Author: financial

HMRC continues to modernise the UK’s tax system, with a range of new digital services and improvements planned over the coming months. While Making Tax Digital has attracted considerable attention in recent years, it is only one part of a much broader programme of change. HMRC’s long-term objective is to create a tax system that is easier to use, more efficient and less prone to error.

The latest developments indicate that taxpayers can expect an increasing number of services to be delivered online. These improvements are designed to reduce paperwork, simplify routine administration and make it easier for individuals and businesses to access information about their tax affairs whenever they need it.

Among the planned enhancements are improvements to the Personal Tax Account, enabling taxpayers to view more information in one place and manage their tax affairs more effectively. HMRC also intends to increase the amount of information that is automatically included in Self-Assessment tax returns. Where HMRC already holds data from employers, pension providers or financial institutions, taxpayers should increasingly find that less manual entry is required. This has the potential to reduce mistakes and make completing a tax return a quicker and less stressful process.

Further developments include improved digital services for claiming allowable expenses and tax reliefs, clearer explanations of PAYE tax codes and deductions, and more online facilities for dealing with National Insurance matters. The overall aim is to make routine interactions with HMRC simpler, faster and more transparent.

For businesses, these developments reinforce the importance of maintaining accurate digital records. Good bookkeeping has always been essential, but digital record keeping is becoming a fundamental part of managing tax compliance. Businesses that continue to rely on incomplete records or manual processes may find it more difficult to take advantage of HMRC’s evolving online services.

The changes also present opportunities. Better digital information can help business owners monitor cash flow, keep track of tax liabilities throughout the year and reduce the risk of unexpected tax bills. Accurate records also enable accountants to provide more timely advice rather than simply preparing year end accounts and tax returns.

Professional advisers remain central to the process. Although HMRC is improving its digital services, technology cannot replace professional judgement. Accountants continue to help clients interpret complex tax rules, identify planning opportunities and ensure that tax returns are accurate and complete. Digital systems work best when they are supported by sound professional advice.

Businesses should not wait until new services become mandatory before reviewing their own systems. Now is an excellent time to assess bookkeeping procedures, ensure accounting software is being used effectively and encourage staff responsible for financial records to follow consistent processes.

The direction of travel is unmistakable. HMRC is steadily building a more digital tax system in which information is shared more efficiently, and routine tasks can increasingly be

completed online. Businesses that prepare early are likely to benefit from improved efficiency, fewer administrative problems and greater confidence that their tax affairs remain in good order.

If you would like advice on how these developments could affect your business or would like help reviewing your accounting systems and record keeping procedures, please contact us. We will be pleased to help.

For many businesses and taxpayers, July is one of the busiest months of the year for tax compliance. Together with January, it is one of the two peak months for tax returns and payments, making it important to plan ahead and avoid unnecessary penalties or interest charges.

The month begins with the deadline for submitting forms P11D and P11D(b) to HMRC, together with providing employees with details of any taxable benefits and expenses they received during the 2025-26 tax year. These forms must normally be submitted by 6 July.

Any Class 1A National Insurance due on taxable benefits must then be paid by 22 July if payment is made electronically, or by 19 July if paying by cheque. Employers should ensure sufficient funds are available, particularly where company cars or private medical insurance have resulted in larger than expected liabilities.

Businesses operating under the Construction Industry Scheme also need to remember the monthly filing deadlines. CIS returns are generally due by the 19th of each month, together with any PAYE and National Insurance liabilities arising from payroll. Missing these deadlines can result in automatic penalties, even where no tax is due.

Businesses registered for VAT should also check whether a VAT return or payment falls due during July. The exact deadline will depend on the business’s VAT stagger, but it is worth reviewing your compliance calendar to ensure returns are submitted and payments made on time.

For many self-employed individuals and company directors, one of the most significant dates is 31 July. This is the deadline for paying the second Payment on Account towards their 2026-27 Income Tax liability. Although the payment is based on the previous year’s tax bill, taxpayers expecting lower profits during the current year may be able to make a claim to reduce their Payments on Account. Care should be taken before doing so, as interest may be charged if the claim proves to be excessive.

July is also a good opportunity to review your overall tax position before the summer holiday period. Checking that payments have been made, records are up to date and future liabilities have been budgeted for can help avoid unexpected surprises later in the year.

With so many important deadlines falling within a few weeks of each other, a little forward planning can make all the difference. If you are unsure which returns or payments apply to you or your business, please contact us. We will be pleased to help you stay compliant, avoid penalties and ensure that your tax affairs remain firmly on track.

The Autumn Budget 2026 is likely to be one of the most closely watched fiscal events for many years. With Andy Burnham widely expected to become Labour leader and Prime Minister before the Budget, businesses and taxpayers are naturally asking whether a change in leadership could result in a different economic agenda.

Although it is impossible to predict the precise contents of the Budget, recent speeches and press reports suggest that any changes are more likely to involve a shift in priorities than a complete change of direction. Burnham has repeatedly stressed that he intends to maintain Labour’s existing fiscal rules, balancing day-to-day spending through taxation rather than borrowing and reducing public debt over time. This is intended to reassure financial markets that economic stability will remain a priority.

One area where businesses could see greater emphasis is investment. Burnham has spoken about accelerating economic growth through increased spending on housing, transport, skills and infrastructure, while giving greater decision-making powers to regions and city authorities. If these ambitions are reflected in the Budget, businesses may benefit from increased public investment, improved local transport and further opportunities arising from regional development programmes.

Support for business investment may also feature prominently. The Government could choose to expand incentives that encourage companies to invest in new equipment, technology, digital transformation, research and development, and workforce training. Improving productivity remains one of the UK’s biggest economic challenges, making this an area where further measures would not be surprising.

Tax simplification is another possible theme. Businesses continue to call for a simpler tax system and less administrative complexity. Additional measures to modernise HMRC’s digital services, reduce unnecessary bureaucracy and improve certainty for taxpayers would be welcomed by many business owners and professional advisers.

The Budget may also include further measures aimed at supporting housebuilding and regeneration. Burnham has made increasing the supply of affordable housing one of his central policy objectives, and commentators believe additional funding for housing development and planning reform could feature in the Government’s economic strategy.

While Labour has continued to rule out increases in the main rates of Income Tax, National Insurance and VAT for working people, speculation continues over whether the Chancellor may review certain tax reliefs or introduce more targeted revenue-raising measures. Such changes, if they occur, are more likely to affect specific sectors or reliefs than to involve broad-based tax increases.

Another possible feature is greater devolution of economic powers. Burnham’s proposals include transferring more responsibility for transport, housing, skills and economic development to regional authorities. This could create new opportunities for businesses by allowing local decision-makers to respond more quickly to regional economic priorities and investment opportunities.

As always, businesses should avoid making important financial decisions based solely on Budget speculation. Until the Chancellor delivers the Autumn Budget, every proposed

measure remains just that, a possibility. However, understanding the direction of current political thinking can help businesses prepare for potential changes and identify opportunities that may emerge during the months ahead.

Research and Development (R&D) tax relief is designed to support companies that invest in innovation and seek to make advances in science or technology. The scheme offers businesses the ability to invest in new technologies and scientific development in exchange for generous tax reliefs. However, not every project will qualify, and businesses should carefully consider whether their activities meet HMRC’s requirements before making a claim.

Only companies’ chargeable to UK Corporation Tax can qualify for R&D relief. In addition, the company must be undertaking a project that aims to achieve an advance in a field of science or technology. 

For tax purposes, the requirements that must be met for R&D to qualify for relief include creating new processes, products or services, making appreciable improvements to existing ones and even using science and technology to duplicate existing processes in a new way. R&D activities can qualify for tax relief even if the project in question failed and both profitable and loss-making companies can benefit from making a claim. 

The advance must go beyond simply improving processes or products for the business itself and should contribute to overall knowledge or capability in the relevant field. Since April 2023, mathematical advances can also qualify as scientific advances for R&D tax purposes.

Businesses should keep clear records of the uncertainties faced, the work undertaken to resolve them, and the successes and failures encountered during the project. Once eligibility has been established, the next step is to identify the qualifying expenditure that can be included in an R&D relief claim. 

Families claiming Child Benefit should be aware of the High Income Child Benefit Charge (HICBC), which can apply when one member of the household has a higher income.

The charge applies where an individual has adjusted net income of more than £60,000 in a tax year and either they or their partner receives a Child Benefit payment. The amount payable increases gradually as income rises, with the charge set at 1% of the Child Benefit received for every £200 of income above £60,000.

As a result, the impact of the charge is phased in rather than applying all at once. However, once income reaches £80,000, the charge effectively claws back all of the Child Benefit received, removing the direct financial benefit of the payments.

Eligible taxpayers can elect to have the charge collected through their PAYE tax code rather than completing a self-assessment tax return. This measure is intended to reduce the administrative burden for employees whose only reason for filing a self-assessment tax return is to declare the HICBC.

Although some families choose to stop receiving Child Benefit to avoid the charge, it is often worthwhile to continue making a claim. Registering for Child Benefit can help protect entitlement to National Insurance credits for parents or carers and ensures children are automatically issued with a National Insurance number shortly before their 16th birthday.

Taxpayers with income approaching or exceeding £60,000 should review their position regularly to ensure they are complying with the rules and making the most appropriate choice for their circumstances.

1 July 2026 – Due date for corporation tax due for the year ended 30 September 2025.

 

6 July 2026 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs for 2025-26.

 

19 July 2026 – Pay Class 1A NICs for 2025-26 (by the 22 July 2026 if paid electronically).

 

19 July 2026 – PAYE and NIC deductions due for month ended 5 July 2026. (If you pay your tax electronically the due date is 22 July 2026).

 

19 July 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2026. 

 

19 July 2026 – CIS tax deducted for the month ended 5 July 2026 is payable by today.

 

1 August 2026 – Due date for corporation tax due for the year ended 31 October 2025.

 

19 August 2026 – PAYE and NIC deductions due for month ended 5 August 2026. (If you pay your tax electronically the due date is 22 August 2026)

 

19 August 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 August 2026. 

 

19 August 2026 – CIS tax deducted for the month ended 5 August 2026 is payable by today.

Understanding dividend tax is important for anyone who receives income from shares in a company. Dividends are taxed differently from salary, pensions and other forms of income, with their own allowances and tax rates.

For the 2026-27 tax year, individuals do not pay tax on dividend income that falls within their Personal Allowance of £12,570. In addition, there is a separate dividend allowance of £500. Dividend income received above these allowances is generally subject to tax.

The rate of tax payable depends on the individual’s overall level of taxable income. For 2026-27, dividends falling within the basic rate band are taxed at 10.75%, those within the higher rate band at 35.75% and those within the additional rate band at 39.35%.

To determine the applicable rate, dividend income is added to other sources of taxable income. As a result, dividends can push an individual into a higher tax band, and different portions of the dividend income may be taxed at different rates.

Where total dividend income is £10,000 or less, an individual may ask HMRC to adjust their tax code so that any tax due is collected through their wages or pension. Alternatively, the income can be reported through a self-assessment tax return. There is normally no requirement to notify HMRC where dividend income is covered entirely by the dividend allowance.

Individuals who receive more than £10,000 in dividends must complete a self-assessment tax return. Those who do not normally file a return must register with HMRC by 5 October following the end of the tax year in which the dividend income was received.

Members of a Limited Liability Partnership (LLP) are normally treated as self-employed for tax purposes. However, special rules can apply where a member’s terms of membership are more akin to the terms of an employee than a partner in a traditional partnership. These are known as salaried members.

The legislation applies a three-part test. A member will be treated as a salaried member for tax purposes only if all three conditions are met:

• Condition A – Disguised salary: At least 80% of the member’s remuneration is fixed, or any variable element is not linked to the LLP’s overall profits or losses. 
• Condition B – Lack of influence: The member does not have significant influence over the affairs of the LLP. 
• Condition C – Insufficient capital stake: The member’s capital contribution is less than 25% of their expected annual remuneration.

To fall within the salaried member rules, an individual must perform services for the LLP in their capacity as a member. Some LLPs will strive to ensure that at least one of the conditions set out above does not apply to ensure these rules do not apply.

In addition, the rules do not apply to:

• Companies
• Individuals who only invest capital in the LLP
• Former active members who no longer provide services but continue to receive a share of profits.

At some point in the life of a business, additional funding may be needed to support growth, purchase equipment, recruit staff, invest in new premises or simply strengthen cash flow. While there are now many alternative finance providers, banks remain an important source of business funding for many organisations.

Preparing thoroughly before approaching your bank can significantly improve your chances of securing the finance you need.

Be clear about why you need funding

One of the first questions a lender is likely to ask is how the money will be used. Businesses that can clearly explain the purpose of the funding and demonstrate the expected benefits are often viewed more favourably.

Whether the funds are required for expansion, working capital, equipment purchases or another purpose, it is important to present a clear and realistic case.

Prepare up-to-date financial information

Lenders want to understand the financial position of the business before making a lending decision. Recent accounts, management accounts, cash flow forecasts and details of existing borrowing may all be requested.

Accurate and well-presented financial information helps demonstrate that the business is being managed effectively and that the owners understand its financial performance.

Demonstrate affordability

Banks are primarily concerned with whether a business can repay the borrowing. A realistic cash flow forecast showing how repayments will be funded can provide reassurance and strengthen an application.

Avoid overly optimistic assumptions. It is usually better to present cautious and achievable forecasts that can be supported by evidence.

Understand your credit position

Before making an application, it is sensible to review both business and personal credit records where appropriate. Addressing any issues in advance can help avoid delays and improve the likelihood of approval.

Lenders may also consider factors such as trading history, profitability and the experience of the management team.

Build a relationship with your lender

Funding applications are often easier when there is an established relationship with the bank. Keeping your lender informed about significant developments and discussing future plans before finance is needed can be beneficial.

Approaching a bank early, rather than waiting until cash flow problems become urgent, usually provides more options and creates a more positive impression.

Give yourself the best chance of success

A well-prepared funding proposal supported by reliable financial information can make a significant difference to the outcome of an application. Careful planning also helps ensure that the type and amount of funding requested are appropriate for the business’s needs.

How we can help

If you are considering seeking finance for your business, we can help prepare forecasts, review funding requirements and present financial information in a format that lenders expect to see. Please contact us if you would like to discuss your funding options.

Many UK businesses focus their sales efforts entirely on the domestic market, yet exporting can offer significant opportunities for growth, diversification and increased profitability. Advances in technology, online marketplaces and international logistics have made it easier than ever for businesses of all sizes to reach customers overseas.

For some businesses, expanding into international markets could be the next logical step in their development.

Why consider exporting?

Selling to overseas customers can help reduce dependence on the UK market and create additional revenue streams. If demand slows in one market, sales in another may help offset the impact.

Exporting can also increase the potential customer base dramatically. A product or service that serves a niche market in the UK may appeal to a much larger audience when offered internationally.

Many businesses discover that overseas customers are willing to pay premium prices for specialist products, high quality services or goods that benefit from the reputation of UK expertise and innovation.

Start with careful research

Before entering a new market, it is important to understand local demand, competition and regulatory requirements. What works well in the UK may need to be adapted to suit local preferences, cultural expectations or legal obligations.

Research should include pricing, distribution methods, import restrictions and any local taxes or duties that may apply. Understanding these issues in advance can help avoid costly mistakes.

Consider the financial implications

Exporting can bring additional costs, including shipping, insurance, foreign exchange charges and compliance requirements. Businesses should ensure that pricing reflects these costs while remaining competitive.

Currency fluctuations can also affect profitability. Where significant overseas sales are expected, businesses may wish to consider strategies to manage exchange rate risk.

Cash flow management is equally important, particularly when dealing with new customers or extended payment terms.

Make use of available support

A range of support and guidance is available to businesses considering international trade. Assistance may be available in relation to market research, export procedures, finance and introductions to potential customers or distributors.

Taking advantage of available support can help businesses enter new markets with greater confidence.

Growth opportunities beyond the UK

Exporting is not suitable for every business, but for many it can provide an important route to growth and increased resilience. Even a modest level of overseas sales can help broaden a customer base and reduce reliance on a single market.

How we can help

Expanding overseas involves both commercial and tax considerations, and careful planning can help maximise the opportunities while reducing the risks. If you are considering selling to customers outside the UK, please contact us to discuss the financial, tax and cash flow implications.