All posts by Terry Harris

National Insurance

Filling in NIC contribution gaps

Feb 26, 2026 by Terry Harris 0 Comments

National Insurance credits can help qualifying applicants to fill contribution gaps in their National Insurance record. This can help taxpayers increase their number of qualifying National Insurance years, which may increase the number of benefits they are entitled to, such as the State Pension.

This could happen if someone was:

  • employed but had low earnings
  • unemployed and were not claiming benefits
  • getting National Insurance credits for less than a full tax year
  • self-employed but did not pay contributions because of small profits
  • living or working outside the UK.

National Insurance credits are available in certain situations where people are not working and therefore, not paying National Insurance contributions. For example, credits may be available to those looking for work, who are ill, disabled or on sick pay, on maternity or paternity leave, caring for someone or on jury service.

Depending on the circumstances, National Insurance credits may be applied automatically or an application for credits may be required. There are two types of National Insurance credits available, either Class 1 or Class 3. Class 3 credits count towards the State Pension and certain bereavement benefits whilst Class 1 covers these as well as other benefits such as Jobseeker’s Allowance.

Taxpayers may also be able to pay voluntary Class 2 or Class 3 National Insurance contributions to protect their entitlement to the State Pension (and in some cases other benefits) if they meet the eligibility requirements. You can only pay voluntary National Insurance contributions to fill gaps for the previous six tax years. The deadline to make payment is 5 April each year. For example, you have until 5 April 2031 to pay voluntary contributions to make up a gap for the 2024-25 tax year.

Source:HM Revenue & Customs | 23-02-2026
Income Tax

How to claim child benefits

Feb 26, 2026 by Terry Harris 0 Comments

An application to claim child benefits can usually be made 48 hours after you have registered the birth of your child, or once a child comes to live with you. An application for child benefit can be backdated for up to 3 months. 

An application for child benefit is usually made online either using the government gateway. If you are unable to complete a claim online, it is also possible to claim child benefit by completing the Child Benefit form CH2 and sending it to the Child Benefit Office. The address is on the form. If a claim is being made for more than 2 children, complete the additional child CH2(CS) form and send it with your CH2. It is also possible to contact HMRC to make a claim by phone if the online or postal routes are not available. Making an application through the government gateway will usually be the fastest way to make a claim.

Child benefit is also usually payable for children who come to the UK. However, there are a number of rules which must be met in order to claim. HMRC must be notified without delay if a child receiving child benefit moves permanently abroad.

The child benefit rates for the only or eldest child in a family is currently £26.05 a week and the weekly rate for all other children is £17.25. These rates will increase to £27.05 and £17.90 respectively from April 2026.

Source:HM Revenue & Customs | 23-02-2026
Business Support

Creative businesses to benefit from government finance package

Feb 23, 2026 by Terry Harris 0 Comments

The government has announced a new package of measures designed to improve access to finance for creative businesses across the UK. The initiative aims to support firms operating in areas such as film, television, music, design, publishing, gaming and digital media, many of which face unique challenges when seeking external funding. The package forms part of the wider Creative Industries Sector Plan and is intended to help businesses grow, innovate and attract long term investment.

A central element of the announcement is an expanded role for the British Business Bank in supporting creative enterprises. This includes targeted investment activity under its Industrial Strategy commitments, with funding directed towards specialist investors that understand the commercial potential of creative ventures. The intention is to increase the availability of early stage and growth capital for businesses whose value is often tied to intellectual property rather than physical assets.

Alongside direct investment, the government is exploring ways to make better use of financial guarantees to encourage lenders to support creative businesses. This includes looking at how intellectual property can be more effectively recognised within lending decisions, which could help unlock finance for businesses that have strong ideas and brands but limited tangible security.

To make the funding landscape easier to navigate, a new single access point for creative businesses is being developed. This will provide clearer guidance on finance options, support services and growth opportunities, backed by practical resources and real world case studies.

The creative industries already make a substantial contribution to the UK economy and continue to grow faster than many other sectors. By improving access to finance and reducing barriers to investment, this package is intended to help creative businesses realise their full potential and strengthen the UK’s position as a global creative hub.

Source:Other | 22-02-2026
Pension

Why inflation matters when funding pension funds

Feb 23, 2026 by Terry Harris 0 Comments

When planning pension funding, inflation is often acknowledged but not always fully reflected in contribution decisions. Using an average inflation rate of around 5% over recent years helps to illustrate why this matters so much. Even when inflation appears to be easing in the short term, its long-term effect on retirement income can be significant.

Inflation erodes purchasing power. A pension pot that looks comfortable today may buy far less in real terms by the time retirement arrives. At an average inflation rate of 5%, prices double roughly every fourteen years. This means that someone planning to retire in twenty years’ time will need close to twice the income they might intuitively expect, just to maintain the same standard of living. Ignoring inflation risks building a pension fund that appears adequate on paper but falls short in practice.

Inflation also affects investment returns. Pension growth is often discussed in nominal terms, but what really matters is real growth, that is growth after inflation. A fund growing at 6% per year sounds healthy, but if inflation is averaging 5%, the real increase in value is modest. This has implications for asset allocation, contribution levels and the balance between growth and lower risk investments as retirement approaches.

For those making regular contributions, inflation should influence both the starting level and how contributions increase over time. Flat contributions that are not reviewed regularly lose real value year by year. Linking contribution increases to inflation or at least reviewing them periodically in light of inflation trends, can make a material difference to the eventual outcome.

Finally, inflation uncertainty reinforces the importance of flexibility. Retirement may last twenty or thirty years, during which inflation will vary. Building in a margin of safety, through higher contributions or diversified investments, can help protect against prolonged periods of higher inflation.

Taking inflation seriously is not about pessimism. It is about realism. Factoring an average inflation rate of 5% into pension planning leads to better informed decisions and a greater chance that retirement income will meet expectations when it is most needed.

Source:Other | 22-02-2026
Pension

Workplace pensions

Feb 19, 2026 by Terry Harris 0 Comments

Automatic enrolment for workplace pensions has helped many employees to start making provision for their retirement with employers and government also contributing to make a larger pension pot.

The law states that employers must automatically enrol workers into a workplace pension if they are aged between 22 and State Pension Age, earns more than minimum earning threshold. The minimum threshold is currently £10,000 and will remain the same in 2026-27. The employee must also work in the UK and not already be a member of a qualifying work pension scheme. Employees can opt-out of joining the pension scheme if they wish.

Under the rules, employers are also required to offer their workers access to a workplace pension when a change in their age or earnings makes them eligible. This must be done within 6 weeks of the day they meet the criteria.

Under the automatic enrolment rules the employer and the government also add money into the pension scheme. There are minimum contributions that must be made by employers and employees.

Both the employer and employee need to contribute. There is a minimum employer contribution of 3% and employee contribution of 4%. This means that contributions in total will be a minimum of 8%: 3% from the employer, 4% from the employee and an additional 1% tax relief. For example, if you pay £40, your employer adds £30, and you receive £10 in tax relief, a total of £80 goes into your pension.

In most automatic enrolment schemes, employees make contributions based on their total earnings between £6,240 (the lower qualifying earnings limit) and £50,270 (the upper qualifying earnings limit) a year before tax. This means that for many employees the 8% contribution rate will not be based on their full salary.

Source:Department for Work & Pensions | 15-02-2026
Business

Simplified expenses on motor vehicles

Feb 19, 2026 by Terry Harris 0 Comments

There are simplified expenses arrangements available for sole traders and business partnerships (with no corporate partner) that allow the use of fixed mileage rates instead of working out the actual costs of buying and running a vehicle (such as fuel, insurance, servicing and repairs). This simplified method is optional, but if you choose to use it for a specific vehicle, you must continue to use it for that vehicle for as long as it is used for business purposes. The simplified expenses regime is not available to limited companies or partnerships involving a corporate partner.

Under simplified expenses, the following flat rates per business mile are available for vehicle costs that are wholly and exclusively for business use:

Vehicle type

Flat rate per mile

Cars and goods vehicles – first 10,000 miles

45p

Cars and goods vehicles – after 10,000 miles

25p

Motorcycles

24p

The number of people in the vehicle does not affect the rates above. The rates are only available for journeys, or any identifiable part or proportion of a journey, that are wholly and exclusively for business purposes. For example, travel from home to work is not a qualifying journey.

The self-employed can continue to claim for other costs not covered by the flat rate for mileage such as parking, tolls, and congestion fees as well as other separate travel expenses such as train journeys.

Source:HM Revenue & Customs | 15-02-2026
Capital allowances

Claiming the Annual Investment Allowance

Feb 19, 2026 by Terry Harris 0 Comments

The Annual Investment Allowance (AIA) is a generous tax relief that allows for the total amount of qualifying expenditure on plant and machinery to be deducted from pre-tax profits. The maximum amount that can be claimed for the AIA is limited to a £1 million annual cap on qualifying purchases.

The AIA can be claimed by an individual, partnership or company carrying on a trade, profession or vocation, a UK non-residential property business or a furnished holiday let. Only partnerships or trusts with a mixture of individuals and companies in the business structure are unable to qualify for AIA.

The AIA is available for most assets purchased by a business, such as machines and tools, vans, lorries, diggers, office equipment, building fixtures and computers. The AIA does not apply to business cars, items you owned for another reason before you started using them in your business or items given to you or your business.

A claim for AIA must be made in the period the item was bought. This date is defined as the date when a contract was signed, if payment is due within 4 months of the contract being signed. If not, the actual payment date if it is due more than 4 months later.

Source:HM Revenue & Customs | 15-02-2026
Income Tax

Who needs to file a self-assessment tax return

Feb 19, 2026 by Terry Harris 0 Comments

There are several reasons why you might need to file a self-assessment tax return. This could apply if you are self-employed, a company director, have an annual income over £150,000, or receive income from savings, investments or property.

You must file a self-assessment tax return if any of the following apply to you during the tax year:

  • You were self-employed as a sole trader and earned more than £1,000 (before expenses).
  • You were a partner in a business partnership.
  • Your total taxable income exceeded £150,000 in the 2025–26 tax year. However, even if your income is below £150,000, other factors (such as rental income or capital gains) may still mean you need to file a self-assessment return.
  • You had to pay Capital Gains Tax on the sale or disposal of assets.
  • You were liable for the High Income Child Benefit Charge.
  • You had other sources of untaxed income, such as:
    o Rental income from property
    o Tips or commission
    o Savings and investment income (including dividends)
    o Foreign income

If you are filing a self-assessment return for the first time, you must notify HMRC by 5 October following the end of the tax year. For the 2025–26 tax year (ending 5 April 2026), this means the registration deadline is 5 October 2026.

HMRC provides a helpful online tool to check whether you need to submit a self-assessment return: www.gov.uk/check-if-you-need-tax-return.

Source:HM Revenue & Customs | 15-02-2026
Income Tax

HMRC reminder for self-employed and landlords

Feb 19, 2026 by Terry Harris 0 Comments

If you have not yet checked whether you need to use Making Tax Digital (MTD) for Income Tax, you should do so urgently. HMRC has issued a timely reminder that for many self-employed and landlords the way to report tax to HMRC will change significantly from 6 April 2026.

MTD for Income Tax is a significant move away from the traditional annual self-assessment process towards a more digital and frequent approach, requiring taxpayers to manage records and submit updates through recognised software. The new system is being gradually rolled out over the coming years.

More than 860,000 sole traders and landlords earning over £50,000 from self-employment or property need to start using digital reporting from April 2026. MTD for Income Tax requires users to keep digital records and send quarterly updates of income and expenses. These updates are not additional tax returns and are created by recognised and approved software providers. A full tax return will still be required by the following 31 January after the tax year, i.e., the first MTD tax return, covering the 2026-27 tax year, will be due by 31 January 2028.

HMRC’s Director of Making Tax Digital, said:

‘With two months to go until MTD for Income Tax launches, now is the time to act. A range of software is available, and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully.

This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.

Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.’

Taxpayers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates for the first 12 months, giving time to adjust. There are also exemptions available for those who genuinely cannot use digital tools.

We would be happy to help if you need assistance getting started with MTD for Income Tax.

Source:HM Revenue & Customs | 15-02-2026
Income Tax

Check how to claim a tax refund

Feb 19, 2026 by Terry Harris 0 Comments

If you believe that you have overpaid tax to HMRC, you may be entitled to claim a tax refund. Overpayments can occur for a variety of reasons, including changes to employment, incorrect tax codes or unclaimed allowances. The process for making a claim will depend on whether you submit a self-assessment tax return and how long ago the tax was overpaid.

According to HMRC, you may be able to claim a refund if you have paid too much tax on:

  • pay from a job
  • job expenses such as working from home, fuel, work clothing or tools
  • a pension
  • a self-assessment tax return
  • a redundancy payment
  • UK income if you live abroad
  • interest from savings or payment protection insurance (PPI)
  • income from a life or pension annuity
  • foreign income
  • UK income earned before leaving the UK

HMRC provides an online tool to help individuals check their eligibility and make a claim for a tax refund. This can be accessed at https://www.gov.uk/claim-tax-refund/y.

Claims can usually be backdated for up to four years after the end of the tax year. This means that claims still be made for tax refunds dating back as far as the 2021-22 tax year which ended on 5 April 2022. The deadline for making claims for the 2021-22 tax year is 5 April 2026. It is important to ensure that all information provided is accurate and that claims are made within the required time limits.

Source:HM Revenue & Customs | 15-02-2026