Archive: 23rd April 2026

Income Tax

Who pays Income Tax at Scottish rates?

Apr 23, 2026 by Terry Harris 0 Comments

The rules as to who pays Income Tax in Scotland is determined by whether an individual is considered a Scottish taxpayer or not. For most people, determining Scottish taxpayer status is straightforward. Individuals who live in Scotland are considered Scottish taxpayers, while those who live elsewhere in the UK are not.

If a taxpayer has homes in both Scotland and elsewhere in the UK, HMRC guidance is used to determine their main home for Scottish Income Tax purposes. Those without a permanent home who regularly stay in Scotland, such as offshore workers or hotel residents, may also be liable for SRIT.

If a person moves to or from Scotland during a tax year, their tax liability is determined by where they spent the majority of that year. Scottish taxpayer status applies to the entire tax year and cannot be split.

Those defined as Scottish taxpayers are liable to pay the Scottish Rate of Income Tax (SRIT) on their non-savings and non-dividend income.

Source:The Scottish Government | 19-04-2026
Capital allowances

What is the Annual Investment Allowance?

Apr 23, 2026 by Terry Harris 0 Comments

The Annual Investment Allowance (AIA) is a valuable tax relief that allows businesses to deduct the full cost of qualifying plant and machinery from their taxable profits. This means that, instead of claiming relief over several years, businesses can often obtain 100% tax relief upfront.

The AIA is currently capped at £1 million per year, and a fresh allowance is available for each accounting period (adjusted if the period is shorter or longer than 12 months).

Most plant and machinery qualifies, including items such as tools, machinery, vans, office equipment, computers and certain building fixtures. However, AIA cannot be claimed on cars, assets previously owned for non-business use or items given to the business.

AIA is available to sole traders, partnerships and companies. However, it is only available to partnerships where all partners are individuals, mixed partnerships that include companies do not qualify.

Timing is important. You can only claim AIA in the period the expenditure is incurred. This is usually the date the contract is signed if payment is due within four months, or the date payment becomes due if later. Special rules apply for hire purchase.

If you do not want to claim the full amount you can claim part of the cost and carry forward the balance using writing down allowances.

Used correctly, AIA can significantly reduce a business’s tax bill, particularly where there is substantial investment in equipment.

Source:HM Revenue & Customs | 19-04-2026
Income Tax

Filing your 2025-26 self-assessment tax return

Apr 23, 2026 by Terry Harris 0 Comments

The 2025–26 tax year ended on 5 April 2026, and attention now turns to filing your self-assessment tax return. While many leave this until the last minute, there are advantages to filing early.

There are two ways to file your return. You can submit a paper return, which must be filed by 31 October 2026, or file online, with a deadline of 31 January 2027. The 31 January deadline is also when any tax due for 2025–26 must be paid, along with the first payment on account for 2026–27.

Although the deadline may seem distant, preparing your return early can make a significant difference. Filing early does not accelerate the payment date, but it does give you certainty over how much tax you owe. This allows time to budget and set funds aside, avoiding pressure in January.

There are other benefits too. If you are due a refund, submitting early means you receive it sooner. It also gives more time to gather missing information, resolve queries, and avoid the last-minute rush when systems are busy and deadlines are tight.

In short, early preparation puts you in more control, whether that means planning for a future tax bill or importantly securing a repayment without delay.

Source:HM Revenue & Customs | 19-04-2026
Capital Gains Tax

When is CGT payable on gains during 2026-27

Apr 23, 2026 by Terry Harris 0 Comments

For most capital gains realised in the 2026–27 tax year, Capital Gains Tax (CGT) is reported and paid by 31 January 2028 via the self-assessment system. This applies to gains on assets such as shares, investments and commercial property.

However, UK residential property is an important exception. Where a residential property is sold and the gain is not fully covered by Private Residence Relief, the capital gain must be reported and paid within 60 days of completion. This rule applies to disposals completed on or after 27 October 2021.

The 60-day deadline mainly applies to rental properties, second homes or properties only partly used as a main residence. If the property is jointly owned, each owner must report and pay tax on their share of the gain separately.

To calculate the gain, you will need details such as purchase and sale dates, acquisition cost, legal and professional fees, and qualifying improvement expenditure. Selling costs, including estate agent and legal fees, can also be deducted. Gathering this information in a timely manner is important given the tight 60-day deadline.

If you have disposed of, or are planning to dispose of, an asset that may give rise to a gain, we would be happy to help you calculate taxable gains, ensure that the filing and payment deadlines are met and avoid unnecessary interest or penalties.

Source:HM Revenue & Customs | 19-04-2026
Employee Benefits

Pay back private fuel costs and avoid tax charge

Apr 23, 2026 by Terry Harris 0 Comments

Employees who receive fuel from their employer for private use in a company car can avoid paying the car fuel benefit charge by reimbursing the full cost of the private fuel. This process, known as "making good," requires the employee to repay the employer for private fuel no later than 6 July following the end of the tax year. For the 2025–26 tax year, the repayment must be completed by 6 July 2026.

If the repayment is not made by the deadline, the employee becomes liable for the car fuel benefit charge. This charge is calculated based on the vehicle’s CO2 emissions and the car fuel benefit multiplier. The charge applies regardless of the actual amount of private fuel used, making it potentially costly for employees who only use a small amount of fuel for private journeys, such as commuting.

To avoid the car fuel benefit tax the employee must reimburse the total cost of all private fuel used during the year, including fuel used to travel to and from work. Keeping accurate mileage records is essential. HMRC will only accept that no benefit has arisen if the full cost is repaid by the deadline. In many cases, repaying the private fuel cost can be more financially beneficial than paying the fuel benefit tax charge.

Source:HM Revenue & Customs | 19-04-2026
General

Beware Winter Fuel Payment scams

Apr 23, 2026 by Terry Harris 0 Comments

Pensioners are being urged to stay vigilant for any Winter Fuel Payment scams. HMRC is starting to recover Winter Fuel Payments issued for winter 2025 from those earning over £35,000 a year. While the process will affect nearly two million people, most will see the repayment handled automatically through adjustments to their PAYE tax code from April 2026, meaning there is no need to contact HMRC directly.

However, the scale of the recovery operation has created an opportunity for scammers. Over the past year, HMRC recorded more than 25,000 scam reports linked to Winter Fuel Payments. Officials are warning that fraudsters may now exploit confusion around the repayment process. Fake texts, emails, and phone calls are expected to increase, often impersonating HMRC and individuals may feel pressured to hand over personal or financial details.

For those submitting self-assessment tax returns online, the payment should appear automatically in their 2025–2026 return which is due to be submitted by the 31 January 2027. Taxpayers are also advised to check carefully and add the payment manually if they are liable. Paper filers will need to include it themselves.

HMRC stresses that it will never request repayment or bank details via text or email. As HMRC’s Chief Customer Officer, said:

‘Criminals are great pretenders and often use fake letters, emails, calls and texts to impersonate HMRC and trick people into giving them money.

I’d encourage anyone who’s unsure to use our online tool at GOV.UK to check whether and how their payment will be recovered – there’s no need to call us.’

Source:HM Revenue & Customs | 19-04-2026
Employment Law

Preparing for a new employment landscape in 2026/27: Further protections

Apr 20, 2026 by Terry Harris 0 Comments

Annual leave & holiday pay (effective April 2026)

From 6 April, the Employment Rights Act (ERA) 2025 has introduced strict new record-keeping duties, requiring employers to maintain detailed records of annual leave, carried-over holiday, and holiday pay. Employers must keep these records for six years, with failure to do so potentially resulting in severe financial penalties under the newly created Fair Work Agency (FWA). These changes address previous gaps in law regarding record retention, placing a higher administrative burden on businesses to ensure compliance.

Redundancy provisions (April 2026)

The cost of procedural errors during collective redundancies has effectively doubled, as the maximum protective award for failing to properly inform and consult on redundancies involving 20 or more staff has increased from 90 days to 180 days of gross pay. This change places a significant premium on early and transparent consultation with staff and unions to minimise the risk of severe financial penalties.

National Living Wage to increase (April 2026)

As of 1 April 2026, all employers must ensure that their payroll reflects the new statutory rates, including an increase in the National Living Wage (NLW) to £12.71 per hour for those aged 21 and over, £10.85 for 18–20 year olds, and £8.00 per hour for 16–17 year olds and apprentices, while statutory maternity, paternity, and adoption pay have also risen to £194.32 pw.

Guaranteed hours (2027)

Zero-hours and low-hours workers will have the right to request guaranteed hours, compensation for cancelled shifts, and reasonable notice of working schedules. Employers must pay for shifts that are cancelled, moved, or reduced at short notice. Employers will be required to provide reasonable notice when scheduling or changing shifts, although the precise definition of "reasonable" is yet to be determined.

The FWA’s draconian new powers

To ensure these new rights are strictly followed, the government has established the FWA as a single, powerful enforcement body. The FWA has the authority to inspect workplaces (by forceful entry if necessary), audit payroll records for minimum wage and holiday pay compliance, and bring court proceedings against any organisations that fall short of statutory standards. This increased oversight coincides with major trade union reforms that make it significantly easier for unions to gain recognition. The membership threshold for recognition applications has dropped from 10% to just 2%, and the requirement for a 50% turnout in industrial action ballots has been removed. With the introduction of electronic and workplace balloting, the logistical barriers to organising industrial action have effectively been lowered, making it essential for employers to cultivate positive, proactive relations with their workforce.

Source:HM Government | 19-04-2026
Business Support

Interest rate outlook for 2026

Apr 20, 2026 by Terry Harris 0 Comments

The outlook for UK interest rates during 2026 remains uncertain, although current expectations suggest relative stability, with the possibility of modest reductions later in the year if inflation continues to ease. While interest rates have fallen from their recent peak levels, they remain higher than many businesses became accustomed to during the period of exceptionally low borrowing costs.

The Bank of England continues to balance the need to control inflation against the risk of slowing economic growth. Inflation has fallen significantly from the elevated levels experienced in recent years, but it has not yet settled consistently at the long term target level of 2%. As a result, policymakers appear cautious about reducing rates too quickly.

Most commentators expect interest rates to remain broadly close to current levels for much of 2026. Small reductions may be possible if inflation continues to trend downwards, although this will depend on developments in energy prices, wage growth and wider global economic conditions.

For business owners, the key message is that borrowing costs are unlikely to fall sharply in the short term. Businesses relying on variable rate lending may therefore wish to review cash flow forecasts to ensure that financing costs remain affordable. Fixed rate borrowing can provide greater certainty, although the appropriate approach will depend on each business’s appetite for risk and its longer term plans.

Higher interest rates can also affect investment decisions, working capital requirements and business valuations. Regular financial review meetings can help identify whether changes to pricing, cost control or funding structures may be appropriate.

Taking a forward looking approach can help reduce the impact of continued uncertainty and ensure that financial decisions remain aligned with overall business objectives.

Source:Other | 19-04-2026
Business Support

Hedging against rising costs

Apr 20, 2026 by Terry Harris 0 Comments

Rising prices remain a concern for many UK business owners, particularly where energy, materials, labour and finance costs are unpredictable. While it is rarely possible to eliminate cost pressures entirely, a number of practical steps can reduce exposure and provide greater stability when planning ahead.

One of the simplest strategies is to review supplier arrangements regularly. Where possible, businesses may negotiate fixed price contracts or longer term agreements with key suppliers. Although fixed pricing does not always deliver the lowest short term cost, it can provide certainty and protect margins where inflation is expected to continue.

Forward purchasing may also be appropriate where storage is practical, and cash flow allows. Buying frequently used materials in larger quantities can protect against future price increases, although care should be taken to avoid tying up excessive working capital in slow moving stock.

Energy costs remain a significant area of volatility. Businesses should review tariff options, consider smart energy management systems and explore energy efficiency measures such as improved insulation, LED lighting or updated machinery. Even modest reductions in consumption can provide ongoing savings.

Pricing strategy should also be reviewed. Regular small adjustments to prices are often more acceptable to customers than infrequent large increases. Transparent communication explaining why prices are changing can help maintain customer relationships and preserve perceived value.

Financial planning plays an important role. Cash flow forecasts should be updated regularly to reflect potential increases in costs. Businesses may also wish to review financing arrangements to ensure sufficient headroom is available if working capital requirements increase.

Finally, diversifying suppliers and revenue streams can reduce reliance on any single source of cost pressure. Businesses that maintain flexibility are often better positioned to respond quickly to changing economic conditions.

Source:Other | 19-04-2026
Employment & Payroll

Filing deadlines for reporting expenses and benefits

Apr 16, 2026 by Terry Harris 0 Comments

Employers providing employees with expenses or benefits in kind must comply with specific reporting, filing, and payment obligations each tax year. These requirements are designed to ensure that benefits are correctly reported, and that the appropriate tax and National Insurance contributions are accounted for.

For the 2025–26 tax year, employers must report employee expenses and benefits to HMRC and provide employees with copies of the relevant information by 6 July 2026. By the same deadline, employers must also submit form P11D(b) and declare the total Class 1A National Insurance contributions due unless all benefits have been payrolled.

Payment of Class 1A National Insurance is required by 22 July 2026 (or 19 July if paying by cheque). Where an employer operates a PAYE Settlement Agreement, any tax and Class 1B National Insurance must be paid by 22 October 2026 (or 19 October if paying by cheque). Employers who choose to payroll benefits must account for tax and Class 1 National Insurance through the monthly payroll process during the year.

Employers are required to maintain adequate records to support the reporting of all expenses and benefits, including valuation calculations and supporting documentation. Certain exemptions and dispensations may apply in limited circumstances, reducing reporting requirements.

Late submission of form P11D(b) attracts penalties of £100 per 50 employees for each month or part month of delay. Additional penalties and interest may also arise where payments to HMRC are made late.

Source:HM Revenue & Customs | 13-04-2026