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More than 4 in 10 taxpayers expected to join MTD had not registered before the first quarterly deadline Making Tax Digital (MTD) for Income Tax is now very much a reality for hundreds of thousands of self-employed people and landlords. According to HMRC, more than 500,000 people had signed up ahead of the first quarterly reporting deadline on 7 August . However, that still left an estimated 364,000 taxpayers – more than 4 in 10 of those expected to be within scope – unregistered before the deadline.  HMRC had identified around 864,000 taxpayers with qualifying income above £50,000 who were expected to join MTD from the 2026/27 tax year . What was due on 7 August? The 7 August deadline covered both registration for MTD and submission of the first quarterly update, reporting income for the opening quarter of 2026/27. Those updates have to be submitted using MTD-compatible software , as HMRC doesn't provide its own online filing service for them. For anyone who missed the deadline, the important thing now is not to ignore it. HMRC has said it will send reminder letters to taxpayers who haven't met their obligations, with further figures on registrations and quarterly submissions expected to follow. Sign-ups are increasing HMRC says activity increased significantly as the deadline approached. Craig Ogilvie, HMRC's director of MTD, said almost 30,000 quarterly update obligations were recorded in a single day earlier in deadline week, adding that HMRC was "regularly breaking MTD sign-up and submission records". However, professional bodies have raised concerns about the number of taxpayers who had still not registered. ACCA senior technical advisory manager Yogesh Dhanak said the figures highlighted shortcomings in HMRC's awareness campaign and warned that implementation remained challenging. Given that more than four in ten of those expected to be within scope had yet to register before the deadline, it's clear that a significant number of people are still getting to grips with the new system. What if you've missed a quarterly deadline? There is some breathing space during the first year. There are no penalties for missing a quarterly update deadline during 2026/27 , although that doesn't mean the update can simply be ignored. Taxpayers are still required to submit the information. The more significant date to be aware of is 6 April 2027 . From then, the points-based late-submission penalty regime will apply. Under the system, a taxpayer will receive one point for each missed quarterly deadline . Once four points have accumulated, a £200 penalty will be charged. That makes the current tax year a useful opportunity to get familiar with the process and make sure your record-keeping and software are working properly before penalties come into play. Final thoughts MTD represents a significant change to the way many self-employed people and landlords manage their tax affairs. If you were supposed to join from 2026/27 and haven't yet registered or submitted your first quarterly update, it's worth dealing with it now rather than allowing the outstanding requirements to build up. And for those already submitting quarterly updates, now is the time to make sure the process is working smoothly. From 6 April 2027 , missed quarterly deadlines can start accumulating penalty points, so getting into good habits during this first year could save a lot of unnecessary hassle later. If you're unsure whether MTD applies to you, need help getting set up with compatible software or simply want somebody to take the headache out of the new requirements, talk to us about MTD. You may find this interesting: SPOTLIGHT ON: MTD for income tax

Late Payments: Protecting Your Cashflow and Getting Paid on Time You can make a perfectly profitable sale and still end up with a cashflow problem if the customer doesn’t actually pay you. By the time an invoice becomes overdue, you may already have paid staff, suppliers and even the tax associated with the work. The profit might exist on paper, but unfortunately you can’t pay the bills with an outstanding invoice. And this is far from a small problem. Research commissioned by the Department for Business and Trade and the Office of the Small Business Commissioner estimates that late payments cost the UK economy almost £11 billion a year . At any one time, around £26bn is owed to businesses in late payments , affecting more than 1.5 million businesses – around 28% of the UK business population . For those affected, the average amount outstanding is approximately £17,000 . Perhaps more concerning is the estimate that 14,000 businesses close each year because of late payments , while affected businesses spend an average of 86 staff hours a year simply chasing money they're already owed. There has been some improvement. Department for Business and Trade figures published in July 2026 show that large businesses paid suppliers in an average of 32 days during 2025 , with 15% of invoices paid late. When reporting began in 2018, that figure was 25%. But for SMEs in particular, protecting cashflow needs to start long before an invoice becomes overdue. When is a business payment actually late? The rules on late commercial payments apply to qualifying business-to-business transactions for goods and services. Where a payment date has been agreed, payment terms between private-sector businesses should usually be no longer than 60 days . A longer period can currently be agreed, but it must be fair to both parties. Public authorities are generally expected to pay within 30 days . If you haven't agreed a payment date, a commercial payment will normally become late 30 days after the later of the customer receiving the invoice or the goods or services being supplied. This is why clear payment terms matter. Simply putting "payment due" on an invoice isn't a substitute for agreeing proper terms beforehand. Your terms should establish when payment is due, how the customer can pay, what information they need to approve the invoice and what happens if they pay late. For larger projects, it may also make sense to use deposits, staged invoices or milestone payments rather than doing all the work before raising one large invoice. You may be entitled to charge interest Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses can have a statutory right to charge interest when another business pays late. The statutory rate is 8% above the applicable Bank of England base rate . For these purposes, the reference rate is fixed for six-month periods. The Bank of England rate on 30 June applies from 1 July to 31 December, while the rate on 31 December applies from 1 January to 30 June. The Bank Rate was 3.75% on 30 June 2026 , making the statutory late-payment interest rate 11.75% a year for qualifying debts becoming late between 1 July and 31 December 2026. So, take a qualifying £5,000 invoice that becomes overdue during this period and remains unpaid for 45 days. At 11.75%, the statutory interest would be approximately £72.43 . Interest normally runs from the date payment becomes late until the customer actually pays. You do need to check your contract before applying statutory interest, though. If it already provides its own late-payment remedy or interest rate, the statutory regime may not apply. You may also be able to recover your costs Interest isn't necessarily the only amount you can claim. There is also fixed statutory compensation towards the cost of recovering a qualifying late commercial payment. For debts of up to £999.99, it's £40 . For debts between £1,000 and £9,999.99, it's £70 , and for debts of £10,000 or more, it's £100 . The charge applies to each qualifying late payment, and reasonable additional recovery costs may also be recoverable in appropriate circumstances. Going back to our £5,000 invoice, that could mean £72.43 in interest plus £70 fixed compensation – £142.43 in total , before any further qualifying recovery costs. Whether you actually charge it is also a commercial decision. Sometimes simply making customers aware that statutory charges can be applied is enough to encourage payment. Good credit control starts before the invoice The best way to deal with late payments is, where possible, to stop them becoming late in the first place. That starts when you take on the customer, not 60 days after you've invoiced them. Check new customers before extending significant credit. Companies House can provide useful information, as can proportionate credit checks. For larger contracts, you might also ask for a customer's full statutory accounts rather than relying solely on what's publicly available. Think about your exposure too. If a customer paid you one or two months late, could your business comfortably absorb it? Agree payment terms before starting work and make sure the customer has accepted them. Find out how their payment system works too, particularly with larger organisations where purchase orders, supplier registration, invoice portals and internal approval processes can all cause delays. Then invoice promptly and accurately . Waiting ten days to raise an invoice effectively gives your customer another ten days' credit. Make it easy to pay, use automated reminders where appropriate and don't be afraid to pick up the phone when something becomes overdue. A conversation can often uncover an approval problem or genuine dispute much faster than another automated email. Most importantly, have an escalation process. Decide when a reminder becomes a phone call, when further credit is suspended and when formal recovery action begins. "It's fine, they always pay eventually" isn't much comfort when the outstanding balance has quietly grown to a level your business can't afford. Check how larger customers actually pay If you're considering giving significant credit to a larger company, there's useful information available before you agree their terms. Large companies and LLPs falling within the reporting requirements must publish information about their payment practices at least twice a year. Current size tests include businesses meeting at least two of these thresholds: £54m turnover, £27m balance-sheet total and 250 employees . The published information can show how quickly a business normally pays, including the proportion of invoices paid within 30 days, between 31 and 60 days and after 60 days, as well as how many were paid later than the agreed terms. That's useful information when a prospective customer asks you for generous credit terms. The Fair Payment Code The old Prompt Payment Code has been replaced by the Fair Payment Code , administered by the Office of the Small Business Commissioner. There are three award levels. Gold requires at least 95% of all invoices to be paid within 30 days. Silver requires at least 95% to be paid within 60 days, including at least 95% of invoices to small businesses with fewer than 50 employees within 30 days. Bronze requires at least 95% of all invoices to be paid within 60 days. An award isn't a replacement for doing your own checks, but it can provide another useful indication of how a prospective customer treats its suppliers. What if an invoice is already overdue? Start by finding out why. Check that the customer received the invoice and has everything they need. Has it been approved? Is there a genuine dispute? When is payment actually scheduled? If the customer accepts the debt but is struggling financially, a written payment plan can sometimes achieve a better result than immediately reaching for legal action. Make sure any agreement clearly sets out the amounts and payment dates. If normal chasing gets you nowhere, you can move to a formal demand setting out the amount owed, original due date, any interest or recovery costs and a deadline for payment. Before starting court proceedings, consider the value of the debt, likely recovery costs and whether the customer can actually pay. Winning a court case doesn't magically produce money if the customer is insolvent. Help from the Small Business Commissioner The Office of the Small Business Commissioner provides free support to small UK businesses experiencing payment problems with larger private-sector customers. For its existing complaint service, a small business is one with fewer than 50 employees . In qualifying cases, the Commissioner can provide guidance, contact the larger customer and investigate an unresolved payment dispute. It's generally worth contacting the Commissioner before commencing court proceedings, as they may no longer be able to assist once legal action has started. Keep an eye on your debtors Credit control should be part of your normal financial management, not something you suddenly think about when the bank balance gets uncomfortable. Review your aged-debtor report regularly. Look at what's current, 30 days overdue, 60 days overdue and beyond. Changes in payment behaviour can provide an early warning that a customer is struggling. Your cashflow forecast should also reflect what happens in reality. If your biggest customer is contractually supposed to pay in 30 days but consistently pays in 45, forecasting the cash arriving on day 30 isn't particularly helpful. And remember: turnover isn't cash . Increasing sales can look great in the accounts, but if you're giving customers lengthy credit terms, rapid growth can actually increase pressure on working capital. Don't forget the VAT Late payment can create another headache if you're VAT registered. Under standard VAT accounting, you normally account for VAT based on your sales and purchase invoices even if your customer hasn't paid you yet. You can therefore find yourself paying HMRC VAT on money you haven't actually received. Eligible businesses can consider the VAT Cash Accounting Scheme, where VAT on sales is generally paid when customers pay you. For 2026/27 , businesses can generally join if estimated VAT-taxable turnover for the next 12 months is £1.35m or less , and normally have to leave if VAT-taxable turnover rises above £1.6m . There is a trade-off: input VAT is also normally reclaimed when you pay suppliers rather than when their invoices arrive, so the scheme won't suit everybody. If you've already accounted for VAT and a debt later becomes irrecoverable, VAT bad debt relief may be available. Among the conditions, the debt normally needs to have remained unpaid for at least six months after the later of the payment due date and date of supply, and it must have been written off in your VAT records. Claims generally need to be made within four years and six months of the later of those dates. The late-payment rules are changing There's another reason to keep an eye on this area. The Commercial Payments Bill was introduced in May 2026. As at 7 August 2026 , it had completed committee stage in the House of Lords but had not become law, with its report stage still to be scheduled. Current proposals include a firm maximum payment period of 60 days for many business-to-business contracts, subject to limited exemptions. The Government has indicated that this would begin no earlier than 2027. Possible exemptions include arrangements where both parties are large businesses, where the purchaser is the smaller party, and certain imports and exports. The Bill would also make statutory late-payment interest mandatory, strengthen the Small Business Commissioner's enforcement and dispute-resolution powers, and introduce greater scrutiny of poor payment behaviour by large businesses. For now, these are proposals rather than the current rules . Businesses will need to revisit their contracts and credit-control processes once the legislation receives Royal Assent and implementation dates are confirmed. Getting paid is part of running the business Late payment can't always be avoided, but you can reduce the risk. Clear terms, sensible credit limits, prompt invoices, regular debtor reviews and consistent chasing all help. And if an invoice does become overdue, understanding your rights around interest, compensation and recovery gives you more options. Most importantly, don't wait until an invoice is 60 or 90 days overdue before thinking about credit control. Getting the work is only half the job. Getting paid for it matters too. If you need help improving your cashflow, managing late payments or getting better visibility over your business finances, get in touch.

Student loan interest rates are changing again, with borrowers across every repayment plan seeing an increase from September 2026. The new rates, confirmed by the Department for Education (DfE), will apply from 1 September 2026 to 31 August 2027. There is some protection for borrowers on Plans 2 and 3, however, with the Government retaining a 6% cap which prevents the maximum rate reaching 7.1%. For Plan 1 borrowers , generally those who started undergraduate courses between 1998 and 2012, the interest rate will rise to 4.1%, based on the retail prices index (RPI). That compares with 3.2% in 2025/26, although it remains slightly below the 4.3% charged in 2024/25. Those on Plan 2 , broadly covering undergraduates who started courses between 2012 and 2023, will pay interest of between 4.1% and 6%, depending on their income. Without the Government cap, the maximum rate would have increased to 7.1%. For comparison, the maximum was 6.2% in 2025/26 and 7.3% in 2024/25. Plan 3 postgraduate borrowers will also pay 6%. Again, the cap prevents the rate reaching 7.1%, compared with rates of 6.2% last year and 7.3% the year before. Finally, Plan 5 applies to borrowers who began undergraduate courses in 2023 or later. Their interest rate will increase from 3.2% to 4.1% for 2026/27, still slightly below the 4.3% charged in 2024/25. Of course, student loans don't work in quite the same way as conventional borrowing. What you actually repay is determined by the rules and income thresholds for your particular plan, rather than simply by the size of the outstanding balance. Nevertheless, with rates increasing across the board, it is worth knowing which plan you're on and understanding how the system affects your wider finances – particularly if you're considering whether making additional repayments makes sense. Not sure how your student loan fits into the bigger financial picture? Get in touch and we can talk through the numbers.

Tax receipts rise as HMRC invests further in compliance, data and automation HMRC collected £938.8 billion in tax and National Insurance receipts during 2025/26 , an increase of 9.3% on the previous year . It’s a sizeable figure, but HMRC’s latest annual report tells us more than simply how much tax was collected. It also gives an indication of where the department is heading, particularly when it comes to compliance, digital services and the increasing use of data and automation. For individuals and businesses, those developments are worth paying attention to. Where is the money coming from? Income Tax, Capital Gains Tax and National Insurance remained the biggest sources of Government tax revenue. Together, they accounted for 59% of HMRC’s total receipts during the year, underlining just how important employment and personal taxation remain to the public finances. Alongside collecting tax, HMRC continued to administer tax reliefs, repayments and financial support for individuals and businesses. It also remained responsible for customs processes and supporting international trade. Greater focus on compliance Reducing the tax gap – the difference between the amount of tax theoretically owed and the amount actually collected – remains one of HMRC’s main priorities. During the year, HMRC continued using compliance investigations, debt collection and targeted enforcement to identify and recover unpaid tax. Technology is playing an increasingly important role here too. HMRC continued investing in data, automation and technology to help identify unpaid tax and make its compliance work more efficient. For taxpayers and businesses, good record-keeping has always mattered. As HMRC becomes increasingly capable of analysing and comparing the information available to it, keeping accurate and consistent records becomes even more important. HMRC continues to move online Modernisation was another major theme during 2025/26. HMRC progressed its preparations for Making Tax Digital for Income Tax , while continuing to develop digital services for taxpayers, businesses and agents. The department also wants more routine enquiries to be dealt with online, reducing reliance on telephone support. Customer service performance remained under pressure during the year, although HMRC reported further improvements across its digital channels. Automation and artificial intelligence are also now being used within some of HMRC’s operational and compliance processes. What does this mean for taxpayers? HMRC identified three main priorities during the year: reducing the tax gap, improving customer experience and modernising the tax and customs system . Those objectives shaped both its spending plans and its operational work. For businesses in particular, the direction of travel is fairly clear. Tax administration is becoming increasingly digital and data-led, while HMRC continues to invest in its ability to identify discrepancies and unpaid tax. That doesn't mean businesses need to be worried about HMRC. It does mean there is increasingly little room for poor records, missed deadlines or figures that don't properly reconcile. Final thoughts HMRC's £938.8bn of receipts may be the headline figure, but the wider story in its annual report is how tax administration itself continues to change. Better use of data, greater automation, Making Tax Digital and increased compliance activity are all becoming part of the normal tax environment. For business owners, having good systems and keeping on top of your tax position throughout the year is becoming more important, not less. If you're not confident that your records, tax planning or accounting systems are keeping pace, that's something I can help with.  Talk to us about your taxes.

How divorce can affect property, pensions, investments and future tax bills. Divorce or the end of a civil partnership is never just about paperwork. There are often some difficult personal and financial decisions to make, and understandably, tax probably isn’t the first thing on your mind. However, it is something that needs to be considered before a financial settlement is agreed. A division of assets can look perfectly fair on paper, but the after-tax position may tell a different story. One person might receive an investment carrying a significant built-in gain, move out of the family home, take on a property and its mortgage, receive a share of a pension or become responsible for claiming Child Benefit. All of these can have tax consequences. The important thing is to understand those consequences before you sign a settlement and move the assets , rather than discovering them afterwards. To put the subject into context, the latest Office for National Statistics release reported 103,816 legal partnership dissolutions in England and Wales in 2023 , comprising 102,678 divorces and 1,138 civil partnership dissolutions. Divorce rates were 8.6 for men and 8.5 for women per 1,000 married individuals. Timing can make a big difference One of the first things I would establish is the timeline. For tax purposes, seemingly simple dates can make a considerable difference, including when you stopped living together, whether the separation was likely to be permanent, when the conditional order or decree nisi was made, when the final order or decree absolute was made, when a financial agreement or consent order was approved, when assets were transferred or sold, and when somebody moved out of the family home. These dates can affect Capital Gains Tax (CGT), property tax, pensions, Child Benefit, Marriage Allowance and Inheritance Tax planning. For CGT purposes, HMRC treats spouses and civil partners as living together unless they are separated under a court order, by a formal deed of separation, or in circumstances where the separation is likely to be permanent. Simply living in different houses does not automatically mean you are separated for these rules if the marriage or civil partnership has not broken down. Capital Gains Tax and transferring assets CGT is one of the main areas I would look at during a divorce. While spouses or civil partners are living together, transfers of most assets between them generally take place on a “no gain/no loss” basis. In simple terms, the person transferring the asset does not trigger an immediate CGT charge. Instead, the person receiving it effectively takes over the original base cost for future tax purposes. The current separation rules first applied to disposals made on or after 6 April 2023 and give separating couples a longer period in which assets can be transferred on this basis. If you and your spouse or civil partner were living together at some point during a tax year, assets can be transferred on a no gain/no loss basis until the earlier of: The end of the third tax year following the tax year in which you stopped living together; or The date the court grants a divorce, annulment or dissolution. Importantly, transfers made under a formal divorce or separation agreement or court order can qualify for no gain/no loss treatment without a time limit . This is why the legal documentation surrounding a settlement can be so important. Don't just look at the family home The family home understandably gets a lot of attention, but it isn't the only asset that may have a future tax liability attached to it. Buy-to-let properties, second homes, shares, investment portfolios, cryptocurrency, business shares, commercial property, land, valuable personal possessions and overseas assets may all need reviewing. Someone receiving an asset under the no gain/no loss rules might not pay tax when they receive it, but they can inherit its original tax base cost. If they later sell it, CGT may therefore be calculated on the gain since the original purchase , rather than simply the increase in value since the divorce. For 2026/27 , the CGT annual exempt amount for individuals is £3,000 . For gains made from 6 April 2026 , basic rate taxpayers pay CGT at 18% on gains within the basic rate band and 24% on gains above it. Trustees and personal representatives pay CGT at 24% from 6 April 2026. This is why I would always encourage somebody to compare assets on an after-tax basis . £200,000 in cash and an investment portfolio valued at £200,000 are not necessarily worth the same amount if that portfolio contains a substantial unrealised gain. What happens to the family home? The family home is often the largest asset involved and can also be one of the more complicated tax areas. Private Residence Relief can reduce or eliminate CGT when you sell a property that has been your only or main residence. For spouses and civil partners living together, there can only be one main residence between them for the purposes of the relief. After separation, each person may have a different only or main residence. Where somebody moves out of the matrimonial or civil partnership home and later sells or transfers their share, they may be entitled to Private Residence Relief for the period before they moved out, plus the final nine months of ownership . There are also special rules where somebody retains an interest in the former family home and it is eventually sold under a formal divorce or separation agreement or court order. In some circumstances, the person who moved out can choose to treat the period after leaving as though the property remained their only or main residence, provided the necessary conditions are met. However, making that choice can affect the relief available on another home bought after moving out, so this is something I would want reviewed before the property is sold. Stamp Duty Land Tax and mortgages For properties in England and Northern Ireland, Stamp Duty Land Tax (SDLT) does not apply where an interest in land or property is transferred to a spouse or civil partner as part of an agreement or court order because the couple are divorcing, dissolving a civil partnership, annulling a marriage or legally separating. In those circumstances, HMRC does not need to be told about the transfer, even where the value exceeds the SDLT threshold. This is different from certain other property transfers. For example, unmarried joint owners transferring a larger share of a property between themselves can potentially have an SDLT liability where money changes hands or mortgage debt is taken over. Wales and Scotland also have their own systems - Land Transaction Tax in Wales and Land and Buildings Transaction Tax in Scotland - so the position should always be checked according to where the property is located. The mortgage needs considering too. If one person is keeping the family home and taking over the mortgage, the lender will usually need to agree. Outside the special divorce and separation rules, taking responsibility for mortgage debt can also count as chargeable consideration for SDLT purposes. Before agreeing that one person keeps the property, I would therefore want to know whether the lender will release the other person, whether the transfer falls within the divorce or separation SDLT rules, whether either person retains an interest in the property and whether a future sale could result in CGT. I'd also want to know whether the person moving out intends to buy another property. Don't overlook pensions Pensions can be one of the most valuable assets within a marriage, but because you can't necessarily see or access the money today, they're also very easy to undervalue. A pension sharing order can give one person a percentage of the value of their former spouse or civil partner's pension rights. The reduction in the original member's rights is known as the pension debit , while the amount allocated to the former spouse or civil partner is the pension credit . This isn't simply money handed over as cash. The recipient becomes entitled to pension benefits in their own right, with those benefits taxable in their hands when eventually taken, depending on the pension scheme and how they access it. Pensions therefore need to be considered alongside tax, retirement plans, age, health, income requirements and the type of scheme involved. Defined benefit pensions, public sector pensions and pensions already in payment may require specialist advice. Maintenance payments Child maintenance payments are not taxable for the recipient and do not affect benefits, including Universal Credit. Spousal maintenance is different, although most modern divorce maintenance arrangements don't provide a straightforward tax deduction for the person making the payments. A limited Maintenance Payments Relief still exists where specific conditions are satisfied, including that either person was born before 6 April 1935 . For 2026/27 , this relief is worth 10% of qualifying maintenance payments, up to a maximum tax reduction of £453 . Where maintenance forms part of a settlement, both parties should therefore understand how it affects their wider tax and cash-flow position. Child Benefit can change after separation If children are involved, Child Benefit should also be reviewed. For 2026/27 , Child Benefit is £27.05 per week for the eldest or only child and £17.90 per week for each additional child. The High Income Child Benefit Charge applies where the higher earner in a couple has adjusted net income above £60,000 . It is based on that person's individual income rather than the couple's combined income. The charge gradually claws back Child Benefit between £60,000 and £80,000 , with the full Child Benefit amount being clawed back once adjusted net income exceeds £80,000 . Following a permanent separation, the former partner's income is no longer taken into account. The threshold instead applies to the parent receiving Child Benefit or their new partner, where applicable. Separation can therefore change who should claim, who might become liable for the charge and who receives valuable National Insurance credits. Marriage Allowance and tax codes Marriage Allowance allows eligible married couples and civil partners to transfer £1,260 of one person's Personal Allowance to the other. For 2026/27 , the standard Personal Allowance is £12,570 , and the transfer can reduce the receiving partner's tax bill by up to £252 . Marriage Allowance must be cancelled where the relationship ends through divorce, dissolution of a civil partnership or legal separation. Tax codes may also need updating following changes to somebody's name, address, employment benefits or taxable income. It's a relatively small administrative point, but one that can easily get forgotten when there are much bigger things going on. Inheritance Tax, wills and estate planning Divorce can have a significant effect on estate planning. Transfers between spouses and civil partners are generally exempt from Inheritance Tax while the marriage or civil partnership continues, but that position changes following divorce or dissolution. Existing wills should also be reviewed because divorce can affect how their provisions operate. For 2026/27 , the Inheritance Tax nil rate band is £325,000 and the residence nil rate band is £175,000 . The residence nil rate band is available where a qualifying residence passes to direct descendants, subject to the relevant conditions, and the taper begins where the net estate exceeds £2 million . HMRC states that qualifying estates can continue to pass on up to £500,000 , or up to £1 million for a surviving spouse or civil partner where the relevant unused allowances are available. After a separation, I would recommend reviewing your will, pension death benefit nominations, life insurance policies, jointly owned property, trusts, guardianship wishes for children and any powers of attorney. Tax planning and legal planning really need to work together here. What if you own a business together? Where one or both spouses own a business, there can be another layer of complexity. You may need to consider whether shares are being transferred, whether no gain/no loss CGT treatment applies, the company's distributable reserves, changes to dividends, whether both people remain directors or employees, whether one person is exiting the business, whether a valuation is required and the terms of any shareholder agreement. Dividend tax rates changed for 2026/27 . The dividend allowance remains £500 , while the dividend tax rates are 10.75% for basic rate taxpayers, 35.75% for higher rate taxpayers and 39.35% for additional rate taxpayers . If company shares form part of a divorce settlement, I would always recommend reviewing the position before anything is signed. The legal value of those shares, their tax base cost, future dividend rights and the control they provide aren't necessarily the same thing. A note for unmarried couples Many of the special tax rules I've discussed apply specifically to spouses and civil partners. Unmarried couples should therefore take particular care because the tax treatment can be very different, particularly for CGT, SDLT, Inheritance Tax and pensions. For example, where unmarried joint owners transfer an interest in a property from one owner to another, there can be an SDLT position if consideration is given, including taking over mortgage debt. Living together does not automatically provide the same tax treatment as marriage or civil partnership. Before agreeing a settlement There is quite a lot to consider, which is exactly why I wouldn't leave the tax review until after an agreement has been reached. Before finalising a divorce or dissolution settlement, I would want to establish what each person owns, whether any assets contain built-in gains, whether transfers qualify for no gain/no loss CGT treatment, and what happens to the family home. I'd also look at mortgages, pensions, maintenance, Child Benefit, the High Income Child Benefit Charge, Marriage Allowance, tax codes, wills and pension nominations, as well as any business shares or company income involved. Summing up Tax planning during a divorce isn't about making a settlement less fair. Quite the opposite – it's about understanding what each person is actually receiving once tax is taken into account . Two assets with exactly the same value on paper can leave their owners in very different financial positions. Timing, ownership, residence history and future plans can all change the outcome, particularly where property, pensions, investments, businesses or Child Benefit are involved. The best time to review all of this is before the financial order is finalised and before assets are transferred . That way, everyone has a clearer picture of the real after-tax position and there is less chance of an unexpected tax bill appearing further down the line. If you're going through a divorce or separation and would like help understanding how property, pensions, investments or Child Benefit could affect your tax position, please get in touch.

According to the Department for Work and Pensions’ (DWP) latest annual report and accounts, fraudulent benefit overpayments reached £9.9 billion in 2025/26 , up from £9.4bn the previous year. Interestingly, that increase doesn’t mean the overall rate of overpayment has gone up. In fact, the rate of benefit spending lost through fraud and error actually fell slightly, from 3.3% to 3.2% . The cash figure has increased because the Government is spending more on benefits overall. Universal Credit still accounts for the largest amount Universal Credit remains responsible for by far the biggest share of overpayments. Its overpayment rate fell from 9.5% to 8.5% , but again the amount of money involved went in the opposite direction, increasing from £6.2bn to £6.7bn . There was better news for Housing Benefit, where both figures fell. The overpayment rate dropped from 7.2% to 6.2% , while the amount overpaid reduced from £1.1bn to £800 million . PIP overpayments almost double One of the more striking figures is for Personal Independence Payment (PIP). Overpayments almost doubled from £330m to £660m , with the overpayment rate rising from 1.3% to 2.3% . The figures come alongside the Government's review of the PIP system, which concluded that the current approach is no longer fit for purpose. Pension Credit, meanwhile, had the highest overpayment rate of any benefit at 10% , equivalent to £620m. That compares with 10.3%, or £610m, a year earlier. State Pension overpayments also increased, rising from £180m to £230m . What is the DWP doing about it? The DWP says its counter-fraud work prevented around £27bn of incorrect payments during 2025/26. It also reviewed 1.2 million Universal Credit claims , identifying and correcting around 250,000 awards . The department estimates that work alone generated savings of approximately £1.1bn . Its longer-term target is to bring the overall level of fraud and error across the welfare system down to 2.8% by 2028/29 . There are a lot of very large numbers here, but the distinction between the percentage rate and the actual amount being lost is important. While the overall overpayment rate has edged down, increasing benefit expenditure means the cost to the public purse has still risen. Whether the measures now being taken can reverse that trend remains to be seen. Talk to us about your finances.

The UK’s crypto industry has reached what the Financial Conduct Authority (FCA) describes as a “significant milestone”, with the timetable now set for a much wider regulatory regime. From October 2027, crypto firms operating in the UK will need to meet tougher standards around financial resilience, market integrity and consumer protection. The new regime will cover trading platforms, intermediaries, custodians, stablecoin issuers and firms arranging staking. Importantly, firms carrying out these activities will need FCA authorisation to operate in the UK. There is some time to prepare. Applications will open on 30 September 2026 and close on 28 February 2027, ahead of the new rules becoming mandatory from October 2027. The FCA says the measures follow a series of consultations with the industry, with changes made to ensure the regime works in practice rather than simply adding another layer of regulation. For example, capital requirements for stablecoin firms have been simplified, while trading rules have been adapted to better reflect the way crypto markets actually operate. Stablecoins themselves will also come under clearer standards. These are crypto assets designed to maintain a stable value, usually by being linked to a currency such as sterling or the US dollar. The FCA believes clearer rules should help build trust in how stablecoins are used over time. Another significant area is market abuse. The new regime will introduce rules covering issues such as insider dealing and market manipulation, alongside further guidance on inside information, legitimate market practice, best execution and how firms should monitor trading activity. Businesses safeguarding qualifying crypto assets will also face dedicated client asset rules, reflecting the particular risks involved in holding these assets on behalf of customers. For now, however, the FCA’s oversight of the crypto sector remains relatively limited, covering financial promotions and anti-money laundering controls until October 2027. There’s clearly still some way to go before the full regime takes effect, but for businesses operating in the crypto sector, the direction of travel is now much clearer. With the application window opening in September 2026, firms affected by the changes should be thinking about what the new requirements will mean for them well before the October 2027 deadline.  Need to talk through what changes affecting your business could mean for your finances? Get in touch.

E-invoicing is coming – but what does that actually mean for your business? E-invoicing is going to become mandatory for all UK VAT invoices from April 2029. Now, 2029 might sound comfortably far away. And no, I’m certainly not suggesting businesses need to start ripping out their accounting systems tomorrow. But this is one of those changes where understanding what’s coming – and making sure your current processes aren’t going to cause problems later – is probably rather sensible. Particularly because e-invoicing isn’t simply about emailing invoices instead of putting them in the post. A PDF isn’t an e-invoice This is probably the first important distinction. Lots of businesses already consider their invoicing to be digital. They raise an invoice in their accounting software, turn it into a PDF and email it to the customer. But that isn’t what HMRC means by e-invoicing. An e-invoice involves invoice data being exchanged digitally and directly between the supplier’s and customer’s finance systems, even where they use different software. Rather than somebody receiving a PDF and then checking, coding, approving or entering the information, the structured data can feed directly into their system. That includes things such as supplier details, VAT numbers, invoice dates, tax points, purchase order references, VAT rates and payment terms. In other words, the invoice doesn’t just look digital. The information behind it is digital too. So, what’s actually changing? The government has confirmed that e-invoicing will become mandatory for all VAT invoices from April 2029. That generally means business-to-business and business-to-government transactions where VAT is due, rather than your normal business-to-consumer retail transactions. We don’t yet have all the detail. HMRC and the Department for Business and Trade are due to publish an implementation roadmap at Budget 2026, which should give us more information about the timetable, staging, standards and practical requirements. We do know, however, that Peppol has been announced as the UK’s core interoperability network for e-invoicing. So the direction of travel is becoming considerably clearer. Another step towards digital tax This shouldn’t really come as a huge surprise. VAT-registered businesses are already required to maintain digital VAT records and submit their returns through Making Tax Digital software. For 2026/27, the VAT registration threshold remains £90,000, with the deregistration threshold at £88,000. The standard VAT rate remains 20%, alongside the reduced rate of 5% and zero rate of 0%. Making Tax Digital for Income Tax has also now started for sole traders and landlords with qualifying income over £50,000 from 6 April 2026. That threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028. E-invoicing is another part of that same general move towards structured digital records, more regular reporting and less manual data entry. But 2029 is ages away… True. And businesses certainly don’t need to complete an e-invoicing rollout now. But there’s a fairly big gap between businesses thinking they invoice digitally and actually being ready for e-invoicing. HMRC-commissioned research found that 59% of VAT-registered SMEs surveyed were familiar with the definition of e-invoicing, but only 29% said they actually used it. PDF and email remained the most common ways of sending and receiving invoices, followed by good old-fashioned paper and post. So there’s potentially quite a bit of work to be done. And some businesses may find they need to make changes well before April 2029. Larger businesses and public sector organisations could start requiring suppliers to provide structured or Peppol-ready invoices as part of their own preparations. If one of those organisations happens to be a major customer, their timetable may suddenly become rather more important than the government’s. This isn’t really just about software There’s a temptation with anything involving the word “digital” to assume the answer is simply buying or upgrading some software. It isn’t. E-invoicing touches the whole process – sales invoices, purchase invoices, customer and supplier information, VAT coding, purchase orders, approvals, credit control and ultimately getting paid. So a useful starting point is simply to look at how invoices currently travel through your business. How are sales invoices created and checked? Are the correct customer details and VAT information held? Are purchase order numbers regularly missing? How quickly do invoices actually go out? And on the other side, how do supplier invoices arrive? Who approves them? How is the VAT checked? Are credit notes dealt with properly? Is somebody manually entering information that already exists somewhere else? Those are process questions rather than technology questions. Your data matters too Structured invoicing relies on structured – and accurate – information. Customer and supplier records therefore become rather important. Legal and trading names, addresses, VAT and company registration numbers, finance contacts, purchase order requirements, payment terms and bank details all need to be right. VAT numbers are an obvious area to pay particular attention to. At the moment, a human being can often spot that something is slightly wrong and work around it. Automated systems tend to be rather less forgiving and are more likely to reject or flag information that doesn’t meet the required format. Cleaning up that information now isn't wasted effort anyway. Good data makes your current accounting processes better too. And then there’s cashflow This is perhaps where e-invoicing becomes more interesting than simply another compliance exercise. Late payment remains a huge problem for UK businesses. The government’s late payment response estimated that late payments cost the UK economy almost £11 billion each year, with around 14,000 businesses closing annually as a result. At any given time, businesses are estimated to be owed around £26 billion in late payments. E-invoicing obviously isn’t going to magically make a customer who doesn’t want to pay suddenly reach for their bank card. But it can remove some of the excuses and delays. Missing purchase order numbers, incorrect information, invoices sitting waiting to be entered onto a system and unclear approval processes can all delay payment. If businesses use the move to e-invoicing as an opportunity to improve those processes, there could be a genuine commercial benefit alongside the compliance one. What should businesses do now? For most businesses, I wouldn't be recommending dramatic changes at this stage. But I would be asking a few questions. Does your current accounting software support structured e-invoicing, or is it planning to? What about Peppol? Does it handle purchase orders, approvals and credit notes properly? Does it integrate with the other systems you use? And perhaps more importantly, where are the manual bits in your current process? Spreadsheets, PDFs, paper invoices, email approvals and manually rekeying information aren't necessarily problems today. But knowing where you rely on them gives you a much better idea of what may eventually need to change. It's also worth looking at your larger customers, public sector customers and overseas customers. They may well start introducing their own e-invoicing requirements before the UK deadline arrives. And don't forget purchase invoices. Receiving structured supplier invoices can reduce manual entry, improve VAT coding, speed up approvals and give businesses better visibility over what they owe. So this isn't only about how you send invoices to customers. What happens next? The next important milestone will be the Budget 2026 roadmap. That should tell us more about the detailed timetable, whether there will be any phasing by business size or transaction type, Peppol and technical requirements, transitional arrangements, legacy software and the support available to smaller businesses. The government has already said it will continue talking to stakeholders about older systems that can't interoperate with the future system. That could be particularly important for businesses using bespoke, older or sector-specific software. Once we have the roadmap, businesses should be in a much better position to work out what – if anything – they actually need to change. For now, don't panic – but don't ignore it either April 2029 is still some way off. There's no need to rush into changing perfectly good software or completely redesigning your invoicing process simply because e-invoicing is coming. But there is an opportunity here. Businesses can use the next couple of years to tidy their customer and supplier data, understand where manual work exists, talk to their software providers and improve the processes around invoicing and payment.  Then, when the detailed requirements become clearer, they'll be making planned decisions rather than hurried ones. And if the end result is less admin, fewer invoice errors, quicker approvals and better cashflow, e-invoicing might turn out to be more than simply another HMRC compliance requirement.

Millions of homeowners could see their mortgage repayments increase over the next few years, according to the latest forecasts from the Bank of England. Its latest Financial Stability Report suggests that more than 5 million homeowners are expected to face higher monthly repayments by the end of 2028 . That's one million more than the Bank predicted in December, with the change linked to the economic impact of the Iran conflict and higher energy prices. What could this mean for borrowers? The good news is that, for many people, the increases are expected to be more modest than those seen over the past couple of years. The Bank estimates that a typical homeowner coming to the end of a fixed-rate mortgage over the next two years will pay around £45 more per month . That compares with borrowers who refinanced between late 2022 and the end of 2024, when average repayments increased by around £120 per month . However, not everyone will see only a small increase. Around 750,000 homeowners currently paying mortgage rates below 3% are due to come off those deals this year. For this group, the Bank expects repayments to rise by an average of £170 per month . Why have expectations changed? Before the recent conflict involving Iran, the outlook had been more positive. More than 2 million borrowers with two-year fixed-rate mortgages ending before the close of 2028 had been expected to remortgage at similar rates, with some even seeing their monthly repayments fall. That picture has now changed. The conflict pushed up oil and gas prices after the closure of the Strait of Hormuz, increasing concerns about inflation and reducing expectations of further interest rate cuts. Mortgage lenders have reflected those higher funding costs in the rates they offer borrowers. Most homeowners are protected... for now More than eight in ten mortgage holders are currently on fixed-rate deals, typically lasting two or five years. That means their monthly repayments won't change until their current deal comes to an end. The challenge comes when it's time to remortgage. For some households, even a relatively modest increase in monthly repayments can make a noticeable difference to the household budget. A practical view No one can predict exactly where mortgage rates will be in the next year or two, but this is a reminder that borrowing costs can change quickly when wider economic events unfold. If your fixed-rate mortgage is due to end over the next 12 to 18 months, it's worth reviewing your finances early rather than waiting until the last minute. Having time to understand your options can make budgeting much easier if repayments are likely to increase. Final thought The latest forecasts suggest that mortgage costs are likely to remain under pressure for many homeowners over the coming years. While the increases are expected to be less severe than those experienced during the recent interest rate rises, they could still have a meaningful impact on household finances. Planning ahead, reviewing your budget and understanding your options before your current deal expires can help avoid unnecessary surprises. If you'd like to discuss how rising mortgage costs fit into your wider financial plans, feel free to get in touch.

Employers are becoming more cautious as confidence weakens Many businesses are taking a more cautious approach to recruitment, with temporary staff increasingly being chosen over permanent hires. A new report from the recruitment industry suggests that uncertainty around the economy, rising costs and wider global events are all influencing hiring decisions, as employers look to remain flexible. For many businesses, it's another sign that confidence remains fragile despite hopes of a stronger year. Permanent recruitment slows According to the latest report, permanent staff appointments fell in May at the fastest rate seen in 10 months . Recruiters say many employers are reluctant to commit to expanding their permanent workforce while economic conditions remain uncertain. Political uncertainty in the UK, together with ongoing conflict in the Middle East, has added to concerns about the wider outlook, making some businesses more cautious about long-term recruitment decisions. The findings are based on a survey of 400 UK recruitment and employment consultancies , carried out during the middle of May. More people looking for work The report also found that more candidates are actively looking for employment. Recruiters suggest this is being driven by a combination of redundancies, fewer vacancies and growing concerns about job security. At the same time, demand from employers has weakened, with many businesses working within tighter budgets. As a result, both starting salaries and temporary pay rates increased only modestly during May compared with the previous month. Some sectors remain stronger than others Not every industry is seeing the same picture. The nursing, medical and care sector was the only area monitored by the report to record an increase in demand for permanent staff. By contrast, retail experienced the sharpest fall in permanent vacancies, highlighting the continued pressures facing many consumer-facing businesses. A wider picture of the labour market The recruitment data adds to other recent signs that the UK labour market is becoming more challenging. Official figures recently showed the unemployment rate rising unexpectedly to 5% in the three months to March, while wage growth has also begun to slow. The report follows separate Government-backed research which found that more than one million young people are now not in work or education - the highest level for more than a decade. Together, these figures suggest many employers are taking a more measured approach to recruitment while they wait for greater economic certainty. Final thoughts Recruitment is rarely a one-size-fits-all decision. While wider economic trends are worth keeping an eye on, the right approach will depend on your own business, your cashflow and your plans for growth. For some businesses, taking on permanent staff will still be the right move. For others, temporary or flexible arrangements may provide the breathing space needed while trading conditions remain uncertain. Having a clear understanding of your finances can make those decisions much easier and help ensure you're planning from a position of confidence rather than reacting to headlines. Talk to us about your business.

Protecting your corporation tax thresholds Running more than one limited company is common for many owner-managed businesses. You might have a trading company alongside a property company, a separate company for a different service line, a holding company sitting above the group, or perhaps an older company that's been retained for a particular brand or project. Each company may make perfect commercial sense on its own. The important point is that, for corporation tax purposes, HMRC may look at those companies together. Since 1 April 2023 , the UK has operated a tiered corporation tax system. The thresholds that determine whether a company pays the 19% small profits rate , the 25% main rate , or falls into the marginal relief band between the two can be divided between associated companies. The more associated companies there are, the lower those thresholds become for each company. This guide explains how the rules apply for accounting periods falling within the corporation tax financial year beginning 1 April 2026 , who counts as an associated company, and the practical steps you can take to protect your position. Corporation tax rates For the financial year beginning 1 April 2026 , the corporation tax rates remain: 19% small profits rate for companies with profits up to £50,000 25% main rate for companies with profits over £250,000 Marginal relief for profits between £50,000 and £250,000 The Government's Corporate Tax Roadmap has also confirmed its intention to keep the headline corporation tax rate capped at 25% throughout this Parliament, while retaining the current small profits rate and marginal relief thresholds. One point that's often overlooked is how marginal relief works. Companies within the marginal relief band are first charged corporation tax at 25% , before marginal relief is deducted using the standard 3/200 fraction . In practice, profits within this band can face an effective marginal corporation tax rate of 26.5% . That's why it's important to monitor profit levels carefully. The associated company rules can bring a business into the marginal relief band much sooner than many directors expect. What is an associated company? The rules are based on control . A company is associated with another if: One company controls the other, or Both companies are controlled by the same person or group of people. For accounting periods beginning on or after 1 April 2023 , the corporation tax thresholds are divided by the total number of associated companies, including the company itself. It's also worth remembering that a company can count as associated even if that relationship only exists for part of the accounting period. This often catches people out when companies are formed, sold, struck off or reorganised during the year. For a 12-month accounting period, a standalone company has the full £50,000 lower limit and £250,000 upper limit available. If there are two associated companies , those limits reduce to £25,000 and £125,000 for each company. With three associated companies , they reduce further to approximately £16,667 and £83,333 . With four associated companies , the limits become £12,500 and £62,500 , while five associated companies reduce them again to £10,000 and £50,000 . For example, a standalone company making £40,000 of taxable profit would normally expect to pay corporation tax at 19% . If it has three associated companies, however, its thresholds reduce to £12,500 and £62,500 , meaning that same £40,000 profit could fall into the marginal relief band. Control is wider than many people realise Control isn't limited to share ownership. It can also include voting rights, entitlement to income or assets on a winding up, and rights held indirectly. The rules can also take account of a person's associates , including: A spouse or civil partner Parents, grandparents and other lineal ancestors Children, grandchildren and other lineal descendants Brothers and sisters Business partners Certain trustees and personal representatives That doesn't automatically mean every family-owned company becomes associated. Where companies are controlled by associates, HMRC will consider whether there is substantial commercial interdependence between them. For example, a husband and wife may each own separate businesses in completely different sectors. Those businesses would not usually be associated simply because they are married. However, that position may change if they share customers, staff, premises, funding, equipment or management. What is substantial commercial interdependence? HMRC looks at three broad areas. Financial interdependence This may exist where one company financially supports another, or where both have a financial interest in the same business. Examples include: Inter-company loans Guarantees Shared funding Informal financial support Economic interdependence This looks at whether companies work towards the same commercial objectives. Shared customers, regular referrals or businesses that rely on each other commercially may all indicate economic interdependence. Organisational interdependence Companies may also be linked through shared: Management Employees Premises Equipment Administrative support Systems Not every connection has to exist. A strong link in just one area may be enough, depending on the circumstances. Companies that often catch people out Some of the most common situations include: Old companies retained for future projects or brand names. Property companies renting premises to a trading company. Family companies providing loans, equipment or referrals. Separate companies owned by spouses but sharing staff or administration. Investment companies that appear dormant but still receive investment income. It's also important to distinguish between being dormant at Companies House and being dormant for corporation tax purposes. The two aren't necessarily the same. Similarly, while some passive holding companies can be ignored under specific rules, the conditions are narrow and shouldn't be assumed to apply without checking. Quarterly instalment payments Associated companies don't just affect corporation tax rates. They can also affect when corporation tax has to be paid. A company is normally regarded as large if annual taxable profits exceed £1.5 million but do not exceed £20 million . However, from 1 April 2023 , that £1.5 million threshold is also divided by the number of associated companies. For example, where there are three associated companies in total, the threshold reduces to £500,000 . That can have significant cashflow implications. Large companies generally pay corporation tax in four instalments throughout the accounting period: Six months and 13 days after the start of the accounting period. Three months after the first instalment. Three months after the second instalment. Three months and 14 days after the end of the accounting period. Very large companies, with profits above £20 million (again adjusted for associated companies), pay even earlier. Although exceptions do exist, including where corporation tax is below £10,000 or certain first-year provisions apply, these rules should always be reviewed before payment dates are assumed. Practical steps If you operate more than one company, it's worth reviewing your structure regularly. Good practice includes: Reviewing all connected companies each year. Checking whether older companies are still needed. Keeping transactions between companies on commercial terms. Separating premises, staff, systems and customers wherever possible. Planning profits across the group. Documenting where businesses genuinely operate independently.  Final thoughts The associated company rules can affect both how much corporation tax you pay and when you have to pay it . If you run multiple companies, have family members with their own businesses, or are thinking about setting up another company, it's worth reviewing the position before your next year end. A straightforward review can identify which companies count, whether any exclusions apply, and whether you're approaching the marginal relief band or quarterly instalment payment thresholds. If you'd like to review your associated company position before your next year end, I'm always happy to have a conversation. Talk to us about your business.

Guaranteed hours plans move forward: What the proposed employment reforms could mean for businesses The Government has announced further details of its plans to give workers on zero-hours and low-hours contracts greater certainty over their working patterns. The proposals form part of Labour's wider programme of employment reforms and are intended to provide workers with greater security over both their hours and their income. However, while supporters say the changes could improve financial stability for employees, many businesses are concerned about the practical impact, particularly in sectors where staffing needs change throughout the year. What is being proposed? Under the latest proposals, employees who regularly work more hours than their contracted amount could become entitled to a contract that reflects those hours after an initial 12-week reference period . The Government's preferred approach is to give eligible workers a guaranteed baseline of hours, providing more certainty over earnings and making it easier for individuals to budget and plan their finances. The new right would apply not only to people on zero-hours contracts but also to workers on low-hours contracts. Ministers are currently considering defining a low-hours contract as somewhere between eight and 20 hours per week . Why is the Government introducing the changes? The proposals are designed to deliver Labour's commitment to end what it describes as exploitative zero-hours contracts. Supporters argue that workers who regularly work consistent hours should have contracts that better reflect the reality of their working pattern, giving them greater financial security and reducing uncertainty around future income. For many employees, knowing what they are likely to earn each month can make budgeting considerably easier. Questions still remain Although the direction of travel is becoming clearer, several important details have yet to be confirmed. The Government is still consulting on issues including: How guaranteed hours will be calculated. How seasonal or variable work will be treated. What happens once the initial 12-week assessment period has ended. Until those details are finalised, businesses may find it difficult to assess exactly how the proposals could affect their workforce. Concerns from employers Business groups have expressed concerns that the reforms may prove challenging for industries where staffing requirements naturally fluctuate. Sectors such as retail, hospitality and leisure often experience seasonal peaks and quieter trading periods. Employers argue that using a fixed 12-week reference period may not accurately reflect those seasonal patterns and could leave businesses committed to guaranteeing hours that are no longer needed once demand falls. As with many employment reforms, the final detail will determine how significant the impact is in practice. What happens next? The Government's consultation remains open until August , with further detail expected once responses have been reviewed. The proposed Fair Work Agency would have powers to enforce compensation where shifts are cancelled or changed without sufficient notice. However, workers seeking a guaranteed-hours contract would still need to pursue claims through the employment tribunal system. Final thoughts Employment law continues to evolve, and proposals such as these are another reminder that businesses need to keep a close eye on upcoming changes. While the reforms are still subject to consultation, employers who rely on flexible working arrangements may wish to start considering how the proposals could affect workforce planning, contracts and staffing costs. Understanding the potential impact early can make it much easier to adapt if the legislation goes ahead. If you'd like to discuss how these proposed changes could affect your business, please get in touch. 

Protecting your corporation tax thresholds Running more than one limited company is common for many owner-managed businesses. You might have a trading company alongside a property company, a separate company for a different service line, a holding company sitting above the group, or perhaps an older company that's been retained for a particular brand or project. Each company may make perfect commercial sense on its own. The important point is that, for corporation tax purposes, HMRC may look at those companies together. Since 1 April 2023 , the UK has operated a tiered corporation tax system. The thresholds that determine whether a company pays the 19% small profits rate , the 25% main rate , or falls into the marginal relief band between the two can be divided between associated companies. The more associated companies there are, the lower those thresholds become for each company. This guide explains how the rules apply for accounting periods falling within the corporation tax financial year beginning 1 April 2026 , who counts as an associated company, and the practical steps you can take to protect your position. Corporation tax rates For the financial year beginning 1 April 2026 , the corporation tax rates remain: 19% small profits rate for companies with profits up to £50,000 25% main rate for companies with profits over £250,000 Marginal relief for profits between £50,000 and £250,000 The Government's Corporate Tax Roadmap has also confirmed its intention to keep the headline corporation tax rate capped at 25% throughout this Parliament, while retaining the current small profits rate and marginal relief thresholds. One point that's often overlooked is how marginal relief works. Companies within the marginal relief band are first charged corporation tax at 25% , before marginal relief is deducted using the standard 3/200 fraction . In practice, profits within this band can face an effective marginal corporation tax rate of 26.5% . That's why it's important to monitor profit levels carefully. The associated company rules can bring a business into the marginal relief band much sooner than many directors expect. What is an associated company? The rules are based on control . A company is associated with another if: One company controls the other, or Both companies are controlled by the same person or group of people. For accounting periods beginning on or after 1 April 2023 , the corporation tax thresholds are divided by the total number of associated companies, including the company itself. It's also worth remembering that a company can count as associated even if that relationship only exists for part of the accounting period. This often catches people out when companies are formed, sold, struck off or reorganised during the year. For a 12-month accounting period, a standalone company has the full £50,000 lower limit and £250,000 upper limit available. If there are two associated companies , those limits reduce to £25,000 and £125,000 for each company. With three associated companies , they reduce further to approximately £16,667 and £83,333 . With four associated companies , the limits become £12,500 and £62,500 , while five associated companies reduce them again to £10,000 and £50,000 . For example, a standalone company making £40,000 of taxable profit would normally expect to pay corporation tax at 19% . If it has three associated companies, however, its thresholds reduce to £12,500 and £62,500 , meaning that same £40,000 profit could fall into the marginal relief band. Control is wider than many people realise Control isn't limited to share ownership. It can also include voting rights, entitlement to income or assets on a winding up, and rights held indirectly. The rules can also take account of a person's associates , including: A spouse or civil partner Parents, grandparents and other lineal ancestors Children, grandchildren and other lineal descendants Brothers and sisters Business partners Certain trustees and personal representatives That doesn't automatically mean every family-owned company becomes associated. Where companies are controlled by associates, HMRC will consider whether there is substantial commercial interdependence between them. For example, a husband and wife may each own separate businesses in completely different sectors. Those businesses would not usually be associated simply because they are married. However, that position may change if they share customers, staff, premises, funding, equipment or management. What is substantial commercial interdependence? HMRC looks at three broad areas. Financial interdependence This may exist where one company financially supports another, or where both have a financial interest in the same business. Examples include: Inter-company loans Guarantees Shared funding Informal financial support Economic interdependence This looks at whether companies work towards the same commercial objectives. Shared customers, regular referrals or businesses that rely on each other commercially may all indicate economic interdependence. Organisational interdependence Companies may also be linked through shared: Management Employees Premises Equipment Administrative support Systems Not every connection has to exist. A strong link in just one area may be enough, depending on the circumstances. Companies that often catch people out Some of the most common situations include: Old companies retained for future projects or brand names. Property companies renting premises to a trading company. Family companies providing loans, equipment or referrals. Separate companies owned by spouses but sharing staff or administration. Investment companies that appear dormant but still receive investment income. It's also important to distinguish between being dormant at Companies House and being dormant for corporation tax purposes. The two aren't necessarily the same. Similarly, while some passive holding companies can be ignored under specific rules, the conditions are narrow and shouldn't be assumed to apply without checking. Quarterly instalment payments Associated companies don't just affect corporation tax rates. They can also affect when corporation tax has to be paid. A company is normally regarded as large if annual taxable profits exceed £1.5 million but do not exceed £20 million . However, from 1 April 2023 , that £1.5 million threshold is also divided by the number of associated companies. For example, where there are three associated companies in total, the threshold reduces to £500,000 . That can have significant cashflow implications. Large companies generally pay corporation tax in four instalments throughout the accounting period: Six months and 13 days after the start of the accounting period. Three months after the first instalment. Three months after the second instalment. Three months and 14 days after the end of the accounting period. Very large companies, with profits above £20 million (again adjusted for associated companies), pay even earlier. Although exceptions do exist, including where corporation tax is below £10,000 or certain first-year provisions apply, these rules should always be reviewed before payment dates are assumed. Practical steps If you operate more than one company, it's worth reviewing your structure regularly. Good practice includes: Reviewing all connected companies each year. Checking whether older companies are still needed. Keeping transactions between companies on commercial terms. Separating premises, staff, systems and customers wherever possible. Planning profits across the group. Documenting where businesses genuinely operate independently.  Final thoughts The associated company rules can affect both how much corporation tax you pay and when you have to pay it . If you run multiple companies, have family members with their own businesses, or are thinking about setting up another company, it's worth reviewing the position before your next year end. A straightforward review can identify which companies count, whether any exclusions apply, and whether you're approaching the marginal relief band or quarterly instalment payment thresholds. If you'd like to review your associated company position before your next year end, I'm always happy to have a conversation. Talk to us about your business.

More people may be falling short of the retirement they expect A new report from Pensions UK suggests that too many people are heading towards a significant drop in income when they retire, with most unlikely to have saved enough to maintain what is considered a moderate standard of living. According to the report, a moderate retirement lifestyle now requires an annual income of £32,700 for a single person and £45,400 for a couple . However, only 23% of working-age people are currently on track to reach that level. The findings highlight the growing challenge of retirement planning as the cost of living continues to increase. What does retirement really cost? Pensions UK estimates that the income needed to achieve different standards of living has continued to rise. A minimum retirement income is now estimated at: £13,900 a year for a single person £22,500 a year for a couple The report suggests that around 82% of workers are on course to achieve this level. For those hoping to enjoy a more comfortable retirement , the figures are considerably higher: £45,400 a year for an individual £62,700 a year for a couple Only 9% of workers are currently expected to reach that standard. Why are the figures increasing? The retirement income calculations are based on the independently developed Retirement Living Standards produced by the Centre for Research in Social Policy at Loughborough University. They are designed to reflect the cost of everyday life in retirement, including spending on food, transport, leisure activities and holidays. Housing costs are excluded from the calculations. According to Pensions UK, higher spending on food and social activities has pushed retirement costs higher over the past year, broadly in line with inflation. A growing focus on retirement planning The report has prompted renewed calls for workers, employers and the Government to do more to improve retirement savings. It also comes as the Government has revived the Pension Commission, which previously led to the introduction of automatic enrolment into workplace pensions. While automatic enrolment has encouraged millions more people to save for retirement, the latest figures suggest that, for many, current contribution levels may not be enough to achieve the lifestyle they hope for later in life. Final thoughts Retirement can feel a long way off, particularly when you're focused on the day-to-day demands of work and family life. However, small decisions made today can have a significant impact over the long term. Whether you're employed, self-employed or running your own business, it's worth reviewing your retirement plans regularly to make sure your savings remain on track and continue to reflect your future goals. If you'd like to discuss your finances or how pensions fit into your wider financial planning, I'm always happy to have a straightforward conversation. Talk to us about your savings.

Rising repayments continue to affect affordability Higher borrowing costs are continuing to put pressure on homebuyers, with many now spending the largest share of their income on mortgage repayments since the 2008 financial crisis. New analysis from UK Finance, the trade body for the banking and finance industry, shows that buyers are now spending an average of 21.3% of their gross household income on their initial mortgage repayments. As borrowing becomes more expensive, affordability is becoming an increasing challenge for many households, reducing demand in parts of the UK housing market. Some areas are feeling the pressure more than others The impact isn't being felt equally across the country. Areas including East Anglia and parts of London's commuter belt remain among the least affordable, where higher property prices continue to combine with elevated mortgage costs. According to the figures, North Norfolk is currently the least affordable local authority, with borrowers spending 25.7% of their gross income on mortgage repayments. It is followed by: Hillingdon – 25.1% Luton – 24.9% Slough – 24.8% Spelthorne – 24.8% These figures highlight how location continues to play a significant role in housing affordability. Confidence remains under pressure The latest data comes against a backdrop of higher interest rates and continued economic uncertainty, both of which are influencing buying decisions. For many prospective buyers, higher monthly repayments mean delaying a move, reducing their budget or stepping back from the market altogether until conditions improve. According to reports in The Negotiator, house prices also fell again last month. Amanda Bryden, Head of Mortgages at Halifax, commented: "Property price trends continue to reflect the uncertainty linked to developments in the Middle East."  What does this mean? For buyers, the latest figures underline just how stretched affordability has become. For sellers and estate agents, they reinforce the close relationship between property prices, buyer confidence and the cost of borrowing. While interest rates and market conditions will continue to evolve, understanding your financial position before making major decisions has never been more important. Final thoughts The housing market continues to adjust to a period of higher borrowing costs and greater economic uncertainty. Whether you're buying your first home, moving property or simply reviewing your finances, taking time to understand what you can comfortably afford is just as important as finding the right property. If you'd like to discuss your finances or how changing economic conditions could affect your plans, I'm always happy to have a straightforward conversation. Talk to us about your finances.

Government moves towards public ownership British Steel is set to return to public ownership after Prime Minister Sir Keir Starmer announced plans for new legislation that would give the Government the power to take full control of the company. The proposed move will be subject to a public interest test, considering factors such as national security, critical infrastructure and wider economic support. The announcement follows the Government's intervention at British Steel's Scunthorpe steelworks in April last year. At the time, ministers stepped in and took control of the site from its Chinese owner, Jingye, to prevent the possible closure of its blast furnaces. Why is the Government stepping in? Sir Keir Starmer said the Government had held discussions with Jingye in an attempt to find a commercial solution, but no sale could be agreed. As a result, ministers concluded that bringing British Steel back into public ownership was now "in the public interest". The decision reflects the strategic importance of steel production to the UK economy, particularly at a time when supply chains, manufacturing resilience and national security remain high on the political agenda. A welcome boost for the industry The announcement has been broadly welcomed by the steel industry. Gareth Stace, Director-General of UK Steel, said the move provides "vital certainty" for British Steel's 2,700 employees , as well as reassurance for customers who rely on domestic steel production. He also highlighted the wider importance of maintaining a UK steel industry, describing it as essential for economic growth, national security and long-term resilience. However, he also cautioned that public ownership should not be viewed as the end of the process. Instead, he said it should mark the beginning of a clear long-term strategy, backed by sustained investment to secure the company's future. Why Scunthorpe matters The future of the Scunthorpe steelworks has attracted particular attention because its blast furnaces play a vital role in the UK's ability to produce virgin steel. If those furnaces were to be switched off, restarting them would be both technically difficult and extremely expensive. That makes decisions around the site important not only for local employment, but also for the UK's long-term industrial capability. The cost of intervention Government involvement has already come at a significant cost. The National Audit Office reported in March that Government supervision of British Steel had already cost around £377 million . If expenditure continues at a similar rate, the total could exceed £1.5 billion by 2028 . At this stage, the overall cost of full nationalisation has not been confirmed. An independent valuation is expected to determine whether compensation should be paid to Jingye as part of the process. Final thoughts The proposed return of British Steel to public ownership represents a significant development for one of the UK's most strategically important industries. While the move has been welcomed by many within the sector, attention will now turn to the long-term plan for the business and the level of investment needed to secure its future. For businesses, it's another reminder that Government policy, global markets and economic resilience remain closely linked, with decisions in one area often having wider implications across the economy. If you'd like to discuss how wider economic developments could affect your business, I'm always happy to have a straightforward conversation. Talk to us about your business.

Director's Loans: How to Avoid Unexpected Tax Bills As a business owner, there will probably come a time when you need to take money out of your limited company outside of your normal salary or dividends. It might be to cover a personal expense, help with a house purchase, or simply smooth your cash flow. There's nothing unusual about that. In fact, director's loans are common in owner-managed businesses. What many people don't realise, though, is that director's loan accounts come with some fairly strict tax rules. If they're not managed properly, they can trigger unexpected Corporation Tax charges, benefit-in-kind issues and additional reporting requirements. With the Section 455 tax rate increasing for new loans made from 6 April 2026, it's more important than ever to keep an eye on your director's loan account. Here's what you need to know. What is a Director's Loan Account? A director's loan account (DLA) simply records money moving between you and your company that isn't: Salary Dividends Reimbursed business expenses Genuine business purchases If you've put your own money into the business, your company owes you, creating a credit balance. If you've taken money from the company for personal use, and it isn't salary or dividends, you owe the company, creating an overdrawn (debit) balance. For most small limited companies, this matters because they're classed as "close companies" for tax purposes. Broadly speaking, that's a company controlled by five or fewer shareholders, which covers the vast majority of owner-managed businesses. According to government estimates, there were around 2.1 million actively trading companies in the UK at the start of 2025, so these rules affect a huge number of business owners. When Does Section 455 Tax Apply? If your director's loan account is overdrawn at the end of your company's accounting period and you haven't repaid it within nine months and one day after the year-end, your company may have to pay a Section 455 tax charge. For loans made on or after 6 April 2026 , the charge is 35.75% . Loans made between 6 April 2022 and 5 April 2026 generally remain subject to the previous 33.75% rate. For example: If your company has a 31 March 2027 year-end and you borrow £40,000 in May 2026, but the balance is still outstanding on 1 January 2028 , your company could face a Section 455 tax charge of £14,300 . The important point is that this tax is paid by the company, not you personally. It's reported through the Corporation Tax return using the CT600A supplementary pages . The good news is that Section 455 isn't a permanent tax. Once the loan is repaid, written off or released, the company can usually reclaim it. However, the money may remain with HMRC for quite some time, so it can still create a significant cash flow issue. It's also worth remembering that: Several smaller withdrawals throughout the year can create exactly the same problem as one large loan. The rules generally apply to loans made to shareholders (participators) and people connected to them. Separate personal tax charges can also arise if the loan is interest-free or later written off. Are There Any Exemptions? Yes, although they don't apply to most owner-managed businesses. The main exemptions include: Loans of £15,000 or less to a full-time employee or director who owns no more than 5% of the company. Normal commercial trade credit. Companies whose normal business is lending money. For most small companies, it's safest to assume that an overdrawn director's loan account could trigger Section 455 unless it's cleared correctly and on time. Don't Forget the £10,000 Rule Section 455 isn't the only tax issue to be aware of. If at any point during the tax year you owe the company more than £10,000 , and you aren't paying interest (or you're paying less than HMRC's official rate), you could have a taxable benefit-in-kind. HMRC's official interest rate is currently 3.75% (from 6 April 2025 and reviewed quarterly). If this applies: You'll pay income tax on the interest you've effectively saved. The company must report the benefit on a P11D . The company also pays Class 1A National Insurance at 15% for 2026/27. This catches more people than you'd think because it's completely separate from the Section 455 rules. You could repay the loan quickly enough to avoid Section 455 altogether, but still have a taxable benefit because your balance exceeded £10,000 during the tax year. The simplest way to avoid this is to keep the balance below £10,000 where possible. If that's not realistic, the company should charge interest at HMRC's official rate and make sure it's actually paid. I'd also recommend having a proper written loan agreement that sets out the amount borrowed, interest rate and repayment terms. Why Repaying and Borrowing Again Doesn't Work Every year, HMRC sees directors repay loans just before the deadline before taking the money back out shortly afterwards. They've introduced anti-avoidance rules specifically to stop this. The first is the 30-day rule , which can apply where repayments of £5,000 or more are followed by new borrowing of £5,000 or more within 30 days. The second is known as the arrangements rule . This can apply where at least £15,000 is outstanding before repayment and there was already an intention to borrow at least £5,000 again afterwards. In both cases, HMRC looks at the substance of what's happened rather than simply the dates on your bank statement. In short, if you're only repaying the loan so you can immediately borrow it again, don't expect it to solve the problem. What If the Loan Is Written Off? Sometimes directors simply can't repay the money. While the company can write off a director's loan, it isn't usually the easy solution people hope for. Where the director is also a shareholder, the amount written off is normally treated as a dividend for income tax purposes. For 2026/27 , dividend tax rates are: 10.75% for basic rate taxpayers 35.75% for higher rate taxpayers 39.35% for additional rate taxpayers The dividend allowance remains just £500 , so most of the written-off amount is likely to be taxable. There may also be National Insurance and employment tax implications depending on the circumstances. The company can generally reclaim any Section 455 tax once the loan has been released or written off, but the personal tax bill often makes this an expensive option. Reclaiming Section 455 Tax Although Section 455 can usually be reclaimed, the process isn't immediate. HMRC only allows relief nine months and one day after the end of the accounting period in which the loan was repaid, released or written off . To make the claim, you'll need details including: When the original loan was made The amount borrowed When it was repaid, released or written off The value of each repayment If only part of the loan has been repaid, partial relief may still be available. Why Good Records Matter More Than Ever The increase to the new 35.75% Section 455 rate means many companies could now have older loans at 33.75% alongside newer loans taxed at the higher rate. When repayments are made, it's sensible to record exactly which loan they're intended to clear. Without clear records, HMRC may apply default rules that don't produce the most tax-efficient outcome. It doesn't need to be complicated. Even a simple email confirming that a repayment relates to a specific loan can make life much easier if questions arise later. Practical Tips to Stay Out of Trouble Director's loan accounts don't need to become a headache, provided you stay on top of them. I'd recommend: Reviewing your director's loan account every month rather than waiting until year-end. Planning dividends properly and only paying them when sufficient retained profits exist. Keeping an eye on the £10,000 benefit-in-kind threshold. Avoiding artificial repayments followed by immediate re-borrowing. Having written loan agreements for larger balances. Clearly recording which loans repayments relate to. Reviewing the position well before your company year-end while you still have planning options available. Final Thoughts Director's loan accounts can be a useful way of managing cash flow and giving yourself flexibility as a business owner. The problems only tend to arise when they're left unchecked. With the Section 455 rate now increasing to 35.75% for new loans from 6 April 2026 , it's well worth reviewing your position regularly rather than waiting until the accounts are prepared. If you're unsure whether your director's loan account is causing a tax issue, or you're thinking about taking money from your company, I'd always recommend getting advice early. A quick conversation now could save you a much larger tax bill later.  If you'd like us to review your director's loan account or answer any questions, please get in touch. We'd be happy to help.

Consumer confidence falls as concerns over inflation return A new survey suggests that many British households are preparing for renewed financial pressure as conflict in the Middle East weighs on economic confidence. Consumer confidence in the UK fell at its fastest quarterly rate since June 2022, when inflation surged following Russia's invasion of Ukraine and the resulting rise in global commodity prices. The survey, which measures factors such as spending intentions and how financially secure people feel, recorded a score of -13 in April . That represents a significant decline from -1 in January and marks the weakest reading since autumn 2023. While confidence has weakened across all age groups, the figures suggest that no part of the population is entirely immune to growing concerns about the economy. Financial confidence falls across generations Younger consumers remain more optimistic than older age groups overall, but confidence among under-35s has also deteriorated. The proportion of younger people who described themselves as financially healthy fell by 20% , while the share reporting that they were struggling or finding it difficult to manage bills and finances increased by 9% . These figures highlight the growing pressure many households continue to face, despite inflation having fallen significantly from its peak. Cost-of-living concerns remain widespread The survey found that concerns about household finances remain firmly linked to the cost of living. Almost 90% of the 2,068 consumers surveyed said they were concerned about living costs, while nearly 80% said they planned to reduce spending over the next three months. When consumers begin cutting discretionary spending, the effects can often be felt across a wide range of sectors, particularly those reliant on consumer confidence and household spending. Rising fuel costs are changing behaviour Higher fuel prices are already influencing everyday decisions. The proportion of consumers planning to drive less in order to save money has doubled since January, increasing from 12% to 24% . While fuel costs are only one part of household budgets, they tend to have a visible impact because they affect commuting, travel and day-to-day living costs almost immediately. Inflation pressures remain The Bank of England has indicated that higher UK inflation is likely to be "unavoidable" as a result of the conflict in the Middle East. Rising fuel, food and energy costs are expected to add further pressure to household budgets in the months ahead. Recent figures from the Office for National Statistics (ONS) showed that CPI inflation rose to 3.3% in March , up from 3% in February and remaining above the Bank of England's 2% target . While inflation is significantly lower than the peaks seen in recent years, any upward movement is likely to be closely watched by policymakers, businesses and consumers alike. What is happening in the jobs market? The employment picture remains mixed. Job vacancies fell again in April, marking the 30th consecutive monthly decline . However, there are signs that employers are responding to uncertainty by increasing their use of temporary workers rather than committing to permanent recruitment. Temporary billings rose at their strongest pace in two-and-a-half years , suggesting that some businesses remain cautious about long-term hiring decisions while economic conditions remain uncertain. Final thoughts The latest survey paints a picture of households becoming more cautious as concerns about inflation, energy costs and the wider economy return to the forefront. While confidence figures can move quickly, they often provide a useful indication of how consumers are feeling and how they may behave in the months ahead. For individuals and businesses alike, periods of uncertainty reinforce the importance of understanding cashflow, reviewing spending and planning ahead wherever possible.  Talk to us about your finances.

Rising costs and weaker demand continue to challenge the industry UK construction firms are facing some of the sharpest cost increases seen in almost 30 years, as the conflict involving Iran pushes up fuel, energy and raw material prices. A closely watched survey of UK construction businesses found that input cost inflation rose significantly in April, reaching its highest level since June 2022, when commodity prices surged following Russia's invasion of Ukraine. In fact, April's increase in purchasing costs was among the steepest recorded since the survey began in 1997. At the same time, activity across the sector continues to weaken. The Construction Purchasing Managers' Index (PMI), one of the key indicators of activity in the industry, fell to 39.7 in April , down from 45.6 in March . Any reading below 50 indicates contraction, suggesting that many firms are seeing workloads and activity levels decline. A difficult backdrop for the industry These pressures come at a challenging time for a sector that contributes around 7% of UK GDP and employs more than two million people . Construction businesses have already been dealing with a combination of: Weaker demand Ongoing skills shortages Higher operating costs Increased financing costs The latest rise in input prices only adds to those challenges. Around two-thirds of firms surveyed reported higher costs during April. Many businesses pointed to suppliers passing on increased fuel and transport costs linked to the conflict in the Middle East, disruption in the Strait of Hormuz, and rising prices for imported materials. Supply chain issues continue Alongside higher costs, supply chains are once again showing signs of strain. Vendor delivery times lengthened at the fastest pace since December 2022 , with firms reporting delays to international shipping and difficulties sourcing materials from parts of the Gulf region. For many construction businesses, delays can be almost as damaging as price increases. Longer lead times make project planning more difficult, affect cashflow and can create challenges when managing customer expectations. New work remains subdued Perhaps the bigger concern is that new work is not always replacing completed projects quickly enough. The survey found that sales decisions are taking longer, reflecting ongoing caution among customers and investors. In some cases, businesses are responding by reducing recruitment activity or choosing not to replace employees who leave voluntarily. While that approach may help control costs in the short term, it also highlights the level of uncertainty many firms are currently experiencing. Final thoughts Construction remains an important part of the UK economy, but the sector is facing pressure from several directions at once. Rising input costs, supply chain disruption, slower decision-making and weaker demand are creating a challenging environment for many businesses. While external events may be outside a company's control, understanding margins, monitoring cashflow and planning ahead become even more important during periods like this. If you're running a construction business and would like to discuss cashflow, profitability or managing rising costs, I'm always happy to have a conversation. Talk to us about your business.

Working abroad: Getting your UK tax residence right How to manage your UK tax position when living or working overseas Spending time abroad for work has become much more common. Whether you're relocating for a new role, taking an overseas posting, working remotely from another country or returning to the UK after several years away, it's important to understand how UK tax rules apply. One of the biggest surprises for many people is that leaving the UK does not automatically make you non-resident for tax purposes. Equally, becoming non-resident does not necessarily remove you from the UK tax system altogether. Understanding your tax position before you leave, while you're abroad and before you return can help avoid unexpected tax bills and unnecessary complications later. Why tax residence matters Your UK tax residence status determines how much of your income and gains fall within the UK tax system. Generally speaking: UK residents are taxed on their worldwide income and gains, subject to available reliefs and double tax treaties. Non-UK residents are usually taxed only on UK-source income, certain UK gains and a limited range of other UK-related income. Getting your residence status wrong can be expensive. If HMRC later concludes that you remained UK resident when you believed you were non-resident, overseas salary, foreign investment income and offshore gains could all become subject to UK tax, together with interest and potential penalties. That's why residence planning is something to consider before you move rather than after the tax return deadline arrives. Understanding the Statutory Residence Test Since 2013, UK tax residence has been determined by the Statutory Residence Test (SRT). The test follows a specific order: Automatic overseas tests Automatic UK tests Sufficient ties test If you meet one of the automatic overseas tests, you are generally non-UK resident for the tax year. If not, the automatic UK tests are considered. If neither set of tests gives a clear answer, the sufficient ties test applies. At the heart of the SRT is day counting. In most cases, a day counts as a UK day if you are present in the UK at midnight. There are limited exceptions, including certain transit days and exceptional circumstances. There is also a deeming rule that can catch people making repeated short visits. If you were UK resident in one of the previous three tax years, have at least three UK ties and spend more than 30 days in the UK without being here at midnight, some of those days can still count towards your UK day total. For anyone close to the limits, accurate records are essential. The automatic overseas tests The clearest route to non-residence is meeting one of the automatic overseas tests. You will generally be non-UK resident if: You were UK resident in one or more of the previous three tax years and spend fewer than 16 days in the UK during the current tax year. You were not UK resident in any of the previous three tax years and spend fewer than 46 days in the UK. You work full-time overseas, have no significant break from overseas work, spend fewer than 91 days in the UK and work more than three hours in the UK on fewer than 31 days. For many people moving abroad for work, the full-time overseas work test is the most relevant. However, it is also one of the easiest tests to fail accidentally through too many UK workdays, extended return visits or gaps between overseas contracts. For SRT purposes, full-time overseas work broadly means averaging at least 35 hours per week overseas under HMRC's detailed calculation rules. A significant break is usually a period of 31 consecutive days or more without overseas work, although certain absences such as annual leave and sickness can be ignored. The automatic UK tests If none of the overseas tests apply, the UK tests are considered. You will generally be UK resident if: You spend 183 days or more in the UK during the tax year. You have a UK home available for at least 91 continuous days, use it for at least 30 days, and have little or no qualifying overseas home. You work full-time in the UK over a 365-day period and more than 75% of your workdays fall in the UK. The UK home test often catches people out. Many individuals assume they have left the UK because they live and work overseas, but continue to retain and regularly use a UK property. The position needs careful review because retaining access to a UK home can have a significant impact on residence status. The sufficient ties test If neither automatic test provides an answer, the sufficient ties test applies. The more ties you have to the UK, the fewer days you can spend here before becoming UK resident. The five main ties are: Family tie Accommodation tie Work tie 90-day tie Country tie The country tie only applies to people leaving the UK and is met when the UK is the country where you spend the greatest number of days. This explains why two people can spend exactly the same number of days in the UK but reach different residence outcomes. Split year treatment Normally a tax year is treated as either fully resident or fully non-resident. However, split year treatment may divide the year into a UK part and an overseas part. There are eight separate circumstances where split year treatment can apply, including: Starting full-time work overseas Ceasing to have a UK home Accompanying a partner who starts full-time work overseas Starting full-time work in the UK Establishing a UK home For those leaving the UK for employment abroad, starting full-time overseas work is often the most common route. Split year treatment is not automatic and must be claimed correctly through the SA109 supplementary pages of your Self Assessment return. What remains taxable if you're non-resident? Becoming non-resident does not remove all UK tax obligations. UK tax may still apply to: Rental profits from UK property Employment income relating to duties carried out in the UK Certain UK pensions Gains on UK property and land Certain UK-source investment income Non-residents selling UK property will usually need to report the disposal to HMRC within 60 days of completion, even where no tax is payable. Landlords may also need to register under the Non-Resident Landlord Scheme, under which tax can be deducted from rental income unless HMRC approves gross payment. Double tax treaties can help prevent the same income being taxed twice, although the exact position depends on the treaty involved. National Insurance matters too Income tax residence and National Insurance follow different rules. Depending on your circumstances, you may continue paying UK National Insurance while working abroad, particularly where: You are temporarily posted overseas by a UK employer. A social security agreement applies. An A1 certificate or certificate of coverage is available. There has also been an important change to voluntary National Insurance. From 6 April 2026, people can no longer pay voluntary Class 2 National Insurance contributions while abroad. Class 3 contributions may still be available, but new applications generally require either: 10 continuous years of UK residence, or 10 qualifying years on your National Insurance record. Anyone moving overseas should review their State Pension position before they leave. The four-year FIG regime The rules for people arriving in or returning to the UK changed significantly from 6 April 2025. The remittance basis has been abolished and replaced by a residence-based system. Under the new Foreign Income and Gains (FIG) regime, qualifying individuals may claim relief on eligible foreign income and gains during their first four years of UK residence. To qualify, you generally need to be returning after at least 10 consecutive tax years of non-UK residence. There are two important points to remember: Claiming FIG relief means losing your UK Personal Allowance and Capital Gains Tax annual exempt amount. The four-year period cannot be extended if relief is not claimed in a particular year. Former remittance basis users may also be able to use the Temporary Repatriation Facility, which allows certain pre-6 April 2025 foreign income and gains to be brought to the UK at reduced tax rates. The published rates are: 12% for 2025/26 and 2026/27 15% for 2027/28 The facility closes after 5 April 2028. Beware temporary non-residence rules One of the most common traps is assuming that a short move abroad allows income or gains to be realised tax-free. The temporary non-residence rules can bring certain income and gains back into the UK tax net when you return. They can apply to: Capital gains Dividends from close companies Certain pension payments Certain company winding-up distributions A notable change announced in the November 2025 Budget removed the post-departure trade profits carve-out for dividends and distributions from close companies. For individuals returning to the UK on or after 6 April 2026, all such dividends received while temporarily non-resident can fall within the rules regardless of when the profits arose. In most cases, you need to be non-resident for at least five complete tax years for the temporary non-residence rules not to apply. Keep good records If HMRC ever challenges your residence position, the burden of proof generally rests with you. Useful records include: Travel records and boarding passes Day-by-day UK presence logs Accommodation records Employment contracts Work calendars Evidence relating to UK homes Family records where relevant For most people, a simple spreadsheet recording travel dates and UK workdays is sufficient. Planning before you leave Before moving abroad, consider: How many UK days you can spend here Whether you satisfy the full-time overseas work test Whether a UK property creates issues Whether split year treatment is available How UK work duties will be taxed Whether rental income requires NRL registration National Insurance implications Double tax treaty protection It's also important to remember that overseas remote working can create tax, payroll, employment law and corporate tax issues for your employer as well. Planning before you return  Before returning to the UK, review: Whether the FIG regime is available Whether temporary non-residence rules apply The timing of income and gains Whether foreign assets should be sold before returning Whether the Temporary Repatriation Facility may help The impact of your chosen return date In some cases, returning on 5 April rather than 6 April can produce a very different tax outcome. Final thoughts Working abroad can be tax-efficient with the right planning. Without it, it can create unexpected tax bills, reporting obligations and complications both in the UK and overseas. The most important decisions are often made before the move takes place. Understanding your residence position, managing your UK ties and planning your return can make a significant difference to the eventual tax outcome. If you're planning to move overseas, already working abroad, or considering a return to the UK, it's worth reviewing your position early. A little planning now can save a lot of time, tax and stress later. If you'd like advice tailored to your circumstances, please get in touch.

Why markets are paying close attention to political and economic uncertainty Government borrowing costs have risen sharply in recent weeks as investors react to growing uncertainty around the future of Prime Minister Keir Starmer and wider economic pressures. The effective interest rate on 10-year Government borrowing briefly reached 5.13% , close to levels last seen during the 2008 financial crisis. Longer-term borrowing also came under pressure, with the 30-year gilt yield rising to 5.81% , its highest level since 1998. While financial markets move constantly, these figures highlight how quickly investor sentiment can change when uncertainty increases. What's driving the increase? Markets were already unsettled by the conflict involving Iran, which pushed oil prices above $100 per barrel and increased concerns about inflation. Higher energy prices often feed through into the wider economy, raising costs for businesses and consumers. If inflation rises, investors may begin to expect interest rates to remain higher for longer. That matters because higher interest rates typically increase borrowing costs throughout the economy. Why the UK has been affected more than some other countries Although many countries have faced similar global pressures, the UK's borrowing costs rose more sharply than those seen in economies such as France and Germany. Analysts suggested that some investors were also concerned about the possibility of changes within the Labour leadership and what that could mean for future Government spending. There are concerns in some parts of the market that a change in direction could result in higher public spending and increased Government borrowing. Prime Minister Keir Starmer and Chancellor Rachel Reeves have repeatedly described their fiscal rules as "iron-clad" and have committed to maintaining strict borrowing controls. However, some Labour MPs have questioned whether the current fiscal framework is suitable for delivering long-term economic renewal. Understanding gilts Government borrowing is largely carried out through bonds known as gilts . Investors effectively lend money to the Government in exchange for interest payments over a fixed period. As with any investment, the perceived level of risk influences the return investors demand. If confidence falls or uncertainty rises, investors generally require higher returns before committing their money. That is why borrowing costs can rise even when no immediate policy changes have been announced. Wider market reaction The impact was felt beyond the gilt market. Bank shares and sterling also reacted as investors assessed the possibility of future tax changes and shifts in economic policy under a different political landscape. However, short-term market movements can be volatile and often reverse quickly. The more significant point is that investors remain highly sensitive to uncertainty around fiscal policy, Government spending and economic direction. What does this mean for businesses and households? For most businesses and households, rising gilt yields are not something that affects day-to-day decisions directly. However, they can influence the wider economy through: Interest rate expectations Mortgage pricing Business borrowing costs Investment confidence Government spending decisions While one day's market movement rarely tells the whole story, periods of uncertainty often remind us how closely financial markets watch Government policy and economic stability. Final thoughts The recent rise in UK borrowing costs reflects a combination of global pressures and domestic political uncertainty. Whether these increases prove temporary or more persistent remains to be seen, but the reaction highlights how quickly markets can respond when confidence is tested. For businesses, the key takeaway is to continue focusing on the fundamentals: cashflow, profitability and planning ahead for changing economic conditions. If you'd like to discuss how wider economic developments may affect your business or personal finances, I'm always happy to have a conversation.

Review systems, suppliers and processes before the deadline E-invoicing is moving from being a back-office efficiency project to something UK businesses need to start planning for. The Government has confirmed that all VAT invoices will need to be issued as e-invoices from April 2029 . In practice, this mainly affects business-to-business and business-to-government VAT invoices rather than standard business-to-consumer sales. While the detailed UK standards and roadmap are still being developed, businesses that start preparing now are likely to find the transition much easier. For most SMEs, the answer is not to rush into replacing systems overnight. Instead, the focus should be on getting the fundamentals right: invoice data, VAT treatment, software capability, customer and supplier records, approval processes and payment controls. A business that gets those foundations in place now will be in a much stronger position when the final requirements arrive. Understanding what e-invoicing actually means One of the biggest misconceptions is that e-invoicing simply means sending invoices by email. It doesn't. The Government defines e-invoicing as the digital exchange of invoice information directly between a supplier’s and customer’s financial systems. The invoice is issued, transmitted and received in a structured format that allows it to be processed automatically. If your business currently creates an invoice, saves it as a PDF and emails it to a customer who then manually enters the information into their own system, that's still a largely manual process. A structured e-invoice is different because the information moves automatically between systems without rekeying. That distinction matters because it reduces: Manual errors Processing delays Missing information Duplicate data entry Invoice disputes Many SMEs are still not ready HMRC research published in March 2026 found that: 59% of VAT-registered SMEs said they were familiar with e-invoicing Only 29% said they actually used it PDF and email invoicing remained the most common approach Paper invoicing was still used by some businesses The gap between familiarity and actual use highlights why preparation matters. Why businesses should start thinking about this now Although 2029 may seem a long way off, e-invoicing affects much more than tax compliance. It touches: Sales invoicing Purchase ledger processes Customer approvals Supplier relationships Credit control Cashflow management Government consultations have consistently highlighted benefits such as: Fewer errors Faster processing Improved compliance Greater automation Better cashflow visibility The cashflow aspect is particularly interesting. Government figures published in March 2026 estimated that UK businesses are owed around £26 billion in late payments at any given time , with affected firms owed an average of £17,000 each . More than 1.5 million businesses are impacted annually, spending an average of 86 hours per year chasing overdue payments. E-invoicing won't eliminate late payment entirely, but it can remove many of the avoidable issues that delay payment, such as: Missing purchase order numbers Incorrect VAT treatment Duplicate invoices Approval bottlenecks Data entry errors There is also a fraud angle The Government's Fraud Strategy 2026–2029 highlights the growing problem of criminals intercepting invoices and impersonating legitimate suppliers. One of the aims of mandatory e-invoicing is to reduce these risks by moving invoice exchanges into secure digital systems rather than relying heavily on email. That means e-invoicing is not just about compliance. It's also about improving security. The current position for 2026/27 For the 2026/27 tax year: The standard VAT rate remains 20% The VAT registration threshold remains £90,000 The VAT deregistration threshold remains £88,000 Because the proposed mandate relates to VAT invoices, businesses that are not VAT registered will not be required to adopt e-invoicing solely because of the new rules. However, some smaller businesses may still find themselves adopting it if larger customers or suppliers begin requiring structured invoice formats. The wider direction of travel is clear. Alongside Making Tax Digital, HMRC continues to move towards greater automation and digital record-keeping. Practical steps SMEs can take now Review your invoicing process Start by understanding how invoices currently move through your business. Ask yourself: Where is invoice data created? Who checks VAT treatment? How often are invoices delayed due to missing information? Do customers reject invoices because of formatting issues? How much manual rekeying still takes place? Often the biggest inefficiencies are not in the software itself, but in the processes around it. Separate document format from data format Many businesses assume they're already prepared because invoices are generated digitally. However, creating a PDF is not the same as structured e-invoicing. When speaking to software providers, focus on how invoice data moves between systems, not simply how the invoice looks on screen. Clean up customer and supplier records Structured invoicing relies on accurate data. Review: Legal entity names VAT numbers Billing addresses Purchase order requirements Contact details Payment terms The cleaner the data, the smoother the transition will be. Review VAT treatment Now is a good time to check whether invoices consistently apply: The correct VAT rates Exemption rules Reverse charge requirements Appropriate invoice wording Any weaknesses in VAT coding are likely to become more visible in automated systems. Speak to your software provider Most accounting software providers are already developing their e-invoicing capabilities. Ask practical questions such as: Can the software send and receive structured e-invoices? What formats does it support? How will future UK changes be handled? Can invoice fields be validated automatically? How are rejected invoices managed? Understanding the roadmap now can avoid surprises later. Focus on key customers and suppliers first Not every relationship needs attention immediately. Start with: High-value customers High-volume customers Suppliers where invoice issues regularly occur A phased approach is often more manageable than attempting a wholesale change. Strengthen approval and fraud controls Even with structured invoicing, businesses still need processes for: Invoice disputes Credit notes Duplicate invoices Supplier bank detail changes Validation failures Good controls remain essential. Final thoughts The best way to view e-invoicing is not as a single compliance deadline in 2029, but as part of a broader shift towards cleaner data, better systems and less manual administration. For SMEs, preparation doesn't mean panic. It means taking practical steps now: Reviewing invoicing processes Cleaning up customer and supplier data Checking software capability Testing VAT treatment Strengthening controls Businesses that start that work early are likely to find the eventual transition far smoother, less disruptive and less expensive. If you'd like help reviewing your invoicing processes, bookkeeping systems or software setup ahead of the changes, get in touch. You may also be interested in: E-invoicing rollout leaves many SMEs unprepared

What businesses should know ahead of the 2029 changes Many small businesses still appear unclear about the Government’s planned move towards mandatory electronic invoicing, with most reporting they have not seen guidance from HMRC ahead of the rollout. At the Autumn Budget, Chancellor Rachel Reeves confirmed that from April 2029 , all VAT-registered businesses will be required to issue invoices electronically as part of wider plans to modernise the UK tax system. Despite the scale of the change, the announcement attracted relatively little attention at the time. There have also been concerns around the lack of a phased introduction for smaller businesses that may still rely on manual processes or older systems. What the research found Research commissioned by HMRC and carried out by IFF Research surveyed 800 SMEs across sectors including manufacturing, transport and business services. The findings suggest there is still a significant knowledge gap around e-invoicing: 25% of respondents said they were not at all familiar with the term “e-invoicing” 69% said they had never used it 91% reported not seeing any HMRC guidance on the upcoming changes That said, there is some nuance behind the figures. The Association of Taxation Technicians pointed out that several businesses initially claimed not to use e-invoicing, but later described processes that actually met the definition. Those responses were later reclassified. Some businesses are already using it without realising Encouragingly, the research also showed: 59% of SMEs were at least somewhat familiar with e-invoicing 29% reported having used it previously Among those already using e-invoicing software: Sage was the most commonly used platform at 46% Xero followed at 17% QuickBooks accounted for 9% Only a small minority (around 5% ) reported using no accounting software at all, although this was more common in manufacturing and construction. Why this matters For many businesses, the move to e-invoicing will probably feel less dramatic than it sounds, particularly if they already use cloud accounting software. However, for others still relying heavily on spreadsheets, PDFs or manual invoicing processes, the change may require adjustments to systems and workflows over the next few years. The wider direction of travel is clear. HMRC continues moving towards greater digital reporting and automation through initiatives such as Making Tax Digital, and e-invoicing forms part of that broader shift. Final thoughts Although April 2029 may still sound a long way off, these types of changes are usually easier to deal with gradually rather than leaving them until the last minute. For some businesses, it may simply mean reviewing existing systems and checking they are compatible. For others, it could be the point where moving to proper accounting software becomes necessary. Either way, understanding how your current processes work now will make future changes far easier to manage. If you want to review whether your bookkeeping and invoicing systems are working efficiently for your business, please get in touch. This may be of interest to you: Spotlight on: Making Tax Digital for Income Tax.

The increase in HMRC’s approved mileage rate for cars and vans from 45p to 55p per mile has certainly generated some headlines today. On the surface, it sounds simple: “Drivers get 10p more per mile tax free.”  The reality is a bit more nuanced. It Doesn’t Apply to Everyone Firstly, this only applies to cars and vans. Motorcycle rates remain at 24p (close to my heart of course), and bicycle rates stay at 20p. Secondly, the HMRC mileage rates are approved allowances, not mandatory reimbursement rates. Businesses are not legally required to pay 55p per mile unless contracts or internal policies say otherwise. Employees May Still Be Able to Claim Relief If an employer continues paying below the approved rate, employees may instead be able to claim tax relief on the difference from HMRC. The Real Cost for Businesses There’s also a wider business impact that many of the headlines ignore. If employers do choose to increase mileage reimbursements, the majority of the additional cost sits with the business itself. Corporation tax relief softens the blow slightly, but only by around 20–25% depending on the business. In other words, roughly 75–80% of the increase is still a real additional cost to the employer. For businesses with travelling staff, care workers, sales teams, engineers or multi-site employees, this could become a significant additional expense at a time when many are already under pressure. The Practical Work Starts Now As always with tax announcements, the headline is the easy part. The implementation, payroll updates, policy reviews and practical implications are where the real work starts. And for many businesses, that’s where the real cost begins too.

More businesses to receive help with rising energy costs The Government has confirmed it will expand a support scheme aimed at helping energy-intensive manufacturers manage rising electricity costs. Around 10,000 UK manufacturers could now benefit from reduced electricity bills under the expanded British Industrial Competitiveness Scheme (BICS) . The original proposal, announced in 2025, covered around 7,000 businesses , meaning an additional 3,000 companies have now been brought into scope. The scheme applies to energy-intensive sectors including: Steel Automotive Pharmaceuticals Why the scheme is being expanded The move comes after continued pressure from high energy prices. Oil and gas costs rose sharply during recent geopolitical tensions. Although prices have eased somewhat since then, UK manufacturers are still facing significantly higher energy costs than competitors in parts of Europe and the United States. For many businesses, energy remains one of the biggest operational pressures, particularly in sectors where electricity usage forms a large part of overall costs. What support businesses could receive From April 2027 , eligible companies will be exempt from certain electricity charges linked to net zero policies. The Government estimates this could reduce costs by around £35 to £40 per megawatt hour . There will also be a one-off payment in 2027 to compensate businesses for support they would otherwise have received from April 2026 . The overall scheme is expected to cost around £600 million . According to the Government, funding will come from wider energy system reforms and public spending, with no additional impact on household energy bills. Businesses will be able to check whether they qualify using their Standard Industrial Classification (SIC) code . Reaction from businesses Business groups have generally welcomed the announcement, although some believe the support still does not go far enough. Critics have pointed out that sectors such as: Hospitality Retail Agriculture remain outside the scheme, despite continuing to face significant cost pressures of their own. Industry bodies continue to warn that energy costs remain a major issue across the wider economy. Recent figures suggest around four in ten UK businesses are still struggling to manage energy bills. Final thoughts For manufacturers affected by high electricity costs, the expansion of the scheme may provide some longer-term relief and greater certainty around operating costs. However, the wider challenge around energy pricing in the UK has not disappeared, and many businesses outside the scheme will still be dealing with significant pressure on margins and cashflow. As always, understanding how rising costs affect profitability and planning ahead remains important, particularly in sectors where overheads can change quickly. If you’d like to talk through rising business costs or how they are affecting your numbers, I’m always happy to have a conversation .

SPOTLIGHT ON: Giving to charity - Tax reliefs you can use Simple ways to use the reliefs available on qualifying gifts Giving to charity is usually driven by personal values rather than tax planning, but the tax treatment still matters. Used properly, the available reliefs can help a donation go further, reduce your tax bill, or both. HMRC’s latest charity tax relief statistics show that charitable tax reliefs were worth around £6.7 billion in the year to April 2025, including £1.7 billion of Gift Aid paid to charities. For individuals, the main UK reliefs sit in four areas: Gift Aid Payroll Giving Gifts of shares or property Charitable gifts left in a will Each works differently. Sometimes the charity receives the tax benefit. In other cases, you claim relief yourself. The right approach depends on what you are giving, how often you give, and your wider tax position in the 2026/27 tax year . Start with Gift Aid For most people, Gift Aid is the first thing to review. If you make a qualifying donation under Gift Aid, the charity can claim an extra 25p for every £1 donated , at no additional cost to you. To use Gift Aid, you need to complete a declaration with the charity. That declaration can cover: Current donations Future donations Donations made in the previous four years Gift Aid is straightforward, but it is not automatic. You should only complete a Gift Aid declaration if you have paid enough UK Income Tax or Capital Gains Tax to cover the amount the charity will reclaim. HMRC states that your Gift Aid donations in a tax year must not exceed four times the amount of qualifying tax you have paid. If a charity reclaims more tax than you have actually paid, HMRC can ask you to pay the difference.  This catches people out more often than many realise, particularly: Retirees Students Lower earners People whose dividend or savings income falls within allowances and generates little actual tax liability Before ticking the Gift Aid box, it is worth checking your position properly. What does not qualify for Gift Aid? Gift Aid is not available: Where the payment is really for goods or services Where the donor receives benefits above permitted limits For Payroll Giving donations For gifts of shares (which have separate relief rules) Higher-rate taxpayers may be missing extra relief One of the most commonly overlooked areas is the additional tax relief available to higher and additional-rate taxpayers. If you pay tax above the basic rate, you may be able to reclaim the difference between your rate of tax and the basic-rate relief already claimed by the charity. HMRC says this can be claimed either: Through Self Assessment Or by asking HMRC to adjust your tax code For example: A £100 donation under Gift Aid becomes £125 gross to the charity A 40% taxpayer can then reclaim £25 A 45% taxpayer can reclaim £31.25 A lot of people tick the Gift Aid box and assume the process ends there. In reality, many higher-rate taxpayers are leaving relief unclaimed. If you already complete a tax return, it is worth reviewing your donations before filing. Timing can matter HMRC also allows Gift Aid donations made in the current tax year to be treated as if they were made in the previous tax year, provided the claim is made through your tax return before the filing deadline. That can help where: You paid higher-rate tax in the previous year but not the current one You want relief earlier Gift Aid and adjusted net income Gift Aid can also affect adjusted net income calculations. HMRC’s guidance confirms that Gift Aid donations reduce adjusted net income by the grossed-up amount. In practice: Every £1 donated reduces adjusted net income by £1.25 This matters because adjusted net income is used when calculating: The Personal Allowance taper The High Income Child Benefit Charge For the 2026/27 tax year : The Personal Allowance remains £12,570 The taper begins once income exceeds £100,000 The allowance reduces by £1 for every £2 of income above that threshold. For taxpayers in England, Wales and Northern Ireland, this creates an effective 60% marginal tax rate between £100,000 and £125,140 . A Gift Aid donation can therefore do more than support a charity — it can help restore lost Personal Allowance. For example: An £800 Gift Aid donation becomes £1,000 gross Adjusted net income reduces by £1,000, not £800 That reduction may help recover part of the Personal Allowance as well as generating higher-rate Gift Aid relief. Payroll Giving If your employer or pension provider offers Payroll Giving, this can be a very efficient option for regular donations. Under Payroll Giving: Donations are taken before Income Tax is deducted National Insurance still applies Income Tax relief is applied immediately For most UK taxpayers, donating £1 through Payroll Giving costs: 80p for a basic-rate taxpayer 60p for a higher-rate taxpayer 55p for an additional-rate taxpayer Scottish taxpayers have different rates because Scottish Income Tax bands differ. Payroll Giving is often attractive because: Relief is immediate There is less admin Donations do not need separate tax return claims However, it depends on your employer or pension provider offering a scheme. Gifts of shares, land and property Cash donations are not the only option. In some situations, gifting shares, land or property directly to charity can be significantly more tax-efficient. If you donate qualifying investments or property: You may receive Income Tax relief You usually avoid Capital Gains Tax on the disposal That can be more efficient than selling the asset first and donating cash afterwards. HMRC’s guidance says Income Tax relief is generally based on: The market value of the asset at the time of the gift Plus incidental costs such as broker fees or legal fees Less any benefit received Because these rules are more technical, record-keeping is important. Charitable gifts in your will Charitable giving can also play a role in estate planning. A charitable gift left in a will is exempt from Inheritance Tax because it is deducted from the estate before tax is calculated. There can also be an additional benefit: If at least 10% of your net estate is left to charity, the Inheritance Tax rate may reduce from 40% to 36% For the 2026/27 tax year : The nil-rate band remains £325,000 The residence nil-rate band remains £175,000 These thresholds are frozen until 5 April 2031 For some estates, the reduced tax rate offsets more of the charitable gift than people expect. Common mistakes Some of the most common issues include: Assuming Gift Aid is the end of the process Using Gift Aid without paying enough qualifying tax Ignoring non-cash giving options Claiming relief for organisations that do not qualify Since April 2024, UK charitable tax reliefs generally apply only to qualifying UK charities and UK Community Amateur Sports Clubs (CASCs). Choosing the right route The right option depends on what you are giving and what you want to achieve. For one-off cash donations, Gift Aid is usually the starting point For regular donations from salary or pension income, Payroll Giving may work better For investments or property standing at a gain, direct gifting may be more tax-efficient For estate planning, charitable legacies can reduce Inheritance Tax exposure The key point is that charitable tax relief is broader than many people realise. Gift Aid is only one part of the picture. Before the end of a tax year, it is worth reviewing your donations, checking whether all Gift Aid claims are valid, and making sure any higher-rate relief has not been missed. If you are considering larger gifts involving shares, property or estate planning, it is usually worth getting advice before acting. If you would like tailored advice around charitable giving and tax reliefs , I’m always happy to have a straightforward conversation.

A new report from the Institute for Fiscal Studies has taken a fresh look at the Government’s Help to Buy scheme and concluded that it largely benefited higher earners rather than significantly improving social mobility. The scheme was introduced in England in 2013 with the aim of helping first-time buyers who did not have financial support from family or friends. It worked through two main measures: a mortgage guarantee scheme allowing buyers to purchase with a 5% deposit an equity loan scheme offering a Government-backed loan of up to 20% on new-build properties, rising to 40% in London for part of the scheme At its peak in 2014/15, around one in five first-time buyer purchases in England were supported through Help to Buy. What the report found According to the IFS, the scheme made only a limited difference to overall housing affordability and had relatively little impact on social mobility. One of the main issues highlighted was that the equity loan scheme applied only to new-build homes. Because new-build supply is limited in many parts of the country, particularly in London and the South East, access to the scheme was uneven. Buyers in lower-cost regions were often more able to benefit, and these areas also tended to have higher average incomes relative to local house prices. The report also noted that many buyers were already close to normal mortgage lending limits before using the scheme. In some cases, additional financial help from family was still needed at the last minute. The wider debate Critics of Help to Buy have long argued that the scheme may have pushed house prices higher by increasing buyers’ purchasing power without significantly increasing supply. Supporters, including James Cleverly, continue to argue that it helped thousands of people onto the property ladder while supporting housebuilding activity. As with many housing policies, the reality is probably somewhere in the middle. Where the scheme stands now The equity loan scheme has now closed to new applicants in both England and Scotland, with Wales expected to follow. The mortgage guarantee scheme, however, remains available across the UK. A practical view For many people, affordability remains the biggest challenge when buying a home. Schemes like Help to Buy can improve access in the short term, but they do not necessarily solve the wider issue of housing costs increasing faster than incomes. The report is another reminder that borrowing capacity, deposits and affordability are all closely linked - particularly while interest rates remain relatively high. Final thought Help to Buy clearly supported a large number of purchases over the years, but the latest analysis suggests the long-term impact may have been more limited than originally hoped. For anyone considering buying, moving or reviewing their finances, understanding affordability properly remains far more important than relying on support schemes alone. If you’d like to talk through your finances or longer-term planning, feel free to get in touch.

UK consumers are starting to cut back on travel spending, with the latest figures suggesting households are becoming more cautious about higher discretionary costs. New data from Barclays shows overall card spending rose by just 0.9% year on year in March , slightly down from 1% in February . Within that, travel spending fell by 3.3% , marking the first decline seen since March 2021 . Overseas travel starting to slow The figures suggest many households are either delaying trips abroad or opting for UK-based breaks instead. Spending fell across several travel-related categories, including: travel agents airlines public transport At the same time, hotel and accommodation spending increased slightly by 1.2% , helped by more domestic bookings over the Easter period. Cost pressures still shaping behaviour Wider economic uncertainty continues to affect spending habits. Ongoing tensions in the Middle East have added further concern around energy prices and household costs. Research linked to the Barclays figures found that around one in seven adults have delayed major purchases or focused more on saving because of concerns about rising energy bills. Although the UK energy price cap fell by 7% in April , forecasts suggest it could increase again in July due to higher wholesale energy prices. Essential spending rising again Essential spending increased modestly overall by 0.5% . Fuel spending rose by 1.6% , marking the first increase in more than a year, largely driven by higher oil prices. Discretionary spending growth also slowed to 1.1% , although spending on clothing and entertainment remained relatively resilient. Confidence remains mixed One of the more interesting parts of the data is the contrast in confidence levels. Most people still feel relatively secure about their own household finances, but confidence in the wider UK and global economy has weakened. At the same time, retail sales remained strong overall, increasing by 3.6% year on year , helped by higher food spending. A practical view None of this points to a sudden collapse in spending, but it does suggest households are becoming more selective. Travel is often one of the first areas where people pause or cut back when costs feel uncertain, particularly when energy prices and inflation risks remain in the background. For businesses, this matters because changes in consumer confidence tend to feed through gradually rather than all at once. Final thought The overall picture is still mixed. People are continuing to spend, but there are growing signs that households are becoming more cautious about larger or less essential purchases. As costs, inflation and global uncertainty continue to shift, confidence is likely to remain sensitive over the coming months. If you’d like to talk through your finances or wider business planning, feel free to get in touch.

Pay growth slowing – what it means for businesses There are further signs that wage growth in the UK is starting to ease. The latest figures from the Office for National Statistics show that average earnings (excluding bonuses) rose by 3.8% in the three months to January , down from 4.2% in the previous period . That makes it the slowest rate of pay growth in more than five years . Although growth is slowing, wages are still increasing slightly faster than inflation, which stood at 3% in January . The wider labour market The overall labour market remains relatively stable. Unemployment is at 5.2% , close to a five-year high The number of people on payrolls increased by around 20,000 in February , bringing the total to 30.3 million So while there are signs of softening, it’s not a sharp shift. Public vs private sector pay One area where the difference is more noticeable is between sectors. Public sector pay growth: 5.9% Private sector pay growth: 3.3% This gap has been a consistent theme, and it continues to affect recruitment and retention in some industries. Hiring and vacancies Job vacancies have remained broadly steady. Early estimates suggest a small decline of 6,000 roles , leaving around 721,000 vacancies in the three months to February. In practice, that points to a labour market that is cooling slightly rather than contracting. What this means for interest rates These figures come just ahead of the next decision from the Bank of England. There had been some expectation of a rate cut, but that now looks less likely. Rising fuel and energy costs - linked to ongoing tensions in the Middle East - have increased the risk of inflation picking up again. That makes it more likely that borrowing costs will be held steady for now. A practical view For businesses, this creates a slightly mixed picture. On one hand, slower wage growth can ease some pressure on costs. On the other hand, inflation risks and interest rates remaining higher for longer continue to affect planning and investment decisions. It’s not a dramatic shift - but it’s another sign that conditions are changing gradually rather than quickly. Final thought The key takeaway is that while pay growth is slowing, the wider environment is still uncertain. Costs, wages and borrowing conditions are all moving at the same time, just in different directions. For most businesses, that makes it more important to keep a close eye on margins, staffing costs and forward planning over the coming months. If you’d like to talk through how this might affect your business, feel free to get in touch.

SPOTLIGHT ON: Pension allowances Practical steps to keep pension planning on track Pensions are still one of the most tax-efficient ways to save for the long term. They can reduce taxable income, support how business owners take money out of their company, and build retirement funds in a structured way. Where things tend to go wrong is not the idea of contributing - it’s contributing without checking the rules first. That’s when a sensible contribution can lead to an unexpected tax charge. The good news is that most issues come from a fairly small number of areas: the annual allowance, tapering for higher earners, the money purchase annual allowance (MPAA), and missed carry forward checks. For the 2025/26 tax year , the standard annual allowance is £60,000 , but in some cases it can fall to £10,000 . This guide looks at the key checks to make before contributing and where problems usually arise. Start with the annual allowance For most people, the starting point is the standard annual allowance: £60,000 for 2025/26 Applies across all pensions combined , not each one separately Going over it can trigger a tax charge if there isn’t enough carry forward available One of the common misunderstandings is what counts towards that limit. It’s not just what you personally pay in. It can include: Personal contributions Employer contributions Contributions made by others Pension growth under defined benefit schemes This is why people get caught out - the figure used for tax purposes is often higher than expected. Tax relief isn’t the same as the allowance Another area that causes confusion is the difference between tax relief and the annual allowance. In simple terms: The annual allowance is the limit before a potential tax charge Tax relief on personal contributions is usually limited to 100% of your earnings Employer contributions follow different rules This is particularly relevant for directors and business owners. For example, someone with a low salary might assume they can’t contribute much personally, but employer contributions could still be an efficient route. Equally, staying within personal earnings limits doesn’t guarantee you’re within the annual allowance once everything is added together. Check if tapering applies For higher earners, the full £60,000 allowance doesn’t always apply. Tapering can reduce it where: Threshold income exceeds £200,000 Adjusted income exceeds £260,000 If tapering applies: The allowance reduces by £1 for every £2 over £260,000 It can fall to a minimum of £10,000 This is a common source of surprise tax bills, especially where income fluctuates - for example through dividends, bonuses or business profits. Watch for the MPAA The money purchase annual allowance (MPAA) is another key area. For 2025/26, it is £10,000 and can apply if you’ve flexibly accessed a pension . This often catches people who: Take taxable income from a pension Assume it’s a one-off decision Then later want to contribute again Once triggered, it can significantly limit future contributions. Don’t overlook carry forward Carry forward can make a big difference. HMRC allows unused allowance from the previous three tax years to be carried forward, subject to conditions. This is particularly useful where: Profits increase A business wants to make a larger contribution Retirement planning has been delayed But it’s also an area where assumptions cause problems. You need to check: Whether you were part of a pension scheme in those years What your actual allowance was Whether tapering applied How much was already used It works well - but only if the numbers are correct. Where issues usually arise Most pension tax charges aren’t caused by pensions themselves, but by lack of review. Common causes include: Assuming the allowance is always £60,000 Missing tapering for higher earners Forgetting the MPAA applies Ignoring employer contributions Relying on carry forward without checking Making last-minute contributions without reviewing income Most of these are avoidable with a simple annual check. Income changes make this more important Planning becomes more sensitive where income varies. Extra care is usually needed if you: Take a mix of salary and dividends Run your own business Receive bonuses or irregular income Are approaching retirement Have started taking pension withdrawals In these cases, it’s better to review contributions during the tax year rather than relying on assumptions. A simple review process A short review before making contributions can prevent most issues. This should cover: Total pension input for the year Whether the full allowance applies Whether tapering is relevant Whether the MPAA applies Available carry forward Whether personal or employer contributions are more efficient It doesn’t need to be complicated - but it does need to happen before money goes in. Other limits to keep in mind The annual allowance is the main consideration, but there are other pension limits worth noting. For 2025/26 : Lump sum allowance: £268,275 Lump sum and death benefit allowance: £1,073,100 These are less likely to create immediate issues but still matter for long-term planning. Final thought Pensions remain a strong planning tool, but the rules aren’t always as simple as the headline figures suggest. Most problems aren’t about contributing too much - they’re about not checking first. A short review each year is usually enough to avoid surprises. If income is changing or you’ve started accessing pensions, that review becomes more important. If you’d like help checking your position before making contributions, feel free to get in touch.

The Government has announced new proposals aimed at increasing youth employment, with financial incentives for businesses that take on younger workers. At the centre of the plan is a £1bn funding package , with a target of creating around 200,000 jobs . For employers, the headline point is straightforward: there may soon be direct financial support for hiring . What’s being proposed Under the proposals, businesses could receive: £3,000 for each person aged 18 to 24 they employ, where that individual has been out of work and actively seeking employment for at least six months £2,000 for each new apprentice taken on by small and medium-sized businesses The Government estimates that around 60,000 young people could benefit directly from these measures. Alongside this, there are plans to expand the existing jobs guarantee scheme . At the moment, individuals aged 18 to 21 who have been on Universal Credit and looking for work for 18 months are guaranteed a six-month job placement. The new proposals would extend that eligibility up to age 24. What this means in practice For businesses, this is less about policy and more about opportunity. If you are already considering hiring (particularly at entry level) these grants could help reduce the initial cost and risk. For some businesses, that may make the difference between delaying a hire and bringing someone in sooner. Apprenticeships are also clearly part of the direction of travel, with additional support aimed at encouraging SMEs to invest in training and development. The wider context These proposals sit alongside broader employment reforms currently being considered. The Government’s Employment Rights legislation includes plans to strengthen worker protections, including reducing the qualifying period for unfair dismissal claims from two years to six months. Taken together, the direction is fairly clear: More support to get people into work More structure around employment rights once they are there  A practical view For many businesses, recruitment decisions come down to timing, cost and confidence. Grants like this don’t change the fundamentals, but they can make hiring more accessible — particularly where you are looking to grow steadily rather than quickly. If you are planning to recruit over the next 12–18 months, it’s worth keeping an eye on how these proposals develop and whether they apply to your situation. Final thought The key point is that these are still proposals, but they give a good indication of where policy is heading. For businesses open to bringing in younger staff or apprentices, there may be practical support available — and it’s worth understanding how that fits into your plans. If you’d like to talk through how hiring decisions impact your wider finances, feel free to get in touch.

SPOTLIGHT ON: MTD for income tax: Your April 2026 checklist Practical steps to get ready for the new reporting rules. Making Tax Digital for income tax (MTD IT) starts from 6 April 2026 for sole traders and landlords with qualifying income over £50,000 . For many businesses and property owners, the change is less about extra tax and more about changing how records are kept and how income is reported to HMRC through the year. HMRC says those in scope will need to keep digital records, send quarterly updates through compatible software, and then complete a year-end process through that software. HMRC has also confirmed that this rollout will widen in later phases, to qualifying income over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028 . The main risk is leaving preparation too late. Businesses that already keep clean digital records and reconcile income regularly are likely to find the transition manageable. Those still relying on paper files, spreadsheets with manual rekeying or a year-end tidy-up may find April 2026 more disruptive than expected. This guide sets out who needs to act now, what the new process looks like, and the practical checks worth making before the start date. Check first whether you are in scope The April 2026 start date does not apply to everyone in self assessment. It applies first to sole traders and landlords whose total qualifying income from self-employment and property was more than £50,000 in the 2024 to 2025 tax year . HMRC’s eligibility guidance says the test is based on qualifying income from those sources, not total income from all sources. That means salaries, dividends and savings income do not count towards the threshold for deciding whether April 2026 applies, although those figures may still be relevant later in the tax return process. Qualifying income can include: income from self-employment income from UK property income from foreign property income from more than one business or property source combined. HMRC also says income from ceased self-employment or property sources can still count towards qualifying income for the threshold test if it appears on the relevant tax return. That is worth checking where a business has changed, split or ceased activity during the year. Be clear on who is not starting in April 2026 A lot of unnecessary concern has come from people assuming MTD IT will apply to every taxpayer from April 2026. It will not. As things stand: sole traders and landlords with qualifying income over £50,000 start from 6 April 2026 those over £30,000 start from 6 April 2027 the government has set out plans for those over £20,000 to start from 6 April 2028 limited companies are not within this April 2026 MTD IT rollout partnerships are not part of the first phase starting in April 2026. That makes this a narrower change than some headlines suggest, but it is still significant for many landlords, sole traders and owner-managed businesses operating outside a company. Thresholds are for gross income, not net. Understand what the new process actually involves MTD IT is not just a digital version of the current self assessment return. HMRC says the process has three main parts. You will need to: create, store and correct digital records of self-employment and property income and expenses send quarterly updates to HMRC using compatible software submit a year-end tax return process , including any other income and gains, and pay tax due by 31 January following the end of the tax year. HMRC has described the quarterly submissions as light-touch quarterly updates rather than extra tax returns. That wording matters, because the update is a summary of digital records for the period, not a full tax calculation each quarter. Get familiar with the quarterly deadlines For many clients, the biggest change in habit will be the reporting rhythm. HMRC’s current guidance says the quarterly update deadlines are: 7 August 7 November 7 February 7 May. That means businesses in scope from 6 April 2026 will move away from a single annual reporting mindset for business and property income. The work will need to be spread through the year, even though the tax payment timetable remains separate. This is one reason April 2026 preparation matters. The businesses that struggle are likely to be those still treating bookkeeping as a once-a-year job. Know what records must be kept digitally HMRC’s digital record guidance is fairly direct. Businesses within MTD IT must create and store digital records of self-employment and property income and expenses. For each item of income or expense, the record needs to include: the amount the date the category of income or expense. HMRC says MTD IT uses the same categories of income and expenses as self assessment. For self-employment, that includes items such as sales, takings, fees, stock costs, travel, office costs and financial costs. For property, it includes rent and property expenses such as repairs, maintenance and services. In practice, the key point is that a rough spreadsheet total or a box of invoices handed over after the year end is no longer the standard MTD is built around. The system expects business and property records to be digital and kept up to date. Check whether your software is ready Compatible software is central to the new regime. HMRC says those in scope will need software that works with MTD IT to keep records, send quarterly updates and complete the year-end submission. There are both full bookkeeping products and bridging-style options on HMRC’s recognised software list, depending on how a business prefers to work. Before April 2026, review whether your current set-up can handle: digital record-keeping for all business and property income streams quarterly updates to HMRC year-end submission through the same or linked software inclusion of other sources of income and gains at the end of the tax year, where relevant. A business may not need the most expensive system on the market, but it does need one that matches how the records are kept in real life. Review how many income streams need tracking One of the more practical issues is that many people affected by MTD do not have just one tidy source of income. A taxpayer may have: one or more self-employments UK rental income foreign property income ceased sources still relevant to the threshold test other personal income that still needs to be included at the year-end stage. That means the bookkeeping question is not only “Do I have software?” but also “Does my set-up properly separate and capture each source?” This matters because weak source separation creates avoidable problems later, especially where one person has both trading and property income. Do not assume the old annual tidy-up will still work Under the old habit pattern, many sole traders and landlords could leave bookkeeping in poor shape for months and still pull together a tax return before 31 January. MTD IT is designed to change that. A sensible shift now is to move towards: monthly bookkeeping monthly or quarterly reconciliations clearer digital storage of invoices and expense evidence regular review of business and property categories fewer year-end adjustments caused by incomplete records. This is not only about compliance. More regular records usually make it easier to track profit, cashflow and tax exposure through the year. Understand the first-year penalty position properly One of the most useful current easements is that HMRC says it will not apply penalty points for late quarterly updates in the first mandatory year, 2026 to 2027 , for those required to join from April 2026. However, that does not mean there is no consequence to poor compliance. HMRC also says: digital records still need to be kept quarterly updates still need to be sent before the tax return can be completed penalties can still apply for late tax returns penalties and interest can still apply if tax is paid late. So the easement is helpful, but it is not a reason to delay preparation. It mainly gives affected taxpayers and agents more room to settle into the quarterly cycle without immediate late-update penalty points. Check whether an exemption may apply Not everyone who would otherwise fall within the thresholds has to use MTD IT. HMRC’s exemption guidance says some people are automatically exempt, including: those with qualifying income of £20,000 or less those without a national insurance number trustees and personal representatives, in relation to those roles certain Lloyd’s members some people who are not physically or mentally capable of using the system, depending on the conditions met. HMRC also says people may be exempt if they are digitally excluded , meaning it is not reasonable for them to use compatible software to keep records or submit them. Agents can apply on behalf of clients in that position. HMRC has said those clients should still be prepared for MTD while an exemption application is being considered, in case it is refused. That makes exemption an issue to review early rather than close to the deadline. Prepare for the year-end step, not just the quarterly updates Quarterly updates are only part of the process. HMRC says that before the final year-end submission is completed, the software will need to include other sources of income and gains where relevant. The final declaration deadline remains 31 January after the end of the tax year. HMRC’s developer guidance states that the final declaration can be made from 6 April after the year end, with a deadline of 31 January the following year. This matters because MTD IT does not remove the need to bring together the wider tax picture. It changes the route and timing for business and property records, but the end-of-year completion step still matters. If you are below the threshold, do not ignore this completely Businesses and landlords below the April 2026 threshold may still want to act early. HMRC allows voluntary sign-up in some cases, and the wider rollout means many taxpayers who are not affected in 2026 may still be affected in 2027 or 2028. HMRC’s current sign-up guidance says someone who will be required from a later date can choose to sign up voluntarily now for the current tax year, provided they are eligible and use compatible software. For some, the best use of 2025 to 2026 is not early enrolment but process improvement, so it is a good time to: clean up records move to compatible software separate business and personal transactions properly improve source document storage get used to quarterly bookkeeping reviews. A practical April 2026 checklist Use this checklist to see what needs doing now. Confirm whether April 2026 applies Check your 2024 to 2025 qualifying income from self-employment and property. If the total is over £50,000 , assume April 2026 is live unless an exemption applies. List all relevant income sources Separate each self-employment. Separate UK and foreign property income where relevant. Identify any ceased sources that still affect the threshold calculation. Review digital records Can you record income and expenses digitally by amount, date and category? Are records up to date enough to support quarterly updates? Check software Confirm whether your current software is compatible with MTD IT. If not, decide whether to move to bookkeeping software or a bridging option. Set a quarterly timetable Build internal deadlines ahead of 7 August, 7 November, 7 February and 7 May . Do not rely on the first-year easement as a substitute for a process. Review exemptions early Check digital exclusion or automatic exemption grounds where relevant. If applying, do it early and keep preparing in parallel. Prepare for the year-end stage too Make sure the year-end process will still capture other income and gains, not just business and property summaries. How I can help The businesses most likely to handle MTD well are the ones that treat it as a records and process project, not just a filing deadline. The quickest wins usually come from confirming whether the threshold applies, cleaning up income sources, choosing the right software and setting a workable quarterly routine. I can help you: confirm whether April 2026 applies based on your qualifying income review whether your records meet HMRC’s digital requirements choose or assess software for quarterly reporting separate self-employment and property records properly prepare an internal timetable for quarterly updates and the year-end submission review whether an exemption may apply.  Looking forward MTD IT is now close enough that affected businesses should treat it as a live change, not a future one. HMRC is already urging those in scope to act, and the move to quarterly digital reporting will be much easier where the groundwork is done before 6 April 2026. HMRC said on 5 February 2026 that 864,000 sole traders and landlords face the new rules from April 2026, which gives a sense of how many taxpayers are now in the countdown phase. The practical message is simple: confirm whether you are in scope, get the records into good shape, check the software, and build a reporting routine before the first quarterly deadline arrives. Need help with MTD? I can assist.

Mortgage rates have moved up quickly in recent weeks, and it’s starting to show in the numbers. New data suggests a typical borrower is now paying around £788 more per year . The figures, compiled by Moneyfacts, are based on a £250,000 mortgage over 25 years , with the average two-year fixed rate now at 5.28% . What’s changed The shift has been fairly rapid. Since late February, lenders have been reacting to increased global uncertainty by adjusting rates and pulling back some of their most competitive deals. Only a few weeks ago, fixed-rate mortgages below 4% were widely available . Those have now largely disappeared. Several major lenders, including Barclays, HSBC, NatWest, Nationwide and Santander, have withdrawn those lower-rate products altogether. How far rates have moved Average mortgage rates have climbed in a short space of time: Two-year fixed rates have risen from 4.83% at the start of March to 5.28% Five-year fixed rates have increased from 4.95% to 5.32% For someone taking a five-year deal, that increase works out at around £651 more per year compared with just a couple of weeks ago. Fewer options available It’s not just about higher rates — there are also fewer choices. There are currently 689 fewer mortgage products available than earlier in the month, which reduces flexibility for both buyers and those looking to remortgage. That said, the situation is still less severe than what we saw after the September 2022 mini-Budget , when roughly a quarter of all mortgage deals were withdrawn. What this means for borrowers If you’re already on a fixed-rate mortgage, nothing changes immediately. You’re protected until your current deal ends. The pressure tends to come when you’re approaching renewal. With rates moving quickly and lenders adjusting their products in response to wider economic conditions, timing and planning start to matter more. If you’re due to remortgage in the next 6–12 months, it’s worth looking at your options earlier rather than later. A practical approach Mortgage rates are influenced by factors outside anyone’s control, global events, inflation expectations and decisions by the Bank of England . What you can control is preparation. Understanding what your payments might look like at different rates, and how that fits alongside your wider finances, makes it easier to plan and avoid surprises. Final thought The key takeaway is that the mortgage market can move quickly, even over a matter of weeks. If you’re approaching a renewal or considering borrowing, it’s worth taking a bit of time to understand where you stand rather than relying on assumptions based on older rates. If you’d like help looking at how this might affect your overall finances, feel free to get in touch.

Where profit quietly disappears in growing Ltd companies Turnover is up. Sales look healthy. The business feels busy. But profit doesn’t quite reflect the effort. This is a common pattern in growing owner-managed companies. Nothing dramatic has gone wrong. There’s no obvious issue. But margins feel tighter than they should. Profit rarely disappears in one place In most cases, profit doesn’t drop because of a single event. It leaks. And those leaks are often easy to miss when the business is growing. Where it tends to go There are a few patterns that come up regularly: Overheads creeping up quietly Software subscriptions, small hires, additional services — each one makes sense individually. Over time, they permanently increase the cost base. Pricing that hasn’t kept up with complexity As the business grows, the work often becomes more demanding. If pricing doesn’t move with it, margins reduce. Revenue growth masking inefficiency When sales are increasing, inefficiencies are easy to ignore. When growth slows, they become much more visible. Small write-offs or slow-moving work Nothing dramatic — just gradual erosion over time. Director drawings without forward visibility Not wrong, but if they aren’t planned alongside cashflow, they can create pressure later. None of these are signs of failure. They’re usually just signs of a business that has grown without regular commercial review. What growing businesses usually need At this stage, most businesses don’t need major change. They need better visibility. Typically, that means: A clear view of gross margin Tracking overhead trends over time Regular cashflow forecasting Stepping back quarterly to review what the numbers are actually saying The changes themselves are often small. But making them early is far easier than correcting things later. Looking beneath the surface If profit feels tighter than turnover suggests, it’s usually worth looking a bit deeper. Not to find problems, but to understand what’s actually happening underneath the surface. Because in most cases, the issue isn’t dramatic. It’s just been building quietly. Part of a bigger picture This is the third post in a short series on how growing businesses interact with their numbers. If you haven’t read the earlier ones, you may also find these useful: The Signs You’ve Outgrown Your Accountant If Your Management Accounts Don’t Change Decisions, They’re Not Working Together, they look at how financial information should evolve as a business grows, and how small changes in visibility can lead to better decisions. If any of this sounds familiar, I’m always happy to have a straightforward conversation about how your numbers are behaving and whether they’re giving you the visibility you need.

The Government has announced a £50m support package for low-income and vulnerable households that rely on heating oil, as prices have risen sharply following the conflict in the Middle East. Kerosene, which is used in heating oil systems, has increased more quickly than petrol and mains gas in recent weeks. Unlike gas and electricity, heating oil is not covered by the energy price cap. That means households who are off the gas grid are more exposed to sudden price changes, often having to pay large upfront amounts to refill their tanks. How the support will be distributed The funding will be distributed through local councils from 1 April , using the new Crisis and Resilience Fund (CRF) . The allocation has been split based on regional demand: £27m for England £17m for Northern Ireland £4.6m for Scotland £3.8m for Wales Northern Ireland is expected to be most affected, with up to 60% of homes relying on heating oil . Why this matters One of the main challenges with heating oil is how it’s paid for. Unlike monthly direct debits for gas and electricity, heating oil often requires lump sum payments , which can put pressure on household finances, particularly when prices rise quickly. Ministers have acknowledged that this creates additional financial strain for vulnerable households trying to maintain heating and hot water. Wider review of the heating oil market Alongside the support package, the Government has announced a broader review of the heating oil market. This includes: Looking at introducing sector-wide regulation for the first time Improving consumer protections Working with suppliers to improve service standards The Competition and Markets Authority (CMA) is also investigating the market to assess whether pricing is fair. Further proposals include appointing a formal regulator — potentially Ofgem — and introducing an ombudsman under the proposed Energy Independence Bill . Final thoughts For households affected, this support may help in the short term. Longer term, the focus is likely to shift towards how the market is regulated and how exposed off-grid households remain to price volatility. As with most cost pressures, the key is understanding how rising costs affect your overall finances and planning accordingly. If you’re reviewing your household or business finances in light of rising costs, I’m always happy to chat.

What online sellers must record and report Online selling can scale quickly. That’s great for revenue, but it puts pressure on record-keeping, VAT decisions and how you report to HMRC. Unlike a traditional business with one sales ledger and one bank account, online selling usually involves multiple moving parts: your website or marketplace, a payment processor, fulfilment providers and often advertising platforms driving demand. Each of these produces its own reports, timelines and deductions. They don’t always line up neatly with what actually lands in your bank. At the same time, visibility has increased. Digital platforms now report seller income and activity to HMRC each year. That means HMRC can compare platform data against your tax returns, VAT submissions and digital records. Selling online doesn’t create a problem by default, but it does mean inconsistencies show up more easily. Why this matters more than it used to Online retail remains a significant part of the UK economy. The Office for National Statistics reported that 28.3% of retail spending was online in December 2025 , up from 28.0% in November , with online sales values 11.1% higher than December 2024 . For businesses, that growth usually means: More transactions (and more refunds and chargebacks) More intermediaries (platforms, processors, fulfilment providers) More cross-border sales affecting VAT More third-party data that HMRC can cross-check The goal is simple: keep records clean and consistent so you can run the business properly and support your tax position if needed. What counts as “selling online”? From a compliance point of view, it doesn’t matter whether you sell: Through your own website (e.g. Shopify) Through marketplaces like Amazon, eBay or Etsy Through social platforms Via payment systems like PayPal or Stripe What changes is where the data sits, and whether the platform has reporting obligations to HMRC. The core principle Tax is based on profit. Sales income (turnover), less allowable costs, equals taxable profit. But HMRC expects evidence. That means your records need to show: What you sold When you sold it What you were paid (and what was deducted) What it cost you Any VAT charged or reclaimed How your tax figures were calculated The key point: you need to record gross activity — not just what hits your bank. What to keep 1. Sales records (gross, not payouts) For each sales channel, keep: Order dates and numbers Customer location Items, quantities and prices Delivery charges Discounts and vouchers Refunds and cancellations VAT charged Common issue: treating payouts as sales. Payouts are usually sales minus fees and refunds , so relying on them can understate turnover. 2. Platform reports Keep: Monthly statements Transaction-level exports Settlement reports VAT invoices for fees Save these regularly — platform data can change after refunds or disputes. 3. Payment processor records Include: Payout reports Chargebacks and disputes Fees and currency charges Any reserves held 4. Cost evidence Keep invoices and receipts for: Stock and imports Shipping and packaging Fulfilment costs Software and subscriptions Advertising Professional services Staff and subcontractors 5. Bank records Alongside statements, keep: Reconciliation schedules Notes for unusual items Separate accounts or clear tracking makes this much easier. 6. Stock records Keep track of: Stock received Inventory movements Returns and write-offs Stock counts This supports both operations and profit accuracy. How long to keep records Self assessment: at least 5 years after the filing deadline VAT: typically 6 years (10 years for OSS/MOSS) Limited companies: generally 6 years from the end of the financial year In practice, many businesses keep six years plus the current year . Platform reporting to HMRC From 1 January 2024 , digital platforms must report seller income and details to HMRC annually. This includes: Name and address Date of birth (for individuals) Tax identifiers (e.g. NI number or company number) There is an exemption for low activity (fewer than 30 sales and under €2,000 - about £1,700). What this means in practice HMRC can see platform-level data Differences between your returns and platform figures may trigger questions Keeping accurate records is more important than ever A simple control: Reconcile platform totals to your accounts regularly. VAT considerations UK threshold For 2025/26, the VAT threshold is £90,000 (rolling 12 months). Common VAT issues Cross-border sales Marketplace VAT rules (especially under £135 consignments) Import VAT documentation Missing paperwork is one of the most common reasons VAT reclaims are challenged. Making Tax Digital (MTD) MTD for VAT All VAT-registered businesses must: Keep digital records Submit VAT returns via compatible software Late submissions now operate under a points-based penalty system . MTD for income tax (from April 2026) Applies to sole traders and landlords with income over £50,000 (2024/25). This means: Quarterly updates Digital record-keeping Even now, it’s worth preparing your systems to handle this. A practical workflow Monthly Import sales and fees Reconcile payouts to bank Check refunds Store invoices and receipts Quarterly Review VAT position Check margins by platform Reconcile platform totals Annually Download full reports Review stock Check VAT position Confirm business details across platforms Common mistakes Mixing personal and business transactions Recording payouts as turnover Missing VAT evidence Ignoring overseas stock rules Not saving data regularly Most issues come from small inconsistencies building up over time. Final thoughts Selling online can look simple from the outside, but the record-keeping behind it rarely is. The biggest risks aren’t usually major errors, they’re small gaps that build over time. Missing a month of fees, recording net instead of gross, or losing track of returns. With the right structure in place, though, it becomes manageable. Clean records don’t just keep HMRC happy — they make the business easier to run.

What happens next if you’re one of them? Around one million taxpayers missed the 31 January deadline for submitting their 2024/25 self-assessment tax return. HMRC data shows just how last-minute things were for many people. More than 27,000 returns were filed in the final hour , with 475,722 submitted on the final day alone . In total, around 11.5 million returns were filed. Even with extended helpline hours and webchat support, a significant number of people still didn’t make the deadline. What happens if you miss it? If you missed the deadline, the first thing to know is that a £100 fixed penalty is applied automatically . This applies even if: You don’t owe any tax You’ve already paid what was due From there, the penalties can increase quickly if the return remains outstanding. How penalties build up If your return is still not submitted: After 3 months: £10 per day (up to £900) After 6 months: £300 or 5% of the tax due (whichever is higher) After 12 months: another £300 or 5% charge On top of that, late payment penalties may apply: 5% of unpaid tax after 30 days Another 5% after 6 months Another 5% after 12 months Interest is also charged on any overdue amounts. Who needs to file a self-assessment return? Self-assessment generally applies if you have income that isn’t taxed automatically through PAYE. That can include: Self-employment income over £1,000 Rental income from property Other untaxed income streams Can penalties be appealed? HMRC has confirmed it will review cases where there is a reasonable excuse for missing the deadline. However, in most cases, the practical advice is: Submit the return as soon as possible Pay any initial penalties promptly Even if you plan to appeal, dealing with it early can prevent further charges from building up. Final thoughts Missing the deadline is more common than people think, but leaving it unresolved is where the real cost starts to build. If you’ve missed the deadline or you’re not sure what to do next, it’s worth getting it sorted sooner rather than later. If you need help with your self-assessment, I’m always happy to have a straightforward conversation.

Most businesses don’t change accountant because something dramatic goes wrong. They change because, quietly, something no longer fits. In the early years of a business, the priorities are usually straightforward. You need someone who files everything correctly, keeps you compliant, and answers tax questions when they arise. That’s valuable. Compliance matters, and getting the basics right is essential. But businesses that grow often reach a stage where compliance alone isn’t enough . The business becomes more complex. Decisions carry more weight. And the numbers need to do more than simply confirm what already happened. The common signs A lot of business owners don’t immediately recognise the shift. It tends to show up in small ways. For example: You only hear from your accountant near deadlines. Your year-end accounts feel like history rather than insight. You’ve never had a detailed conversation about margin. Cashflow still surprises you from time to time. Your pricing hasn’t been challenged in years. Most decisions are still made on instinct because the numbers don’t quite answer the question. None of these necessarily mean your accountant is doing a bad job. Often it simply means your business has reached a different stage . What growing businesses usually need next Established owner-managed companies typically start to need a slightly different type of financial support. Things like: Management information that informs decisions , not just compliance reports. Clear visibility of gross margin , rather than just turnover figures. Forecasting , so issues are spotted before pressure builds. Regular conversations about structure, profit extraction and growth plans . The difference is often subtle. The conversation shifts from: “Have you filed your VAT?” to something closer to: “What’s happening to margin in this part of the business?” When the conversation needs to evolve For many businesses, the turning point isn’t dramatic. It simply feels like the financial side of the business hasn’t evolved at the same pace as everything else. If the business feels more complex than it did a few years ago, but the financial conversations haven’t changed, it may be worth reviewing the level of support you receive. A straightforward conversation Sometimes, a small shift in the way financial information is presented (or the conversations around it) can make a significant difference to how confidently you run the business. If any of this sounds familiar, I’m always happy to have a straightforward conversation about where your business is now and whether your financial reporting is keeping pace with it. You may also be interested in If Your Management Accounts Don’t Change Decisions, They’re Not Working This article looks at how management accounts should provide real insight (not just historical reporting) and why growing businesses often need better visibility of margin, cashflow and performance.

There are some tentative signs of improvement in parts of the UK economy, particularly in manufacturing. The closely watched Purchasing Managers’ Index (PMI) for manufacturing rose to 51.8 in January , up from 50.6 in December and its highest level since August 2024 . Any reading above 50 indicates growth , so the increase suggests activity in the sector is expanding again after a period of weakness. The survey, which is based on responses from around 650 manufacturers , also reported new export orders rising for the first time in four years . Demand improved from several key markets, including Europe, the United States and China , and manufacturers reported stronger optimism about the year ahead. In fact, business confidence in the sector reached its highest level since before the 2024 Autumn Budget . This improvement in manufacturing appears to reflect broader signs of economic strengthening. A combined PMI reading covering both manufacturing and services indicated the fastest expansion in overall business activity since April 2024 . Other economic indicators have also shown modest improvement. Retail sales beat expectations in December , while official figures showed UK GDP increasing by 0.3% in November , a stronger performance than many economists had forecast. Confidence among business leaders is also beginning to stabilise. Separate data from the Institute of Directors showed overall economic confidence among its members improving in January to its highest level in eight months . While the headline measure remains negative overall, confidence in their own organisations returned to positive territory . Taken together, these indicators suggest that some of the uncertainty surrounding Rachel Reeves’s November Budget may be starting to ease. In the months leading up to the Budget, speculation around tax changes had weighed on investment decisions and business spending. However, the economic picture remains mixed. Inflation has eased somewhat, falling to 3.4% in December , but it still sits well above the Bank of England’s 2% target . At the same time, the labour market continues to show signs of strain. Unemployment has risen to a near five-year high , and manufacturers are still reducing staff numbers, although job cuts are now occurring at the slowest pace in more than a year . For businesses, the takeaway is that while there are early signs of recovery, the operating environment remains uncertain. Costs, interest rates and demand conditions continue to shift, which makes it important to keep a close eye on cashflow, margins and investment decisions as the year develops. If you’d like to talk through how the current economic environment might affect your business, feel free to get in touch.

Simple ways to reduce tax on savings When people talk about retirement planning, it often sounds complicated. In reality, most sensible tax planning for savings comes down to two very familiar tools: ISAs and pensions . Used properly, they allow you to save and invest in a tax-efficient way while balancing two important things - flexibility today and security later . You don’t need complex structures to make this work. In most cases, understanding the rules and allowances is enough to make a meaningful difference. This guide looks at the 2025/26 allowances, the rules that regularly trip people up, and a practical way to combine ISAs and pensions into one simple plan. A quick note before we start: this article explains tax rules and planning principles. It isn’t personal investment advice, and if you need recommendations on investments, providers or products, regulated advice may be appropriate. Why ISAs and pensions sit at the centre of tax planning Most personal financial planning really comes down to two questions: How do we reduce unnecessary tax today? How do we build financial flexibility for the future? ISAs and pensions tend to answer those questions better than most other options. An ISA allows savings and investments to grow without UK income tax or capital gains tax, and withdrawals are usually tax-free. A pension gives you tax relief when you contribute, and investments inside the pension can grow largely tax efficiently. The trade-off is that the money is locked away until later life and withdrawals can be taxable. Used together, they allow you to balance accessible savings with long-term retirement planning without making things overly complicated. The allowances you need to know ISA allowance The annual ISA allowance for the 2025/26 tax year is £20,000 per person . You can spread this across different types of ISA. Under current rules, you can also pay into more than one ISA of the same type in a tax year as long as you stay within the overall £20,000 limit. Some providers offer flexible ISAs , which allow you to replace money withdrawn within the same tax year. However, this depends on the provider, so it is always worth checking the details. Lifetime ISA and Junior ISA allowances A Lifetime ISA allows contributions of up to £4,000 per year , with the government adding a 25% bonus (up to £1,000) . There are eligibility rules and withdrawal restrictions to be aware of. A Junior ISA allows up to £9,000 per year per child . The government has confirmed that ISA, Lifetime ISA and Junior ISA limits will remain frozen at these levels until April 2031. Pension annual allowance For most people, the headline pension allowance is: £60,000 per year. However, the practical limit can be lower due to several rules. Higher earners may face the tapered annual allowance , which reduces the limit based on “threshold income” and “adjusted income”. The minimum tapered allowance is £10,000 . There is also the Money Purchase Annual Allowance (MPAA) , which applies if you have started flexibly accessing defined contribution pensions. This reduces your annual allowance to £10,000 . Personal contribution limits Tax relief on pension contributions usually applies up to 100% of your annual relevant earnings . If you have little or no earnings, you can still normally contribute up to £3,600 gross per year and receive tax relief in certain circumstances, typically through the relief-at-source system . More people are using these allowances Recent data shows how widely these tax wrappers are now used. Government savings statistics show around 15 million adult ISA accounts received subscriptions in 2023/24 , up from 12.4 million the year before . Meanwhile, the Department for Work and Pensions reports more than 22 million people were saving into workplace pensions in 2023 , over 10 million more than in 2012 . The direction of travel is clear. More households are using ISAs and pensions, so it’s sensible to make sure your own approach is intentional rather than accidental. How ISAs Work What an ISA actually does An ISA acts as a tax wrapper . Savings interest, dividends and investment growth inside an ISA are generally free from UK income tax and capital gains tax. Withdrawals are normally tax free as well. That combination can help you: keep savings interest tax free build investment portfolios without annual capital gains tax administration withdraw funds later without pushing yourself into a higher tax band The main ISA types Cash ISA Essentially a savings account within a tax wrapper, often used for emergency funds or shorter-term goals. Stocks and Shares ISA Investments held within an ISA, typically used for medium- to long-term planning. Lifetime ISA Designed for first-home purchases or retirement savings from age 60, with the government bonus mentioned earlier. Junior ISA A tax-free savings or investment account for children that becomes theirs at age 18. ISA rules that catch people out A few common misunderstandings appear regularly. Using the allowance too late ISA allowances reset each tax year and cannot be carried forward. Assuming tax-free means penalty-free Lifetime ISAs and some products have withdrawal penalties depending on circumstances. Flexible ISA confusion Not every ISA allows withdrawals to be replaced within the same tax year. Future ISA rule changes Government announcements in late 2025 signalled that cash ISA limits may change from April 2027 . If you rely heavily on cash ISAs, it is worth keeping an eye on future updates from providers. How pensions work What pensions actually do Pensions are primarily a tax-relief vehicle for long-term savings . They usually provide: income tax relief on contributions employer contributions in workplace schemes tax-efficient investment growth the ability to take some benefits tax free within limits The trade-off is that access is restricted. Pension access age The government has legislated that the normal minimum pension age will rise to 57 from 6 April 2028 for most people. This makes ISA savings particularly useful for anyone who plans to stop working earlier than that. Tax relief in practice Depending on how your pension scheme operates, tax relief may be applied automatically or you may need to claim additional relief through self assessment. Two points come up frequently: higher-rate taxpayers may need to claim extra relief people in net pay arrangements may miss relief if they are not taxpayers Understanding your scheme’s structure can make a difference. Lump sum limits The familiar “25% tax free” rule still exists, but there are headline limits. The maximum tax-free lump sum is £268,275 , known as the lump sum allowance . In certain cases, the lump sum and death benefit allowance is £1,073,100 . These limits mean pension planning still needs careful consideration for larger pension pots. Annual allowance complications The annual allowance rules create many pension planning surprises. Key factors include: Tapered annual allowance where threshold income exceeds £200,000 and adjusted income exceeds £260,000 , potentially reducing the allowance to £10,000 MPAA , which restricts contributions after pension access Carry forward , allowing unused allowances from the previous three tax years to be used under certain conditions ISAs vs pensions: which should come first? This is the question most people actually need answered. A practical approach is: prioritise pensions where employer contributions are available use ISAs alongside pensions to maintain accessible savings use pensions for long-term retirement funding, especially when paying higher-rate tax use ISAs for flexibility and medium-term goals A simple two-pot structure Many households find it helpful to think about savings in two pots. Your ISA pot (short- and medium-term) emergency fund home improvements or major purchases career changes or self-employment transitions early retirement bridge Your pension pot (long-term) retirement income long-term investing tax-efficient saving with tax relief This structure reduces stress because each pot has a clear purpose. Situations where planning matters more Different life stages change how ISAs and pensions interact. Employees with workplace pensions Make sure you contribute enough to capture the full employer contribution and consider salary sacrifice where appropriate. Self-employed individuals Without employer contributions, it’s important to balance pension saving with accessible reserves. Higher earners between £100,000 and £125,140 Pension contributions can reduce adjusted net income , potentially restoring the personal allowance and reducing an effective 60% tax rate . Higher earners near taper thresholds Monitoring pension input levels is essential to avoid breaching the tapered allowance. Saving for children Junior ISAs allow up to £9,000 per year to grow tax free for a child. Approaching retirement ISAs can help manage taxable income in retirement and provide access before pension age. Bringing it all together A tax-efficient retirement plan does not need to be complicated. For most people, the best approach is consistent and repeatable: use pensions for long-term retirement funding use ISAs for flexibility and tax-efficient savings review allowances each tax year make adjustments before the tax year ends If you only focus on a few things, start here: capture employer pension contributions maintain an ISA reserve for flexibility review pension limits if you are a higher earner or already drawing benefits Small adjustments each year can make a significant difference over time. If you have questions about pensions, ISAs or tax-efficient retirement planning, feel free to get in touch.

Recent data suggests UK service sector employers are becoming more cautious about hiring, with many businesses turning to automation instead. The latest purchasing managers’ index (PMI) shows that staffing levels in the sector fell again in January. Job losses accelerated compared with December, continuing a trend that began in October 2024 . According to the survey, this represents the longest period of workforce reductions in the sector for 16 years . In many cases, businesses are not actively cutting roles but are choosing not to replace employees who leave voluntarily. Automation filling the gap The PMI survey, compiled by S&P Global, suggests that companies are increasingly using automation to improve efficiency and deal with labour shortages. Technology is allowing organisations to streamline processes that previously required additional staff. At the same time, uncertain market conditions and squeezed margins are making businesses more cautious about expanding payroll. That’s significant because the services sector accounts for almost 80% of UK economic output . It includes industries such as hospitality, professional services and financial firms. Pressure on entry-level roles Entry-level positions appear to be the most affected. Several cost pressures are converging at the same time: increases to the national living wage higher employer National Insurance contributions rising energy costs higher food and business rate expenses For many organisations, these rising employment costs make it harder to justify additional recruitment. Instead, some businesses are investing in automation or process improvements to manage workloads. AI concerns add to the debate The conversation around automation has intensified recently, following claims that artificial intelligence could replace parts of professional roles. This was highlighted by an announcement from Anthropic, the developer of the Claude chatbot , which suggested its technology could automate aspects of legal work. The announcement triggered share price falls among publishing and data businesses. The reaction started in London markets and quickly spread globally, even as the FTSE 100 reached a record high. While automation and AI are still evolving, investors are clearly paying attention to how these technologies might change labour markets. Despite job cuts, business activity is improving Despite the reduction in hiring, the broader services sector is showing signs of growth. The PMI rose to 54 in January , up from 51.4 in December , marking the fastest expansion since August . When combined with manufacturing data, overall UK business activity reached a 17-month high . Improved confidence following November’s Budget announcement appears to have supported that momentum. In other words, businesses are still growing — they are just becoming more cautious about how they deploy labour. What this means for businesses For many business owners, the issue isn’t automation versus people. It’s about balancing rising employment costs with productivity. If margins are tightening, it’s natural to look for ways to operate more efficiently. That might mean technology, restructuring processes, or simply reviewing whether staffing levels still match the current stage of the business. The key is understanding how those decisions affect cashflow, profitability and long-term growth. If you’re navigating rising costs, hiring decisions or changing margins, it’s worth stepping back and looking at the numbers properly before making big changes.  If you’d like to talk through how these trends might affect your business, I’m always happy to have a straightforward conversation.

Spotlight On: If Your Management Accounts Don’t Change Decisions, They’re Not Working Most established businesses receive monthly management accounts. A PDF lands in your inbox. You glance at turnover. You check profit. Maybe you compare it to last month. Then you get on with your day. That isn’t management information. That’s reporting history. Reporting the past vs managing the future There’s nothing wrong with knowing what happened last month. But if that’s all your numbers are telling you, they’re not doing enough. Proper management accounts should help you answer questions like: Which product or service line is actually driving margin? Are overheads creeping up quietly? Is cashflow tightening before it becomes a problem? Are you pricing correctly for the level you’re operating at? What happens if revenue dips next quarter? If your monthly figures don’t help you make better decisions, they’re not working hard enough. This isn’t about dashboards It’s not about fancy software. It’s not about colourful charts. It’s about clarity. I often see growing limited companies reach a stage where: Revenue looks healthy Margins feel tighter than they should Cash seems fine… until it isn’t At that point, decisions start being made on instinct because the numbers don’t quite answer the right questions. Year-end accounts are for HMRC. Management accounts should be for you. Where the real value sits The difference between “accounts” and “useful management information” is usually subtle rather than dramatic. It might mean: Better visibility of gross margin Clearer tracking of overheads Regular cashflow forecasts, not just bank balances A quarterly conversation about what the numbers actually mean Small adjustments. Fewer surprises. Stronger decisions. That’s where the real value sits. When businesses outgrow basic reporting There’s often a point where a business quietly outgrows its existing reporting structure. What worked at £250k turnover doesn’t always work at £1m. What worked when you had three staff doesn’t always work at twelve. If you’re receiving monthly figures but still feel like you’re steering slightly in the dark, it may simply be that your business needs a different level of financial insight. Not more paperwork. Just better questions. Final thought Management accounts shouldn’t just confirm you survived last month. They should help you shape the next one.  If any of this resonates, I’m always happy to have a straightforward conversation about how your current reporting is working for you, and whether it could work harder.

Frozen tax thresholds are pulling more low earners into the system. The continued freeze on the personal allowance is expected to push around 780,000 low-income earners into paying tax by 2029/30 . Many of those affected will be earning only slightly above minimum wage, often on zero-hours contracts or juggling multiple part-time roles. For households already managing tight budgets, entering the tax system brings both financial and administrative pressure. Why this is happening Because income tax thresholds remain frozen, wage increases (even modest ones) are dragging more people into tax. According to the Office for Budget Responsibility, if thresholds had risen with inflation, the personal allowance would be almost £5,000 higher by 2030/31 . That difference effectively increases tax liabilities for lower earners. It’s what economists call “fiscal drag”, but for individuals, it simply means paying tax sooner and on more of their income. Rising demand for support Charity TaxAid has reported a 58% increase in demand over the past three years , helping more than 18,000 people last year alone . As more lower earners are drawn into the system, that pressure is likely to grow. Entering the tax system isn’t just about paying tax. It means: Understanding PAYE codes Filing returns (where required) Managing payments and deadlines Navigating HMRC processes For people already stretched financially, that complexity can feel overwhelming. Pensioners may also be affected By 2027/28 , the full new State Pension is expected to exceed the personal allowance. That could leave some pensioners with unexpected tax bills, especially those with additional income. For older taxpayers, particularly those with health or accessibility needs, dealing with tax assessments can add further strain. Making Tax Digital adds another layer From April 2026 , self-employed individuals and landlords earning over £50,000 must submit quarterly digital updates under Making Tax Digital. From April 2027 , the threshold falls to £30,000 . For vulnerable taxpayers, particularly those without strong digital skills or reliable internet access, the shift to quarterly digital reporting increases the risk of: Missed deadlines Penalties Unexpected tax debts The system may become more efficient overall, but it will require more active management. Wider cost pressures Additional measures, including higher property tax rates from 2027 , may indirectly raise living costs if landlords pass higher tax burdens on through rent increases. While not a direct income tax change, the knock-on effects still matter for household budgets. Some positive developments Not all changes are negative. Proposed loan charge resolution measures and stronger action against tax avoidance promoters represent meaningful steps towards protecting vulnerable taxpayers from unfair hardship. What this means in practice For many people, this isn’t about complex tax planning. It’s about understanding what’s changing and not being caught off guard. If you’re close to the personal allowance, juggling multiple income sources, or unsure how upcoming changes might affect you, it’s better to review things early. Clarity makes the system far less stressful. If you’d like to talk through your position, I'm here to help.

Could 2026 be a turning point for struggling businesses? New analysis from the Resolution Foundation suggests that 2026 could bring sharper pressure on underperforming UK firms, particularly so-called “zombie” companies that have been surviving but not thriving. According to its latest outlook, many businesses are facing what it describes as a “triple whammy”: Prolonged high interest rates Elevated energy costs Successive increases to the minimum wage For firms that were already operating on tight margins, this combination may prove decisive. What are “zombie” firms? Economists use the term “zombie firms” to describe businesses that generate just enough cash to survive but not enough to grow, invest or meaningfully reduce debt. Persistently low interest rates after the 2008 financial crisis allowed many heavily indebted businesses to continue trading despite weak performance. Cheap borrowing reduced immediate pressure, but it also meant labour and capital remained tied up in less productive areas of the economy. Now, with operating costs higher and borrowing no longer ultra-cheap, that cushion has largely disappeared. Productivity and disruption The report suggests that 2026 could mark a turning point for the UK economy after decades of weak productivity growth. Productivity (output per hour worked) matters because it drives wages and living standards. Higher productivity allows businesses to pay more without simply passing on costs. However, the Foundation cautions that any productivity improvement may come with short-term disruption. If weaker firms exit the market, unemployment may rise before the benefits of reallocation are felt elsewhere. Unemployment already rising UK unemployment is already at its highest level outside the Covid period for a decade. The headline rate reached 5.1% in October , with many employers delaying hiring decisions ahead of Rachel Reeves’s Autumn Budget. Business groups argue that higher taxes and rising wage costs are discouraging recruitment, particularly among SMEs. Interest rates and operating costs Although the Bank of England has cut base rates six times since August 2023, businesses are still operating in a cost environment well above pre-pandemic levels. Those rate cuts followed 14 consecutive increases, and the cumulative effect continues to be felt in loan servicing and financing costs. Add energy costs and wage pressures into the mix, and it’s clear why some firms are struggling. Confidence remains fragile Separate research from the British Chambers of Commerce reinforces the picture. At the end of 2025, business confidence fell to a three-year low. Tax and inflation were cited as the most significant concerns. Fewer than half of firms expect turnover to rise in the year ahead, and investment plans are being scaled back rather than expanded. That combination of cautious hiring, lower investment and rising costs, creates a more fragile economic backdrop heading into 2026. What this means in practice Headlines about “zombie firms” can sound dramatic, but the practical question for most business owners is simpler: Are margins under pressure? Is debt affordable at current rates? Can costs be absorbed without damaging cashflow? Is investment still realistic this year? In tighter conditions, clarity becomes more valuable than optimism. Understanding your cost base, reviewing borrowing, and forecasting realistically for the next 12 months often makes the difference between reacting late and adjusting early. If you’re unsure how exposed your business might be to these pressures, it’s worth reviewing the numbers before they review you. If you’d like to talk through your position and options for 2026, we can do exactly that.

What directors need to do Companies House has started rolling out mandatory identity checks for directors and people with significant control (PSCs). This forms part of the wider reform programme under the Economic Crime and Corporate Transparency Act 2023 , designed to improve the reliability of the public register and reduce misuse of UK companies. If you’re a director, PSC, or act for multiple companies, this isn’t something to ignore. The process isn’t complicated, but there are a few moving parts and deadlines to manage. This guide explains: Who needs to verify How the process works What you need to do for each role What happens if you miss a due date What’s changing - and why it matters Historically, Companies House accepted filings largely on trust, with limited verification at the point of submission. That’s changed. Under the reforms, Companies House now has stronger powers to: Query and reject information Remove false or misleading content Act as a more active gatekeeper of the register In its 2024–2025 annual report , Companies House confirmed it used new powers to remove suspicious information and combat registered office abuse, impacting over 100,000 companies , including striking some off where necessary. Identity verification is one of the key elements of this reform. The aim is straightforward: make it harder for individuals to set up companies, act as directors or declare control using false identities. Key dates and the transition period Identity verification became a legal requirement from 18 November 2025 . Companies House describes this as the start of a 12-month transition period , giving companies time to ensure directors and PSCs: Verify their identity Connect that verified identity to each role they hold There isn’t a single universal deadline. Your due date depends on: Your role Your company’s confirmation statement cycle Companies House will: Display due dates on the public register (on the people tab) Email companies ahead of confirmation statement deadlines explaining what must be done If you act for multiple companies, assume you’ll be managing multiple deadlines. Who needs to verify? You must verify your identity if you are: A company director The equivalent of a director (LLP member, general partner, managing officer) A director of an overseas company registered in the UK A person with significant control (PSC) An authorised corporate service provider (ACSP) Companies House has also confirmed verification will later extend to additional filing roles, limited partnerships, corporate directors, corporate LLP members and officers of corporate PSCs. The two-step process (often missed) There are two separate steps : Complete identity verification and receive a Companies House personal code Provide an identity verification statement (including your personal code) for each relevant role Verifying once does not automatically connect you to every role. You must use your personal code to link your verified identity correctly. Ways to verify 1. Online via gov.uk One Login (free) This is the free route. Depending on your circumstances, you may verify by: Using the ID checking app Answering online security questions Entering photo ID details and attending a participating Post Office Government testing reported: An average completion time of 2.4 minutes (18 March–30 June 2025) 60% awareness of the new rules (YouGov sample of 1,007 senior decision-makers) 81% support for verification 73% agreeing directors/PSCs would find it easy 2. Via an ACSP (may charge a fee) An ACSP is an AML-supervised professional (e.g., accountant, solicitor, formation agent) authorised to verify identities. They must verify to the same standard as Companies House. They may charge a fee. This can be practical if: You’re overseas You cannot use the online route You already use an agent for filings Your Companies House personal code Once verified, you receive an 11-character Companies House personal code . Important points: You generally verify once (unless instructed otherwise) The code is personal to you, not linked to one company You must use it when filing confirmation statements, being appointed as a director or becoming a PSC Keep it secure and only share it with trusted filing agents If verified via an ACSP, the code will be emailed to you. Treat it like a secure credential. What directors must do — step by step Step 1: Identify your roles List: Each company where you are a director Equivalent roles (LLP member etc.) Whether you are also a PSC Any overseas entity roles You must connect your verified identity to each role correctly. Step 2: Complete verification Either online or via an ACSP. Step 3: Store your personal code securely Good practice includes: Using a secure password manager Restricting access to authorised filers Keeping a record of when it’s shared Step 4: Connect your identity to each role This is where most of the transition work happens. Directors You must provide your personal code within the company’s next confirmation statement . If directors are not verified, Companies House has stated it will reject the filing. If you’re a director of multiple companies, this applies to each one. PSCs Rules differ slightly: If you are both a director and PSC: Provide the code in the confirmation statement (director role) Also provide it separately via the PSC verification details service within a 14-day window starting the day after the confirmation statement date If you are a PSC but not a director: Provide your personal code within the first 14 days of your birth month If you became a PSC after 18 November 2025: Provide the code when first added or within 14 days Companies House allows you to check your specific 14-day window on the register. New companies and appointments When registering a new company, personal codes must be provided for directors at the point of filing. Early verification makes incorporations smoother. For overseas companies, directors must verify by the anniversary of the UK establishment’s registration. What happens if you don’t comply? Companies House has been clear. Acting as a director without verification is unlawful Companies may also commit an offence PSCs who fail to verify may commit an offence Enforcement routes include: Prosecution Referral to the Insolvency Service Financial penalties Filing rejections Companies House has stated it will reject confirmation statements if directors are not verified. Extensions for PSCs are limited (up to 14 days in certain circumstances). If you anticipate missing a deadline, treat it as urgent. Privacy and security Companies House states: Do not email or post ID documents Use approved verification routes only Keep your personal code secure Since April (as referenced in the November 2025 update), over one million people have verified their identity via gov.uk One Login. Verification makes impersonation harder — but you should still protect your credentials. A practical checklist Personal Confirm all roles Complete verification Store your personal code securely Identify confirmation statement dates Identify PSC 14-day windows Company Confirm all directors have verified Ensure filing agents have required codes securely Check register for status indicators Verify early for upcoming incorporations Final thoughts If you only do three things: Verify your identity Store your personal code securely Provide the code in the right place for each role  If you manage several companies, treat this as a small compliance project and track it properly. If you’re unsure how this applies to your roles, or you want help coordinating deadlines across multiple companies, I can help make it manageable.

The Government has announced a further change to its planned inheritance tax reforms affecting agricultural property relief (APR) and business property relief (BPR) . If you own significant farming or business assets (or hold them in trust), this is worth paying attention to. What’s changing? From 6 April 2026 , a new allowance will cap the amount of qualifying agricultural and business property that can receive 100% inheritance tax relief . The allowance will now be £2.5 million per estate , increased from the previously proposed £1 million. Where qualifying business and agricultural assets exceed the allowance, the excess is expected to qualify for 50% relief , rather than 100%. How the allowance works Individuals will have an allowance that refreshes every seven years . Trusts will have an allowance that refreshes every 10 years . The allowance will be available to both individuals and trusts. It will also be transferable between spouses and civil partners . In practical terms, that means a couple may be able to apply up to £5 million of 100% APR and BPR between them , in addition to other inheritance tax allowances such as the nil rate band. Fewer estates affected The change is being delivered through an amendment to the Finance Act 2025/26, which has now been brought forward and enacted. According to the Government, increasing the threshold to £2.5 million will reduce the number of APR-claiming estates affected in 2026/27 from 375 to 185 . The policy itself has been revised several times since it was first announced at the Autumn Budget 2024 , so it’s clear this is still an area of close scrutiny. What this means for you If you have substantial farming or business assets (particularly if they’re held within trusts), it would be sensible to review your succession and estate planning ahead of April 2026. Reliefs are still generous, but the cap introduces a new layer of planning. The right structure will depend on asset values, ownership arrangements and long-term intentions. If you’d like to sense-check how these changes affect you, it’s far easier to review things now than after the rules take effect.

Paying yourself this year without surprises Deciding how to pay yourself from your business sounds simple until you start weighing up salary, dividends and pensions, and how each one affects not just your take-home pay, but your tax, national insurance, household benefits and long-term savings. The “best” answer isn’t the same for everyone. It shifts depending on profits, cashflow and what’s going on at home, for example, whether you’re claiming child benefit, repaying a student loan, or getting close to the higher tax thresholds. This guide walks through the main options for the 2025/26 tax year , explains the key thresholds most people bump up against, and flags the points it’s usually worth checking before you act. The 2025/26 numbers that drive most decisions Income tax bands (England, Wales, Northern Ireland) Personal allowance: £12,570 Basic rate: 20% up to £50,270 Higher rate: 40% £50,271–£125,140 Additional rate: 45% over £125,140 Remember: the personal allowance reduces by £1 for every £2 of income over £100,000. If you pay Scottish income tax (on non-savings, non-dividend income), the bands and rates differ — and HMRC publishes those separately. National Insurance (NI) NI often makes salary decisions more sensitive than people expect. Employees (Class 1 primary — category A) 0% up to the primary threshold 8% on main earnings 2% above the upper earnings limit Employers (Class 1 secondary — category A) 15% once earnings exceed the secondary threshold Key thresholds for 2025/26: Primary threshold: £12,570 (employee NI begins) Secondary threshold: £5,000 (employer NI begins) Lower earnings limit: £6,500 (protects benefit entitlement even when no NI is due) Dividends, allowance and tax rates Dividends don’t attract NI, but they have their own tax rules. For 2025/26: Dividend allowance: £500 (0% tax but doesn’t extend your basic rate band) Dividend tax rates: 8.75% (basic rate band) 33.75% (higher rate band) 39.35% (additional rate band) Here’s one useful reminder from HMRC: over 90% of UK taxpayers do not receive taxable dividend income. That’s one reason people get caught out on dividend reporting when they start investing or running a company. Corporation tax reminders (because dividends come from post-tax profits) If you run a limited company, dividends are paid from profits after corporation tax. For 2025/26: 19% small profits rate (profits under £50,000) 25% main rate (profits over £250,000) Marginal relief between £50,000 and £250,000 This matters because the common statement “dividends are lower taxed than salary” isn’t universally true once you consider corporation tax too. What salary gives you — and what it costs Salary still has a role even when dividends are available: It uses your personal allowance predictably. It creates “earned income”, which can matter for certain reliefs and pension contribution limits. It helps build entitlement for some state benefits, depending on levels and NI credits. It is a deductible business cost for corporation tax, provided it’s paid wholly and exclusively for the trade. But here’s a frequent surprise for clients: employer NI now starts at £5,000 per year at 15% , which means a salary set near the personal allowance isn’t automatically “cheap”. Unless you have employment allowance available to offset that employer cost, it can erode the benefit. Employment allowance can reduce an eligible employer’s Class 1 NI bill by up to £10,500 — but there are rules. For example: A company with only one director cannot have that person as the only employee paying secondary NI if it wants to claim the allowance. Connected companies can only claim once across the group. For many single-director companies, employer NI becomes a significant factor in salary decisions. Dividends — how they work and practical limits Dividends are often tax-efficient, but only when the company has distributable profits. Important points include: A company can only pay dividends from distributable profits (after accumulated losses are accounted for). Dividends are not deductible for corporation tax — salary is. So dividend planning always needs a corporation tax view, not just a personal tax one. In 2025/26, the dividend allowance is only £500 , and dividends feed into your adjusted net income for other calculations (e.g., child benefit). Pensions — often the most tax-efficient “pay yourself later” option For many owner-managers, pension contributions are not an alternative to salary or dividends — they sit alongside them. Pension contributions can: Reduce personal income tax (subject to limits and relief method). Reduce corporation tax when made as employer contributions. Avoid NI when structured properly — often a key advantage versus paying extra salary. The annual allowance for 2025/26 is £60,000 , but high earners face tapering: Threshold income limit: £200,000 Adjusted income limit: £260,000 Minimum tapered allowance: £10,000 If you’ve already flexibly accessed pension benefits, the money purchase annual allowance (MPAA) is £10,000 for this year. Personal pension relief depends on “relevant earnings”, which dividends usually don’t count towards — another reason employer contributions can be useful. If you earn less than £3,600 a year, you can still get tax relief on contributions up to £2,880 net (grossed up to £3,600). Government figures for 2024 show around 89% of eligible employees saved into a workplace pension — and for business owners, pensions remain one of the most tax-advantaged ways to build long-term wealth. Common approaches by business type Limited company owner-managers Most extraction strategies blend all three routes: A base salary (often set with NI and benefit entitlements in mind). Dividends as flexible top-ups (assuming reserves allow). Employer pension contributions where cashflow supports longer-term saving. What changes the “right” answer is often: Whether the company can claim employment allowance. Whether your total income is near a key threshold like £50,270, £100,000 or £125,140. For example: if a director takes a £12,570 salary in 2025/26, employee NI is generally nil at that level, but employer NI above £5,000 may apply at 15% unless reliefs are available. Modelling these effects gives a much clearer picture than relying on general rules of thumb. Sole traders and partnerships If you don’t have dividends, you draw profits directly. In practice, “pay yourself” planning then focuses on: understanding profit levels early enough to avoid surprises in your payments on account using pension contributions to reduce taxable income where appropriate watching the same thresholds (higher-rate entry, personal allowance taper, child benefit charge) If incorporation is on the table, it’s worth doing a full comparison — the decision includes legal responsibilities, profit volatility and admin costs, not just tax. Household issues that affect the “best” answer Child benefit and adjusted net income The high income child benefit charge (HICBC) applies once adjusted net income exceeds £60,000, with full withdrawal by £80,000. Dividends count here, so dividend planning can directly impact whether you keep child benefit. Student loan repayments If you’re self-employed or complete Self Assessment, student loan repayments are based on your total income for the year. For directors taking dividends, payroll deductions alone may not be the whole story — especially if Self Assessment includes other income sources. Government data shows this matters most for Plan 1 and Plan 2 thresholds (e.g., Plan 1 is around £26,065), so it’s worth checking how your mix of salary and dividends affects any repayment position. What’s been announced after 5 April 2026 This guide uses 2025/26 figures, but if you’re planning pay patterns around the tax year end, it’s worth noting that HMRC has published proposals to increase dividend tax rates from 6 April 2026 . If you expect to pay dividends near year end, consider scheduling a short review before 5 April 2026 to check timing, available reserves and the most current rules. Practical checklist for the rest of 2025/26 If you want to take action before 5 April 2026 , these steps usually provide the most value: Forecast total personal income — salary, dividends, interest, rent, benefits etc. Identify thresholds you’re near: £50,270, £60,000, £100,000, £125,140 . Confirm whether your company can claim employment allowance. Check distributable reserves before declaring dividends and document decisions properly. Review pension contribution scope — including annual allowance and taper risk. If child benefit applies, model adjusted net income. If you have a student loan, include that in forecasts. Compare planned versus actual numbers. Before the year end, stepping back and comparing your actuals against your plan — especially if profits have shifted, dividends have been irregular, or household income has changed — is often one of the most valuable actions you can take. Bringing it together Paying yourself isn’t just about minimising tax. It’s about matching your personal needs, household circumstances and business cashflow. The right blend of salary, dividends and pension contributions can improve take-home pay, protect liabilities and build long-term security — but only when it’s based on your actual numbers and priorities. If you’d like a sense check or tailored comparison using your year-to-date figures and expected draws before 5 April 2026 , we can model a few scenarios and set out sensible next steps.  That’s exactly the kind of work I do every day — and it’s usually far more useful than generic rules of thumb.

Business confidence slips as costs rise The latest British Chambers of Commerce Quarterly Economic Survey suggests business confidence has weakened again. Less than half of responding businesses — 46% — expect their turnover to increase over the next 12 months. That’s the lowest level recorded in three years and a reminder that, for many firms, recovery still feels fragile rather than secure. The survey gathered responses from more than 4,600 businesses , mainly SMEs, between mid-November and early December, spanning the period before and after the Autumn Budget. Costs are still driving decisions Cost pressures remain a major factor. 52% of businesses plan to increase prices in the next three months (up from 44% in the previous quarter). 27% report cutting back investment plans , while only 19% have increased investment . In hospitality, retail and manufacturing, more than a third of firms are reducing planned spending. Those figures tell a fairly clear story. Businesses are protecting margins first, investing second. Tax and inflation remain front of mind Taxation continues to be the leading concern, cited by 63% of respondents - up on the previous quarter and matching levels seen after last year’s Budget. Concerns were particularly high ahead of the Chancellor’s statement and eased slightly afterwards. Inflation remains a significant worry for more than half of firms, and despite recent interest rate cuts, many businesses report little sign of renewed momentum. With forecasts suggesting rising unemployment and further cost pressures ahead, caution seems to be the prevailing mood. What this means in practice None of this means businesses should stop planning. If anything, it makes planning more important. In uncertain conditions, the fundamentals matter: clear cashflow forecasts realistic pricing decisions disciplined cost control and sensible investment timing Confidence doesn’t usually return because a headline changes. It tends to improve when business owners feel they understand their numbers and have options. If the wider economic picture feels unsettled, focus on what you can control. Clear information reduces uncertainty, and uncertainty is often what drives stress. If you’d like to talk through what the current climate means for your business specifically, that’s exactly the kind of conversation I have every day.

EV discounts strain market growth The UK new car market passed an important milestone in 2025, with registrations topping two million vehicles for the first time since the pandemic. A total of 2,020,373 new cars were registered, marking the third consecutive year of growth . That said, the market still hasn’t returned to pre-pandemic levels. In 2019, registrations were closer to 2.3 million , so while momentum has returned, it hasn’t fully recovered. EV growth Electric vehicles made up a growing share of the market. In 2025, 473,340 EVs were registered, accounting for 23.4% of all new cars. That’s a solid increase on 2024, but still well short of the Government’s 28% target under the Zero Emission Vehicles (ZEV) Mandate. The mandate requires manufacturers to hit rising annual EV sales targets or face financial penalties. According to the Society of Motor Manufacturers and Traders, the industry is increasingly relying on heavy discounting , often worth several thousand pounds per vehicle, to stimulate demand. Their concern is that this approach isn’t sustainable and that consumer appetite isn’t keeping pace with regulatory ambition. Mandate flexibility — and softer penalties The ZEV Mandate does allow some flexibility, including emissions credit trading and fleet-wide averaging. Following industry pressure, these flexibilities were further relaxed in April , and potential fines for non-compliance were reduced. This has eased pressure on manufacturers in the short term, but it doesn’t solve the underlying issue: demand still needs to grow without permanent reliance on discounts. Government incentives — and mixed signals Government support has included a £2bn Electric Car Grant Scheme , offering up to £3,750 per vehicle , alongside continued investment in charging infrastructure. However, plans announced in the Autumn Budget to introduce a per-mile tax on EVs risk dampening demand just as uptake needs to accelerate. The Office for Budget Responsibility estimates that incentives could add 320,000 EV sales over five years , but the proposed tax may reduce sales by around 440,000 overall . Transport Minister Keir Mather said Government action was driving uptake, pointing to EV sales being nearly 24% higher year-on-year . What this means for businesses For manufacturers, dealers and fleet operators, the picture is mixed. Volumes are improving, but margins are under pressure. Discount-led growth can boost registrations, but it also strains profitability and long-term planning. For businesses considering EV fleets, this environment creates opportunity, but also uncertainty. Grants, pricing, tax treatment and running costs all need to be weighed carefully. As with many policy-led markets, success will depend on balancing incentives, regulation and genuine consumer demand — not just hitting targets on paper. If you want to talk through what these changes mean for your business or personal finances, get in touch .