6 April brings a variety of changes to the tax rules.

The start of the tax year on Monday 6 April (Easter Monday) heralds a variety of changes to tax and pension rules, few of them welcome.

Dividend tax The rate of tax on dividends will increase by two percentage points if you pay tax at basic rate (8.75% to 10.75%) or higher rate (33.75% to 35.75%). The additional rate tax on dividends remains unchanged at 39.35%, as does the dividend allowance at just £500.

Making Tax Digital (MTD) for income tax This starts to operate for the self-employed and landlords who have qualifying income (broadly gross income) from both sources that exceeded £50,000 in 2024/25. MTD will require you to submit quarterly returns of income and expenses to HMRC using approved software.

Inheritance tax (IHT) reforms The new rules for agricultural and business IHT reliefs come into effect. Following changes announced in the Autumn 2025 Budget and two days before Christmas, the 100% relief allowance will be a combined £2,500,000 and will be transferable between surviving spouses and civil partners.

Venture capital trusts (VCTs) The rate of income tax relief for the high risk investments will drop from 30% to 20%. At the same time, the size of companies covered by the scheme will double.

Capital gains tax (CGT) The rate of CGT on gains that qualify for business assets disposal relief will rise from 14% to 18%. Other rates of CGT remain unchanged, as does the annual exemption at £3,000.

National insurance contributions (NICs) If you work or live abroad, then you will not be able to pay voluntary Class 2 NICs (£3.65 a week) to accrue UK State pension for 2026/27 and subsequent years. You may be eligible to pay Class 3 NICs, but the cost is much higher at £18.40 a week.

State pension age (SPA) The phasing in of a new SPA of 67 will begin in April 2026. If you were born between 6 April 1960 and 5 March 1961, then your SPA will increase to between 66 years 1 month and 66 years 11 months. If you were born on or after 6 March 1961, your SPA will be at least 67.

If you would like more information on how any of these changes could affect you, please get in touch with our accountants in Barnsley.

The rate of compensation paid to smaller employers for administering statutory payments will increase from 8.5% to 9% on April 6, 2026, although it will be much less generous than the increase last year.

Employers may appreciate the additional funding, but it won’t cover the cost of the new “day one” rights for all workers or the higher minimum wage rates that will take effect on April 6, 2026.

Recuperation

92% of statutory payments are typically recoverable by employers; however, smaller employers may recover 100% of the cost in addition to the 9% compensation. Thus, starting on April 6, 2026, the overall rate of recovery will be 109%.

For instance, the typical recovery is £920 if statutory maternity pay of £1,000 is paid. A smaller employer, however, will get £1,090 back.

Statutory sick pay is not recoverable, but statutory payments for maternity, paternity, adoption, shared parental, parental bereavement, and neonatal care are.

Employers that are smaller

If an employer’s total class 1 national insurance contribution (NIC) payments for the tax year prior to the employee’s qualifying week were £45,000 or less, they are considered small for statutory payments purposes:

• Class 1A and 1B NICs are not included, but employer and employee contributions are.
• When determining whether the £45,000 threshold is reached, the £10,500 employment allowance is not subtracted. For instance, class 1 NIC payments may be £40,000, but the relevant amount is £50,500 if the full employment allowance is subtracted. It is therefore too high to be eligible.
• The type of leave determines the qualifying week. For instance, the relevant week for statutory adoption pay is the week the adoption agency notifies the employee that they will be matched with a child.

Payroll software uses the employer payment summary to claim relief on a monthly basis.

HMRC’s guide to getting financial help with statutory pay can be found here.

Beginning on April 6, 2026, the State Pension Age (SPA) will be gradually raised from 66 to 67. After SPA is reached, employee class 1 national insurance contributions (NICs) are no longer due, so employers must exercise caution.

Age of pension

SPA will be reached by men and women born between April 6, 1960, and March 5, 1961, at age 66 plus a predetermined number of months. A person born on May 5, 1960, for instance, will reach SPA on June 5, 2026, while someone born one day later will do so on July 6, 2026. For those born on or after March 6, 1961, the pension age will be 67.

Class 1 NICs

Employer contributions are still required even though employee class 1 NICs are no longer due after an employee reaches SPA:

• The first wage or salary payment made to employees on or after SPA is reached is subject to the change. The date of payment, not the earnings period, determines NIC classification.
• For instance, if an employee reaches SPA on or before June 30, 2026, NIC category letter C will be used for the entire June 2026 salary (paid at month’s end).
• To ensure that no more employee class 1 NICs are deducted, employers should verify that the employee’s NI category letter has been set to “C” in payroll software. Depending on the employee’s birthdate, the software might perform this automatically.

The normal procedure is for the employee to show proof of reaching SPA, either with their birth certificate or passport.

The NICs situation on reaching SPA is simpler for self-employed people. After reaching SPA, they simply cease paying class 4 NICs at the beginning of the tax year.

The government’s “check your SPA calculator” can be used to determine SPA can be found here. You can discuss payroll services with our team of accountants in Barnsley.

Employers must be ready for the new “day one” rights, which will take effect on April 6, 2026.

Employers should be aware of the new “day one” rights that employees will have starting on April 6, 2026, even though many of the major changes brought about by the Employment Rights Act 2025 won’t take effect until 2027.

Sick pay required by law (SSP)

Currently, SSP eligibility begins on the fourth day of illness; however, this three-day waiting period will be eliminated:

• All employees will be eligible for SSP after the lower earnings threshold—currently £125 per week—is eliminated.
• Employees who take time off due to illness will be paid 80% of their average weekly wages or the lower of the SSP rate starting on April 6, 2026.

Employers may have to deal with an increase in sick leave abuse cases, which will require careful handling.

Return-to-work interviews and asking employees to check in frequently while on sick leave are two strategies to lessen abuse.

Regular parental leave and paternity leave

Both regular parental leave and paternity leave will become “day one” rights. Currently, paternity leave is only available after 26 weeks of employment; this qualifying requirement will not change with regard to paternity pay.

Currently, unpaid regular parental leave is only accessible following a year of employment.

An employee will no longer be barred from taking paternity leave after taking shared parental leave.

Paternity leave for bereaved partners

This is a “day one” right that was introduced by separate legislation and will become a new statutory entitlement on April 6, 2026. Statutory pay requirements do not exist. Employees who lose a child’s mother within the first year of the child’s life are eligible to take the new leave. Depending on when a bereavement occurs, a maximum of 52 weeks of leave may be taken. If a child is adopted and the primary adopter passes away, the same leave is available.

See government factsheets covering SSP and paternity and parental leave changes or contact our team of accountants in Barnsley for more information.

The HMRC figures for 2023–2024 show that subscriptions to cash ISAs have increased by nearly 224% more than stocks and shares ISAs in the decade since 2013–2014.

Source: HMRC.

However, with the 2025 Autumn Budget due at the end of November and ISAs on the Chancellor’s agenda, what does this mean for future savings and investments?

Will the HMRC ISA rules change?

For some time, Chancellor Rachel Reeves has been planning to reform Individual Savings Accounts. It’s widely believed that the current HMRC ISA allowance – the maximum limit of £20,000 per tax year – is going to be reduced for cash ISAs, despite disapproval from the big banks.

The recent statistics from HMRC cast new light on this debate. While stocks and shares ISA subscriptions totalled £31 billion in 2023–2024, cash ISA subscriptions amounted to £69.5 billion, bringing the decade’s total investment in cash ISAs to £360 billion by April 2024.

Assuming this total has now surpassed £400 billion, it would create £16 billion in interest that HMRC isn’t collecting tax on. To the Chancellor, lowering the savings cap on cash ISAs could help to reduce tax loss, as the most recent estimate suggests £9.4 billion was lost in 2024–2025 through untaxed ISAs.

This was up almost 20% from the previous year, after little net inflow for cash ISAs for most of the previous decade when the Bank of England rate was lower and provided worse returns.

It makes sense, then, that the Chancellor would feel justified in changing the rules for cash ISAs – but we will have to wait to see what is announced in the Autumn Budget.

Should you get a cash ISA right now?

Before you rush to set up a cash ISA before the Budget ushers in any changes, you should think carefully about what you want to achieve with your savings deposits.

If you only want to move money to a tax shelter, unless you’re an additional rate taxpayer, the Personal Savings Allowance already covers up to £200 of tax on personal interest.

Or, if you’re aiming to set money aside for long-term growth, there may be better options available.

More details on how ISAs work can be found on the government website, or you can speak to a financial adviser, like one of our Barnsley accountants, to help you explore a range of options.

At gbac, we offer a wide selection of financial services, so we would be happy to discuss tax planning and investment possibilities with you. Simply contact us to talk at a time that suits you.

When used wisely, company loans can be an effective way for directors to access company funds quickly. However, a company loan can also come with serious tax implications.

It’s important for directors to be aware of the ways that taking a company loan can affect their tax liability. Before taking this step, here’s what company directors should know.

Personal tax on director’s loans

Most directors will already know that a company loan could affect their personal tax if there are taxable benefits. If the loan interest is lower than the HMRC rate (3.75%) and the director’s beneficial loans total more than £10,000 during the same tax year, there will be a tax charge.

However, the beneficial loan tax charge isn’t that significant for directors paying the higher tax rate. For example, an interest-free loan of £20,000 for 6 months would only cost £150 in tax.

Company tax on director’s loans

If the individual is the director of a close company and a shareholder, the tax situation will become more complicated. The following rules generally apply to owner-managed companies:

• If a loan is repaid by the deadline for the company to pay Corporation Tax (9 months and 1 day from the end of their accounting period) then there will be no tax charge.
• If the loan isn’t repaid in full by then, there will be a company tax charge in addition to their Corporation Tax bill, applying 75% to the outstanding loan amount.
• The tax charge will be refunded back to the company if the director repays the loan.

This tax charge means that larger loans can become expensive for directors if they can’t repay. The loan will also be a red flag on the company’s balance sheet that may discourage investors or customers.

Get advice on director’s loan tax

If you are a director and borrow money from or pay money into your company, you must keep records of your director’s loan account and include these details on the balance sheet in your annual reports.

More information about director’s loans, and reporting and paying tax on them, is published on the government website. There is also the possibility of outsourcing your accounts management to an agent who can manage your financial records, filing, and taxes for you.

Here at gbac, our accountants in Barnsley can provide a range of services to help company directors with efficient financial management, from corporate finance to tax consultancy and more.

To discuss our accounting services, contact us to book a consultation with our team.

Despite government plans to tighten company reporting regulations at Companies House, the Chancellor recently announced intentions to ‘cut red tape’ for small to medium businesses.

The rules for filing company accounts due to take effect from 1st April 2027 include:

• Micro-entities and small companies must file profit and loss accounts
• Small companies need to file a director’s report
• All companies can no longer file abridged accounts

However, as per the statement from Chancellor Rachel Reeves, the government intends to reduce pointless form-filling so that thousands of businesses can save time and money on admin.

Here’s more information on what could be changed for company reporting in 2027.

Loosening company reporting requirements

According to the Chancellor, the requirement for all companies to file a director’s report at Companies House is going to be removed. However, some aspects of the director’s report will be included in other parts of the company’s financial statements instead.

Additionally, medium-sized private companies will no longer be required to produce a strategic report explaining their business strategy and performance as part of their annual accounts.

Of course, companies will welcome any lightening of their administrative burden, but there are also concerns that the Chancellor’s latest plans don’t go far enough.

Further increasing company size thresholds

Companies House already significantly increased company size thresholds from April 2025, but the Chancellor has announced that these thresholds will be increased again.

For a company to be categorized as a micro-entity or a small company, its turnover, balance sheet total, and number of employees must be below the following thresholds:

	Micro-entity	Small company	Medium company
Turnover	£1 million	£15 million	£54 million
Balance sheet	£500,000	£7.5 million	£27 million
Employees	10	50	50

These current thresholds apply to accounting periods that began on or after 6th April 2025. If they are increased again, more businesses will qualify for benefits such as reduced reporting requirements for micro-entities and potential audit exemptions for small companies.

Get help with filing annual accounts

Not sure about the Companies House annual accounts filing requirements, or how the latest company reporting regulations affect your business? Guidance on Companies House annual requirements is available online, but you also have the option of utilising professional accounts management.

At gbac, our experienced accountants in Barnsley can assist companies of all sizes with financial management services, covering bookkeeping, tax consultancy, statutory filing, and more.

To discuss what our team can do for your business, call 01226 298 298 or email info@gbac.co.uk today.

With a new online service launched by HMRC, taxpayers who need to pay the High Income Child Benefit Charge (HICBC) can do so in real time, instead of registering for self-assessment.

The HICBC applies if a parent/guardian (or their partner) has received Child Benefit while earning more than £60,000 a year. The charge removes 1% of the benefit for every £200 over this threshold, which means that the benefit is reduced to nil once their annual income reaches £80,000.

Read on to learn more about the online service and how to sign up to pay directly through PAYE.

How to pay the HICBC via PAYE

If an employee has no other reason to submit a self-assessment tax return, such as declaring property income, then they should be able to pay the HICBC through PAYE.

You can sign up to pay the Child Benefit tax charge through PAYE on the government website, but you’ll need to provide your National Insurance number, photo ID, and income details. Once you have registered successfully, HMRC should update your tax code within 48 hours.

The deadline to register for the online service is the 31st of January following the tax year the HICBC is payable for. Anyone who is already registered for self-assessment must deregister first.

If you haven’t yet submitted a return for the 2024–2025 tax year, you can choose to settle your HICBC liability through PAYE during the 2025–2026 tax year instead. However, if you’re also liable for the HICBC in 2025–2026, this means HMRC will recover both amounts in the same year.

After the current tax year ends, HMRC will only collect the HICBC via PAYE during the relevant tax year.

Get help managing your HICBC liability

Signing up to pay this tax charge directly as an employee should be straightforward. That said, some cases can be more complicated if relationships with partners change during the tax year.

For parents/guardians earning between £60,000–£80,000 a year, it may seem easier to simply opt out of receiving Child Benefit. It’s important to still claim, even while opting out of payments, to receive National Insurance credits that contribute to the individual’s State Pension.

If you aren’t sure what to do, it can be helpful to seek tax planning advice from professionals, like the team here at gbac. Our accountants in Barnsley can help you optimise your tax-free allowances.

For more information, please give us a call on 01226 298 298 or send an email to info@gbac.co.uk.

In a few months, it will become mandatory for sole traders and landlords earning more than £50,000 a year to use Making Tax Digital (MTD) – unless they are eligible for an exemption.

HMRC will make exemptions for traders or landlords who are ‘digitally excluded’ – which means they can’t switch to the new digital platform due to their age, health condition or disability, lack of broadband access, or inability to use a computer because of religious reasons.

Wondering whether you can avoid the MTD requirements? Here’s how valid exemptions will work.

What counts as digital exclusion from MTD?

For HMRC to allow you to avoid using MTD software, you must meet at least one of the following criteria:

• No internet access – Your home or business must be in a location where you can’t access the internet, and there must not be a suitable alternative location with access.
• Age, health, or disability – You must prove that your age, health condition, or disability prevents you from using a computer, tablet, or smartphone to manage digital records.
• Religion – You must show that you are a practicing member of a religious society that doesn’t use computers, tablets, or smartphones for business or personal purposes.

There may be other reasons for digital exclusion, so HMRC will consider them on a case-by-case basis.

If you have already been granted an exemption from using MTD software for VAT returns, then you will also be exempt from MTD for Income Tax as long as your circumstances stay the same.

Who isn’t digitally excluded from MTD?

HMRC will not accept applications for MTD exemption if the only reason for applying is that:

• You previously only submitted paper tax returns
• You’re unfamiliar with digital accountancy software
• You only have a few digital records each tax year

It’s expected that switching to and using MTD software may require additional costs and extra time at first, so HMRC won’t consider these valid reasons for exemption, either.

You can find more information about applying for an exemption from MTD on the government website, but you should only submit an application if you have a valid reason for digital exclusion.

Do you need help with MTD accounting?

If you want to apply for a Making Tax Digital exemption, you can either apply yourself or get someone else to apply on your behalf using HMRC’s contact details for general enquiries.

Even if you are unable to set up or use MTD software yourself, an easy way to comply with HMRC is to hire an agent who can use the digital software to manage your records and file returns for you.

Here at gbac, we have a team of experienced Barnsley accountants who can handle your digital accounts for you, ensuring efficient tax management year-round.

For more information on how we can help, call us on 01226 298 298 or email info@gbac.co.uk.