The Autumn Budget announced significant changes to reduce Agricultural Property Relief (APR) and Business Property Relief (BPR) under Inheritance Tax (IHT).
Time is running out to respond to the open consultation on reforms to APR and BPR
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Rising BADR rates bring MBO timing into sharper view
The idea of selling a business to its management team has long been part of succession planning in the UK.
Late tax payments now charged at 8.5 per cent as HMRC hikes interest rate
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.
Why Trump’s tariffs could have more of an impact on your finances than you realise
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.
Will a discretionary trust prevent your home from qualifying for the residence nil rate band?
No one wants to pay more Inheritance Tax (IHT) than they have to.
Are your payroll practices compliant with the new minimum wage rates?
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).
Too many businesses falling into VAT traps
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:
- Charging the wrong VAT rate – Some goods and services have reduced or zero-rated VAT and applying the wrong rate can mean underpaying or overpaying tax.
- Incorrect VAT reclaims – Not all expenses qualify for VAT recovery. Claiming back VAT incorrectly can trigger an HMRC investigation.
- Late VAT returns and payments – HMRC penalises businesses that miss deadlines. In the Spring Statement the Government announced that late payment penalties for VAT taxpayers will increase from April 2025 onwards. Filing and paying on time is essential to avoid these fines and unnecessary scrutiny.
- Missing the VAT registration threshold – If your annual turnover exceeds £90,000, you must register for VAT. Failing to monitor this can result in penalties for late registration.
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.
How to stay compliant
VAT mistakes are avoidable with the right approach, so we suggest you do the following:
- Check VAT rates carefully to avoid costly errors.
- Keep track of turnover to ensure VAT registration happens on time.
- Maintain proper records to support VAT claims and submissions.
- Submit returns and pay on time to avoid HMRC scrutiny.
- Verify suppliers to steer clear of fraudulent transactions.
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.
900,000 sole traders pulled into MTD for ITSA
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.
Who is affected and when?
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:
- From April 2026 – Sole traders and landlords with income over £50,000 must comply.
- From April 2027 – The threshold reduces to £30,000.
- From April 2028 – Those earning over £20,000 will also be required to join.
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:
- Adopt digital record-keeping – Research and select HMRC-approved accounting software that best fits your needs.
- Understand quarterly reporting – Rather than submitting a single annual return, you must provide tax updates every three months, followed by a final declaration. Keeping up-to-date financial records will help to avoid errors and late submissions.
- Seek professional guidance – An accountant can clarify compliance and help optimise tax efficiency. Their expertise can make the transition less stressful.
- Stay informed – HMRC may refine its requirements, so signing up for relevant updates and attending webinars will ensure you remain prepared.
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.
Labour introduces harsher penalties for late taxpayers
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:
- Day 15 – two per cent
- Day 30 – four per cent
- Annual interest rate on late payments – four per cent
However, from April 2025, the new penalty rates will be:
- Day 15 – three per cent
- Day 30 – six per cent
- Annual interest rate on late payments – 10 per cent
The 15-day grace period, however, will remain.
These increased penalties also apply to taxes paid under MTD for VAT.
How to avoid late tax penalties
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.
Should you submit your tax return at the start of this tax year?
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.