2026 predictions: 7 trends for small businesses

Small businesses are navigating unpredictable times as prices remain high and energy bills are a constant challenge. Amidst this uncertainty, we’ve researched some key trends and moments that could help you prepare for a successful year in 2026.

1. A new way to file your taxes

Making Tax Digital (MTD) will be a landmark shift in how you file and pay your business income tax. And for many small businesses this process will begin in 2026. 

If your qualifying income is more than £50,000 for the 2024-25 tax year then you’ll start using MTD from April 2026. It will then be phased in for those earning £30,000 in the 2025-26 tax year from April 2027. 

We worked with GoSimpleTax to understand how businesses can prepare for the transition from the current Self Assessment process to quarterly reporting and MTD for income tax. 

HMRC has a Making Tax Digital hub with a range of resources, including webinars and an eligibility checker.  

Will it be simpler? In the long-run we hope so, but the initial setup and adjustment to the new process could take time and a bit of extra money. 

2. Incentives for hiring apprentices 

With new funding available for small businesses to hire apprentices, we could see a rise in under 25s training with SMEs. The government announced it will remove the ‘co-investment’ needed from businesses when hiring an apprentice in this age bracket, so it means apprenticeships are fully funded. 

The existing apprenticeship levy means you could be eligible to get £1,000 for hiring an apprentice, training is funded, and you won’t have to pay employer’s National Insurance. Wages must be at least minimum wage, and these are paid by you as the employer. 

Whether you run a hair salon, restaurant, or small shop on the high street, hiring an apprentice could help support your business growth or plug a skills gap in 2026. 

Read more about hiring an apprentice and the funding available. 

3. Cyber security risks 

It’s not just big businesses now being targeted by fraudsters. Cyber attacks can come from anywhere – and it’s a worrying trend we might see more of in 2026. The key will be how you prepare yourself for any risks. 

Around 42 per cent of small businesses reported phishing attacks in the last 12 months, according to the Cyber Security Breaches Survey 2025. The same study also found the average cost of a cyber attack is £7,960 for micro and small businesses, based on the most disruptive attack reported by each firm affected. 

So, 2026 could be the year you consider a cyber security risk assessment, cyber insurance, and a full cyber security strategy. 

4. AI as a creative partner?

As the uses of artificial intelligence go beyond the administrative, we might start to see more creative uses of the technology over the coming year. Whether that’s using ChatGPT as a sounding board for a business challenge, or asking Gemini to draft you a business pitch, there’s hundreds of ways AI can support your business. 

AI tools are already helping businesses: 

• summarise complex regulatory documents 
• chase invoices 
• write business pitches and social content
• analyse data and suggest ways to improve 

5. Climate data and sustainability reporting

New sustainability reporting standards are set to come in for big businesses in 2026, but this could affect smaller firms if you’re part of their supply chain. 

These larger businesses won’t be able to estimate your emissions so will request data from you about your carbon footprint, waste, and work practices. 

For example, if you’re a small catering company providing food for big businesses then you’ll probably start being asked for more detailed information before winning a contract.  

While a consultation is underway, the government is still to release a timeline of how these standards will be adopted. But smaller businesses might want to start looking into how to prepare for trickle-down data requests in 2026. 

6. New ways for customers to find you

Agentic shopping is predicted to make it easier for consumers to shop within apps like ChatGPT. With the right optimisations, it could give more ways for your products to show up for people in AI search. 

Currently in-app shopping is only available for ChatGPT in the US, but businesses on Etsy, Shopify, and other platforms will start to see their products appearing in personalised chats using AI. And it’s expected to launch in the UK before too long. 

What does this mean for you? The consumer won’t have to leave the app to buy something – and if your product or service answers a need then it could be another marketing channel for you. 

7. A rise in young entrepreneurs? 

We could well see more young people choosing self-employment as an alternative career path. The Simply Business Young Entrepreneur Fund in 2025 saw thousands of aspiring people under 30 apply to win a grant to launch their business. 

Our research with the Federation of Small Businesses found that almost two thirds of young people (18-35 year olds) want to start their own business (rising to 75 per cent of 16-19 year olds) – but only 16 per cent are able to get started.

Could we see more of this ambition become a reality in 2026? Keep an eye on our Big Dreams Project to see how we’re on a mission to help 10,000 small businesses start or grow by 2030.

Helpful guides for small businesses 

• Employment Rights Bill – only 1 in 4 know what’s coming
• How much does an accountant cost?
• Predictions for freelancers and contractors
• Is business insurance a legal requirement?