Terry Harris

Income Tax

Struggling to meet tax payments this month?

Jan 22, 2026 by Terry Harris 0 Comments

With the balancing payment and first payment on account both due on 31 January 2026, it is worth checking your options early if funds are tight.

The final balancing payment for the 2024–25 tax year is due by 31 January 2026, which is also the deadline for filing your self-assessment tax return. This payment will settle any remaining tax owed for the year after taking account of payments on account already made.

In addition to the balancing payment, many self-assessment taxpayers will also have a first payment on account for the 2025–26 tax year due on the same date, which can make January a particularly challenging month for cash flow.

If you are struggling to meet the tax payments due by 31 January 2026 deadline, it is important to take action early, as there are options available to help manage the payment.

Taxpayers with self-assessment liabilities of up to £30,000 can use HMRC’s online Time to Pay (TTP) service to set up instalment payments. This can be done without speaking directly to an HMRC adviser and is available up to 60 days after the payment deadline.

To use the online Time to Pay service, you must:

Have no outstanding tax returns
Have no other unpaid tax debts
Have no existing HMRC payment plans

If you do not meet these criteria, it may still be possible to agree a bespoke Time to Pay arrangement by contacting HMRC directly. These arrangements are assessed on a case-by-case basis and are usually based on your personal or business financial position.

HMRC will generally agree to extended payment terms where they believe the tax can be paid in full over time. However, if HMRC considers that delaying payment will not resolve the issue, they may seek immediate payment and can take enforcement action if the debt remains unpaid.

If you anticipate difficulty in paying your January 2026 tax bill, please do not ignore the problem. Please let us know and we can help you understand what options are available to you.

Source:HM Revenue & Customs | 19-01-2026

Income Tax

Basis period reform – spreading rules for payment

Jan 22, 2026 by Terry Harris 0 Comments

If your business has transitional profits from basis period reform, spreading over five years may reduce the cash flow impact, but it is important to understand the deadlines.

The self-employed basis period reform has changed the way trading income is allocated to tax years. Under these reforms, the basis of assessment moved from a current year basis to a tax year basis.

As a result, all sole traders and partnership businesses are now required to report their profits on a tax year basis. This change fully came into effect from the self-assessment return due by 31 January 2025, covering the 2023–24 tax year.

Under the old rules, businesses could have overlapping basis periods. This sometimes resulted in profits being taxed twice, with corresponding overlap relief usually given when the business ceased. The move to a tax year basis removed the basis period rules and prevented the creation of any new overlap relief.

The spreading rules for the payment of transitional profits are still available. By default, transition profits are spread evenly over five tax years, from 2023–24 to 2027–28, helping to ease cash-flow pressures. Taxpayers can also elect to accelerate the taxation of transition profits if they wish, but spreading continues to apply automatically unless an election is made.

If your business ceases on or before 5 April 2027, any transition profit remaining after overlap relief that has not yet been taxed must be brought into charge in the final year of trading.

Source:HM Revenue & Customs | 19-01-2026

General

What factors affect a person’s credit rating?

Jan 19, 2026 by Terry Harris 0 Comments

A person’s credit rating (often referred to as a credit score) is a measure used by lenders to assess how reliably someone manages borrowing and financial commitments. It can affect whether credit is offered at all, the interest rate charged and even the size of deposit required for certain products. Although each lender uses its own scoring system, most look at similar underlying factors.

One of the biggest influences is payment history. Missing payments on credit cards, loans, overdrafts, mobile phone contracts or buy now pay later agreements can have a negative impact. Even one late payment can reduce a score, while repeated late payments suggest ongoing financial pressure.

The level of borrowing also matters. Lenders consider overall debt, how much available credit is being used and whether borrowing is increasing over time. For example, using most of a credit card limit may indicate higher risk, even if payments are made on time.

A person’s credit history length can also affect their rating. Someone with a longer track record of managing credit sensibly often scores better than someone with little or no borrowing history, even if they are financially secure.

Frequent applications for credit can reduce a score in the short term. Multiple searches in a short period may suggest financial difficulty or over reliance on borrowing.

Another key factor is the stability of personal details. Being registered on the electoral roll at the current address can improve a credit profile, as it helps lenders verify identity. Regularly moving home or having inconsistent address records, can make a person appear higher risk.

Errors can also play a part. Incorrect information, financial links to another person (such as a former partner) or outdated details can damage a credit rating unfairly, so it is worth checking a credit report from time to time.

Finally, it is important to remember that credit scoring is not just about debt, it is about behaviour. A steady pattern of borrowing, prompt repayments and tidy records generally leads to a stronger credit rating over time.

Source:Other | 18-01-2026

Business Support

What banks look at when a small business applies for a loan

Jan 19, 2026 by Terry Harris 0 Comments

When a small business applies for a bank loan, the bank is mainly trying to answer one question, “How likely is it that we will be repaid, on time and in full?” To reach that decision, they will review a mix of financial evidence, trading performance and the overall risk profile of the business.

A key factor is affordability. Banks will look at recent accounts, tax returns (where relevant) and up to date management figures to see whether profits and cash flow can comfortably cover the proposed repayments. They will often request bank statements to understand day to day cash movement, whether income is stable and whether the business regularly runs tight on cash or relies heavily on an overdraft.

They will also assess the quality of the borrower. This includes the business credit record, payment history and any missed payments or County Court Judgements. In many cases the personal credit history of the directors or business owners will be reviewed as well, particularly for smaller companies or newer businesses.

Security is another important area. For secured lending the bank will consider what assets are available, such as property, vehicles, equipment or investments and the likely value if sold. For unsecured borrowing, banks may request a personal guarantee, which gives them extra protection if the business cannot repay.

Banks will also look closely at what the loan is for. Funding that supports growth, improves productivity or helps smooth short term cash flow tends to be viewed more positively than borrowing that simply plugs ongoing losses. A clear plan, realistic forecasts and evidence of customer demand can strengthen an application.

Finally, the bank may assess the wider trading outlook, sector risk and how dependent the business is on a small number of clients or suppliers. The stronger and more consistent the business looks, the better the chances of approval.

Source:Other | 18-01-2026

Tax Diary

Tax Diary February/March 2026

Jan 16, 2026 by Terry Harris 0 Comments

1 February 2026 – Due date for Corporation Tax payable for the year ended 30 April 2025.

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

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

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

1 March 2026 – Due date for Corporation Tax due for the year ended 31 May 2025.

2 March 2026 – Self-Assessment tax for 2024-25 paid after this date will incur a 5% surcharge unless liabilities are cleared by 1 April 2026, or an agreement has been reached with HMRC under their time to pay facility by the same date.

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

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

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

Source:HM Revenue & Customs | 15-01-2026

Corporate Governance & Regulation

Company information in the public domain

Jan 15, 2026 by Terry Harris 0 Comments

Did you know you can monitor any UK company for free and get email alerts when key details change, which can help protect your own business from unexpected or unauthorised filings?

A significant amount of information about companies is available in the public domain from Companies House. Companies House is responsible for incorporating and dissolving limited companies, examining and maintaining statutory records, and making company information publicly accessible.

Much of this information is available free of charge, in line with the government’s commitment to open data. As a result, all publicly available digital information held on the UK register of companies can be accessed without cost.

The information available includes core company details such as the registered address and date of incorporation, details of current and resigned directors and officers, copies of documents filed with Companies House, mortgage and charge information, previous company names and insolvency records.

In addition, you can choose to monitor a company and receive email alerts whenever new documents are filed, such as changes to directors or registered office addresses. This can also be a useful safeguard for your own company, helping you to identify any unexpected or unauthorised filings at an early stage.

Source:Companies House | 12-01-2026

Business

Pre-trading expenditure for companies

Jan 15, 2026 by Terry Harris 0 Comments

Starting a new business can be expensive, but many of your pre-trading costs may qualify for tax relief if they meet the right conditions.

There are special tax reliefs for pre-trading expenses that are incurred before a business starts trading. This could include expenses that are required to help a business prepare for trading such as buying stock and equipment, renting premises, getting insurance and initial advertising expenditure.

A deduction may be allowed where the following conditions are met:

The expenditure is incurred within a period of seven years before the date the trade, profession or vocation commenced, and
the expenditure is not otherwise allowable as a deduction in computing the profits of the trade, profession or vocation but would have been so allowable if incurred after the trade had commenced.

To be allowable, the pre-trading expenditure must be incurred wholly and exclusively for the purposes of the relief. To be clear, this means that no relief would be allowed where pre-trading expenses would not have been tax deductible if they had been incurred when the business was trading. The business should keep accurate records relating to pre-trading expenditure to be able to demonstrate that the expenses are qualifying.

The qualifying pre-trading expenditure is treated as incurred on the day on which the trade, profession or vocation is first carried on.

Capital expenditure does not qualify for this relief but there are other special provisions for capital allowances.

Source:HM Revenue & Customs | 12-01-2026

Business

Expenses for the self-employed

Jan 15, 2026 by Terry Harris 0 Comments

If you are self-employed, knowing which everyday costs you can legitimately claim can make a real difference to how much tax you end up paying.

The question of which costs you can claim against your self-employed business is a common one. If you are self-employed it is important to be aware if an expense is allowable or not. Any allowable costs can be used to reduce your taxable profit.

HMRC lists the following office expenses as being allowable:

office costs, for example stationery or phone bills
travel costs, for example fuel, parking, train or bus fares
clothing expenses, for example uniforms
staff costs, for example salaries or subcontractor costs
things you buy to sell on, for example stock or raw materials
financial costs, for example insurance or bank charges
costs of your business premises, for example heating, lighting, business rates
advertising or marketing, for example website costs
training courses related to your business, for example refresher courses

If you work from home, you may also be able to claim a proportion of your costs for things including heating, electricity, Council Tax, mortgage interest or rent and internet and telephone use. You will need to adopt a fair and reasonable approach to apportioning your costs, such as by reference to the number of rooms used for business purposes or the proportion of time you work from home.

Source:HM Revenue & Customs | 12-01-2026

Corporation Tax

Creative Industry Corporation Tax reliefs

Jan 15, 2026 by Terry Harris 0 Comments

If your business works in film, TV, games or the arts, Creative Industry Tax Reliefs could reduce your Corporation Tax bill and may even generate a payable tax credit.

Creative Industry Tax Reliefs (CITR) are a range of UK Corporation Tax reliefs designed to support companies operating in the creative sector. The reliefs allow qualifying companies to increase the amount of allowable expenditure when calculating their taxable profits, thereby reducing the Corporation Tax they are required to pay. Where a company is loss-making, it may be possible to surrender those losses in exchange for a payable tax credit.

CITR covers a wide variety of creative activities. Reliefs are available for film, animation, high-end television, children’s television and video game production, as well as for theatre, orchestra performances, and museums and galleries exhibitions. More recently, the Audio-Visual Expenditure Credit and the Video Games Expenditure Credit have been introduced, offering an alternative credit-based system for eligible productions.

To qualify for CITR, films, television programmes and video games must meet specific cultural criteria. This is usually achieved by passing a formal ‘cultural test’, which assesses various factors such as content, setting and the nationality of key personnel. Alternatively, a production may qualify through an internationally agreed co-production treaty. Meeting these requirements allows the production to be certified as a British film, British programme or British video game.

Certification is administered by the British Film Institute (BFI) on behalf of the Department for Culture, Media and Sport. The BFI can issue an interim certificate while production is ongoing, followed by a final certificate once the project has been completed. This certification is a key requirement for claiming the relevant tax reliefs.

Source:HM Revenue & Customs | 12-01-2026

General

What is the advance tax certainty service?

Jan 15, 2026 by Terry Harris 0 Comments

If your business is planning a major UK investment, HMRC’s new advance tax certainty service could give you binding clarity on the tax position before you commit.

HMRC has recently published draft guidance on the new advance tax certainty service as part of the government’s Corporate Tax Roadmap at the Autumn Budget 2024, where the Chancellor set out plans for a new HMRC service to give major investment projects clarity on how tax law will apply in advance. As part of the Autumn Budget 2025 measures last November, it was confirmed that the new service is expected to open in July 2026.

Under the new advance tax certainty service, businesses investing at least £1 billion in the UK over the lifetime of a project can apply for a formal, binding position from HMRC on how various taxes will be applied to their specific circumstances. This applies to taxes such as Corporation Tax, VAT, Stamp Taxes, PAYE and the Construction Industry Scheme.

Unlike existing clearance routes, the advance tax certainty service is designed specifically for large and complex projects where uncertainty over tax outcomes could otherwise discourage investment. HMRC clearances issued through this service will bind the tax authority for up to five years subject to full initial disclosure of all material facts. The clearance may then be renewed for a further five years unless a material change in the law, or a court decision that clarifies its application, means that the prior clearance is no longer correct.

This service is intended to provide those investing significant amounts in the UK, confidence that the tax treatment of a project will not later be challenged.

Source:HM Treasury | 12-01-2026

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