Following changes to legislation, HM Revenue & Customs (HMRC) has revised the way it calculates interest on late and early payments, linking it more closely with the Bank of England base rate.
As global stock markets reel in response to US President Donald Trump’s sweeping new tariffs, many UK businesses may assume this is a crisis confined to Wall Street or the multinational giants.
No one wants to pay more Inheritance Tax (IHT) than they have to.
1 April 2025 signalled the first wave of payroll changes for businesses to contend with this year, including the increase to the National Living Wage (NLW) and National Minimum Wage (NMW).
VAT is complex, and too many businesses are making costly, avoidable mistakes.
Even a simple oversight or misunderstanding can lead to penalties, cash flow problems, and disputes with HM Revenue & Customs (HMRC).
Here are some of the most common VAT mistakes to avoid:
Additionally, you may need to consider the Kittel principle which allows HMRC to deny VAT reclaims if a business knew or should have known it was involved in a fraudulent supply chain.
Even if a company is not directly involved in fraud, failing to carry out proper due diligence on suppliers can lead to serious financial consequences.
VAT mistakes are avoidable with the right approach, so we suggest you do the following:
For extra peace of mind, seeking expert advice can help ensure your VAT processes are always compliant.
Protect your business from VAT traps – speak with our team today.
The Government has confirmed that Making Tax Digital (MTD) for Income Tax will apply to sole traders and landlords earning over £20,000 a year.
This latest extension means that an additional 900,000 sole traders must adopt digital record-keeping and quarterly tax submissions by this deadline.
Mandating digital record-keeping allows HMRC to enhance compliance and streamline reporting for taxpayers and the tax authority, reducing errors and improving efficiency.
Over the next few years, more sole traders will be brought into the MTD system.
Here is when different income thresholds will come into effect:
You will need to plan ahead to ensure your business is ready for these changes before they are enforced.
How should you prepare?
Sole traders should take the following steps to ensure compliance before the deadline:
Taking proactive steps now to prepare for mandatory digital record-keeping will make your transition to MTD smoother.
Are you ready for MTD? Get in touch for tailored support.
The Chancellor’s Spring Statement introduced harsher penalties for late taxpayers under Making Tax Digital for Income Tax Self Assessment (MTD for ITSA).
With the Government confirming an extension to sole traders and landlords earning more than £20,000 from April 2028, a lot more taxpayers – an estimated 900,000 – will need to pay tax via MTD for ITSA.
Under the current rules, you will not receive a penalty if you pay your tax within the first 15 days of the deadline.
Penalties then apply at the following rates:
However, from April 2025, the new penalty rates will be:
The 15-day grace period, however, will remain.
These increased penalties also apply to taxes paid under MTD for VAT.
Higher penalty charges will be painful for those with cashflow difficulties, businesses still getting to grips with MTD for ITSA, and those who simply forget to pay their taxes on time.
To avoid getting caught out, make sure your bookkeeping is up to date and that you have money set aside for tax bills in advance.
Give yourself plenty of time to submit your tax return and make payments. Leaving everything to the last minute will be even more costly than before.
Avoid getting caught by costly penalties. Get in touch today for urgent advice and guidance.
Submitting your Self-Assessment tax return at the start of this tax year is a great way to manage your tax bill effectively.
The earlier you file a return, the sooner you will find out how much tax you owe.
This can help with financial planning and budgeting for the year ahead.
Early submission also means that any refunds you are owed can be paid to you sooner, thus boosting your cash flow.
You will also have more time to calculate any reliefs or allowable expenses available to you.
This could reduce the amount of tax you owe and free up crucial funds for your business.
Furthermore, submitting a tax return at the beginning of the year provides you with proof of income, which can otherwise be difficult to obtain for those who are self-employed.
Having this proof of income is crucial if you need to apply for a mortgage, claim benefits, or open a savings account.
Finally, leaving your tax return to the last minute can lead to panic, errors, and late submissions that result in penalties from HM Revenue & Customs (HMRC).
This was the case for the more than one million taxpayers who missed the 31 January 2025 deadline this year.
Submitting your tax return at the beginning of the tax year gets it done and out the way, giving you peace of mind and enabling you to focus on other business and financial matters.
Need help submitting your tax return? Contact our experts today.
The new financial year will see many of the proposed changes announced in the Autumn Budget enacted, impacting businesses across the country.
These changes will have business owners planning their tax strategy for the 2025/26 tax year, and a key part of this should be considering capital allowances.
While the changes made in the Autumn Budget could cause you financial problems, capital allowances provide a efficient way to reduce taxable profits.
Here are just a few of the capital allowances you can take advantage of in the 2025/26 tax year:
In short, capital allowances can give your business a real financial boost, but only if the claims are done right.
It is easy to overlook what qualifies or make mistakes that invite HMRC attention, so a bit of expert help now can save a lot of hassle later.
Speak to us today and make capital allowances work for your business in 2025/26.
From 6 April 2025, many directors will need to report dividend income in much more detail in their Self-Assessment tax return.
This change will affect an estimated 900,000 directors across the UK.
HM Revenue & Customs (HMRC) will now require directors to disclose the name and registration number of the company, the highest percentage shareholding held during the tax year, and the amount of dividend income received from that company.
These figures must be listed separately from dividends received from other sources.
At present, directors simply report total dividend income. HMRC has no visibility of how much comes from their own business versus other investments.
This change will allow HMRC to build a clearer picture of remuneration and target compliance activity more effectively.
The Government has abandoned its proposal to require the reporting of actual hours worked by employees through payroll.
Originally delayed to April 2026, the plan has now been dropped entirely due to concerns over the implementation cost, which was estimated at nearly £60 million.
The question about whether a taxpayer is a director of a close company will also become mandatory on the Self-Assessment return from 2025/26.
As a director, you will need to be prepared with accurate figures, particularly where shareholdings change during the year or where different share classes are involved.
These changes are an indication of a move towards increased transparency and more detailed individual reporting.
If you own a business and need help preparing for the 2025/26 changes then contact our team of expert accountants today.
