Rachel Reeves to abandon plans to raise income tax rates in budget   According to British media reports, UK Chancellor Rachel Reeves will abandon the original plan to raise income tax rates in the upcoming budget. The move has been described as “tearing up” a core budget measure and represents a major policy U-turn by Labour as internal unrest within the party intensifies.   The Guardian, citing sources, said Prime Minister Keir Starmer and Chancellor Reeves have jointly decided to drop their pledge in the Labour manifesto not to increase the tax burden on workers. The Financial Times first revealed that this tax reversal was submitted to the Office for Budget Responsibility (OBR) on Wednesday, 12 November. Downing Street has not denied the reports but declined to comment on the contents of the budget.   Previously, ahead of the autumn budget, Reeves held an unusual pre-budget press conference, effectively giving the public an early “warning shot” and hinting that she would break a key election-time pledge by raising income tax rates. (Related: Tax rises are inevitable! The UK Chancellor gives a rare speech before the Autumn Budget!)   Now, she and Starmer may instead rely on a series of “small-scale tax increases” to fill the multi-billion-pound fiscal gap caused by downgraded productivity forecasts and policy reversals on winter fuel payments and disability benefits. According to the Financial Times, Reeves may adjust income-tax thresholds and allowances—an approach widely regarded as a “stealth tax rise.”   Another potential option is to raise gambling duties to fund the additional costs of scrapping the “two-child benefit limit.” However, Treasury sources say the revenue from this would fall far short of covering the expense.   This shift comes after a week of intense “briefing wars” within Labour. Allies of the Prime Minister indicated that Starmer would fight to keep his position if challenged, with some even naming Health Secretary Wes Streeting as a possible contender, though he has publicly denied this.   Discontent within Labour over Starmer’s leadership has been brewing for months, and the income-tax plan became the spark that pushed tensions to breaking point. Some MPs have even discussed whether the move could mark the beginning of the end of Starmer’s premiership. Several ministers believe that this decision is tantamount to announcing the start of a “succession countdown.” Read more... Warning as Britons prepare to spend £14 billion this Black Friday   With the arrival of the Black Friday shopping season, UK consumers are expected to spend nearly £14 billion. Research by e-commerce marketing platform Omnisend shows that consumers will spend an average of £299 during Black Friday — an increase of £83 year-on-year. Average spending on Cyber Monday and the days that follow is also expected to rise to £229, £70 higher than last year.   The most popular purchase categories include clothing and accessories (49%), tech and electronics (45%), and toys (28%). Omnisend predicts that one-third of consumers plan to spend more than last year, while only 14% expect to spend less.   Meanwhile, inflation and debt pressures are affecting how people choose to pay. The survey shows that “Buy Now, Pay Later” (BNPL) services such as Klarna and PayPal are becoming less attractive: only 17% of consumers say they will use BNPL during Black Friday, though 32% would consider using it for high-priced items.   Amazon remains the top platform of choice for Black Friday and Cyber Monday shopping (76%), but a growing number of UK consumers are also turning to Chinese e-commerce platforms such as Temu (22%), Shein (21%), and TikTok Shop (14%).   Despite Black Friday’s continued popularity amid the surging cost-of-living pressures, concerns about “fake discounts” and scams are increasing.   Analysts advise consumers to research original prices weeks before the sales begin to avoid falling for retailers that mark up prices in advance and then offer seemingly attractive discounts. Shoppers are also urged to carefully verify seller information at checkout, stay alert to suspicious websites or links, and use credit or debit cards whenever possible for added protection. If you suspect you’ve been targeted by a Black Friday scam, call the number on the back of your bank card immediately and report the incident to Action Fraud.   Read More... UK divisions of ticket resale website Viagogo hit with £15m bill over tax shortfall   Two UK subsidiaries of ticket-resale platform Viagogo have recently been hit with a tax demand of around £15 million by HM Revenue & Customs (HMRC). The company has long faced criticism over problems in the secondary ticketing market, with accusations that it enables scalpers to profit through the platform at the expense of consumers.   According to company filings, Viagogo’s two subsidiaries — VGL Services and IFOT Services — have set aside funds to cover tax adjustments, interest, and penalties arising from a “transfer pricing inquiry” for the years 2016 to 2018.   “Transfer pricing” refers to the pricing of goods or services exchanged between subsidiaries within a multinational corporate group. Tax authorities examine whether companies manipulate internal prices between high-tax and low-tax jurisdictions to shift profits and reduce their tax burden.   The £15 million provision includes interest and penalties related to late tax payments. Although the filings do not detail HMRC’s findings, there is no indication that Viagogo deliberately engaged in tax evasion or avoidance. During the period under investigation, the two UK subsidiaries did not directly sell tickets; instead, they provided technical and customer-support services to other parts of the group.   The company stated in the filings that HMRC’s decision could result in “double taxation” — where the same income is taxed in two different jurisdictions. Viagogo says it has updated its transfer-pricing policies and plans to seek relief through tax treaties between the UK and other countries, which may lead to some financial recovery in the future.   As of earlier this year, the two subsidiaries had already paid £5.5 million, though the timing and final amount of the remaining payments have not yet been determined.   Meanwhile, Viagogo is also facing a wider review of the secondary ticketing market. New policies are expected that would cap resale prices in order to curb ticket scalping. If implemented in the UK, such measures could significantly impact Viagogo’s core business. Read More... Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk 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 .

Have you been following the latest financial news in the UK?  It seems that every time one opens a news site, words like ‘inflation’, ‘unemployment’, ‘rising debt’ and ‘fiscal deficit’ appear. Each headline seems to tell the same story — that the UK’s public finances are on increasingly shaky ground. According to current data, the UK is caught in a fiscal dilemma combining ‘high debt and high deficit’ with ‘low growth and high inflation’.  The result is a vicious cycle between weak economic fundamentals and worsening fiscal health. Official figures show that as of September in the current financial year, public sector net borrowing reached £99.8 billion — £7.2 billion higher than forecasts by the Office for Budget Responsibility (OBR), marking the second-highest level for the same period since records began in 1993 (excluding the pandemic years). Borrowing in September alone reached £20.2 billion — slightly below expectations but £1.6 billion higher than a year earlier — with debt interest payments hitting a record high for any September, driving the overall rise in expenditure. Meanwhile, the national debt continues to hover at alarming levels. As of September, public sector net debt stood at 95.3% of GDP, up one percentage point from a year earlier. Debt interest payments are projected to reach £111 billion in the 2025/26 financial year — surpassing the education budget and placing enormous strain on public finances. Worsening inflation and a weakening labour market have further compounded the challenge. Consumer Price Index (CPI) inflation for 2025 is expected to rise by 3.4%, driven mainly by energy and regulated prices.  The unemployment rate has climbed to 4.7%, while the ongoing decline in job vacancies reflects declining business confidence — companies are reluctant to hire when their profit margins are under pressure. Compounding the problem, productivity growth remains weak, with average annual growth over the next five years expected to be just 0.4%.  Many analysts attribute this stagnation to the after-effects of Brexit and years of underinvestment, which have eroded the economy’s internal growth momentum and limited fiscal flexibility.  Workers may end up paying thousands more in Income Tax In the Autumn Budget announced in October 2024, Chancellor Rachel Reeves revealed that from April 2025 the employer National Insurance (NI) rate would rise from 13.8% to 15%, and the threshold for employer NI contributions would be lowered from £9,100 to £5,000 per year. These two measures are expected to raise £25 billion annually, making them the largest revenue-raising changes in the budget. Although employers are responsible for paying NI, the OBR estimates that 60% of the cost will be passed on to workers through lower wages or higher consumer prices. This effectively means employees could see their real incomes shrink as businesses adjust to higher costs — an indirect form of taxation. HMRC data shows that the government’s freeze on income tax thresholds has already brought in £154.18 billion between April and September this year — £12.41 billion more than in the same period last year. Under Conservative leadership, the income tax threshold freeze was set to last until 2027–28, but many now expect Reeves to extend it further to 2029–30 in the next Autumn Budget. While extending the freeze on income tax and NI thresholds could raise an additional £10.4 billion in revenue, HMRC estimates that it also pushes more taxpayers into higher tax bands. As wages and savings income rise with inflation, many people who previously paid the basic rate now cross the 40% threshold and are taxed on their additional income at the higher rate — about 520,000 more taxpayers in total. This so-called ‘fiscal drag’ effect increases the tax burden even when real purchasing power has not significantly improved. As a result, average earners could end up paying thousands more in income tax by the end of the decade. For ordinary employees, this highlights the growing importance of sound financial planning and effective tax management.  After all, wage growth may not keep up with inflation. What tax changes might the 2025 Autumn Budget bring? The 2025 Autumn Budget is scheduled for 26 November, more than a month later than last year.  Although no official announcements have been made, there has been widespread speculation about potential changes.  The following are among the most discussed possibilities.  However, it’s important to note that these are only for reference and discussion.  The final details will depend on official government statements. 1. Inheritance Tax reform Reports suggest that the Chancellor plans to impose a 40% inheritance tax on private pension wealth starting in April 2027, while also reducing allowances available to farmers and businesses. She may also consider setting a lifetime cap on the value of gifts that can be passed on before death to prevent people from using them to reduce their inheritance tax bills. There is also speculation that Reeves could expand inheritance tax to target property wealth, for example by abolishing the current £175,000 residence nil-rate band or removing the rule that exempts estates worth less than £325,000 (including property and other assets) from inheritance tax. 2. Income Tax changes Some reports suggest Reeves might reduce National Insurance by two percentage points to ease the social security burden on workers, while simultaneously raising income tax rates to maintain or slightly increase total tax revenue.  The goal would be to broaden the taxpayer base, requiring pensioners, landlords and self-employed individuals — who do not currently pay NI — to contribute more through income tax. If implemented, this change could affect around 8.7 million income-tax-paying pensioners and 4.3 million self-employed individuals across the UK. Aside from these two major points of speculation, others believe the Chancellor may instead choose to raise VAT or continue freezing income tax thresholds to generate revenue and close the fiscal gap.  Some advice from TB Accountants You can help manage potential tax pressures by: Optimising your pension contributions to make full use of tax reliefs Reviewing compensation adjustments in wage negotiations to offset cost pass-through from employers Consulting a professional tax adviser to assess how capital gains tax and inheritance tax might affect your financial planning and asset structure   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 the UK, residential properties are subject to council tax, while non-residential properties are charged business rates. If you plan to start a business or are already operating from commercial premises, business rates are a crucial tax to understand in addition to company registration, accounting and tax filing. Business rates are closely tied to your eligibility for Small Business Rate Relief (SBRR). What are business rates? Business rates are a tax collected and managed by local councils, although the rates and rules are set by the central government.  Owners or tenants who use all or part of a building for non-residential purposes generally have to pay business rates.  Common examples include: Offices Shops Warehouses Pubs Other commercial premises In addition, if you own furnished holiday lets or self-catering accommodation that is available to let for more than 140 days a year, you may also be liable for business rates instead of council tax. Agricultural buildings and those used to support disabled people are also generally exempt. How business rates are calculated and paid After a detailed calculation, local councils usually send your business rates bill for the upcoming tax year between February and March each year. In other words, you should plan and budget for the next year’s payment in advance. In England and Wales, business rates are calculated based on two key elements: 1. Rateable value Each commercial property is assigned a ‘rateable value’ by the Valuation Office Agency (VOA). This value is based on the property’s estimated market rent as of 1 April 2021. 2. Multiplier The rateable value is multiplied by a government-set ‘multiplier’ to determine the amount payable. The multiplier is set nationally, helping you roughly estimate how much business rates you will owe. For the 2025/26 tax year, the standard multiplier is 55.5 pence, and the small business multiplier is 49.9 pence. It is important to note that the VOA may request additional information about your property to accurately assess its rateable value.  You can request an extension if more time is needed to prepare. If you believe the council’s calculation is incorrect, you may apply for a reassessment. Business rates relief for small businesses Some businesses in England are eligible for business rates relief. If your property is in Scotland, Wales or Northern Ireland, different rules apply. Your business may qualify for relief if it meets one of the following conditions: It is classed as a small business It operates in retail, hospitality or leisure (such as a shop, restaurant, entertainment venue or hotel) It is the only business in a rural area It is a registered charity or community amateur sports club In England, the Small Business Rate Relief rules are as follows: If your property’s rateable value is below £12,000, you will not pay any business rates. If the rateable value is between £12,001 and £15,000, the relief gradually decreases from 100% to 0%. For example, if your property has a rateable value of £13,500, you will receive a 50% discount on your bill. A property valued at £14,000 would receive a 33% discount. Normally, businesses can only claim relief for one property. However, you may still qualify if you have multiple properties, provided that: The total rateable value of all properties is under £20,000 (£28,000 in London), and The rateable value of any other individual property does not exceed £2,899. As long as these conditions are met, your main property will continue to qualify for relief for one year. Other available reliefs Your business may also qualify for other types of relief if: Your property is empty, partially vacant or under refurbishment You have made specific improvements to the property Your bill has changed significantly due to a revaluation You face reduced small business or rural relief from 1 April 2023 Your business is facing financial hardship Your property is located in an Enterprise Zone or Freeport Your property is part of a heat network infrastructure If your property has been affected by serious local disruption such as flooding, nearby construction or roadworks, you may also apply for temporary rate relief. Some advice from TB Accountants It is important to note that business rate calculations are not fixed. If your business changes in nature or moves to a new location, your Small Business Rate Relief entitlement may also change. For example, if your property’s rateable value increases, the amount of relief available may decrease accordingly. For new small businesses or those renting commercial premises for the first time, we strongly recommend checking the property’s rateable value before signing a lease. Consult a qualified accountant or tax adviser to confirm whether you are eligible for relief and what documentation is required.  At the same time, plan your cash flow carefully to ensure that your business rates are paid on time each year to avoid penalties or surcharges.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 .

Millions of UK social media users at risk of £100 HMRC fine   Recently, HM Revenue & Customs (HMRC) warned social media users that they could face tax penalties of at least £100 if they fail to declare income earned online.   According to a new study by business management platform Tide, the rise of the “creator economy” has led millions of Britons to earn extra income through social media, making an average of £1,223 a year.   As more creators turn hobbies into side businesses—promoting products on TikTok Shop, partnering with brands, or monetizing popular content—many overlook HMRC’s £1,000 tax-free trading allowance, potentially putting them at risk of non-compliance.   The research found that 42% of UK social media users aged 18 and over have received income or free gifts from content creation, earning an average of £1,223 per year. Among them, 21% made more than the £1,000 tax-free threshold.   Under UK tax law, anyone who earns over £1,000 a year from content creation—including the value of gifts—must submit a Self Assessment tax return to HMRC. However, only 52% of social media users are aware of this rule, and just 44% of creators have actually filed their taxes.   Those who fail to file on time face an initial fine of £100, with additional penalties accumulating over time, potentially leading to significant financial losses within a year.   HMRC reminds taxpayers that if, within a tax year, you: Earn more than £1,000 from social media activities; Receive gifts worth over £50; or Accept gifts in exchange for promoting a product or service,   these should all be declared as taxable income. Although free products may seem like perks of being an influencer, HMRC considers them a form of taxable benefit.   The data also revealed regional differences: social media users in East England earn on average £700 more than the national average, making them the most at-risk group for potential fines, followed by those in London and North East England. Read more... HMRC to review suspending 23,500 child benefit payments   HM Revenue & Customs (HMRC) is reviewing its decision to suspend child benefit payments for about 23,500 recipients, after the agency used travel data to determine that they had permanently left the UK.   Under existing rules, child benefit payments automatically stop if the recipient has been living outside the UK for more than eight weeks. However, many affected families have said their payments were halted even though they had only been abroad for a short holiday.   The incident has drawn the attention of the UK Parliament’s Treasury Select Committee, which has demanded an explanation from HMRC. Following an initial investigation, HMRC has apologised for any possible errors and urged families who believe their benefits were wrongly stopped to get in touch.   In September last year, the UK government launched a crackdown on child benefit fraud, expected to save about £350 million over five years. The new system allows HMRC to cross-check its records with international travel data from the Home Office, leading to the suspension of payments for thousands of families.   However, as complaints have continued to rise, many people have reported that they had only been abroad briefly and had already returned to the UK.   One such case involved British mother Eve Craven, who took her son on a five-day trip to New York. About 18 months later, she received a letter from HMRC stating that her son’s child benefit had been stopped because the system had no record of her return to the UK. “The letter gave me a month to provide all the evidence proving I’d come back,” she said in an interview. “It was clearly their system’s mistake, yet we were the ones asked to fix it — that’s just not fair.” Her child benefit has since been reinstated, and the missing payments have been backdated.   The problem first surfaced among families traveling to and from Northern Ireland. Some had flown out of the UK from Belfast, arrived in Dublin, and then driven back home across the border. Because the UK and Ireland share a Common Travel Area, there are no routine passport checks between Northern Ireland and the Republic of Ireland — meaning the UK authorities had no data showing that some people had returned.   HMRC has now decided to review all affected cases, though it remains unclear how many errors occurred. The agency said it would re-examine past cases using PAYE employment data, and where continued UK employment is confirmed, it will reinstate payments and issue backdated compensation.   Read More... Bank of England says it expects inflation has peaked as it holds interest rate   The Bank of England’s Monetary Policy Committee (MPC) voted 5–4 last week to keep the benchmark interest rate unchanged at 4%, while signalling that inflation has likely peaked and a rate cut could come soon.   The UK’s Consumer Price Index (CPI) inflation rate remained high at 3.8% in September, the highest among G7 nations. Typically, higher interest rates help to curb price growth.   However, in its latest economic outlook, the Bank said inflation in the UK appears to have reached its peak and is expected to gradually decline over the coming months, stabilising at just above the 2% target within two years.   The decision comes just three weeks before the Treasury’s autumn budget announcement, fuelling speculation that the Bank may be waiting to reassess the economy once the new fiscal plan is revealed. Chancellor Rachel Reeves has previously hinted at potential tax increases and spending cuts, measures that could further weigh on economic growth.   At the same time, the Bank noted that tariff-related factors have contributed to slightly lower-than-expected inflation. According to its latest projections, the UK’s GDP is forecast to grow 1.2% next year and 1.6% in the following year.   Market analysts now widely expect the Bank of England could announce its first interest rate cut as early as next month, during its December 18 meeting, just before Christmas. Read More... Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk 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 .

According to data from the Home Office, tens of thousands of asylum seekers were still living in hotels as of June 2025.  At the same time, the government has pledged to stop using hotels for asylum accommodation by 2029 and to shift its focus to other types of housing, including former military sites and privately contracted properties.  However, the number of available beds and support services remains far from sufficient to meet the influx. This will push pressure onto local communities and the private rental sector, increasing the likelihood that asylum seekers will be dispersed into houses in multiple occupation (HMOs). Under these competing pressures, a housing model already fraught with problems may face even greater disruption. 1. The growing complexity of HMO housing A house in multiple occupation (HMO) refers to a property shared by at least three tenants from two or more households, who share facilities such as a kitchen or bathroom. If the property houses five or more tenants, it is often classified as a large HMO, subject to stricter licensing requirements. Students and low-income professionals are the main tenant groups in this type of housing. However, as more mixed households move into the same property, the complexity of HMO living is increasing and even reshaping local communities.  Jenny (pseudonym), who has lived in Perivale, West London for twenty years, said her area was once known for its family-friendly environment, small gardens and safe streets. But, since a neighbouring house was purchased by an investment company and converted into an HMO in 2021, the neighbourhood has changed dramatically: night-time noise, a constant flow of new occupants, unpleasant odours and even registered sex offenders living near schools have all become concerns. Jenny and other residents emphasised that many tenants have not received adequate support or supervision, turning HMOs from temporary accommodation into commercialised housing for profit. 2. HMOs as potential accommodation sites With the Home Office reaffirming its commitment to end hotel use for asylum seekers by 2029, government contractors are actively seeking partnerships with landlords, offering guaranteed rent, long-term leases and full property management services.  For investors, using HMOs as temporary asylum accommodation has therefore become highly financially attractive.  Government contractors such as Clearsprings Ready Homes are currently looking for landlords willing to house asylum seekers, providing guaranteed rental income, long-term contracts and management services. Analysts note that the government’s five-year fixed contracts are particularly appealing to investors, but they may also raise community concerns. Hotels offer centralised security and management, whereas dispersed accommodation means asylum seekers could be housed near schools, care homes or in quiet residential areas. HMOs, by their nature, offer little control over the mix of tenants. 3. HMO investment returns remain higher than traditional rentals Despite the social instability concerns, HMO properties continue to offer landlords more stable and higher returns. Surveys show that HMO investments still outperform traditional rental yields. With the cost of living and mortgage rates continuing to rise, the UK’s HMO market is expected to show strong growth in 2025. Official data indicates that UK rental prices rose by 9% over the past year, marking the largest increase in nearly a decade. As rents soar, more tenants are turning to shared housing as a cost-effective way to live in cities. Industry experts highlight that this trend is especially pronounced in London and is now spreading to other major cities. Research by Aldermore Bank found that 30% of HMO landlords earn annual gross rental income between £100,000 and £199,999, compared to only 10% of non-HMO landlords.   The reason is simple: renting out rooms individually often generates higher total income than letting a property as a single unit. For landlords, HMOs offer stable income, and if tenants come from vulnerable groups, rent is often paid directly through housing benefits.  However, for local communities, this can lead to more unregulated mixed-use housing and potential risks near schools or care homes. Experts warn that without corresponding support and enforcement resources, the situation will only worsen. For existing tenants, if landlords convert their properties into HMOs under government contracts for higher returns, this could squeeze the private rental market, push up local rents and force tenants to move. The view from TB Accountants ‘The government wants to save money, landlords want to make money, and communities want stability’.  This statement perfectly captures the dilemma of the HMO housing model. To strike a balance, HMO landlords are now facing increasing regulatory scrutiny. Under the Housing Act 2004, HMO properties must hold a valid operating licence, and many local councils have recently expanded their licensing requirements.  The following tax changes are worth noting: Stamp duty changes Multiple Dwellings Relief (MDR) was abolished in June 2024. This means purchases involving multiple properties, including HMO portfolios, can no longer calculate stamp duty based on an averaged price per dwelling, significantly raising investment costs. Tighter short-term letting tax rules Tax benefits for Furnished Holiday Lets (FHLs) will largely be removed from April 2025. Income tax and capital gains advantages will gradually align with those of standard rental properties. Council tax and business rates If an HMO is deemed to be ‘commercially operated’ or includes short-term letting, it may be liable for business rates rather than council tax, increasing running costs. Additionally, the Renters Reform Bill is expected to take effect by the end of the year, imposing stricter rules on landlords, including minimum room sizes, energy efficiency standards and tenant protections.  As policies and market dynamics continue to evolve, those intending to become HMO landlords are advised to prepare in advance, ensuring compliance and undertaking necessary refurbishments to mitigate potential legal risks.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 .

If you think Inheritance Tax is something only the wealthy should worry about, it’s time to think again.  The UK’s Inheritance Tax system is undergoing major changes, and this ‘silent revolution’ could quietly reshape how every family passes on its wealth. The story of Simon Broadbent Simon Broadbent, an entrepreneur from Huddersfield who runs a 160-year-old metal forming company, recently decided to gift his estate to his descendants.   However, one issue deeply troubles him: ‘I am 83 next birthday and, so that my descendants escape the potential inheritance tax bill of £6m-plus, I’ll have to survive until October 2032. My firm is property-based. In the event of an earlier demise, sites will require disposal within six months, cruelly affecting investment, growth and employment.  In my case the tax has turned into an ageist lottery. At the moment plans are afoot to rig up a life-support unit at home with an instruction to pull the plug on the appointed day, seven years hence.’   At his age, his concern is understandable.  Under current UK Inheritance Tax rules, if the person making the gift survives for at least seven years after transferring assets, the gift becomes completely tax-free.  However, if the person dies within seven years, the gift is treated as part of their estate and taxed on a sliding scale depending on how many years they lived after the transfer. So, for Simon, his most important task now is simply to keep living — while tallying up his assets: property, jewellery, savings, cash, and life insurance.  But this leads to one key question: When the policyholder dies, does the life insurance payout count towards Inheritance Tax? When is life insurance subject to Inheritance Tax? Under current UK law, life insurance payouts are not automatically exempt from Inheritance Tax. Whether they are taxed depends entirely on how the policyholder and beneficiaries are arranged. The key factor is whether the payout forms part of the deceased’s estate. The payout counts as part of the estate – Inheritance Tax applies Scenario:  You personally hold the policy and list your estate as the beneficiary (or fail to name a beneficiary). Tax treatment:  The payout becomes part of your estate and is added to other assets such as property and savings. If the total exceeds the Inheritance Tax threshold (£325,000, or up to £500,000 if left to direct descendants such as children or grandchildren), the excess is taxed at 40%. The payout is excluded from the estate – Inheritance Tax avoided (most effective approach) Scenario:  You place your life insurance policy into a trust. Tax treatment:  The policy legally belongs to the trust rather than to you. When you pass away, the insurer pays the proceeds directly to the trust, which distributes them to your chosen beneficiaries. Because the funds never form part of your estate, they are usually exempt from Inheritance Tax and bypass probate entirely. The payout goes to a spouse or civil partner – automatically tax-free Scenario:  You designate your spouse or civil partner as the sole beneficiary. Tax treatment:  Under UK law, transfers between spouses or civil partners who are UK-domiciled are completely free of Inheritance Tax, regardless of the amount. Inheritance Tax reforms in 2025 As of 6 April 2025, the ‘domicile’ concept was abolished in favour of a residence-based approach.  Anyone who has been a UK tax resident for at least 10 of the previous 20 tax years will be treated as a ‘long-term resident’, meaning their worldwide assets (including overseas property and bank accounts) could be subject to UK Inheritance Tax.  Even after leaving the UK, their non-UK assets may remain taxable for up to 10 years, depending on how long they previously lived in the UK. The government is tightening Inheritance Tax reliefs.  For instance, from April 2027, inherited pensions may become taxable, and reliefs for family business transfers are also under review. These developments highlight the growing importance of early tax planning. How to plan ahead and avoid Inheritance Tax Put your life insurance policy in trust This is the most effective strategy. Once your policy is held by a trust, the payout is no longer part of your estate. It avoids probate and can be distributed immediately to your beneficiaries — free from Inheritance Tax. Plan your finances early Under the UK’s ‘seven-year rule’, any gifts you make during your lifetime are fully exempt if you survive for seven years after the gift.  Even if you die within seven years, the tax rate reduces gradually based on how long you lived. Many wealthy individuals use this rule to transfer wealth early and reduce future tax exposure. Seek professional advice Inheritance Tax and trust planning are complex. It’s highly recommended that you seek professional advice from an experienced accountant or tax lawyer to design the most efficient strategy for your personal and family circumstances.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 .

Roughly 14,000 corporate jobs are to go at tech giant Amazon   Amazon has announced it will cut around 14,000 corporate jobs. According to the company, affected employees and teams will receive notifications from leadership. It remains unclear how this round of layoffs will specifically impact Amazon’s 75,000 employees in the UK.   According to reports from Reuters and The Wall Street Journal, earlier estimates suggested Amazon would cut about 30,000 jobs.   Data released by Amazon in July showed the company posted profits of £19.2 billion. The rapid advancement of artificial intelligence (AI) is believed to be one of the main reasons behind the layoffs.   Beth Galetti, Amazon’s Senior Vice President of People Experience and Technology, addressed the decision in an internal email to staff: “Some people might ask, ‘Why are we cutting jobs when the company is performing so well?’” she wrote. “We must recognize that the world is changing rapidly. This generation of AI is the most transformative technology since the Internet—it enables companies to innovate at unprecedented speed.”   Amazon CEO Andy Jassy has also stated multiple times over the past year that AI is reshaping how Amazon operates. “In the future, we’ll need fewer people to perform some of the tasks currently handled by humans. Generative AI is playing an increasingly important role in planning, analysis, and forecasting—helping teams move faster and make better decisions.”   According to The New York Times, Amazon plans to replace more than 500,000 roles with robots in the future, automating up to 75% of its operations. This round of layoffs is seen as part of a broader restructuring aimed at “streamlining operations and speeding up decision-making,” allowing algorithms to take over many coordination, reporting, and decision-making tasks traditionally handled by middle managers.   Analysts note that this logic is spreading throughout corporate America. Generative AI systems are now capable of efficiently performing typical managerial tasks—writing reports, summarizing progress, drafting memos, and summarizing meeting notes. Consulting firm Gartner predicts that by 2026, one in five organizations worldwide will use AI to eliminate at least half of their management layers.   In addition to Amazon, Target—the second-largest general retailer in the U.S.—has announced its first major round of layoffs in a decade, cutting nearly 2,000 positions. Paramount Pictures, following its merger with Hollywood studio Skydance, also plans to cut 1,000 jobs.   According to an October report by human resources firm Challenger, Gray & Christmas, U.S. companies have so far announced 946,000 job cuts in 2025—the highest level since 2020. Of these, more than 17,000 are directly related to AI, and another 20,000 involve automation and technological upgrades. The tech industry alone has cut 108,000 jobs this year.   The report predicts that total U.S. corporate layoffs this year are likely to exceed one million. Analysts say this wave of job cuts is reminiscent of the first automation-driven employment shock in manufacturing and technology between 2005 and 2006. Read more... State pension age may rise beyond 70 as thousands more live to 100   As the number of centenarians in the UK hits a record high, experts warn the government may need to raise the State Pension age to over 70.   Experts are warning that the UK government may have to accelerate plans to raise the State Pension age to above 70, as the number of people living to 100 reaches an all-time high.   According to the latest data from the Office for National Statistics (ONS), there were 16,600 centenarians in the UK in 2024, double the number from 20 years ago. In the same year, the population aged 90 and over was estimated at 625,000, up more than 50% since 2004 and 2.2% higher than in mid-2023. This includes 210,000 men and 415,000 women.   The UK government currently reviews the State Pension age every six years. At present, the age is 66, with plans to rise to 67 by 2028 and to 68 by 2046. However, as more people are expected to enjoy up to 35 years of retirement, the pension system faces what officials describe as a “serious financial challenge.”   According to government sources, a review of the State Pension age is under way. Possible measures being considered include reforming the “triple lock” — the policy that increases pensions each year by whichever is highest among inflation, average earnings growth, or 2.5%. Discussions may also consider bringing forward future pension age increases, potentially pushing the eligibility threshold into the 70s.   Analysts also note that longer life expectancy will significantly increase the burden on personal savings: “People will need to prepare financially for a much longer retirement,” they said.   Between 2021 and 2023, life expectancy in London was about 80 years for men and just over 84 years for women. The area with the highest female life expectancy in England was Kensington and Chelsea (86.5 years), while Hart had the highest for men (83.4 years).   In addition, the September inflation rate, published this week, stood at 3.8%. This figure is typically used to determine annual increases for various social benefits — including Universal Credit, tax credits, and disability allowances — and serves as a key reference for the State Pension triple lock.   However, since average wage growth this year reached 4.8%, exceeding inflation, pensions are expected to rise by 4.8% in April 2025. This means:   Those reaching pension age after April 2016 will see the new State Pension increase to £241.30 per week (about £12,547.60 per year), an increase of £574.60; Those who retired before April 2016 will see the old State Pension rise to £184.90 per week (about £9,614.80 per year), an increase of £439.40.   Read More... HMRC has ‘lost control’ of small businesses as missing tax hits 40%   Data from HM Revenue & Customs (HMRC) for the first half of this year show that UK small businesses failed to pay around 40% of the corporation tax owed for the 2023–2024 fiscal year, prompting criticism that the tax authority has “lost control” of this sector.   By definition, small businesses are companies with an annual turnover below £10 million and fewer than 20 employees. In the 2019–2020 fiscal year, this group accounted for less than half of the UK’s overall tax gap; by 2023–2024, their share had risen to 60%.   According to the report, although the overall tax gap — the difference between the amount of tax owed and the amount actually collected — has slightly narrowed, the unpaid corporation tax from small businesses rose from £12.3 billion to £14.7 billion. Out of the £36.7 billion in corporation tax owed by small firms that year, only £22 billion was collected, meaning around 40.1% went unpaid.   Across the UK economy, the total uncollected tax for 2023–2024 amounted to £46.8 billion, or 5.3% of total tax liabilities, down slightly from 5.6% the previous year. HMRC collected £829.2 billion in total tax revenue during the period.   The Federation of Small Businesses (FSB) said many firms find the tax system overly complex, and when they seek assistance, HMRC’s response is often slow. The FSB’s policy chief urged: “HMRC should prioritise improving its helpline services, reducing response times, and helping businesses navigate tax processes more smoothly. This would not only improve tax collection efficiency but also cut productivity losses caused by bureaucratic delays.”   While small businesses now account for the largest share of the tax gap, HMRC estimates that wealthy individuals make up only about 5% of it. However, the National Audit Office (NAO) has warned that HMRC may be underestimating the scale of tax evasion among the wealthy.   The advocacy group Tax Justice UK criticised the findings, saying: “Evidence suggests that non-compliance among the ultra-rich is far higher than official estimates. Many hide vast amounts of wealth offshore, beyond HMRC’s reach.”   The spokesperson added: “The real issue is that HMRC lacks the resources and support needed to close the tax gap — and the true shortfall could be much greater than the published figures suggest.”In its latest public spending review, the government allocated £1.7 billion to HMRC to recruit 5,500 compliance officers and 2,400 debt management staff over the next four years. The aim is to improve service quality while cracking down on deliberate tax evasion.   Read More... Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk 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 recent years, the UK economy has faced multiple challenges, including high inflation, rising interest rates, supply chain pressures and increasing energy costs.  Small and medium-sized enterprises (SMEs) have been particularly vulnerable, with more cases of bankruptcy, liquidation and restructuring — while some business owners are choosing to sell their companies altogether. If you are planning to sell your company in the UK, whether transferring all your shares or disposing of part of the business assets, the key question you’ll face is: how much tax will you need to pay?   This does not only involve Capital Gains Tax (CGT) but also requires careful planning around available reliefs and the compliance of the transaction structure. Taxes payable when selling a business When selling a company or business in the UK, the main tax involved is Capital Gains Tax (CGT).  For the 2025/26 tax year, each individual has a £3,000 annual CGT allowance, with the excess taxed at the following standard rates: 18%: for gains within the basic income tax band 24%: for gains above the basic rate threshold Following the Autumn Budget 2024, the UK government announced significant changes to CGT rules effective from 2025, including adjustments to the preferential rates and lifetime limits of Business Asset Disposal Relief (BADR) and Investors’ Relief (IR). For business owners and investors planning to sell or exit a company, understanding these updates and how to qualify for reliefs is crucial for efficient tax planning and compliant reporting. Business Asset Disposal Relief (BADR) Introduced in 2008 and formerly known as Entrepreneurs’ Relief before 2020, BADR was designed to help reduce the CGT burden when selling a business.  It replaced the previous ‘taper relief’ system with a fixed 10% CGT rate, preventing business owners from being overly penalised by high tax bills upon selling their companies. As of September 2025, the lifetime limit for BADR remains at £1 million per individual. Any gains above this threshold are taxed at the standard CGT rate. When BADR was first launched, its preferential rate was fixed at 10%. However, under reforms introduced in the Autumn Budget 2024, this rate will gradually increase: From April 2025: 14% From April 2026: 18% This means that future disposals of businesses or shares will attract a higher tax cost, making early planning even more important. Conditions for BADR eligibility To qualify for BADR, the following conditions must be met: Ownership period: You must have owned the business for at least 24 months before the sale (‘qualifying period’). Status requirement: During that time, you must have been a sole trader, company director, company secretary, or employee. Shareholding: For share disposals, you must hold at least 5% of the company’s share capital and voting rights. Qualifying disposals: Includes the sale of all or part of a business, company shares, or remaining assets after cessation. Cessation rule: If the business has ceased trading, the sale must occur within three years of cessation. Exclusions: Non-trading property disposals do not qualify. Spouse/partner rule: If the business is jointly owned by a couple or civil partners, each can claim BADR separately if they meet the qualifying conditions. Investors’ Relief (IR) Investors’ Relief (IR) is a separate tax benefit aimed at external investors in early-stage businesses who are not involved in day-to-day operations, similar in concept to BADR but designed for a different group. The lifetime limit for IR was reduced from £10 million to £1 million on 30 October 2024, and the tax rate will also rise in stages: From April 2025: 14% From April 2026: 18% To qualify, applicants must meet the following conditions: Shares must be held for at least three years continuously. The investee company must be a trading company or the holding company of a trading group. The investor must not be involved in company management. Shares must not be listed on a main stock exchange (AIM-listed shares are eligible). Shares must be newly issued shares. How and when to claim BADR or IR To claim either BADR or IR, you must submit the claim by the first anniversary of 31 January following the end of the tax year in which the disposal took place. For example, for disposals made in the 2025/26 tax year, the deadline for claims is 31 January 2028. You can claim via the Capital Gains Tax section of your Self Assessment tax return, or by submitting the HS275 form directly to HMRC. Some advice from TB Accountants With the gradual increase in the preferential tax rates for both BADR and IR, business owners and investors are facing higher overall tax costs.  Before selling a company, transferring shares or exiting an investment, it’s important to carefully plan the timing of your disposal to take advantage of the current lower rates.   Efficient use of available tax reliefs can have a direct impact on your post-sale returns. Given the complexity of UK company capital gains tax rules and the interaction with other reliefs and reporting requirements, it’s highly advisable to seek professional advice from a qualified accountant or tax consultant before making any major decisions.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 recent years, QR codes have become an indispensable part of daily life and are increasingly common across the UK.   Whether ordering drinks in a bar or paying for parking, a quick scan can complete the transaction within seconds. However, what many people don’t realise is that this seemingly convenient little square has quietly become a new weapon for fraudsters.  According to British media reports, in just one year this new type of scam has cost consumers more than £3.5 million. The rise of QR scams This form of scam, which relies on scanning QR codes, is known as ‘QR phishing’ or ‘quishing’. As the name suggests, the ‘Q’ refers to QR codes that, when scanned with a smartphone camera, can instantly link to websites, apps, payment pages or digital files.  Fraudsters then use these links in emails, text messages or phone calls to carry out phishing attacks, tricking victims into revealing passwords, credit card numbers or bank details, or even downloading malicious software onto their phones. According to Action Fraud, between April 2024 and April 2025, there were 784 reports of QR phishing incidents, resulting in total losses of nearly £3.5 million — an average of more than two cases a day and daily losses of around £10,000. Yet experts warn that this is likely just the tip of the iceberg.  Where does QR phishing usually occur? According to Action Fraud, car parks are among fraudsters’ favourite “fishing grounds”. Criminals place fake payment QR codes over the genuine ones on pay machines. Information obtained by The Bureau of Investigative Journalism (TBIJ)  revealed that out of 373 local authorities, one in three reported such incidents in their car parks over the past year. Parking-related QR scams not only expose drivers’ personal and financial information but can also lead to unpaid parking fees — meaning victims lose money and still receive fines. Case study A 71-year-old woman scanned a fake QR code at Thornaby railway station car park. Fraudsters used her personal details to set up online banking, change her registered address and take out a £7,500 loan in her name. She was later blacklisted and unable to access her own accounts. How to protect yourself from QR phishing Unlike the suspicious links in traditional phishing emails, QR scams are harder to spot because of where and how the codes appear.  To stay safe, follow these tips: 1. Pause before you scan Scams often work when you’re distracted or in a hurry. If you’re unsure about a QR code, don’t scan it — go directly to the company’s official website or app instead. A few extra seconds could save you a lot of trouble. 2. Use your phone’s built-in scanner Avoid third-party scanning apps, which tend to be less secure and more easily exploited. 3. Watch out for tampered QR codes In public areas, check whether a code looks like it’s been covered or altered — if it does, don’t scan it. 4. Go directly to official sources When making payments, it’s safest to use the company’s website or official app. 5. Check the web address After scanning, verify that the link is legitimate before entering any login or payment information. 6. Install security software Adding an extra layer of protection on your phone can help block malicious links and apps. Fraud cases reach record levels Despite regular public warnings, scam cases continue to rise year after year. According to Cifas’ Fraudscape 2025 report, there were 421,000 recorded fraud cases in the UK last year — the highest on record.  Even the Financial Conduct Authority (FCA) has been impersonated by scammers. In the first half of 2025 alone, 4,465 reports involved criminals posing as the FCA, with 480 victims losing money.  These scams often exploit public trust in official organisations, claiming they can recover losses, but their real goal is to steal money or personal information. Some advice from TB Accountants QR codes and digital services have made everyday life and business more convenient, but they also bring new security challenges.  Fraud now poses a risk not just to individual consumers but also to businesses and professional organisations. For companies, frequent financial transactions and sensitive data exchanges mean that even one careless scan of a fake QR code by an employee or client could lead to data breaches, financial loss or compliance issues.  Fraudsters may impersonate clients or suppliers to request fake payments, exposing firms to further risks under data protection and anti-money laundering (AML) regulations. Whether you’re an individual or a business, the key to managing risk is awareness and prevention. Staying alert to new scams and acting cautiously are the best ways to protect your finances and data.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 .

More than 1.1m people over pension age could pay income tax on savings accounts   According to the latest analysis by UK investment platform AJ Bell, based on data from HMRC (Her Majesty’s Revenue and Customs), it is estimated that in the 2025–2026 tax year, about 1.16 million people in the UK over the state pension age will have to pay income tax on interest earned from savings accounts. This number has grown rapidly in recent years — from 493,000 in 2022–2023, rising to 953,000 in 2023–2024, and is projected to reach 1.09 million in 2024–2025 — more than doubling in just three years. The analysis attributes this trend mainly to the rise in the Bank of England’s base rate and the long-term freeze on personal income tax thresholds. AJ Bell noted that these retired savers now account for roughly 44% of the 2.64 million people expected to pay tax on savings interest in the current tax year. At present, the UK’s Personal Savings Allowance (PSA) is as follows: Basic-rate taxpayers can earn up to £1,000 in savings interest tax-free. Higher-rate taxpayers have a tax-free allowance of £500. You can learn more about how savings interest is taxed in our previous article: “Do you have to pay tax on savings interest in the UK? What happens if you don’t report it? What tax-free allowances can you use?” In addition, savings held in tax-free accounts such as Individual Savings Accounts (ISAs) and certain National Savings & Investments (NS&I) products do not count toward the PSA limit, and remain ideal tools for protecting savings, boosting returns, and reducing tax exposure. However, there are reports that the Labour government may consider lowering the annual cash ISA contribution limit to encourage more investment in the stock market. For the 2024/25 tax year, individuals can contribute up to £20,000 to ISAs each year. Currently, it is estimated that over 14 million people in the UK have more than £10,000 in cash savings. Retirees often hold larger cash reserves to reduce investment risk or maintain liquidity for short-term needs. However, as cash savings grow, an increasing number of pensioners are being drawn into the income tax net, and some are even pushed into higher tax brackets. Withdrawals from pension funds above the tax-free allowance are subject to income tax; reinvesting the funds into other assets may also trigger capital gains tax or dividend tax. Even leaving the money as cash savings could result in additional income tax bills. Therefore, retirees are advised not to withdraw pension funds unnecessarily, to avoid unwanted tax liabilities. Read more... China’s Temu more than doubles EU profits to nearly $120m despite having only eight staff   Chinese e-commerce platform Temu saw a sharp rise in profits from its European Union operations last year — earning nearly $120 million in pre-tax profit despite employing only eight staff members. According to the latest financial statements filed by Whaleco Technology, Temu’s EU headquarters based in Ireland, the company’s pre-tax profit for the 12 months ending December 2024 surged 171% year-on-year, jumping from $44.1 million in 2023 to nearly $120 million. Over the same period, revenue increased from $758 million to $1.7 billion. However, Temu paid only $18 million in corporate tax, about $3 million of which was a top-up payment under the EU’s global minimum tax policy adopted at the end of 2023 — a figure that has sparked tax fairness debates. The filings show that Temu now has over 115 million users in the EU, equivalent to about one-quarter of the region’s total population. According to the CEO of the Fair Tax Foundation, Temu’s Irish entity reports only platform commission and service fee income, while the actual consumer transaction volume facilitated through its platform may exceed $10 billion. Including an estimated $2 billion in sales from UK-based sellers, Temu’s total scale now surpasses that of British retailer Next, and rivals Primark. This reveals a major disconnect between Temu’s massive sales in the UK and Europe and its minimal tax contributions. The company’s complex tax haven-based corporate structure means that European countries gain little tax revenue from its operations. Due to Chinese e-commerce platforms’ significant price advantage, a growing number of UK and European trade associations are urging governments to act swiftly to ensure local retailers can compete fairly with Chinese e-commerce giants. Proposed measures include strengthening the global minimum tax and digital services tax, reviewing tariff exemptions, and requiring multinationals to disclose country-by-country tax payments. The United States has already abolished the “de minimis” exemption, which previously allowed imports under $800 to be duty-free. The EU plans to end customs duty exemptions for parcels valued under €150 by 2028, and the UK Chancellor has also said that the government is reviewing similar loopholes.   Read More... UK inflation unexpectedly remains at 3.8% for third month in a row   The UK Office for National Statistics (ONS) released new data last week showing that inflation in September remained at 3.8%, unchanged for the third consecutive month and below market expectations of 4%. This provides a positive signal ahead of Chancellor Rachel Reeves’ key budget announcement next month. Earlier forecasts had predicted inflation would rise to 4%, but the data showed that increases in transport costs were offset by a slight decline in food prices and a slowdown in inflation within the “recreation and culture” sector. Meanwhile, food inflation stood at 4.5%, marking its first decline since May last year. This suggests that the upward pressure on food prices caused by climate-related factors has begun to ease. Although September’s inflation came in below expectations, it remains well above the Bank of England’s 2% target, and this is the 12th consecutive month it has exceeded that level. Chancellor Rachel Reeves commented: “I am not satisfied with these figures. Too many people are working harder but feeling worse off. We must change that. The government will fully support the Bank of England in bringing inflation down.” She also revealed that a series of measures to ease the cost-of-living pressures on households will be announced in the budget on November 26. Because inflation came in lower than expected, markets have moved up their forecast for the Bank of England’s first interest rate cut from March 2026 to February. However, analysts believe inflation may still decline only gradually, meaning a rate cut as early as December this year remains possible. As is customary, the September inflation figure will be used to adjust various welfare benefits, including Universal Credit, disability allowances, and the state pension. The International Monetary Fund (IMF) also forecast last week that the UK will have the highest inflation rate among G7 countries both this year and next.   Read More... Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk 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 .

As prices continue to soar across the UK and the cost of living keeps rising, an increasing number of people are facing unprecedented financial pressure. According to official data, in April 2025 alone, 72% of UK residents reported that their living expenses had increased compared to the previous month, with 14% saying they had to rely more heavily on credit due to the high cost of living.  As winter approaches, heating, electricity and food expenses are expected to climb even higher, potentially pushing more households into debt crises. At the same time, HMRC has announced the restart of its Direct Recovery of Debts (DRD) scheme, which allows the tax authority to deduct unpaid taxes directly from individuals’ bank accounts. Many people were alarmed by this news, and wondered:  Can HMRC really access our bank accounts?  Can they actually take money without prior notice? HMRC restarts compulsory tax deductions  According to the Money Advice Trust , the cost of living in the UK has been rising for several consecutive months.  By spring 2025, nearly seven million people were behind on at least one bill. Low-income households are especially vulnerable to ‘problem debt’, while many higher-income individuals are burdened with large mortgage debts. HMRC’s reinstatement of the Direct Recovery of Debts (DRD) scheme is designed to tackle the growing issue of unpaid taxes.  To ensure fairness and avoid excessive impact, the system includes several safeguards: It only applies to confirmed debts that are past the appeal deadline and where the debtor has repeatedly ignored HMRC’s attempts to make contact. It only applies to debts exceeding £1,000. Debtors who dispute the amount still have the right to appeal. HMRC must leave at least £5,000 in the account to cover essential living or business expenses such as wages, mortgages and basic needs. In addition, HMRC has stated that it will first try to contact debtors to discuss a Time to Pay arrangement. Deductions from accounts will only occur if repeated contact attempts fail. Can HMRC access bank accounts?  Many people assume their bank accounts are entirely private, but legally, HMRC does have limited and conditional access rights. Under Schedule 36 of the Finance Act 2008, HMRC may investigate tax returns and request information from banks or other data holders if there is ‘reasonable cause’.  Later, the Finance Act 2021 granted HMRC the authority to issue Financial Institution Notices (FINs), compelling banks to provide account data and transaction records to verify a taxpayer’s position or recover unpaid taxes. Notably, HMRC does not need the taxpayer’s consent or approval from an independent tribunal to issue a FIN.  However, several legal safeguards are in place to prevent abuse: The requested information must be directly relevant to a tax investigation. Each FIN must be authorised by a senior officer. HMRC must show that complying with the notice would not place an excessive burden on the bank. In most cases, HMRC must explain to the taxpayer why the information is being requested, unless a tribunal rules that advance notice could hinder tax collection. In other words, HMRC cannot freely browse through your accounts.  However, if they suspect tax evasion, underreporting of income or unpaid taxes, they are legally entitled to access related information. When might HMRC check a bank account? HMRC does not carry out random investigations. Most checks are triggered by specific signs or reports. Common triggers include: Accounting discrepancies or irregularities: Figures in tax returns that don’t match accounting records, unusually high expenses or inconsistent profit margins. Lifestyle and financial inconsistencies: A declared income that appears incompatible with one’s lifestyle, such as owning multiple luxury cars on a low income. Inconsistent tax returns: Large year-to-year income fluctuations or personal expenses claimed as business costs. Repeated late filings: Persistent late submissions can suggest non-compliance. Third-party reports: Tips from financial institutions, government departments or even members of the public. Serious criminal suspicion: Involvement in money laundering or terrorist financing may trigger joint investigations with law enforcement. Voluntary disclosures: When taxpayers report underpaid taxes, HMRC may verify the accuracy of the disclosure. Debt recovery actions: When unpaid taxes meet DRD criteria, HMRC may deduct the owed amount directly from the bank account. Some advice from TB Accountants  In the UK, tax oversight is becoming increasingly digital and data-driven.  HMRC can now cross-check information across departments and match it with bank systems in real time. This means every account and transaction could potentially become part of their compliance review. In most cases, HMRC will first send letters or emails alerting you to outstanding tax debts and attempt to resolve them through communication.  However, if HMRC suspects tax evasion or fraud, it does have the authority to access accounts without prior notice, mainly to prevent the transfer or destruction of assets, though such cases are relatively rare. If you’re concerned about becoming a target of HMRC scrutiny, you can reduce your risk by following sound financial practices: Keep personal and business finances separate For sole traders and freelancers, maintaining a dedicated business account is essential. Company funds should never be held in personal accounts. Maintain complete financial records Keep all receipts, invoices and accounting records, ensuring that data is accurate and consistent. File taxes on time and truthfully Avoid underreporting, exaggeration or omissions. Seek professional advice If your tax affairs are complex or you receive a notice from HMRC, consult an accountant or tax lawyer promptly.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 .

Recent UK tax compliance data has sounded the alarm once again: in the past three years, nearly half a million small and medium-sized enterprises (SMEs) repeatedly missed tax deadlines, with as many as 19% admitting they delayed tax payments more than five times in just the past 12 months.  A combination of complex tax rules and cash flow pressures is dragging SME compliance levels down. HMRC’s latest tax gap report shows that small businesses are the weakest performers when it comes to compliance, accounting for nearly 60% of unpaid taxes.   In addition, a survey by business finance provider Premium Credit revealed that out of 5.4 million SMEs in the UK, 9% missed deadlines for corporation tax, VAT, and other taxes over the past three years. In response, the UK government has launched new measures, pledging £1.7 billion in funding for HMRC from 2025 to 2029.  This will include 5,500 new compliance officers and 2,400 debt collection specialists, with a strong focus on tackling cross-border tax avoidance and deliberate evasion. The three main taxes every UK company (UK SMEs) must understand 1. Corporation tax All companies registered in the UK must pay corporation tax on their profits. Companies with annual taxable profits below £50,000 pay 19% Companies with taxable profits between £50,000 and £250,000 are subject to a marginal rate of 26.5% Companies with taxable profits over £250,000 pay 25% Banks are also required to pay a 3% bank surcharge, bringing their effective rate to 28%. Corporation tax must be paid within nine months of the end of the accounting period, and the return (CT600) must be filed within 12 months. 2. Value Added Tax (VAT) If a company’s taxable turnover exceeds £90,000 in any 12-month period, it must register for VAT. The standard rate is 20% (covering most goods and services).  A reduced rate of 5% applies to items such as domestic fuel and power, while a zero rate applies to specific goods and services such as food, books, and medicines. Note: For businesses involved in cross-border e-commerce, VAT compliance is particularly important.  From June 2025, online marketplaces are required to conduct in-depth verification of non-UK sellers, including proof of business location, VAT number validation, and device geolocation tracking across eight core checks. Platforms such as Amazon and eBay have already started compliance reviews, and sellers who fail will face account restrictions. 3. Employer National Insurance contributions (NICs) If a company employs staff, it must operate PAYE to withhold and pay income tax and national insurance on behalf of employees, while filing and paying these to HMRC on time. This ensures employees’ tax obligations are met. Failure to register or report on time can result in penalties, interest charges, and even HMRC investigations. Penalties depend on the length of non-compliance and the amount of tax unpaid. In addition to these, UK companies may also be liable for business rates, stamp taxes, capital gains tax, withholding tax, and environmental taxes. How can companies manage tax risks? 1. Build a solid compliance foundation: digitalisation and account separation Integrating HMRC-approved digital systems is essential. Manual bookkeeping has become a weak spot for SMEs, with error rates 2.3 times higher than the industry baseline.  Under the Making Tax Digital (MTD) rules, all VAT-registered businesses must maintain digital records and submit returns through approved software. It is also vital to separate business and personal accounts. Around 31% of tax gap cases arise from business owners mixing finances, which HMRC treats as a failure to take reasonable care. 2. Make use of tax reliefs: reduce liabilities legally while avoiding risks This may include maximising R&D tax relief, making full use of capital gains tax allowances, and applying double tax treaties for cross-border business.  3. Establish risk alerts: prevention is better than cure We recommend quarterly internal audits focusing on VAT compliance (checking invoices contain all mandatory details such as business name, VAT number, and goods descriptions, and ensuring reverse charge transactions record both input and output VAT), payroll accuracy, and cash flow management. It is also wise to set up a system for responding to HMRC enquiries quickly. 4. Professional support: TB Accountant’s protection framework Given the complexity of the UK tax system, professional tax advice is no longer optional—it is essential for running a compliant business.  TB Accountants provide SMEs with comprehensive services, including: Corporation tax compliance and planning VAT registration and return management Payroll and pensions administration Tax health checks and risk diagnostics HMRC investigations and dispute resolution     Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. 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@tbagroup.uk  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 .