Rachel Reeves may have to raise UK taxes in October UK Chancellor Rachel Reeves outlined her economic plan in the Spring Budget statement, aiming to meet her own fiscal rules without introducing new tax measures—achieved through welfare and spending cuts. On the surface, this may seem like good news. However, analysts believe this is only temporary, and the Treasury is highly likely to introduce further tax hikes in the Autumn Budget in October. Paul Johnson, director of the Institute for Fiscal Studies think tank, stated, “Economic forecasts are very likely to worsen significantly before the October budget, which would mean further tax increases.” When asked about the possibility of further tax hikes in the autumn, UK Prime Minister Keir Starmer did not rule it out but said, “Clearly, I’m not going to commit to the content of future budgets now—no Prime Minister or Chancellor in any government has ever done that,” he told reporters.  “But if you look at the content and intent of both the Autumn Budget and the Spring Budget statement, you will see that when it comes to the decisions we must make, we have not blindly opted for tax increases. I think that demonstrates our approach.” Labour had pledged in its election manifesto not to increase taxes for “working people,” including National Insurance, income tax, and VAT. However, in last year’s Autumn Budget, the government raised employer National Insurance contributions, arguing that tax hikes were necessary to fill the “black hole” in public finances and invest in the NHS and other public services. Meanwhile, global trade tensions could further challenge Labour’s fiscal plans—Donald Trump has announced a 25% tariff on all steel and aluminum exports to the US, with additional tariffs taking effect from April 2. The UK is currently engaged in “intensive negotiations” with the US to reach a deal that avoids these tariffs. In a TV interview last week, when asked whether further tax hikes or spending cuts would be needed in October if economic conditions worsened, Chancellor Reeves acknowledged that “risks always exist” but also pointed to “opportunities” for economic growth, particularly through housing construction and planning system reforms. The UK’s independent fiscal watchdog, the Office for Budget Responsibility (OBR), has downgraded its forecast for economic growth this year from 2% (as predicted in October) to just 1%. However, the OBR expects growth to exceed previous forecasts in subsequent years, partly due to an increase in housing construction. Read more... UK may scrap digital services tax in exchange for US tariff exemption According to British media reports, Cabinet members, including the Chancellor of the Exchequer and the Business Secretary, have suggested that the UK may consider scrapping the 2% digital services tax (DST) on US tech giants such as Facebook, Google, and Amazon. This move is being considered as a bargaining chip in negotiations with Donald Trump to secure an agreement that would prevent tariffs. Earlier, Trump imposed a 25% tariff on all steel and aluminum imports to the US and signed another executive order last week targeting the automotive sector, imposing a 25% tariff on imported cars and auto parts. The digital services tax was introduced in April 2020 by the former Conservative government. It applies a 2% levy on revenues generated in the UK by companies with global revenues exceeding £500 million. A recent report by the UK’s National Audit Office (NAO) revealed that in its first year, the DST raised nearly £360 million from US tech giants, including Amazon, Google, and Apple—30% more than forecasted in 2021. Projections suggest that the tax will generate approximately £800 million for the UK government in the 2024-2025 fiscal year. Clive Lewis, Labour MP for Norwich South, argued that any potential changes to the tax would be "a complete dereliction of duty." Another Labour MP stated, “At a time of economic difficulty, we should maximize revenue from the digital services tax rather than attempting to reduce it.” However, some experts believe that scrapping the tax could ultimately be beneficial if it leads to the US exempting the UK from its tariff policies or securing other favorable trade agreements. So far, ministers have not committed to changing the tax but have left the door open as part of broader trade negotiations with the US. Last week, Chancellor Rachel Reeves also indicated that she would not rule out modifying the DST in exchange for tariff exemptions from the US. She told the BBC: “We need to strike a balance. These discussions are ongoing, and we want to make progress without subjecting UK exporters to higher tariffs.” UK Business Secretary Jonathan Reynolds echoed this sentiment, stating, “This tax was never meant to be permanent.” He noted that the DST was introduced as a temporary measure by former Prime Minister Rishi Sunak due to concerns that multinational tech giants were shifting profits overseas instead of paying taxes in the UK. The UK originally planned to phase out the tax three years ago, but this has yet to be implemented. Read More... HMRC announces three new tax rules with millions of UK households warned UK Tax Authority (HMRC) Announces New Making Tax Digital (MTD) Rules for Millions of Households The UK’s tax authority, HMRC, has introduced three new income tax rules under the Making Tax Digital (MTD) initiative, affecting millions of landlords across the country. The first implementation date is set for April 2026: ●    From April 6, 2026: Landlords with an annual income (total revenue before deductions) exceeding £50,000 must register for an MTD account for income tax filing. ●    From April 6, 2027: Landlords with an annual turnover exceeding £30,000 will also be required to register for MTD. ●    From April 6, 2028: As confirmed in the Spring Budget, the third phase of the scheme will extend to landlords with an annual income of £20,000, following the government’s announcement in the Autumn Budget 2024. What is Making Tax Digital (MTD)? MTD is a tax digitization initiative introduced by the UK government to streamline tax processes, improve efficiency, reduce errors, and offer a more convenient experience for taxpayers. By introducing digital records and real-time tax reporting, the system aims to gradually replace traditional tax filing methods. How to Register for MTD? If you do not yet have an HMRC account, you need to register on the HMRC website first. After that: 1.    Log in to your Government Gateway account. 2.    Select "Register for MTD services". 3.    Follow the instructions and provide the necessary details, including your National Insurance Number (NI Number), VAT Registration Number (if applicable), and other required information. Once your registration is submitted, HMRC will send you a confirmation email, and you can start submitting digital tax returns using compatible software. Read More... For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

In early 2025, the AI company DeepSeek made breakthroughs and innovations in technology are quietly transforming the landscape of various industries, including cross-border e-commerce operations. Today, let’s discuss how ecommerce sellers can seize the opportunity offered by AI tools to grow their business.  US Increases Tariffs, Rejects Chinese Packages? On 1 February 2025, US President Donald Trump signed an executive order imposing a 25% tariff on imports from Canada and Mexico, and an additional 10% tariff on goods from China. At the same time, all goods exported from China to the US no longer enjoy the "de minimis" policy, which previously allowed packages valued under $800 to be exempt from duties and customs declarations (small-value exemption). In response, both Canada and Mexico stated that they are preparing to impose similar tariffs on US goods, while China has announced that it will take "necessary countermeasures to safeguard its legitimate rights and interests." Analysts believe that the implementation of these new bilateral tariffs could mark the beginning of a new era of global trade wars. Soon after, the US Postal Service (USPS) announced on the evening of 4 February that it would suspend accepting packages sent from mainland China and Hong Kong until further notice, without providing an explanation for the suspension's cause or duration. Although the suspension was later lifted that same evening, it caused concern in both domestic and international industries, particularly among cross-border e-commerce businesses reliant on package transportation. Sellers may consider diversifying their supply chains to other countries to avoid these costs, or sourcing from countries with lower tariffs or more favourable trade agreements. Facing the ever-changing international trade situation and tax regulations, this is undoubtedly a 'double-edged sword' containing both opportunities and challenges for e-commerce sellers. Embracing new technology and finding reliable, comprehensive professional teams will be key to improving competitiveness and seizing opportunities. AI - DeepSeek Emerges Since ChatGPT first sparked the ‘AI revolution’, this new technology has been changing our lives. On 27 January 2025, the AI model DeepSeek topped the free app download chart in the US App Store, surpassing ChatGPT.  As an advanced artificial intelligence tool, DeepSeek, like ChatGPT, is helping t change the game for many industries. For e-commerce, DeepSeek can help sellers enhance decision-making efficiency, reduce operational costs, and improve competitiveness by providing precise data analysis, intelligent recommendations, and risk warnings. Impact of DeepSeek on E-Commerce In this age of information explosion, mastering advanced technological tools and professional tax and accounting skills is key for cross-border sellers to break into global markets and seize opportunities. DeepSeek can help improve business services in the following ways: Improving Operational Efficiency DeepSeek can collect data in real-time from multiple sources (such as social media, e-commerce platforms, news websites, etc.) and analyse it using intelligent algorithms to help users understand market trends, consumer behaviour, and competitor dynamics. Based on this analysis, DeepSeek provides sellers with personalised product recommendations, marketing strategy optimisation suggestions, and more, helping to improve customer satisfaction and reduce costs. Driving Innovation DeepSeek’s open-source AI models allow businesses to customise tools for cross-border logistics, payment processing, and localisation, giving them a competitive edge. Its automation features help sellers reply to customer inquiries in different languages, automatically generate marketing content, and save time and human resources. Optimising Supply Chain Management DeepSeek helps sellers monitor various stages of the supply chain in real-time, from raw material procurement to logistics delivery, ensuring the efficient operation of the supply chain while reducing inventory costs and logistics risks. Risk Warning and Management DeepSeek provides monitoring of market changes and potential risks, such as exchange rate fluctuations and policy changes, helping sellers adjust strategies promptly to reduce business risks. Promoting Cross-Border Trade With DeepSeek's multi-language support and global data coverage, sellers can identify which products are most popular in specific markets, adjust their product lines and pricing strategies, and more easily enter new international markets, tailoring marketing strategies to meet the consumer needs and cultural differences of various countries and regions. Ensuring Compliance with TB Accountants Whether dealing with ever-changing tariff policies or the convenience brought by new technologies, professional expertise is required.  With over 16 years of experience in tax services and cross-border compliance, TB Accountants has helped global sellers navigate complex tax regulations, safeguarding your journey to greater wealth. As an ACA member and ACCA-accredited accounting firm, our headquarters in London, branches in Shenzhen and Xiamen, and global offices have served over 60,000 clients, and we are continuing to expand in the cross-border finance and taxation fields. We not only help you simplify complex VAT rules in various countries but can also provide VAT and tax registration and filing services, EPR registration, EU Responsible Person services, CE product testing and certification, trademark registration and more in over 20 countries, including the UK, EU, US, Japan, Australia, UAE, Canada, and Mexico. We also keep you updated on tax policies in different countries and regions, ensuring compliance. Whether it’s tax consultation, audit services, or cross-border e-commerce compliance and financial optimisation plans, we aim to be your long-term partner in business development. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

Shopping habits across the world have increasingly shifted from brick-and-mortar stores to online platforms, with consumers expanding their purchases from domestic to international markets. As global markets open up, the demand for online shopping continues to rise. In today’s thriving e-commerce industry, how can international sellers establish themselves on major platforms? What are the necessary requirements, and how can they gain a competitive edge? We’ll guide you through several of the world's leading e-commerce platforms to support your global trade ambitions. The Growth of the Global E-commerce Market In 2024, the global e-commerce market continues its expansion and is expected to reach USD 6.56 trillion by the end of 2025, reflecting a year-on-year growth of 7.8%. According to industry data from 2024, global e-commerce platforms such as Amazon, Temu, AliExpress, and eBay have shown varying growth trends over the past year, with changes in store requirements and product offerings across different countries. Amazon Despite challenges such as COVID-19, inflation, and the rise of social media commerce, Amazon has maintained steady growth. The platform is expanding its essential product sales and has launched a budget-friendly marketplace, Amazon Haul, to counter competition from low-cost rivals. The initial launch is in beta testing with selected sellers, and a large-scale rollout is expected later in 2025. General Requirements for Selling on Amazon Business Registration: Sellers must provide valid business registration documents Identity Verification: Sellers must provide proof of identity for the legal representative listed on the business licence, such as an ID card or passport Contact Information: Sellers must provide their full name, contact details, and a valid email address Product Information: A detailed description of all product categories, including product titles, descriptions, and relevant images Payment Method: Sellers must link a valid payment method for paying selling fees Previous E-commerce Experience: Providing store links from other e-commerce platforms can increase the chances of approval. UK Marketplace Requirements In addition to the general requirements, sellers looking to open a store on Amazon UK must consider the following: VAT Registration: Regardless of whether the company is established in the UK, all sellers on Amazon UK must provide a valid UK VAT number within 60 days and upload it to the seller platform KYC (Know Your Customer) Verification: In compliance with European regulatory requirements, Amazon conducts KYC checks on sellers operating in Europe, including the UK. Sellers must submit company details, contact information, primary contact details, and credit card information EU Marketplace Requirements VAT Compliance: Sellers must register for VAT in all relevant EU countries in order to activate regional Amazon marketplaces EU Responsible Person (RSP): Under the EU Product Safety Regulation (2019/1020), products bearing the CE marking must have an authorised representative within the EU. This responsible person’s contact details must be included on the product, packaging, or accompanying documents In 2024, the EU has further tightened regulations. This means that sellers trading in Member States which have introduced Extended Producer Responsibility (EPR) requirements must provide a valid EPR registration number.  Sellers who do not upload a number may be automatically charged under Amazon ‘Pay on Behalf’ (where supported), or their products may face removal from the platform. Additionally, the EU has increased scrutiny on low-cost products to ensure they meet safety standards. TikTok Shop In September 2023, the globally popular social media platform TikTok officially launched TikTok Shop, integrating shopping features within the app. This allows users to purchase products while watching short videos, providing sellers with direct access to global consumers. General Requirements for Global Selling on TikTok Shop Business Registration: Sellers must be legally registered corporate entities in their home country, as individuals cannot register as cross-border sellers Store Information: Sellers must provide accurate business details, including the company’s legal name, address, phone number, and email Bank Account Information: Sellers must provide valid banking details for transaction settlements VAT Registration: If VAT registration is required in the target market (e.g. the UK), sellers must provide a valid VAT number upon application Additional Documentation: Sellers may need to submit business registration certificates, credit card statements, bank statements, or utility bills to verify business information Legal Representative Verification: Sellers must submit proof of identity for the company’s legal representative and provide a photo of them holding their ID Invitation Code: An invitation code is required to register as a seller, which can be obtained from TikTok These requirements may vary depending on market-specific regulations, and sellers should prepare accordingly. UK Marketplace Requirements For TikTok Shop UK, sellers must adhere to the following: VAT Registration: As per UK tax regulations, sellers must register for VAT with HMRC and comply with VAT reporting and payment requirements Product Compliance: Products must meet UK safety and regulatory standards.  Electronics and electrical items must comply with CE or UKCA certification requirements UK Authorised Representative (UK AR): Since 15 October 2023, TikTok requires all electronic products sold in the UK to bear a UKCA (Or EU CE) label, otherwise they may be rejected EU Marketplace Requirements VAT Compliance: Sellers must register for VAT in relevant EU countries and submit returns accordingly EU Responsible Person (EURP): Under EU Regulation (EU) 2019/1020, certain products (e.g., electronics, electrical goods, toys) must have a designated responsible person within the EU for compliance matters. Since 15 October 2023, TikTok requires all electronic products sold in the EU to bear an authorised EU representative label, or they may be rejected Product Compliance: Products must meet EU safety standards and possess CE certification where applicable Increasing Regulatory Scrutiny in Global Markets In recent years, global regulatory frameworks for cross-border e-commerce have tightened, prompting TikTok Shop to update its policies: Southeast Asia: Countries such as Vietnam, Thailand, and Indonesia have imposed restrictions on cross-border platforms like TikTok Shop, Temu, and Shein. Measures include removing VAT exemptions and prohibiting the sale of low-value imported goods to protect local manufacturers and consumers EU: The EU is investigating whether products sold on cross-border e-commerce platforms meet regulatory requirements. Additionally, the EU is considering removing the tax exemption on imported goods valued under €150 to strengthen oversight of cross-border e-commerce As different regions impose varying restrictions and regulations on TikTok Shop’s permitted products, sellers should stay informed of changes in their target markets to ensure compliance. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

Hundreds of UK companies have been fined for submitting false information during registration According to The Guardian, the UK's Companies House, the government agency responsible for overseeing national company registration, has issued fines totaling hundreds of thousands of pounds to companies using false information during registration, after gaining new investigative powers. However, only £1,250 of these fines have actually been paid. These incidents expose serious loopholes in the UK's company registration system and have raised public and industry concerns about false registrations, fraud, and whether penalties can be strictly enforced. To improve the authenticity and transparency of company registration, Companies House earlier introduced new regulations, including requiring identity verification for company directors. The agency acknowledged that up to 20% of the 4.9 million companies registered in its database may have submitted false information. This includes cases where people registered companies using names like "Darth Vader" and "Santa Claus" as directors. Since last fall, the agency has gained the authority to impose financial penalties on companies violating regulations, such as failing to submit ownership information on time. However, sources revealed that since October 2024, Companies House has issued 234 fines totaling £58,500, but only £1,250 has been paid, accounting for about 2% of the total. This data, while revealing flaws in the company registration process, also highlights the challenges Companies House faces in enforcing action against false registration and commercial fraud. While the agency has been granted the authority to impose fines, the actual effectiveness still needs improvement. Justin Madders, Minister for Business and Trade, stated: "We will accelerate the collection of fines by the summer of 2025. For individuals who have not yet paid their fines, we will investigate and decide whether to refer them for debt collection and legal proceedings." Additionally, Companies House still has 20% of relevant positions vacant, which affects the implementation of certain measures. Liam Byrne, Chair of the Parliamentary Business Affairs Committee, emphasized: "Companies House is no longer just a registration agency; it has become the frontline in the fight against economic crime." He pointed out that some registered companies are being used to evade international sanctions and engage in money laundering activities, with "UK residents allegedly involved in assisting." Therefore, to truly achieve a transparent, efficient, and robust regulatory system, institutional reform alone is not enough; strong enforcement and sustained investment are also necessary. The Labour Party's spring budget statement also made it clear that funds and technology will be invested to combat tax evasion and other violations of tax laws. Read more... Donald Trump has imposed 10 per cent tariffs Last week, U.S. President Donald Trump signed an executive order at the White House for "reciprocal tariffs," aimed at imposing a 10% "minimum benchmark tariff" on U.S. trading partners. It is expected that higher tariffs will be imposed on certain trade partners starting April 9. A series of measures have directly raised the U.S. tariff level to its highest point in over a century. According to White House documents, 21 countries, including the UK and Australia, will face a 10% tariff, followed by 20% for the EU, 24% for Japan, 34% for China, 46% for Vietnam, and 49% for Cambodia. The only exceptions are Canada and Mexico—goods that meet the criteria under the USMCA (United States-Mexico-Canada Agreement) will remain tariff-free, although automobiles, steel, and aluminum have already been separately targeted. According to an earlier executive order signed by Trump, tariffs on all automobiles and automotive parts exported to the U.S. will be raised to 25%, and all imported computers (including laptops) will also be affected by the new tariffs. Although Trump unilaterally calls these new tariffs the "Declaration of Independence" for the U.S., the reality is that during his tariff announcement, the U.S. dollar sharply dropped against major currencies, U.S. stock futures plummeted, and tech giants like Apple, Tesla, and Nvidia lost trillions in market value. According to calculations by Yale University, with a 20% tariff, each American household will spend an additional $3,400 to $4,200 per year. Meanwhile, with the global economic situation unstable, Trump's "tariff bomb" is sure to further disrupt the market. In response to his challenge to the global trade system, the EU, Canada, and other countries have already stated they will take "reciprocal retaliation." Read More... Pressure grows on Government to allow London tourist tax The leading think tank Centre for London has warned in a new report that London's creative industries are facing a development crisis due to a 50% decrease in per capita spending on arts and culture by the London Assembly from 2010 to 2021. As a result, the Centre for London, along with numerous industry representatives, is pressuring London Mayor Sadiq Khan to allow the imposition of a tourist tax on overnight visitors to London in order to help invest in the city's arts and cultural sectors. A tourist tax, also known as a visitor tax, accommodation tax, or city tax, is an additional fee levied on visitors (especially overnight visitors) during their stay in certain countries or cities. It is typically calculated per person per night or as a percentage of the accommodation cost, collected by hotels or accommodation platforms and paid to local governments or relevant tourism authorities. The primary purpose of the tourist tax is to increase fiscal revenue to maintain city public services (such as attractions, street cleaning, public transport, etc.) and support cultural, environmental protection, and tourism promotion activities. So far, the UK has not implemented a nationwide "tourist tax" policy, but some local councils have started or plan to pilot such a tax. Since April 2023, Manchester has become the first city in the UK to officially impose a tourist tax, charging £1 per night per room, applicable only to hotels and short-term rentals in the city’s "city tourist zone." Edinburgh and Glasgow in Scotland are also planning to legislate for a tourist tax, charging £1-2 per night per visitor. Additionally, major European cities such as France, Italy, Spain, Germany, and Austria have their own methods and fees for collecting tourist taxes. Read More... For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

With a series of tax increases set to officially begin in April as part of the Labour Party's autumn budget, both personal living costs and employer costs will see significant rises. In the face of widespread opposition to these substantial tax hikes, the Labour government has repeatedly emphasised that the government is facing bankruptcy – the fiscal gap through tax increases and cuts.  However, according to the latest monthly data from the Office for National Statistics (ONS), the UK government posted a surplus of £15.4 billion in January, marking the highest level for that month since records began more than 30 years ago. So why is the UK government making these statements, despite a surplus of over £10 billion for the month? What impact does the national debt have on personal and corporate taxes, as well as the broader economic environment? How should we respond? Labour's Massive Tax Increases to Bridge a £22 Billion Deficit On 29th July 2024, the UK's new Chancellor of the Exchequer, Rachel Reeves, revealed the results of a fiscal review in the House of Commons, stating that the previous Conservative government had concealed the true state of public finances, leading to a £22 billion fiscal gap. To address this financial challenge, the Labour government announced in their first budget plan, released on 30th October 2024, that they would raise £40 billion through tax increases to ensure public service funding and fill the fiscal hole left by the previous government. The key measures include: Increasing employers' national insurance contributions: This is expected to raise £25 billion. Raising capital gains tax and inheritance tax: Aimed at making high-income earners pay more, these changes also affect wealthy foreign nationals residing in the UK. Overall, the Labour government plans to raise public spending by £70 billion annually through tax increases and additional borrowing, to support public services such as the National Health Service (NHS) and make significant investments in schools, hospitals, railways, and energy. Why Does the UK Government Need to Borrow Money? The main source of revenue for the UK government is taxation. For instance, workers pay income tax and national insurance, everyone pays VAT on certain goods, and businesses pay tax on their profits. In theory, the government could cover all expenses solely through taxation, but if tax revenues fall short, the government typically has three options: raise taxes, cut spending, or borrow money. Borrowed funds must ultimately be repaid, with interest. How Does the Government ‘Borrow’ Money? How Much Has It Borrowed? The UK government borrows money by issuing financial products—bonds. Bonds are a financial instrument that promises to repay funds in the future, with most requiring the borrower to pay interest regularly. UK government bonds are known as gilts and are generally considered extremely low-risk, with very little chance of default. These bonds are mainly purchased by financial institutions both in the UK and abroad, including pension funds, investment funds, banks, and insurance companies. The government issues both short-term and long-term bonds to borrow over different time periods, setting different interest rates. Meanwhile, the amount borrowed by the government fluctuates every month. Borrowing tends to be lower in January as many people pay a large portion of their annual taxes in one go, including: Income tax for the previous fiscal year through Self-Assessment by 31 January, alongside prepayment of part of the following year's tax (‘Payments on Account’). Large companies usually pay corporation tax quarterly, but some small and medium-sized businesses with a financial year ending on 31st December or 31st March will need to pay corporation tax for the previous year in January. Capital gains tax (CGT) on gains from the sale of assets such as stocks or property, which must be paid by 31st January. Some VAT payments are due in January, as certain businesses are required to pay VAT quarterly or annually. In the fiscal year from April 2024 to January 2025, the UK government borrowed a total of £118.2 billion, £11.6 billion more than the previous year. The total debt owed by the government is referred to as the national debt. Currently, the UK's national debt stands at around £2.8 trillion, roughly equivalent to the UK's annual Gross Domestic Product (GDP)—the total value of all goods and services produced in the country in one year. Despite the national debt being over twice the level it was during the 1980s and up to the 2008 financial crisis, the debt-to-GDP ratio is still lower than during much of the 20th century and remains lower than that of some other major economies. Why Is the Government Increasing Debt? As the government increases borrowing, interest payments on the debt also rise, which will have a far-reaching impact on individuals, businesses, and the overall economic environment. From the policies that have already been implemented and those set to follow, rising inflation, the end of private school VAT exemptions, increased employer national insurance costs, and the rising minimum wage are all costs that will be passed on to UK households and consumers. Train fares in England and Wales are set to rise by 4.6%, and energy and water bills are also increasing. Disposable incomes are shrinking, putting pressure on household budgets. The Bank of England is expected to continue cautiously slowing down rate cuts to control inflation, which will keep mortgage and personal loan costs high. For businesses, higher taxes are already forcing many industries to announce plans for layoffs and reduced investment. If business confidence weakens or companies face operational difficulties, it will directly lead to slower economic growth, or even recession. Higher unemployment and reduced consumer confidence would create a vicious cycle. Looking Ahead: Preparing for Financial Challenges Currently, the situation is not as dire as it may seem. If you want to plan ahead, here are some financial and tax planning suggestions to help you reduce investment risks and navigate the changing economic landscape: Individuals can explore and legally utilise tax-saving tools such as pension contributions and ISA tax-free accounts to reduce income tax burdens. In a high-interest rate environment, prioritise paying off high-interest loans and reducing unnecessary borrowing. Businesses should take advantage of tax credits and capital expenditure deductions to lower tax liabilities. Consider investing in government bonds, gold, and quality dividend stocks to hedge against economic instability. Focus on defensive investments, such as government bonds, gold, and high-quality dividend stocks, to offset economic risks. Diversify asset allocations by balancing UK-based assets and overseas market investments to reduce risks from a potential devaluation of the pound. If you wish to learn more about the latest financial, accounting, and tax news, or would like to consult with a professional accountant to resolve your financial and tax planning queries, get in touch with us. TB Accountants can assist you in developing tailored financial, tax, and investment strategies to safeguard your personal and business finances. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

HMRC halts phone and webchat self-assessment refunds Due to an increase in "suspected fraudulent activity," HMRC (Her Majesty's Revenue and Customs) has decided to suspend self-service tax refunds via phone and online chat windows. All taxpayers wishing to apply for a self-service refund will now need to submit an overpayment claim either online or by post. At the same time, HMRC stated that although suspected fraudulent activity has risen, their system remains "secure," and the suspension of phone and online chat self-service refunds is aimed at providing a safer service. Recently, there has been a noticeable rise in complaints about HMRC’s customer support services. Taxpayers have reported that one-third of calls go unanswered, and written correspondence can take up to nine months to receive a reply. An assessment report published earlier this year revealed that HMRC answered only two-thirds of incoming calls — just half the volume compared to ten years ago. Calls with wait times exceeding 70 minutes are automatically disconnected. However, HMRC’s Chief Executive, Jim Harra, disagrees with the negative reviews about their customer service. He stated, “Our service standards have significantly improved, with call waiting times reduced by 17 minutes since April last year.” Read more... Super-rich flee London: the loss of millionaires second only to Moscow A global annual wealth report has revealed that, in just 12 months, 11,300 millionaires chose to leave London, making it the city with the second-largest outflow of high-net-worth individuals globally, behind only Moscow, Russia. This figure includes 18 centi-millionaires (with net assets of $100 million or more, approximately £78 million) and two billionaires.  The survey defines wealth as “investable liquid assets,” including cash, bonds, and stocks, but excluding real estate. The report cites several reasons for the decline in the number of wealthy individuals in the UK, including a series of tax increases under both the Conservative and Labour governments, the prolonged failure to recover from the 2008 financial crisis, post-Brexit economic uncertainty, and the continued depreciation of the pound. Chancellor Rachel Reeves’ determination to abolish the non-domicile tax status has further accelerated the exodus of the wealthy. Under the new rules, all individuals who have resided in the UK for more than four years — regardless of their domicile status — will be required to pay UK tax on their global income and capital gains, ending the previous “remittance basis” system, which taxed only income and gains brought into the UK. According to the Adam Smith Institute think tank, scrapping the non-dom tax status could cost the UK over £10 billion in economic growth per year, amounting to a total loss of £111 billion over the next decade. New data shows that London is currently home to 215,700 millionaires, making it one of only two cities in the top 50 surveyed where the number of wealthy residents has declined compared to a decade ago (the other being Moscow). Overall, London’s wealthy population has fallen by 12% since 2014, while Moscow has seen a 25% decrease. Around 30,000 high-net-worth individuals have left London in the past decade, compared to about 10,000 from Moscow. Despite the outflow of wealthy residents, London still ranks as the fourth most expensive city in the world, with property prices per square metre trailing only Hong Kong, New York, and Monaco, and surpassing every other country. Historically, from the 1950s through to the early 21st century, the UK — and London in particular — had been one of the top destinations globally for millionaire migrants, attracting wealthy families from across Europe, Africa, Asia, and the Middle East. Read More... UK economy grew more than expected in February The latest data from the Office for National Statistics (ONS) shows that the UK economy performed better than expected in February, growing by 0.5%. Following the release of the data, the pound rose against the US dollar, climbing 0.4% within an hour to $1.3019. According to data from the London Stock Exchange, analysts had previously forecast GDP growth of just 0.1%. Chancellor Rachel Reeves described the results as "encouraging," though she struck a cautious tone when referencing President Trump’s tariff storm and the market volatility over the past week. The latest figures also show a significant improvement compared to the flat growth recorded in January. Year-on-year, GDP in February 2025 rose by 1.4%. Ruth Gregory, Deputy Chief UK Economist at Capital Economics, also commented that the UK’s "surprisingly strong growth is likely to be short-lived, as US tariffs and domestic tax hikes will take a toll." "The bigger picture is that the UK economy has only grown in four of the past nine months, and it’s hard to see a significant acceleration ahead," she added. Hailey Low, Deputy Economist at the National Institute of Economic and Social Research (NIESR), noted, "Rising global uncertainty and escalating trade tensions mean the economic outlook remains highly uncertain. With President Trump’s tariff storm, the UK’s economic growth may slow even further this year." This could pose fresh challenges for the Chancellor, who will face difficult decisions when she delivers the Autumn Budget later this year. Read More... For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

A pension is like a retirement salary card – it ensures you’re not solely relying on the State Pension (which, let’s be honest, barely covers cat food), but also have occupational/personal pensions to maintain your quality of life. It protects against inflation and longevity, so even if you live to 100, you won’t see your account hit zero. Plus, you get to enjoy a few tax benefits along the way – because who wants to still be flipping burgers at McDonald’s at age 70? Generally, there are two main ways to withdraw from your pension and maximise your annual return: pension drawdown and purchasing an annuity. Pension drawdown means withdrawing directly from your pension while allowing the remainder to keep growing. Think of it as dipping into your pension savings pot, taking a bit out, and reinvesting the rest to receive a steady income. This typically applies to Defined Contribution pensions, such as occupational and personal pensions. Then there’s purchasing an annuity. According to financial experts, annuity rates in the UK have reached a 15-year high. Data from Retirement Line shows that as of 11 April 2025, the average annuity rate for a 65-year-old is 7.26%. That means if you invest £100,000, you could receive £7,260 a year for life! What exactly is an annuity? And who should consider purchasing one? What is a Pension Annuity? A pension annuity is an insurance product designed to provide a regular income after reaching retirement age. It’s not for compensation of accidents or illness, but rather a long-term plan where the insurer pays you a regular pension once you hit retirement age, helping to support and improve your lifestyle in later years. The income you receive depends on several factors, such as the value of your pension pot, your health, life expectancy, and other circumstances. In simple terms, imagine you’re a lucky retiree, bundling your lifetime pension savings (from an occupational or personal pension) into a giant red envelope and handing it over to an insurance company. The insurer grins and says, ‘Darling, sign this deal with the devil and I’ll give you pocket money every month – for life!’ That’s an annuity – trading a large upfront sum for a steady stream of income in future.   Types of Pension Annuities in the UK There are three main types of pension annuities in the UK: Lifetime Annuity, Fixed-Term Annuity, and Flexible Annuity. Each comes with different payment methods, levels of risk, and target users. Lifetime Annuity Key Features: Paid for life: After purchase, the insurer pays a fixed amount monthly or annually until the policyholder passes away. No investment risk: The income is set at purchase and unaffected by market fluctuations. Optional add-ons: e.g. joint life annuity (your partner continues receiving income after your death), or inflation-linked annuity (income rises with inflation). Irreversible: Once purchased, it usually can’t be altered or cancelled. Ideal For: Risk-averse individuals: Those who want to completely eliminate longevity risk. Those needing stable income: Particularly people without other pension sources. Healthy retirees: Those expecting to live longer may receive higher overall lifetime income. Drawbacks: Inflexibility: You can’t adjust income or access the capital. Inflation risk: If not linked to inflation, your purchasing power may erode over time.   Fixed-Term Annuity Key Features: Set term payments: Typically set at 5–30 years, fixed income during this period. Maturity value: You may receive a lump sum at the end of the term or roll it into another pension plan (terms dependent). Some flexibility: Some products allow income adjustment or early termination. Locked-in rate: Income is fixed and unaffected by market interest rates. Ideal For: Mid-term planners: Those planning to switch to another income source (e.g. State Pension) later. People needing a maturity lump sum: To cover large future expenses such as medical costs or travel. Moderate risk tolerance: Willing to accept fixed income for a set period while preserving future options. Drawbacks: Term limitation: If you outlive the term, you must rely on other income sources. Uncertain maturity value: Some maturity amounts are linked to fund performance and can vary. Flexible Annuity Key Features: Adjustable income: You can change how much you withdraw monthly (within limits). Market-linked: Some products invest your funds, so income may fluctuate based on performance. Inheritance potential: Remaining funds can be passed to beneficiaries after death. Hybrid approach: Combines features of annuities and flexible withdrawals (like UFPLS). Ideal For: Higher risk tolerance: Those seeking higher returns through investments. Flexibility seekers: Want to adjust income as life circumstances change (e.g. health or family). Estate planners: Those wishing to leave remaining funds to heirs. Drawbacks: Market risk: Poor investment returns may lower your income. Longevity risk: Mismanagement could lead to running out of funds too soon.   Buying Tips Lifetime Annuity: Best for those relying on annuities as their main income and who don’t want to manage their funds. Fixed-Term Annuity: Good for bridging periods (e.g. until the State Pension kicks in) or for those needing a lump sum later. Flexible Annuity: Ideal for those with some investment knowledge, wanting income control and inheritance options. Special Features Since 06 April 2015, retirees can treat their pension savings like a bank account – withdrawing a lump sum, taking partial withdrawals, or continuing to invest. Tax Alert! You can withdraw 25% of your pension pot tax-free (sweet!) The rest is taxed as income – withdraw too much at once, and you could jump into a higher tax band (ouch!) Annuity income is taxable (yes, HMRC is always watching...)   Some Advice from TB Accountants When you're young, you work hard to pay into your pension. In retirement, the insurance company transforms into your personal ATM, transferring money to you monthly. An annuity is like a post-retirement auto-renewable salary. Perfect for those who value stability and don't want the hassle of managing their finances. But if you’re an investment wizard, a pessimistic lifer, or a compulsive spender – tread carefully! For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

We have previously shared a lot of information about property purchase, rental, and sale taxes in the UK, and we have received many enquiries from both UK-based and overseas landlords. Some of our clients have asked: Can repairs for a primary residence in the UK be claimed for tax relief? How does it differ from rental properties in terms of tax treatment? Does it depend on the type of materials used? Today, we will address your questions regarding property repairs and renovations one by one. Can Repairs for Primary Residences Be Claimed for Tax Relief? In the UK, the cost of repairing a primary residence is generally not  eligible for tax relief. This means that as a homeowner, you cannot deduct the cost of repairs from your taxable income. However, if you make energy efficiency improvements to your property, such as installing insulation, upgrading to energy-efficient windows, or replacing your boiler, you may be eligible for tax relief or government subsidies. Additionally, if your home is a listed building and you carry out repairs that meet conservation standards, you may be entitled to relief. What Energy Efficiency Improvements Qualify for Tax Relief? Compared to listed building repairs, energy efficiency improvements are more likely to qualify for relief. To encourage homeowners to improve their properties’ energy efficiency, reduce energy consumption, and lower carbon emissions, the UK government has introduced several tax relief and subsidy schemes, including: Green Home Grants This scheme offered homeowners grants of up to £10,000 to improve the energy efficiency of their homes. Eligible improvements included wall, floor, and roof insulation, as well as installing double or triple glazing. This scheme closed to new applications on 16 May 2023. Great British Insulation Scheme The Great British Insulation Scheme aims to improve the energy efficiency of hundreds of thousands of homes by providing insulation measures. If your application is approved, you may receive free or discounted insulation materials to help reduce energy costs. Key features: Available to homeowners in England, Scotland, and Wales. Primarily targets homes with an Energy Performance Certificate (EPC) rating of D or below. Provides full grants depending on the property’s energy performance and income level. This scheme is backed by a £1 billion budget and is set to end on 31 March 2026. Energy Company Obligation (ECO) The ECO scheme requires large energy suppliers to fund energy efficiency improvements for low-income and vulnerable households. Through this scheme, homeowners may receive free or low-cost insulation and low-carbon heating systems, such as replacing or repairing boilers or upgrading heating systems. The details of the ECO scheme may change depending on government policy and will require confirmation of your property’s energy efficiency rating. What Other Support is Available? The government also offers other forms of support, such as low-interest loans and financial incentives, to help homeowners cover the cost of energy efficiency improvements. The UK National Wealth Fund has pledged to guarantee £250 million in loans to improve the energy efficiency of hundreds of thousands of homes. The aim is to attract bond investors to help the government meet its climate targets. Housing associations will use these loans to fund small-scale renewable energy projects, low-carbon heating systems, insulation, and water-saving initiatives.   How Can Landlords Claim Tax Relief for Rental Property Repairs? Unlike primary residences, the cost of repairs related to rental properties can be deducted when calculating taxable rental income. Below is a detailed guide on how to claim tax relief for such expenses: Deductible Repair Costs The following costs must be directly related to the rental business and should be supported by relevant documentation such as invoices and receipts: Property maintenance and repair costs: This includes routine maintenance and repairs to the structure, fixtures, and equipment, such as fixing a leaking tap, repairing wall cracks, or replacing damaged flooring. However, it does not include upgrades or improvements. Utility bills: Such as water, electricity, and gas, if paid by the landlord. Appliance and furniture repairs: For example, repairing or replacing damaged household appliances or furniture. Insurance costs: Including building insurance, landlord liability insurance, contents insurance, and public liability insurance. Service charges: Payments to gardeners, cleaners, etc. Agent and management fees: Payments made to letting agents or property management companies. Professional fees: Costs incurred for services provided by accountants, solicitors, etc. Ground rent and service charges: If applicable. Telephone, stationery, and advertising costs related to the rental business. Travel and mileage costs related to the rental business. Important :  These expenses must be aimed at maintaining the property’s current state, rather than enhancing or upgrading it. Non-Deductible Costs The following expenses are not eligible for deduction: Capital expenditure: Such as purchasing property, extensions, or improvements that increase the property’s value. Personal expenses: Costs related to personal use. Full mortgage repayments: Since 2020, landlords can no longer deduct mortgage interest from rental income but can instead claim a 20% tax credit. Does It Matter If You Use Standard or Eco-Friendly Materials? UK tax regulations do not explicitly require landlords to use eco-friendly materials to claim deductions for repair costs. As long as the expense is classified as a repair and not an improvement, the cost can be deducted regardless of the materials used.   Filling Out Your Tax Return Landlords must report their rental income to HM Revenue & Customs (HMRC) through Self Assessment. When completing the Self Assessment Tax Return (SA100), you must also complete the supplementary form SA105 (Property). Key Steps: Register for Self Assessment: If this is your first time filing a Self Assessment tax return, you need to register with HMRC. After registering, you will receive a Unique Taxpayer Reference (UTR). Registration must be completed within 6 months of the end of the relevant tax year. Submit Your Return: You can choose to submit your Self Assessment tax return online or by post. The online submission deadline is 31 January each year, while the paper submission deadline is 31 October. Report Rental Income: Enter the total rental income received in the appropriate section of the form. List Deductible Expenses: Provide details of all deductible repair and management costs, such as repair expenses, insurance fees, and management fees. Calculate Net Rental Income: Deduct allowable expenses from the total rental income to calculate the net rental income, which will be included in your overall taxable income. Record Keeping: Landlords are required to keep relevant records for at least 5 years in case of inspection by HMRC. Some Advice from TB Accountants In summary, it is essential to distinguish whether your property is a primary residence or a rental property. For rental properties, there are numerous tax relief options available, but you must maintain complete records and invoices. If you are still unsure about which expenses qualify for relief or how to complete your Self Assessment tax return, you can turn to us. Our professional accounting and tax team will provide one-on-one consultation, assist you in organising your rental income and expenses, reduce tax risks, and tailor a tax optimisation plan for you. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

Sir Keir Starmer paid £54,718 in income tax According to a document released by the government, UK Prime Minister Sir Keir Starmer paid £54,718 in income tax during the 2023/24 financial year. The summary shows that for the tax year ending on 5 April 2024, Starmer paid income tax on earnings of £152,225. Most of this income came from his role as a Member of Parliament, with additional earnings from book royalties and £5,174 in interest from savings accounts. Chancellor Rachel Reeves and Deputy Prime Minister Angela Rayner also published their personal tax summaries for the same financial year: ● Rachel Reeves had a total annual income of £91,758 and paid £24,215 in income tax. Her self-employment income totalled £12,372, primarily from book royalties and audiobook fees. ● Angela Rayner reported a total income of £85,205 and paid £21,514 in income tax. All of her income and taxable benefits came from her work as an MP. Although the figures may appear substantial, Starmer’s income tax bill for 2023/24 was lower than in the previous year. In 2022/23, he paid £52,688 in Capital Gains Tax after selling a piece of land partially inherited from his father. His total tax paid that year was only about one-fifth of the amount paid by then-Prime Minister Rishi Sunak. This latest tax summary outlines Starmer’s taxable UK income, capital gains, and tax liabilities for the previous financial year. It was prepared by his chartered accountancy firm and submitted to HM Revenue & Customs (HMRC). David Cameron became the first British Prime Minister to publish a tax summary in 2016. Theresa May also released her tax information during her Conservative leadership campaign but did not do so while serving as Prime Minister. Rishi Sunak and Chancellor Jeremy Hunt have both disclosed their personal tax data while in office. However, Sunak’s two immediate predecessors, Boris Johnson and Liz Truss (whose tenure lasted less than two months), did not make their tax records public. Read more... Inflation continues to fall, more interest rate cuts are expected this year According to data released by the Office for National Statistics (ONS), the Consumer Price Index (CPI) inflation rate fell to 2.6% in March, marking the second consecutive month of decline and a drop that exceeded expectations. This represents the slowest pace of price increases since December last year, bringing inflation closer to the Bank of England’s 2% target. The decline was largely driven by falling oil prices, reduced fuel costs, and a steady rate of food price increases. However, analysts caution that the drop may be temporary, as a series of tax hikes introduced in early April are expected to raise household bills. Meanwhile, core inflation—which excludes volatile items such as fuel and food—fell to 3.4%. This is seen as encouraging news for the Bank of England, which is currently weighing interest rate cuts. The Bank’s Monetary Policy Committee is scheduled to meet next month and is widely expected to reduce the base rate to 4.25% to ease borrowing costs. Based on current economic indicators, analysts generally anticipate four interest rate cuts this year, with the base rate projected to reach 3.5% by December 2025. Lowering the base rate reduces interbank lending costs, prompting commercial banks to offer lower loan rates. This makes borrowing cheaper for both businesses and individuals, thereby stimulating economic activity, encouraging business investment, and boosting consumer spending. At the same time, the United States and EU countries have also been working to curb rising prices. The Eurozone’s inflation rate stood at 2.2% in the same period, down from 2.3% in February. Since the European Central Bank (ECB) cut its base rate for the first time in five years in June 2024, it has reduced rates five times to the current 2.5%. In the US, the inflation rate has fallen to 2.4%. At its March meeting, the Federal Reserve held its benchmark interest rate steady in the 4.25% to 4.5% range but revised down its economic growth forecast. Read More... Number of payrolled workers in UK fell by 78,000 ahead of budget tax rise According to revised data released by the Office for National Statistics (ONS), the number of people on UK payrolls (via the Pay As You Earn, PAYE system) fell by 8,000 in February, followed by a significant drop of 78,000 in March—marking the fastest decline since the peak of the COVID-19 pandemic. This sharp contraction reflects growing global uncertainty and suggests that many businesses sought to reduce costs through layoffs ahead of tax increases introduced in April. Business leaders had previously warned that the tax hikes announced by Chancellor Rachel Reeves in last autumn’s Budget would force companies to cut jobs and hold back on larger wage increases. Multiple surveys conducted earlier this year indicated that UK businesses were reducing headcounts at the fastest rate since the 2008 financial crisis (excluding anomalies during the pandemic). Earlier this month, the rise in employer National Insurance contributions began impacting nearly one million businesses. In addition, the increase in the minimum wage has added further cost pressure, particularly on sectors such as hospitality, leisure, and retail. Suren Thiru, Economics Director at the Institute of Chartered Accountants in England and Wales (ICAEW), commented: "These figures suggest the labour market was already weakening ahead of the sharp tax and cost increases this month. Faced with a double hit of rising uncertainty and increasing expenses, employers have scaled back hiring plans. The UK job market is entering a turbulent phase, and despite persistent skills shortages, the combined impact of global uncertainty and mounting cost pressures—particularly from higher National Insurance—could lead to a moderate rise in unemployment." In the three months to March, the number of job vacancies fell by 26,000 to 781,000—dropping below pre-pandemic levels for the first time since 2021. Meanwhile, the UK’s official unemployment rate remained unchanged at 4.4% in the three months to February. Read More... For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

On the 26th March 2025, the Chancellor Rachel Reeves delivered the highly anticipated Spring Budget statement. It is important to note that this statement is not a formal Budget—Labour has pledged to release only one Budget per year. The Spring Budget statement serves as an update and supplement to the current economic situation and any progress made since the Autumn Budget in October 2024. Earlier, the Office for Budget Responsibility (OBR) indicated that by the 2029-30 financial year, Labour's £9.9 billion fiscal buffer, which underpins its budgetary rules, would be depleted. As a result, compared to the Autumn Budget, Reeves faces tougher choices in this Spring Budget. Taxes No tax increase in spring budget After what has been described as the ‘biggest tax-hiking Budget in history’, the Chancellor has not announced further tax increases in the Spring Budget. However, she emphasised plans to take strong measures against tax evasion. Although specific details have not yet been disclosed, the government aims to recover an additional £1 billion by targeting 20% of potential tax evaders through a series of measures, including a newly proposed reward scheme. While no new tax adjustments were announced in the Spring Budget, it is important to remember that changes to water bills, energy bills, council tax, employer National Insurance contributions, Capital Gains Tax (CGT), and the National Minimum Wage will take effect from April, marking the start of the new financial year. Economy Growth forecast downgraded The OBR has revised the UK's 2025 growth forecast downwards from 2% to 1%. Meanwhile, the government’s budget deficit projections have shifted: 2025-26: £36.1 billion deficit 2026-27: £13.4 billion deficit 2027-28: £6 billion surplus 2028-29: £7.1 billion surplus 2029-30: £9.9 billion surplus Regarding living standards, household disposable income per capita is expected to grow by an average of 0.5% per year (approximately £500) from 2025-26 to 2029-30. This is largely due to strong wage growth and inflation easing in the later years of the forecast period. Welfare Universal Credit Cuts One of the most significant welfare changes is the 50% cut to the Health Element of Universal Credit, which provides additional financial support for individuals with health conditions or disabilities that limit their ability to work. Currently, eligibility for this support is determined through the Work Capability Assessment (WCA). For new applicants, the benefit will be frozen at £97 per week until 2029-30, rather than increasing with inflation. Additionally, due to tighter eligibility criteria, 800,000 people will lose access to the Daily Living Component of Personal Independence Payment (PIP). While the new welfare savings plan is expected to save £4.8 billion, over 3 million households will lose an average of £1,720 per year. By 2030, 250,000 people (including 50,000 children) are expected to fall into poverty due to these welfare cuts. Housing Housebuilding at record levels The government has reaffirmed its commitment to increasing housebuilding, with projections indicating that by 2030, new home construction will reach its highest level in 40 years. Planning reforms are expected to increase housing supply by 170,000 over the next five years, bringing the total to 305,000 new homes per year. By the end of this Parliament, this would increase the UK's housing stock by around 1.3 million homes, a 16% rise. Additionally, in the new tax year, the government will allocate £1 billion to accelerate the removal of dangerous cladding and reduce Right to Buy discounts. Local councils will also be allowed to retain all revenue from the sale of social housing to reinvest in new housing supply. Departmental Cuts Voluntary Civil Service Redundancies The Chancellor aims to make the government ‘leaner and more flexible’ by introducing a voluntary redundancy scheme for civil servants, with the goal of saving £3.5 billion by 2029-30. Further details on departmental spending cuts will be revealed in the June Spending Review. Defence Increased funding for defence The Chancellor confirmed that UK defence spending will rise to 2.5% of GDP by 2027. In 2026, an additional £2.2 billion will be allocated to the Ministry of Defence to fund: New high-tech weaponry Upgrades to Portsmouth Naval Base Renovation of military housing These investments are aimed at strengthening the UK’s defence industry and establishing the country as a global defence powerhouse. Market Reaction to the Spring Budget Statement The financial markets’ reaction to fiscal policies is crucial. The good news for the Chancellor is that gilt yields (the premium investors demand for holding UK government debt) slightly decreased following the Spring Budget speech. 30-year UK government bond yield: Fell by nearly 0.1 percentage points to 5.283% 10-year and 2-year bond yields: Also saw slight declines According to the OBR, inflation is expected to average 3.2% this year before steadily declining to 2% in 2026-27, aligning with the Bank of England’s target. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

With the new financial year, a series of tax increases announced in last autumn’s budget came into effect. These changes impact not only income tax, corporation tax, and capital gains tax but also pension reforms, national insurance adjustments, and taxation on high earners and new UK residents’ global income. Which Tax Increases Are Being Implemented? With these tax changes, how should individuals and businesses plan their finances to adapt to this more challenging tax environment?g and you carry out repairs that meet conservation standards, you may be entitled to relief. Stamp Duty Land Tax From 1 April 2025, the tax-free threshold for standard residential property transactions was halved from £250,000 to £125,000, meaning more property transactions will be subject to tax. Additionally, from 1 April, changes to first-time buyer relief include: The tax-free threshold will be reduced from £425,000 to £300,000. The maximum property price eligible for the 5% stamp duty rate will decrease from £625,000 to £500,000. Buyers of properties exceeding £500,000 will no longer be eligible for any first-time buyer relief and must pay the standard stamp duty rates. These changes mean higher tax burdens for buyers, particularly first-time buyers and those purchasing mid-priced properties.   Income Tax As previously announced, income tax thresholds and personal allowances will remain frozen until 6 April 2028: The personal allowance remains at £12,570. The 20% basic rate applies to income from £12,571 to £50,270. The 40% higher rate applies to income from £50,271 to £125,140. The 45% additional rate applies to income above £125,140.   Inheritance Tax The inheritance tax nil-rate band of £325,000 will also remain frozen until 6 April 2028. Given inflation and wage growth, more taxpayers will gradually move into higher tax bands, increasing their tax burden. Employer National Insurance Contributions (NICs) From 6 April 2025, employer NICs rose from 13.8% to 15%. The threshold for employer NICs will also be lowered from £9,100 to £5,000.   Capital Gains Tax (CGT) Since 30 October 2024, the CGT rate for individuals and trustees disposing of assets has increased from 20% to 24%. From 6 April 2025, the CGT rate for Business Asset Disposal Relief (BADR) will be 14% (from 10%) From 6 April 2026: 18%   Council Tax From 1 April, millions of households saw an increase in their council tax bills. Most English councils will raise council tax by 4.99% without triggering a referendum. However, six areas will introduce larger increases in 2025/26: Bradford: +10% Newham, Windsor & Maidenhead: +9% Birmingham, Somerset, Trafford: +7.5% Exemptions and discounts: Students do not pay council tax. Single-person households receive a 25% discount. Households with a disabled person may qualify for a discount. In Scotland, council tax in 13 regions will rise by at least 10%, while in Wales, increases will range between 5% and 9.2%. Northern Ireland collects domestic rates instead of council tax.   Abolition of the Non-Domicile Tax Regime From 6 April 2025, the non-domicile tax regime was abolished and a new residence-based system for foreign income and gains (FIG) was introduced: Individuals who were non-UK tax residents for 10 consecutive years but become UK tax residents will receive a four-year 100% tax exemption on foreign income and gains. After four years, global income and capital gains will be taxed in the UK. For existing non-domiciled individuals: Temporary Repatriation Facility: Between 2025/26 and 2026/27, they can remit overseas income at a reduced 12% tax rate. From 2027/28, normal tax rates will apply. CGT Rebase: Individuals who held foreign assets before 5 April 2017 can use their value on that date as the tax base. Inheritance Tax: Long-term residents (10 out of the past 20 tax years in the UK) will be subject to UK inheritance tax on foreign assets for 3-10 years after leaving the UK.educt mortgage interest from rental income but can instead claim a 20% tax credit. National Living Wage (NLW) From 1 April: The minimum wage for 16-17-year-olds increased by 18% to £7.55 per hour. The rate for 18-20-year-olds rose by 16% to £10 per hour. The minimum wage for 21+ employees increased by 6.7% to £12.21 per hour.   Overseas Workday Relief From 6 April 2025, HMRC introduced an expedited process ensuring that PAYE deductions apply only to UK-based earnings, not overseas income, for internationally mobile employees. Compliance checks will still be required.   Vehicle Excise Duty (VED) From April 2025: Tighter CO2 bands: Vehicles emitting over 130g/km CO2 will face higher first-year rates. EV exemption ends : Electric vehicles will be subject to an annual £165 standard rate. Luxury surcharge : Vehicles over £40,000, including EVs, will incur an extra £355 charge annually for five years. Stronger enforcement : Unpaid VED will incur a 10% penalty and stricter ANPR camera enforcement.   Household Bills From 1 April: Water bills: Up 26% (£123 annually). Energy prices: Average household energy bills will rise to £1,849 per year, adding £9.25 per month. TV licence: Increasing by £5 to £174.50. The View from TB Accountants The upcoming tax and cost increases in April will significantly impact UK households and businesses. Domestic policy changes and global trade tensions add further uncertainty to the UK economy. In its latest statement, the Office for Budget Responsibility revised down the UK’s 2025 GDP growth forecast from 2% to 1%. Inflation is expected to average 3.2% in 2024, peaking at 3.8% in July. The Bank of England will announce its latest interest rate decision in May, impacting homebuyers and savers alike.  Understanding tax changes and making adjustments will help individuals and businesses maintain financial stability. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

New tax rises warning as borrowing jumps in UK hit by tariff wars Economists warn that, against the backdrop of a surge in borrowing triggered by U.S. President Trump’s new tariffs, U.K. Chancellor Rachel Reeves may be forced to further raise taxes in the autumn budget later this year. Official data shows that the British government’s borrowing exceeded expectations in the last fiscal year. As of the end of March this year, public sector net borrowing rose to £151.9 billion. This figure is £14.6 billion higher than the £137.3 billion previously forecast by the Office for Budget Responsibility, equating to £95,300 of debt per household. Meanwhile, the total annual borrowing was also £20.7 billion higher than during the same period the previous year. Just a day before the release of this data, the International Monetary Fund (IMF) sharply downgraded its forecast for U.K. economic growth this year by 0.5 percentage points to 1.1%, while raising its inflation forecast by 0.7 percentage points to 3.1%. A series of gloomy economic forecasts has further increased the public finance pressures facing Chancellor Reeves. She previously stated she would "defend Britain's interests" and is preparing to travel to Washington to meet with other finance ministers to push for a trade agreement with the United States. Speaking at the Semafor World Economy Summit in Washington, Reeves said: “The message we've received is that the U.S. is very keen to reach an agreement with the U.K. ... The cooperation we are aiming for is not limited to a tariff agreement, but also includes establishing technology partnerships and further deepening our already close ties in security and defense.” Elliott Jordan-Doak, U.K. Senior Economist at Pantheon Macroeconomics, said: "Looking ahead to the next fiscal year and the upcoming autumn budget in October, the breakdown of global trade patterns and geopolitical uncertainty will further intensify the pressure on the Chancellor." He said: “We had already anticipated that the government would need to raise defense spending above the recently pledged 2.5% of GDP, reaching at least 3.0% of GDP by 2027. To ease fiscal pressures, this will likely require a combination of borrowing and tax increases.” Read more... Retail sales see biggest rise for nearly four years According to data from the Office for National Statistics (ONS), U.K. retail sales volume grew by 1.6% in the first quarter of this year compared to the previous quarter, marking the largest quarterly increase since July 2021. Retail sales in March rose by 0.4% month-on-month, far exceeding market expectations of a 0.4% decline. Sunny weather boosted sales at garden centers, and demand for clothing and home improvement goods also increased. However, the ONS noted that food sales fell, with supermarkets in particular performing poorly. Analysts also warned that sales might weaken in the coming months. Danni Hewson, head of financial analysis at AJ Bell, said: "March brought some relief for many households, as inflation continued to fall and wage growth was not yet being swallowed up by rising bills. It was also an encouraging signal for retailers. However, most businesses are having to brace for a possible turning point ahead." Another survey showed that consumer confidence slipped in April. Market research firm GfK reported that its Consumer Confidence Index fell to its lowest level since November 2023, as people faced rising bills and became more pessimistic about the economic outlook. At the same time, a corporate health assessment released by leading consultancy Begbies Traynor showed that the number of companies in “critical” financial distress surged by 13%. Just hours after that report was published, official data revealed that corporate insolvencies in England and Wales rose by 9% year-on-year in March. This series of data aligns with other recent signs that the U.K. economy is slowing, and that businesses and households are under mounting pressure from rising bills. Tensions have also been further aggravated by U.S. trade protectionist policies, with challenges continuing to intensify since the beginning of this month. However, the gloomy outlook has led a growing number of economists and financial market participants to believe that the Bank of England will have more room to accelerate interest rate cuts starting next month, despite the risk of a new wave of inflationary pressure in the future. Read More... Energy price cap set to fall in July, according to forecast According to the latest forecast from energy consultancy Cornwall Insight, U.K. household energy bills are expected to fall in July, due to a global slump in natural gas prices triggered by U.S. President Trump's trade tariffs. The company said it expects the U.K. energy regulator Ofgem to announce a 9% reduction in the typical household energy bill, amounting to a decrease of £166, bringing the average bill down to £1,683. Craig Lowrey, principal consultant at Cornwall Insight, noted that recent warm weather has also led to a drop in short-term energy demand, further pushing market prices downward. However, he also cautioned that the evolving and unpredictable nature of U.S. policies could alter the situation again before July, meaning there is still uncertainty around the current forecast for price cuts. “While a drop in bills is always good news for households, we mustn't be overly optimistic,” he said. “We've all witnessed rapid market surges as well as rollercoaster-like downturns, and the market’s quick decline this time highlights its extreme vulnerability to geopolitical and market fluctuations.” Ofgem adjusts the household energy price cap every three months, mainly based on wholesale market costs. The price cap for the period from July to September will be officially announced on May 27. The energy price cap system was introduced by the government in January 2019 to set a maximum price per kilowatt-hour (kWh) that energy suppliers can charge consumers in England, Scotland, and Wales. However, the cap does not limit a household’s total bill, as final costs still depend on actual energy usage. Despite recent reductions in the price cap, household energy bills remain significantly higher than historical levels. For instance, in April 2021, the energy price cap stood at just £1,138 — almost one-third lower than the latest forecast of £1,683. Read More... For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .