As 2025 is now well underway, it’s once again that time of year when you need to consider your year-end tax plans. While there will be no Spring Budget this year, taxpayers must still get their tax affairs in order before the end of the tax year on 5th April.

Only a Spring Forecast is due in March rather than more tax reform announcements, but the changes announced in the Autumn Budget in October 2024 are enough to be getting on with.

Here is what you should be taking into consideration for your tax year-end planning:

Pension Contributions Planning

It was announced in the Autumn Budget that pension savings will be included in estates for Inheritance Tax (IHT) purposes from April 2027, rather than being paid to beneficiaries tax-free.

This means that while pension schemes still offer a tax-efficient way of saving for retirement, they are no longer as tax-efficient for estate planning, so this must be taken into account when reviewing your pension contributions this year.

Capital Gains Tax (CGT) Planning

The Autumn Budget also increased the rates of Capital Gains Tax (CGT) with immediate effect from October 2024. Annual gains exceeding the exempt amount of £3,000 are now subject to:

• 18% CGT for non-taxpayers or basic rate (20%) taxpayers
• 24% CGT for higher rate (40%) and additional rate (45%) taxpayers

If you haven’t used your annual exemption yet, you should think about doing so before the end of the tax year – otherwise you’ll lose it, as you can’t carry it forward to use in the next tax year.

Inheritance Tax (IHT) Planning

Though there had been speculation about the abolition of Inheritance Tax (IHT), the Labour government will be maintaining this tax on inherited personal estates with the same thresholds.

You’re still allowed to give away tax-free gifts of up to £3,000 a year, though these may be taxed if you pass away within 7 years. You can only carry this allowance forward for 1 year, so you should look into using your full exemption for the last 2 tax years if you haven’t already.

Marriage Allowance Planning

Married couples or civil partners can share some of their Personal Allowance if one of them earns less than the annual tax-free amount of £12,570 and the other is a basic rate taxpayer.

The lower-earning partner can claim Marriage Allowance to transfer up to £1,260 of their tax-free allowance to the higher-earning partner, reducing their tax bill by up to £252. You can backdate claims for up to 4 years, so claims for 2020–2021 are due to expire in April.

Income Tax Planning

It has been increasingly documented that the long-term personalincome tax threshold and allowance freezes are pushing more taxpayers into higher tax bands due to fiscal drag.

If you find yourself pushed into a higher tax bracket, this will affect your tax reliefs, possibly losing your Child Benefit or tax-free allowance. You can try to avoid this by spreading income and allowances across multiple years or transferring them between married partners.

Get tax planning advice from gbac

Tax planning is vital year-round if you want to make the most of all the allowances and reliefs that you’re eligible for, but it’s even more essential if you haven’t used them up before the end of the relevant tax year or eligibility period.

You shouldn’t rush into important tax decisions due to the pressure of the looming year-end deadline, though. Tax errors can be costly and hard to fix, which is why it’s best to seek professional advice before taking action.

Here at gbac, our team of accountants in Barnsley includes tax consultants and financial advisers, so be sure to reach out if you need guidance on efficient tax management.

You can call us on 01226 298 298 or send an email to info@gbac.co.uk to find out more.

Umbrella companies typically employ temporary workers on behalf of recruitment agencies and end clients. However, this structure leaves room for umbrella company fraud and tax avoidance, which is why they’re often under HMRC’s spotlight.

In 2022–2023, around 40% of umbrella companies didn’t comply with their tax obligations – but it isn’t difficult to form an umbrella company, so the individuals behind them can easily launch new ones after being shut down for non-compliance.

HMRC will therefore be making some changes to tackle non-tax-compliant umbrella companies, which will take effect from the start of the 2026–2027 tax year.

Changing PAYE and NIC responsibilities

From April 2026 onwards, the accounting responsibility for PAYE and National Insurance Contributions (NICs) – including employer NICs – will transfer from the umbrella company to the recruitment agency that supplied the worker.

If there is no recruitment agency in the labour supply chain, then these accounting responsibilities will move to the end client. This should encourage recruiters and end clients to make sure they don’t deal with illegitimate companies.

They can still contract with umbrella companies in the same way as before, but if an umbrella company fails to account for the right amount of Income Tax and NICs, the recruiter or end client will then be responsible for any shortfalls.

In turn, workers will benefit from recruiters and end clients avoiding non-compliant operators, as they won’t have to worry about facing unexpected tax bills.

Avoiding non-compliant umbrella companies

Smaller employment agencies will likely continue to outsource payroll functions to umbrella companies for convenience, but given the potentially high cost of using a non-compliant umbrella company, agencies – and end clients – should undertake diligent checks and ensure legal indemnities are in place.

While the new rules won’t come into force until next year, it’s advisable to update systems, scrutinize contracts, and re-evaluate fee arrangements well in advance.

For more information, you can read HMRC’s policy paper on the agency’s plans to tackle tax non-compliance in the umbrella company market.

It may also be beneficial to speak to financial advisers like our accountants in Barnsley, as the team here at gbac can offer a range of payroll and tax management services to ensure total compliance with HMRC.

To learn more, call 01226 298 298 or email an enquiry to info@gbac.co.uk.

Postgraduates with student loans will be liable for high effective marginal tax rates – which apply to every £1 above repayment thresholds – but partially or fully repaying all of their student loans might not make the most financial sense.

Regardless of the student loan plan type, the normal repayment rate is 9% above the specified threshold, which varies from £24,990 to £31,395 a year depending on whether it is Plan 1, 2, 4, or 5.

Postgraduate loans have a repayment rate of 6% on income over £21,000, so repayments for both undergrad and postgrad loans would have a total rate of 15%.

So, how might this affect higher earners, and is it worth paying off your student loans early if you have a Master’s loan too? We explain further below.

Marginal tax rates with student loans

The average employee with earnings exceeding the repayment thresholds for both an undergraduate and postgraduate loan will face an effective marginal tax rate of 43%.

This includes the 15% rate for both student loans, the 20% basic Income Tax rate, and the 8% rate for National Insurance Contributions (NICs) in this earnings bracket.

For those earning between £50,270 to £100,000 a year, this effective marginal tax rate will increase to 57%, including the 40% higher Income Tax rate and 2% for NICs.

Meanwhile, those earning from £100,000 up to £125,140 could face a hefty 77% rate. While NICs remain at 2%, for every £2 earned over £100k you lose £1 of your tax-free allowance, pushing you towards the dreaded 60% tax rate.

Unearned income is only liable for student loan repayments if it exceeds £2,000 a year and requires submitting a Self-Assessment Tax Return.

If you also earn income from a rental property, savings, or self-employment, you should therefore aim to keep this below the threshold to reduce your student loan repayments.

Making early student loan repayments

Despite ongoing high marginal tax rates, perhaps surprisingly, it may not be the best financial move to repay all or some of a student loan off early.

As an example, if an employee has a £28,000 doctoral loan and earns £35,000 a year, they will repay £840 a year based on 2024-2025 terms. These annual payments would total £25,200 by the time the loan balance is due to be written off in 30 years.

If this employee repaid £5,000 of the loan in the first year, it’s likely they would still end up repaying the same amount of £25,200 over the same length of time due to interest – which is set at the Retail Price Index (RPI) plus 3% for postgraduate loans.

In cases like this, there is no real advantage to making early repayments – but the pros and cons of doing so depend on the individual’s financial circumstances.

You can find guidance on student loan repayments on the government website for more information on specific repayment plans and thresholds.

If you would like professional advice on the most efficient way to manage your tax and student loan repayment liabilities, why not speak to our accountants in Barnsley?

Give us a call on 01226 298 298 or send an email to info@gbac.co.uk to find out how our financial advisers can help you manage your accounts effectively.

Despite the previous government’s 2024 Spring Budget proposing a new type of Individual Savings Account (ISA) that would extend the annual savings allowance for ISAs, this did not come to fruition in the Labour government’s 2024 Autumn Budget.

Instead, the current tax-free allowance for ISAs will be frozen for another 5 years after already remaining unchanged since April 2017 – staying at £20,000 until April 2030.

While it’s good news that this tax-free savings option won’t be scrapped, this long freeze is likely to result in fiscal drag if savings and interest aren’t managed appropriately.

Here’s a quick summary of how the frozen ISA limits could affect your savings.

ISA subscription limits

The £20,000 tax-free savings limit applies across all types of ISAs, including:

• Lifetime ISAs
• Cash ISAs
• Stocks and Shares ISAs
• Innovative Finance ISAs

Lifetime accounts specifically have a £4,000 annual tax-free limit, which is included in the total tax-free savings allowance and will also be frozen at this threshold until 2030.

Other types of savings accounts with a frozen annual allowance include Junior ISAs and Child Trust Funds (CTFs), which can accumulate £9,000 a year tax-free for the next 5 years.

A rumoured lifetime savings cap of £500,000 didn’t materialise, but neither did the previously mentioned UK ISA, which would have introduced an additional allowance of £5,000.

Fractional interests

Though HMRC previously stated that fractional interests (also known as fractional shares) could not be held within a Stocks and Shares ISA or CTF, the tax agency has confirmed this is actually possible under new regulations that came into effect in November 2024.

Fractional shares will be allowed under certain conditions, including being in a contractual arrangement. Regular savers can now acquire shares in international companies, but ISA managers must remove any fractional interests that aren’t eligible under the new rules.

Do you need ISA advice?

Currently, there are more than 4,000 savers in the UK with ISA saving pots worth over £1 million. Whether you’re one of them or you’re new to the world of ISAs and need help managing your savings, we can offer professional guidance here at gbac.

You can find HMRC’s basic ISA guide on the government website, but if you want in-depth advice on savings accounts or you’re looking for an ISA manager, you should get in touch with our team of knowledgeable accountants in Barnsley.

Just call us on 01226 298 298 to speak to the gbac team, or send your query by email to info@gbac.co.uk and one of our financial advisers will reach out as soon as possible.`

The increase in National Insurance Contributions (NICs) for employers that was announced in the 2024 Autumn Budget is due to take effect in a few months – from 6th April 2025.

The three primary changes to employer NICs include:

• Cutting the starting point for payment from £9,100 to £5,000
• Increasing the employer’s rate from 8% to 15%
• Boosting the employment allowance from £5,000 to £10,500

While the greater employment allowance will act as an NIC credit that can help employers to reduce their liability, the payment threshold reduction will raise lots more revenue for the Treasury – and is the largest concern for retail, leisure, and hospitality businesses.

Under the new rules, the NIC cost of employing a part-time worker earning £175 per week goes up from zero to £11.85 per week. That’s before the National Living Wage increase of 6.7%, too.

It’s easy to see why UK businesses aren’t happy with this part of the Budget, but the impact of these changes to NICs won’t only affect employers in 2025.

How will rising NICs affect you?

The Office for Budget Responsibility (OBR) predicts that employers could react to higher NICs by reducing working hours, restricting pay rises, or cutting down on recruitment.

As NICs for self-employed workers now have a maximum rate of 6%, more individuals may consider working as one-person companies. However, this is contentious, as there has been plenty of recent litigation over the line between being an employee and a contractor.

For those who are already self-employed, the appeal of incorporating on tax grounds has decreased due to the rise in NICs – weakened further after previously increased dividend tax.

Employees, whose starting point for paying employee NICs remains at £12,570, may see indirect benefits like new or improved salary sacrifice schemes, which can save employers money by passing NICs to employees through pension contributions or company cars.

More information about the employer NIC changes can be found on the government website.

Need advice on NICs in 2025?

Whether you’re an employer, an employee, or self-employed, you’ll need to make sure that all your payroll and tax systems are up to date and compliant in time for the new tax year.

If you need help with managing National Insurance Contributions, or you’re looking for any other account management and HMRC liaison services, you’re in the right place.

Here at gbac, our accountants in Barnsley provide a wide range of bookkeeping and tax management services, so don’t hesitate to contact us to discover what we can do for you.

Simply call us on 01226 298 298 or send an email to info@gbac.co.uk and we’ll be in touch.

As part of the Autumn Budget that was shared in October 2024, the government came up with a ‘roadmap’ for Corporation Tax that should provide more certainty for UK businesses.

After inheriting a ‘fiscal black hole’ from the previous government, the Labour government is attempting to repair public finances and restore stability to the UK economy.

Here’s how their corporate tax roadmap aims to encourage companies to invest in long-term growth by maintaining a stable tax environment over the next 5 years.

Main Corporation Tax commitments

The government’s roadmap sets out the following key commitments to develop and maintain a competitive and supportive Corporation Tax regime in the UK:

• Corporation Tax Rate – Corporate tax will be capped at 25% until 2029, with current thresholds and rates remaining the same for small profits and marginal relief.
• Capital Allowances – First-year allowances for new plant and machinery expenses, the £1 million Annual Investment Allowance, the Structures and Buildings Allowance, and writing down allowances will all be maintained.
• R&D Reliefs – Current rates for Research & Development relief (including the merged expenditure credit scheme and SME relief scheme) will be maintained.
• Loss Reliefs – The established loss reliefs for companies and groups will remain the same.

Should the government need to cut the main rate of Corporation Tax to keep the regime competitive with other markets, the option to do so will remain open.

Potential improvements to Corporation Tax

The government has also highlighted areas for possible improvements to the corporate tax system, such as simplifying capital allowances, extending full expensing to leased or hired assets, and establishing an advisory panel and disclosure facility for R&D relief.

One of the biggest concerns is predevelopment costs for investment in renewable energy, as an Upper Tribunal recently decided the cost of studies before installing wind turbines is not eligible for capital allowances, which discourages investors. The government will be launching a consultation in the next few months to address this issue.

You can read more about this in the corporate tax roadmap on the government website.

Get professional corporate tax advice

If you own a small or medium business and want to ensure you comply with tax rules while making the most of Corporation Tax reliefs, our accountants in Barnsley can help.

Contact gbac for corporate tax assistance by calling 01226 298 298 or emailing your enquiry to info@gbac.co.uk – no matter the size of your company, we can offer tailored solutions.

The thresholds defining company sizes at Companies House haven’t been updated since 2016, but they have now been revised, with new thresholds coming into effect on 6th April 2025.

Companies House also plans to roll out new requirements for directors and people with significant control (PSCs) to verify their identities, which should be introduced by late 2025.

The static thresholds and a couple of years of high inflation have made more businesses liable for reporting requirements that might be inappropriate for them, which is why Companies House will be raising the thresholds from the start of the next tax year.

New company size thresholds

Though the defining numbers for company sizes will increase by around 50%, the number of employees will remain the same. To qualify as a micro-entity or a small or medium company, the company must not exceed more than two of the three criteria shown below:

Company Size	Annual Turnover	Balance Sheet	Number of Employees
Micro-entity	£1 million (previously £632,000)	£500,000 (previously £316,000)	10
Small Company	£15 million (previously £10.2 million)	£7.5 million (previously £5.1 million)	50
Medium Company	£54 million (previously £36 million)	£27 million (previously £18 million)	100

 

As a result of these redefinitions, over 100,000 small companies will be reclassified as micro-entities, which benefit from fewer reporting requirements – though lenders may still require detailed information to assess the creditworthiness of a micro-entity.

Small companies may be eligible for an audit exemption, so companies that were at risk of changing to a medium size classification can now avoid losing this exemption.

However, growing companies may prefer to retain their current reporting requirements to avoid disrupting their systems, even if there is an opportunity to move to a lower classification.

New identity verification rules

Along with changes to business disclosure rules and registered addresses in recent years, Companies House plans to intensify identity checks for directors and PSCs by next autumn.

Verification for existing companies will take place whenever a company files its confirmation statement over the subsequent 12 months. Action against non-compliant companies whose directors or PSCs fail to verify their identity will begin by the end of 2026.

These company size and identity verification transitions could be burdensome, but Companies House filing guidance is available to read through on the government website.

If you aren’t sure what this means for your company’s reporting next year, why not make the most of our company secretarial services at gbac, where we can manage this for you?

Our experienced accountants in Barnsley can ease the burden of statutory filing by managing your Companies House accounts on your behalf, in full compliance with the latest rules.

Call our team on 01226 298 298 to learn more about our financial services, or email your query to info@gbac.co.uk and we will get back in touch with more information shortly.

Despite the tax agency’s ambitions to move everything to digital platforms, HMRC is reverting back to paper-based forms for employees claiming employment expenses. This switch from online submission is an attempt to reduce fraudulent expenses claims.

It’s suggested that businesses are claiming expenses with little or no business relevance as they try to offset increasing tax burdens, and tax refund companies have also been known to misuse the expenses claim system to obtain higher repayments.

With this move from digital to paper claims by HMRC, it seems that some employees have been adopting a similar approach to misusing the system for ineligible expenses.

Here’s what you should know about how to claim employment expenses appropriately.

Using Form P87 to claim job expenses

If their employer has not reimbursed them, then employees can claim tax relief for employment expenses through PAYE. However, from 14th October 2024, employees must complete the P87 paper form and post it to HMRC with evidence to support their claim.

Appropriate evidence for a job expenses claim could include the following:

• Receipts for professional subscriptions showing how much was paid
• A mileage log copy noting reasons and distances for each journey for mileage allowance
• Copies of hotel or restaurant receipts for subsistence expenses
• Proof of requirement to work from home (e.g. an employment contract)

Despite this change for the above expenses, claims for flat rate expenses like uniforms or work clothing and equipment can still be submitted online. According to HMRC, the digital claim option should be available again for all expense claims from April 2025.

Claiming expenses through self-assessment

An alternative method to claiming through PAYE with the P87 form is to claim work expenses by submitting a Self-Assessment Tax Return online. This is the only route permitted if your employment expenses are more than £2,500 for that tax year.

Initially, there is no requirement to supply evidence when claiming this way, but HMRC will be extending compliance checks and may request more information to confirm eligibility.

The process for submitting Self-Assessment Tax Returns will otherwise remain the same.

Expenses that self-employed people can claim tax reductions for include work-related financial, travel, clothing, office, staff, stock, marketing, and training costs.

Get help with claiming employment expenses

HMRC’s guidance on claiming employment expenses for tax relief is available online.

The tax agency’s aim is to help people pay their taxes correctly the first time, rather than expending more resources on rectifying issues later. Individuals can ensure they comply by submitting forms and evidence as accurately as possible.

It can help to outsource your forms to a tax consultant, who will already be familiar with filing expenses both by post and online. For example, our accountants in Barnsley can assist with all manner of accounts, tax, and HMRC services and queries.

To find out more about employment taxes and reliefs, call the gbac team on 01226 298 298, or email us at info@gbac.co.uk and we’ll be in touch shortly to discuss your enquiry.

The business rates system taxes the value of properties used for business, providing a stable source of government revenue to support essential local services like social care.

However, property-intensive sectors bear a larger share of the tax burden, which disincentivises high street investment and provides fewer opportunities for local communities.

The Labour government is planning to reform business rates over the next few years to help high street businesses and give this area of economic activity a much-needed boost.

While business rates relief has been extended for the retail, hospitality, and leisure sectors, with the current discount dropping from 75% to 40% next year, many businesses in England could see their business rates bill almost double in 2025–2026.

So, what are the government’s plans to reform business rates and tax reliefs, and how is this supposed to help English businesses? Learn more about the incoming changes below.

Business rates in 2025–2026

Retail, hospitality, and leisure (RHL) properties that don’t qualify for small business rate relief (for property values below £15,000) receive a discount of 75% on up to £110,000 per business.

While this will continue in the 2025–2026 tax year, the discount will be cut to 40%. Properties usually qualify for this business rates relief if the business is primarily a shop, restaurant, café, bar, pub, cinema, music venue, gym, spa, or hotel.

While businesses will be relieved that the discount isn’t stopping altogether, they will no doubt still be disappointed by the significant decrease.

A business rates bill is calculated by multiplying the property’s rateable value by a multiplier. The government intends to protect smaller properties by freezing the small business multiplier (for property values below £51,000) at 49.9p, helping over a million businesses.

By continuing to provide a business rates discount instead of removing it altogether on 31st March 2025, as planned by the previous government, this will save the average pub with a rateable property value of £16,800 more than £3,300 in 2025.

However, the standard multiplier (for property values of £51,000 and above) will be uprated from 54.6p to 55.5p, which will likely disappoint businesses in this bracket.

Business rates in 2026–2027

As announced in the Autumn Budget, the government will take steps to implement a fairer business rates system by introducing permanently lower multipliers for RHL properties with rateable values below £500,000 from April 2026.

This permanent reduction will be sustainably funded by implementing a higher multiplier for RHL properties with rateable values of £500,000 and above, which includes most large distribution warehouses used by giant online retailers.

The rates for the new multipliers are currently unknown but will be set in next year’s Autumn Budget, following revaluations and consultations with businesses and stakeholders.

The government will be consulting on other potential reforms, too, such as areas where ‘cliff edges’ in the system disincentivise businesses in England from expanding.

There are no details so far of discounts for business properties in Scotland, Wales, or Northern Ireland, though RHL properties in Wales benefit from a 40% discount at present.

Details of the business rates reliefs in England are explained on the government website.

If you are a small to medium business owner with concerns about how these changes could affect your property taxes, our accountants in Barnsley can provide professional advice.

To find out how gbac can help you with business tax reliefs, contact our team by calling 01226 298 298, or send an email to info@gbac.co.uk and we will be back in touch soon.