Terry Harris

Suing whistleblowers for a breach of confidence is not a viable strategy

Jan 7, 2026 by Terry Harris 0 Comments

The Court of Appeal has ruled that the initiation of legal or arbitral proceedings by an employer against a ‘whistleblower’ who has made a protected disclosure constitutes an actionable detriment under the Employment Rights Act (ERA) 1996, effectively overriding the defence of Judicial Proceedings Immunity, or JPI.

In November 2021, the claimant, initiated Employment Tribunal proceedings against his former employer for post-employment detriment as a consequence of whistleblowing. The claimant, who had worked at his employers’ London residence until his resignation in 2019, alleged that he made protected disclosures regarding instances of verbal and physical abuse by his employer directed at members of staff.

The respondent’s defence was that the claimant had made the allegations for financial gain rather than for altruistic reasons, had breached a confidentiality and independent consulting agreement under ICC Rules, and was effectively running an “extortion scheme” by making “false claims”.

The Court allowed the appeal based on the protection of whistleblowers by the ERA 1996, concluding that this statutory protection overrides the common law doctrine of JPI. In the Court’s view, allowing an employer to use litigation as a shield against a whistleblowing claim would render the legislation meaningless, as Section 47B(1) of the ERA provides a right not to be subjected to “any detriment by any act” by an employer for making a protected disclosure, including any perceived breach of confidence, as such a mechanism would effectively enable employers to escape liability by suing whistleblowers. Moreover, under Section 43J of the ERA, any confidentiality agreement that precludes a protected disclosure is deemed to be void.

Thus, the initiation of legal or arbitral proceedings by an employer against a worker, when executed on the ground of a protected disclosure, is actionable as a detriment under Section 47B of the ERA. This ruling effectively prevents employers from using litigation as a de facto penalty or “punitive tool” to harass or financially pressure a whistleblower. The Court has now established that this protection is not limited to threats, but also extends to the act of commencing proceedings. Employers should note that they cannot simply bypass Section 43J by enforcing a confidentiality clause through arbitration proceedings.

Source:Other | 06-01-2026

General

Saving to pay tax

Jan 5, 2026 by Terry Harris 0 Comments

For many individuals and business owners, paying tax is one of the largest regular financial commitments they face. Yet tax bills often arrive as a shock, not because the amounts are unexpected, but because the funds have not been set aside in advance. Developing a disciplined approach to saving for tax can remove stress, protect cash flow and support better financial decision making.

The starting point is understanding when tax is due and how much is likely to be payable. For employees taxed through PAYE, liabilities are largely settled automatically. For the self-employed, company directors, landlords and investors, tax is often paid later, sometimes many months after the income is earned. This delay can create a false sense of affordability, leading to funds being spent rather than reserved.

A practical approach is to treat tax as a non-negotiable cost, similar to rent or wages. As income is received, a proportion should be transferred immediately into a separate savings account earmarked for tax. This creates a clear boundary between available funds and money that belongs to HMRC. For those with variable income, setting aside a conservative percentage can help ensure there is enough saved even if profits increase unexpectedly.

Using a dedicated tax savings account can be particularly effective. Keeping tax funds separate reduces the temptation to dip into them for day to day spending. Some people choose instant access accounts for flexibility, while others prefer notice or fixed term accounts if they are confident about timing and amounts. The aim is not high returns, but certainty and accessibility when payment deadlines arrive.

Regular reviews are also important. Changes in income, tax rates, or personal circumstances can affect how much needs to be saved. Reviewing figures quarterly or alongside management accounts allows adjustments to be made before problems arise. This is especially relevant where payments on account apply, as these can significantly increase cash outflows in certain months.

Saving for tax is not just about avoiding penalties or interest. It supports better planning and peace of mind. When tax funds are already in place, decisions about investment, expansion, or personal spending can be made with greater confidence. It also reduces reliance on short term borrowing or time to pay arrangements.

In simple terms, saving for tax turns a reactive problem into a controlled process. By planning ahead and treating tax as a priority, individuals and businesses can smooth cash flow, reduce anxiety and stay firmly in control of their financial position.

If you are considering an asset purchase and are unsure which funding route is most appropriate, we can help you review the options and assess the impact on your business. A short discussion at the planning stage can often lead to a more efficient and sustainable outcome.

Source:Other | 04-01-2026

Business Support

Learning from mistakes in business

Jan 5, 2026 by Terry Harris 0 Comments

Making mistakes in business is unavoidable. No matter how experienced or careful someone is, decisions are made with imperfect information, time pressure and changing conditions. What separates resilient businesses from those that struggle is not the absence of mistakes, but the ability to learn from them and adapt.

The first step is recognising mistakes early. Small issues often provide warning signs before they develop into serious problems. A missed deadline, a dissatisfied client, or a project that runs over budget all contain useful information. Ignoring these signals, or explaining them away, usually makes matters worse. Acknowledging what has gone wrong allows corrective action while the impact is still manageable.

Once a mistake is identified, reflection becomes essential. This involves stepping back from the immediate emotional response and focusing on the underlying causes. Was the decision based on incomplete data, unrealistic assumptions, or insufficient resources? In many cases, mistakes reveal weaknesses in systems rather than individual failings. Understanding this distinction helps avoid blame and encourages constructive analysis.

Mistakes often highlight flaws in processes. Repeated pricing errors may point to poor cost tracking or unrealistic margins. Ongoing issues with staff turnover might indicate unclear roles or weak communication rather than performance problems. Reviewing systems after a setback allows businesses to improve controls, refine workflows and reduce the likelihood of repetition.

Another key lesson is adaptability. Markets change, customer expectations evolve and strategies that once worked may no longer be effective. A failed product launch or marketing campaign can reveal valuable insights about customer behaviour that would not have been obvious beforehand. Businesses that treat these outcomes as feedback, rather than failure, are better placed to adjust and move forward.

Sharing lessons learned is also important. When mistakes are discussed openly, others can benefit from the experience without repeating it themselves. This helps create a culture of continuous improvement, where people feel able to raise concerns and suggest improvements.

Over time, learning from mistakes builds resilience and confidence. Each setback that is understood and addressed strengthens future decision making. In business, mistakes are not a sign of incompetence, they are evidence of action. The real risk lies not in making mistakes, but in failing to learn from them.

Source:Other | 04-01-2026

Income Tax

HMRC’s Time to Pay service

Jan 2, 2026 by Terry Harris 0 Comments

With the 31 January deadline approaching, thousands of taxpayers are using HMRC’s Time to Pay service to spread the cost of their self-assessment tax bill rather than facing immediate payment pressure.

HMRC has reported that thousands of people have set up payment plans to help spread the cost of their self-assessment tax bill. Taxpayers with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s ‘Time to Pay’ service. Almost 18,000 self-assessment payment plans were set up between 06 April 2025 and 30 November 2025. The deadline to file and pay any tax owed for the 2024-25 tax year is 31 January 2026.

If you owe tax to HMRC, you may be able to set up an online ‘Time to Pay’ payment plan depending on the type of tax debt and your circumstances. For self-assessment, you can create a payment plan online if you’ve filed your latest tax return, owe £30,000 or less, are within 60 days of the deadline and have no other debts or payment plans with HMRC.

A Time to Pay arrangement cannot be set up until a self-assessment return has been filed. If the tax owed is more than £30,000, or a longer repayment period is needed, people can still apply but will need to contact HMRC directly. HMRC will typically ask for details about your income, expenses, other tax liabilities, and any savings or assets, which they may expect you to use toward your debt.

HMRC will usually only offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full now but will be able to pay in the future. If HMRC do not think that more time will help, then they can require immediate payment of a tax bill and start enforcement action if payment is not forthcoming.

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

Employee Benefits

Avoiding the car fuel benefit charge

Jan 2, 2026 by Terry Harris 0 Comments

Employees with company cars may be paying unnecessary tax on private fuel, when reimbursing the cost of private fuel in full can often remove the car fuel benefit charge altogether.

Where an employee is provided with a company car and fuel for private use, the default position is that the employee must pay the car fuel benefit charge. The amount of the charge is calculated based on the car’s CO2 emissions and applied to the car fuel benefit multiplier, which is currently £28,200 and is set to increase to £29,200 for the 2026–27 tax year.

Avoiding the car fuel benefit charge is possible if the employee reimburses their employer for all fuel used for private journeys, a process known as ‘making good’. Private fuel includes all fuel used for commuting to and from work. To do this, employees should keep a record of private mileage and repay their employer using the published advisory fuel rates. These rates are designed to reflect average fuel costs and are updated quarterly.

If properly documented, HMRC will accept that no car fuel benefit charge is due, meaning the employee avoids the income tax liability on the private fuel. In most cases, reimbursing the employer is far cheaper than paying the tax, especially for employees with relatively low private mileage.

The car fuel benefit charge will still apply if it cannot be demonstrated to HMRC that the employee has reimbursed the full cost of fuel used for private journeys, including commuting. To prevent this, employees must maintain a detailed log of private mileage and ensure they make good the cost of all fuel provided for private use.

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

Capital Gains Tax

Nominating a property as your home

Jan 2, 2026 by Terry Harris 0 Comments

Owning more than one home can create valuable Capital Gains Tax planning opportunities, but only if you understand how and when to nominate a property for Private Residence Relief.

Typically, you do not have to pay Capital Gains Tax (CGT) when you sell a property that has been your main family home. In contrast, properties that have only been used as investments and never as a primary residence do not qualify for this exemption. This tax relief is known as Private Residence Relief (PRR).

It is increasingly common for taxpayers to own more than one home, and there are a number of important considerations for homeowners. An individual, married couple, or civil partnership can only benefit from PRR on one property at a time. However, it is possible to choose which property benefits from the CGT exemption when it is sold by making an election.

To nominate a property as your main home, you must write to HM Revenue and Customs (HMRC), specifying the full address of the home you want to nominate. All owners of the property must sign the letter. If your combination of homes changes, you must make a new nomination within two years of the change. You must also have lived in the house as your main or only residence at some point in the past.

Special rules apply for overseas properties and for non-UK residents. Since 6 April 2015, an overseas property can only be nominated if you lived in it for at least 90 days in the tax year. It is important to carefully consider the timing and frequency of making or changing an election to ensure maximum relief.

Even if you own more than one home, certain periods always qualify for relief. You are entitled to PRR for the last nine months before you sell your property, even if you were not living there at the time. Other qualifying periods may include the first two years of ownership if the property was being built or renovated, or if you could not sell your previous home, provided you lived in it as your only or main residence within two years of acquiring it.

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

Value Added Tax

VAT Annual Accounting – filing your return

Jan 2, 2026 by Terry Harris 0 Comments

For eligible businesses, the VAT Annual Accounting Scheme can reduce paperwork, smooth cash flow and replace quarterly returns with a single annual submission.

The VAT Annual Accounting Scheme is open to most businesses with a taxable turnover of up to £1.35 million per year. Businesses using the scheme are required to submit one VAT return per year, rather than quarterly returns. This can significantly reduce the administrative time and cost associated with preparing and filing your VAT returns.

The scheme also allows businesses to make regular interim payments throughout the year, which can help with cash flow management. Interim VAT payments are made during the year based on the business’s estimated total VAT liability for the accounting period.

Interim payments can be made either monthly or quarterly and are followed by a final balancing payment submitted with the annual VAT return. The regular payments are usually based on the previous year’s VAT liability, which means they may be higher than necessary if turnover has fallen.

Where payments are made monthly, they are typically calculated as 10% of the estimated annual VAT bill and are due at the end of months 4 through 12 of the VAT accounting period. Where payments are made quarterly, they are usually calculated as 25% of the estimated VAT liability and are due at the end of months 4, 7 and 10.

The final balancing payment for the annual VAT return is due within two months of the end of the standard 12-month VAT accounting period. If VAT has been overpaid based on the estimated amounts, HMRC will refund the difference. Payments must be made electronically.

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

Payroll

Payroll annual reporting obligations

Jan 2, 2026 by Terry Harris 0 Comments

As we move into the start of 2026, it is not that long until the current 2025–26 tax year comes to an end and there are a number of payroll annual reporting obligations that must be completed. This includes sending a final PAYE submission for the tax year. The final Full Payment Submission (FPS) needs to be submitted on or before your employees’ final payday for the 2025–26 tax year.

It is also important that employers remember to provide employees with a copy of their P60 form by 31 May 2026. A P60 must be given to all employees that are on the payroll on the last day of the tax year, 5 April 2026.

The P60 is a statement issued to employees after the end of each tax year that shows the amount of tax they have paid on their salary. Employers can provide the P60 form on paper or electronically. Employees should ensure they keep their P60s in a safe place as it is an important record of the amount of tax paid.

In addition, a P60 is required in order that an employee can prove how much tax they have paid on their salary, e.g.:

to claim back overpaid tax;
to apply for tax credits;
as proof of income if applying for a loan or a mortgage.

Employees who have left their employment during the tax year do not receive a P60 from their employer, as the same information will be on their P45.

The deadline for reporting any Class 1A National Insurance contributions and submitting P11D and P11D(b) forms to HMRC for the tax year ending 5 April 2026 is 6 July 2026.

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

Income Tax

Are you ready for Making Tax Digital for Income Tax?

Jan 2, 2026 by Terry Harris 0 Comments

Are you ready for Making Tax Digital for Income Tax (MTD for IT)? This new way of reporting will become mandatory in phases from April 2026. If you are self-employed or a landlord earning over £50,000, now is the time to prepare for digital record keeping, quarterly updates and the new penalty system that will apply under MTD for IT.

The date from which you must start using MTD for IT depends on your level of qualifying income. If your qualifying income exceeded £50,000 in the 2024–25 tax year, you will need to use MTD for IT from 6 April 2026. If your qualifying income exceeded £30,000 in the 2025–26 tax year, you will need to use MTD for IT from 6 April 2027. Where qualifying income exceeds £20,000 in the 2026–27 tax year, the government has confirmed that MTD for IT will apply from April 2028. Qualifying income is defined as the total income you receive in a tax year from self-employment and property before expenses.

You are currently exempt from MTD for IT if you meet specific conditions that automatically exempt you from the service, such as reasons relating to age, disability, or location, if you have applied for and been granted an exemption by HMRC, or if your qualifying income is £20,000 or less in a tax year.

HMRC’s guidance on MTD for IT has been updated and now includes further information on both permanent and temporary exemptions. It explains which exemptions apply automatically and which require an application. Permanent exemptions are generally automatic and continue to apply unless your circumstances change. You will need to apply for an exemption if you believe you are digitally excluded from using MTD for IT. If you are not required to use MTD for IT, you must continue to report your income and gains through the self-assessment tax return where applicable.

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

General

Bank of England delivers narrow vote rate cut

Jan 2, 2026 by Terry Harris 0 Comments

The Bank of England’s Monetary Policy Committee (MPC) last met on 18 December and, in a narrow 5–4 vote, decided to reduce the interest rate by 25 basis points, bringing it down to 3.75%. All four dissenting members voted to keep the rate at 4%. This marks the sixth interest rate reduction since August 2024.

Inflation continues to fall, with the latest figure at 3.2%. While this remains above the 2% target, inflation is now expected to return towards target more quickly in the near term. The Bank of England’s next meeting to consider interest rates is scheduled for 5 February 2026.

Following the interest rate cut, the late payment interest rate applied to the main taxes and duties on which HMRC charges interest will decrease from 8% to 7.75%. This change took effect on 29 December 2025 for quarterly instalment payments and will take effect on 9 January 2026 for non-quarterly instalment payments.

In addition, the repayment interest rate paid by HMRC on main taxes and duties will fall by 0.25 percentage points, from 3% to 2.75%, from 9 January 2026. The repayment rate is calculated as the Bank Rate minus 1%, subject to a minimum of 0.5%.

Source:Other | 01-01-2026

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