As the 2024–2025 tax year comes to a close, you should be completing your year-end tax planning to ensure all loose ends are tied up before moving on to new tax year planning.

While the end of the current tax year on 5th April is currently the main focus for many tax planners, the start of the new tax year on 6th April should be given just as much attention.

Here are some of the factors you should be accounting for in your new tax year plans:

Personal Allowance

The annual tax-free Personal Allowance remains the same as it has since 2021, as it has been frozen at £12,570 until 2028. This freeze is expected to result in 2 in 9 taxpayers moving into the higher rate or additional rate brackets of Personal Income Tax by 2028.

The tapering of the tax-free allowance will also contribute to this increase, as higher earners will lose £1 of their annual allowance for every £2 they earn over £100,000.

Depending on their individual earnings, couples should look into claiming the Marriage Allowance or transferring investments between partners to reduce their taxable income.

Other tax allowances

Tax is also charged on personal income from savings interest and dividends from company shares if it isn’t covered by the standard Personal Allowance or other allowances.

The Personal Savings Allowance is £1,000 for nil or basic rate taxpayers and £500 for higher rate taxpayers, while additional rate taxpayers are not eligible. Meanwhile, the Dividend Allowance is only £500, with the tax rate dependent on the individual’s income tax band.

If rising interest rates could increase your tax liability, you might want to look into other investment options, such as an Individual Savings Account. You won’t be taxed on interest and dividends from an ISA if they fall within the £20,000 annual tax-free allowance for ISAs.

It’s much easier to move income around to make the most of allowances at the start of the tax year, so you should take stock now rather than waiting until next March.

High Income Child Benefit Charge

Whether you’re married or not, if you or your partner earn over £60,000 a year after certain allowances and claim Child Benefit, then the highest earner will be taxed on this benefit.

The High Income Child Benefit Charge (HICBC) taxes 1% of the benefit for every £200 earned over the threshold, so you’ll have to pay all of it back if you earn £80,000 a year or more.

For parents with two children, this would be the same as adding another 11.26% to the responsible taxpayer’s marginal tax rate – so it may be worth opting out instead.

Otherwise, shifting investment income could also help to keep both parents under the HICBC threshold, even if both earners are within the higher rate tax band.

Plan for 2025–2026 taxes with gbac

If you have any concerns about the taxes and allowances mentioned above, or you’re looking for professional help to legally reduce your tax liability, you can come to gbac.

We have an experienced team of accountants in Barnsley who can provide tax consultancy services to individuals and organisations across the country.

The sooner you get started planning for the new tax year, the better – so get in touch by calling 01226 298 298 or emailing info@gbac.co.uk to set up a consultation.

This year, 1.1 million taxpayers missed the 31st January deadline for filing their tax returns and paying the tax they owed for the April 2023–April 2024 tax year.

HMRC has made it clear that there are few acceptable reasons for filing late tax returns – so not only will they incur a penalty for late payment, but they’ll also have to pay late payment interest.

In 2024, a record total of £409 million was paid to HMRC in late payment interest, which is triple the amount that HMRC collected three years ago.

But why is there such a big increase, and how can you avoid being charged late payment interest?

Why are so many people paying late payment interest?

There are several reasons for the increase in late payment interest collections, including increasing interest rates and frozen or reduced tax liability thresholds.

At the start of 2022, HMRC charged an interest rate of 2.6% on outstanding tax balances, but the average interest rate increased to 7.6% in 2024. Since February 2025, it has been 7%.

Additionally, many tax allowances and tax thresholds have been frozen for several years already and will continue to be frozen until 2028, drawing more people into the Income Tax net and pushing existing taxpayers into brackets with higher rates.

The reduction of the Capital Gains Tax (CGT) exemption also played a part (with the increased CGT rates announced in the Autumn Budget sure to contribute further in the next tax year).

On top of this, HMRC will begin adding a 1.5% surcharge to the late payment interest rate from 6th April 2025 – pushing the current rate up to 8.5% if nothing else changes.

How to prevent late payment interest charges

If you’re already facing late payment interest charges on an outstanding tax bill, it would make sense to pay off your overdue tax liability as quickly as possible using savings income.

With such a high interest rate for late tax payments, the best thing to do is make sure you submit your self-assessment tax return as early as possible, so you’ll know how much your tax bill will be and can plan accordingly to pay it off quickly.

Regularly adding savings to a separate bank account for the specific purpose of paying taxes is a recommended approach – then you can look into setting up a payment plan with HMRC.

Once you’re up to date with previous tax bills, a HMCR Budget Payment Plan will allow you to make weekly or monthly payments towards your next bill. If it isn’t completely covered, you’ll only have to pay the difference, and if it’s less than expected, you can request a refund.

Take control of your tax liability with gbac

The worst thing you can do is bury your head in the sand and let your tax liability spiral with increasing penalties and late payment interest charges.

You should contact HMRC at the earliest opportunity and try to set up a Time to Pay (TTP) arrangement, so you can pay your overdue tax in more affordable instalments – though interest will still be charged until the balance has been paid in full.

If you’re feeling overwhelmed with overdue tax pressures and would prefer to have a professional handle your tax affairs for you, we can help you here at gbac.

Offering tax consultancy and HMRC liaison services, our accountants in Barnsley can not only advise you on the next steps to take control of your tax bill, but can also assist with all areas of tax planning to help keep everything on track for the future.

Simply call us on 01226 298 298 or email your enquiry to info@gbac.co.uk to learn more.

Are you planning to come from another country to work as an employee in the UK?

From 6th April 2025, an improved version of overseas workday relief (OWR) will be introduced.

This tax relief is currently available for UK resident non-UK domiciled employees – UK resident workers whose permanent residence is located outside of the UK for tax purposes – on offshore earnings, related to duties performed for their UK employer outside of the UK.

So, how is OWR changing, and what will this mean for non-UK domiciled employees and UK employers?

How is overseas workday relief changing?

Under the current OWR system, earnings for duties performed overseas as part of employment by a UK employer are exempt from tax in the UK if:

  • The employee’s domicile is not in the UK
  • They’re taxed on the remittance basis
  • Their earnings aren’t remitted to the UK

This tax relief is currently available for up to 3 years.

From 6th April 2025, eligibility will be based on the employee’s residence instead of their domicile.

Qualifying new residents – people arriving in the UK to work as employees who haven’t been UK residents for 10 previous consecutive tax years – can claim OWR with the following conditions:

  • Available for up to 4 tax years (with separate annual claims via self-assessment tax return)
  • Exempting remuneration for duties performed overseas regardless of remittance to the UK
  • Capped at the lower of £300,000 or 30% of the employee’s global income per tax year

This relief can be applied to employment income earned wholly or in part outside of the UK.

Do you need advice on claiming OWR?

At present, the OWR system does not entitle the claimant to the Income Tax Personal Allowance or the exempt amount for Capital Gains Tax when using the remittance basis.

While the remittance basis will be abolished, the new OWR system will be the same in this regard, as claiming OWR for a particular tax year will result in losing both of these allowances.

You can find the technical note from HMRC detailing the reformation of the taxation of non-UK domiciled individuals online, covering OWR on pages 12–16.

If you’re an employer of UK non-domiciled employees or a UK non-domiciled employee yourself, and you’re confused about qualifying for or claiming overseas workday relief under the current or upcoming tax rules, it may be best to seek professional guidance.

Our accountants in Barnsley would be glad to advise you on OWR rules and assist you with claiming tax reliefs to your full eligibility, so be sure to contact gbac for expert assistance.

Speak to one of our financial advisers by calling 01226 298 298, or email your details to info@gbac.co.uk and we will get back to you promptly with more helpful information.

HMRC is having a busy start to 2025 when it comes to Making Tax Digital (MTD) updates. As we reported earlier, the MTD timeline has changed for those due to start using the digital platform to submit Income Tax Self-Assessment (ITSA) returns from 2026.

Landlords and self-employed individuals earning more than £50,000 a year are required to implement digital tax records and returns by 6th April 2026, with the following new guidance available for three-line accounts and income from joint property ownership.

Three-line accounts

The three-line account approach confirmed by HMRC involves:

  • Self-employed people and landlords with annual income below the VAT threshold of £90,000 only giving one total expenses figure when completing a self-assessment tax return.
  • Classifying each amount as income or an expense while keeping digital records.
  • Submitting only the total income and expense figures to HMRC each quarter.

However, there is an exception if a landlord incurs residential financial costs, as these are not deductible expenses and must be recorded separately.

Joint property income

Joint property owners only need to keep records of their individual share of the property’s income and expenses. Landlords can choose to record quarterly income and annual expenses if they prefer.

Noting individual transactions isn’t necessary – HMRC only requires a total figure for each category.

If a joint property owner is eligible for the three-line account approach above, they can simply provide figures for total quarterly income and total annual expenses, as follows:

  • Every quarter – Submit a single income figure to HMRC.
  • At the end of the tax year – Report a total figure for expenses through the finalisation process.

MTD for Income Tax

The latest guidance from HMRC on Making Tax Digital for Income Tax can be found on the government website. This includes more information on the income and expense categories for quarterly updates in the absence of a three-line account approach.

If you are still unsure about your MTD obligations as a landlord or self-employed individual, you should seek professional support from tax consultants who can help you with digital systems.

Here at gbac, our Barnsley accountants would be more than happy to advise you on digital accounting and assist you with tax management. Why not get in touch by phone or email to learn more about our financial services and what we can do to help you?

Though there may yet be a late reprieve – which doesn’t seem likely, according to predictions for the upcoming Spring Forecast – the cost of purchasing a property in England or Northern Ireland will be going up from 1st April 2025 due to increasing Stamp Duty Land Tax (SDLT).

Now the temporary nil rate threshold increase to £250,000 has reverted to the pre-September 2022 level of £125,000 and discounts for first-time buyers have also been reduced to previous levels, those purchasing property after the end of March will face higher Stamp Duty costs.

Here’s what’s in store for landlords and first-time homebuyers in England and Northern Ireland.

SDLT for landlords

As we reported earlier this year, Stamp Duty for landlords is due to increase in April.

Anyone purchasing a property that costs £250,000 or above will face an additional £2,500 expense, as more of the purchase price will be subject to the 2% tax charge when the nil rate threshold is reduced.

For landlords, however, this comes in addition to the 2% surcharge increase introduced on 31st October 2024. As an example, while SDLT on a £350,000 property would have been £15,500 before the end of October 2024, it would currently be £22,500 – and will jump to £25,000 from April 2025.

This marks a Stamp Duty increase of over 60% for landlords in the space of just six months.

SDLT for first-time buyers

Due to temporary discounts for first-time buyers, those purchasing their first property in England and Northern Ireland do not have to pay SDLT on properties up to £425,000.

This means that current purchases between £425,000–£625,000 only incur a charge of 5% above this threshold, while no relief is available for properties costing more than £625,000.

However, these thresholds will be reduced from April 2025, with the nil rate cut to £300,000 and the upper limit dropping to £500,000. The 5% rate will apply to property purchases between these limits.

Therefore, anyone purchasing a property worth just over £500,000 will need to negotiate the price, as even a £1,000 reduction on a £500,000 property sale will save the buyer £5,050 in SDLT.

Stamp Duty tax advice

Property buyers in England and Northern Ireland should aim to complete transactions before 1st April 2025 or prepare for increasing Stamp Duty costs – especially landlords.

Scotland and Wales have their own property taxes, but for buyers in England or Northern Ireland, an online Stamp Duty calculator is available to help you work out the amount of SDLT payable.

If you would prefer to seek professional assistance with property tax matters, why not contact our team of accountants in Barnsley to benefit from our tax-efficient financial services?

For advice on Stamp Duty Land Tax, simply call gbac on 01226 298 298, or send an email to info@gbac.co.uk with your details and we will be in touch to discuss your tax situation.

In December 2024, Chancellor of the Exchequer Rachel Reeves announced the date when her next formal report to Parliament would be due, following the Autumn 2024 Budget.

Several Chancellors ago in 2016, then-Chancellor Philip Hammond decided to replace two Budgets a year with one Autumn Budget and a Spring Statement, the former of which would be the main fiscal event, with the latter no longer introducing significant tax changes.

Rachel Reeves is set to follow this structure again – and after the disastrous 2022 mini-budget, when Chancellor Kwasi Kwarteng failed to consult the Office for Budget Responsibility (OBR), the OBR is still being commissioned to produce two reports a year.

Therefore, Chancellor Reeves will present a Spring Statement to Parliament based on the OBR’s latest economic and fiscal analysis, which will be published on the same day.

With the aim of giving businesses and families more certainty and stability, the Spring Forecast shouldn’t announce any significant spending changes – but with low economic growth in the UK, the pressure is on for the Labour government to produce feasible long-term plans.

When is the Spring Forecast?

The Spring Forecast is due to be published by the OBR on Wednesday 26th March, after which Reeves will deliver a statement in Parliament regarding the national financial outlook.

As businesses and households across the UK are still digesting the implications of the Autumn Budget, which announced billions of pounds’ worth of tax hikes and spending policies, most will be hoping that the Spring Forecast won’t introduce more drastic changes.

While the Treasury has previously stated that the Chancellor is committed to ‘one major fiscal event’ each year, with no significant policy announcements due until the next Autumn Budget, it’s possible the government will change its mind under the pressure to stimulate growth.

With reports that high borrowing costs and little economic growth has wiped out any ‘fiscal headroom’ the government may have had, speculation is increasing about a downgraded forecast.

Though the Chancellor wouldn’t have wanted to rock the boat, high inflation and the poor economic growth forecast already hinted by the Bank of England could force the government’s hand.

Will the Chancellor raise taxes?

Though the Spring Statement is not scheduled to include the fiscal announcements of a Budget, the OBR forecast will set the scene for the nation’s finances and pave the way for more difficult tax-and-spend decisions down the line at the next Autumn Budget, due around October 2025.

After government borrowing costs increased in January this year, rumours began to appear that either targeted tax rises or spending cuts will be necessary to balance the books.

The government already pledged not to increase Income Tax, VAT, or employee National Insurance Contributions – which accounted for more than half of tax receipts in 2023–2024 – so going back on this promise would be an extremely unpopular move.

This would leave public spending cuts as the only remaining choice, but this would also be very difficult, as departmental spending is already stretched thin and the Chancellor also pledged not to return to the austerity policies introduced after the global financial crisis.

Raising taxes to fund public spending would then need to happen, but the Chancellor would have to look at other areas such as extending the tax threshold freeze – despite another pledge to end it – or perhaps extending the survival period for Inheritance Tax on financial gifts.

Alternatively, the government could reduce Corporation Tax and the additional rate for Income Tax to stimulate the entrepreneurial sector, but there isn’t much room for tax cuts.

It all depends on whether the government is willing to break previous pledges, and if so, which ones.

Consult accountants for tax advice

Most speculators anticipate a Spring Statement that doubles down on last October’s Budget without substantial changes, though the Chancellor must explain what meaningful action the government plans to take to address the urgent issues caused by a stalling economy.

The absence of further major tax changes will be good news for those currently planning for 2025 and adjusting to the latest changes for the 2026 tax year and beyond.

With the new tax year approaching in April, now is the best time to start professional tax planning if you haven’t already. Here at gbac, we offer a wide selection of financial services, so you can speak to our accountants in Barnsley for tax-efficient financial advice.

Simply call our office on 01226 298 298 or email us at info@gbac.co.uk for more information.

A recent First Tier Tribunal (FTT) case has revealed the importance of staying on top of your tax returns even if you think you don’t owe any tax – as a UK taxpayer who lived overseas learned the hard way.

In this case, the taxpayer had submitted his tax returns on time as a UK resident. However, while living abroad during the 2020–2021 tax year, he assumed he didn’t need to submit a self-assessment tax return that year, as the income from his UK property was covered by his Personal Allowance.

Despite the lack of tax liability, HMRC charged significant penalties for late submission.

Here’s what you should be wary of if you don’t want to end up in the same boat!

Failed appeal against late tax return penalties

The taxpayer in question eventually submitted his 2020–2021 tax return over a year late, which resulted in a total penalty of £1,600 from HMRC even though no tax was due.

This included an initial £100 penalty for missing the filing deadline, a £10 daily penalty for 90 days, and two £300 penalties for filing more than 6 months late and more than 12 months late.

The taxpayer submitted an appeal and argued at the hearing that he could neither submit a return nor open emailed penalty notices due to lack of internet access while living overseas.

He also argued that postal delays were outside of his control, but in both instances, the FTT determined that the taxpayer should have taken more responsibility in organising his tax affairs – such as making arrangements to forward mail from the UK to his overseas address.

Ignorance of the law was not accepted as a reasonable excuse to appeal a tax penalty.

Make sure to file returns and pay taxes on time

This is an example of why it’s so essential to stay on top of your tax filing obligations, even if there is no tax due to be paid. The £1,600 fines were only penalties for late tax returns, so the total would have been even higher if there was also an overdue tax bill.

If tax was due, HMRC would charge both penalties and interest on the outstanding amount. The tax agency currently charges 7.25% interest on late payments, but the UK government will be introducing an extra 1.5% levy on late tax payments from 6th April 2025.

To get an estimate of the penalties and interest you might owe for a late self-assessment tax return or payment, you can use the online calculator on the government website.

Alternatively, to help you navigate tax penalties and avoid them in the first place by filing and paying on time, you could turn to professional tax consultants like our accountants in Barnsley.

Call the gbac team on 01226 298 298 or email us at info@gbac.co.uk to learn more about how we can get your tax affairs in order by optimising allowances and ensuring deadlines are met.

While the mandatory implementation of Making Tax Digital (MTD) for self-employed workers and landlords is still over a year away, the Autumn Budget 2024 expanded its scope.

Here’s a quick summary of what landlords and small business owners need to know for 2026.

Making Tax Digital timeline

Those expected to submit returns online for Income Tax Self-Assessment (ITSA), namely landlords and the self-employed, must adjust to the following implementation timeline:

  • 6th April 2026 – if earning more than £50,000 for the 2024–2025 tax year
  • 6th April 2027 – if earning between £30,000–£50,000 for the 2025–2026 tax year
  • By the end of the current parliament – if earning between £20,000–£30,000 for the previous tax year

These earnings are based on gross income, not on net profit after the deduction of expenses.

By stating these mandation levels, the UK government seems fully committed to implementing MTD for ITSA from April 2026, with no further postponements.

Outstanding issues with MTD

One of the main concerns about MTD for ITSA is that testing has been relatively small scale, with a lack of compatible software until recently and significant voluntary sign-up exclusions.

For example, those unable to voluntarily use MTD so far include anyone:

HMRC has yet to confirm how MTD will work for those with jointly owned property, as it would be impractical for each owner to keep digital records and submit quarterly updates separately.

You can find Making Tax Digital guidance on the government website, or speak to our accountants in Barnsley if you need professional support to move to digital accounting.

The gbac team is just a phone call or email away, ready to assist you with digital financial services and effective tax management in compliance with HMRC.

With many people making pension contributions to multiple providers throughout their working lives, it’s not surprising that some of these pots end up lost along the way.

A pension savings pot is considered lost if the provider is no longer able to contact the owner.

Over the last 6 years, the number of lost pension pots in the UK has doubled to 3.3 million – adding up to a total value of nearly £31 billion in missing pension funds.

Not sure if one of these could be yours? Here’s what you should know about missing pension pots, including how to find out if you have lost pension funds and how to recover them.

How are pension pots lost?

Some people may work for many different employers over several decades, with some periods of employment being relatively brief. Pension contributions made during short tenures are easy to overlook, especially if they occurred a long time before retirement.

If a saver forgets about a pension pot from a specific period of employment and loses contact with the provider, which often happens due to someone moving house without updating their address, the provider will be unable to reunite them with their lost pension pot.

However, this doesn’t mean the money is lost forever, as owners can track down lost pensions.

How to trace a pension pot

The first step to tracing a lost pension fund is to contact the associated employer, though this is only possible if the employer is still active, which may not be the case after many years.

If this is a dead end, the government offers an online service to help people find pension contact details, which is also available by phone or post. They can’t tell you if you have a pension pot or how much it is – they will only give you the contact details to enquire yourself.

This service can only help you track down a workplace or personal pension scheme if you know the name of the relevant employer or provider. If you don’t have these details, you may need to rely on a private pension tracing service that has access to information databases.

If you need professional help with pension planning and pension consolidation, our Barnsley accountants would be happy to help you build a tax-efficient pension pot.

Simply call 01226 298 298 or send an email to info@gbac.co.uk to discuss our financial services.