re self-employed or a landlord with income over £50,000, MTD for Income Tax starts this month (April 2026). You’ll need to keep digital records and submit quarterly updates to HMRC using compatible software.
This is not optional. If your qualifying income exceeds £50,000, you must comply with MTD for ITSA from April 2026. If you haven’t set up compatible software yet, this is urgent. Talk to us.
The Northern Ireland angle
Barnett consequentials
When the UK Government increases public spending in England, the Barnett formula automatically generates additional funding for the devolved administrations. The Spring Budget’s spending commitments in health, education, and infrastructure will generate Barnett consequentials for Northern Ireland.
The exact figures depend on the NI Executive’s spending decisions, but the projected additional allocation for 2026/27 is in the region of £200-300 million. How this is allocated across departments is a matter for Stormont, not Westminster.
What this means for NI SMEs
A few specific points for businesses operating in Northern Ireland:
The employer NIC burden hits NI harder. NI has a higher proportion of small businesses and lower average wages than the UK as a whole. The employer NIC increase, even with the Employment Allowance offset, represents a proportionally larger burden on NI businesses.
Agricultural property changes affect NI disproportionately. Farming is a larger part of the NI economy than any other UK region. The changes to Agricultural Property Relief will affect a significant number of NI farming families. If you’re a farming family with land and buildings worth more than £1 million (which, given NI property values, is increasingly common), you need professional advice on succession planning.
City Deal investments. The Belfast Region City Deal and Derry/Londonderry City Deal continue to receive UK Government backing. These provide opportunities for businesses in digital, advanced manufacturing, and health sciences, particularly around capital investment incentives.
Cross-border trade. The Windsor Framework continues to create a unique trading environment for NI businesses. The Budget didn’t announce any changes to the framework, but the ongoing complexity of dual-market access means NI businesses face administrative costs that their GB counterparts don’t. If you’re trading goods across the Irish Sea or into the EU via the Republic, make sure your customs and VAT processes are robust.
Invest NI and business support
The Budget didn’t directly address Invest NI funding (this is a devolved matter), but the Barnett consequentials should support continued investment in:
- R&D grants and innovation vouchers
- Skills and training programmes
- Export development support
- Capital grants for manufacturing and technology businesses
If you haven’t engaged with Invest NI, it’s worth exploring what support is available. Their programmes can complement the tax reliefs discussed above.
What should you do now?
Here’s a practical checklist for NI business owners following the Spring 2026 Budget:
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Review your employment costs. Model the full-year impact of the employer NIC changes on your wage bill. Consider whether the Employment Allowance covers the increase.
-
Check your MTD readiness. If you’re self-employed with income over £50,000, you need to be compliant now.
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Plan capital expenditure. Full expensing and the AIA make 2026/27 a good time to invest in equipment and machinery.
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Review your exit timeline. If you’re planning to sell your business, the BADR rate increase to 18% from April 2026 changes the maths.
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Start succession planning. If you’re a family business or farming operation with assets over £1 million, the IHT changes demand attention.
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Talk to your accountant. Seriously. Many of these changes interact with each other in ways that aren’t obvious. A 30-minute conversation now could save you thousands.
How Arro can help
We’ve been advising NI businesses through Budget changes for years, and we know that the headlines rarely tell the full story. If you’re unsure how any of these changes affect your specific situation, book a call with our team. We’ll give you a clear, practical assessment of what to do next.