In recent years, cryptocurrency has moved from a niche investment into the mainstream. From Bitcoin and Ethereum to Dogecoin and beyond, more and more people are making profits.  But did you know these gains have long been part of the Capital Gains Tax system and are firmly within the sights of HM Revenue & Customs (HMRC)? HMRC has officially announced new rules – from 1 January 2026, tax reporting requirements for cryptoassets will tighten significantly, and tax evasion will face severe penalties. Overview of the new rules To close tax loopholes more effectively, the UK will introduce the Cryptoasset Reporting Framework (CARF), a new system expected to generate £315 million in additional revenue over the next five years. From 1 January 2026, cryptocurrency exchanges and service providers will be required to collect and report to HMRC full personal details and transaction summaries of their users, to check whether individuals have declared their cryptocurrency gains accurately. This includes: Full name Residential address Date of birth Tax residence National Insurance number Summary of crypto transactions Tougher tax enforcement HMRC has stated that this data will be used directly to verify tax returns, with significantly increased scrutiny. The new rules clearly state: Failure to provide complete and accurate information will incur fines of up to £300. Crypto service providers that fail to submit user data, or submit inaccurate information, will face fines of up to £300 per user. Cases may trigger tax investigations, with back taxes, interest and penalties to be recovered. In addition, Chancellor Rachel Reeves has announced increased investment in technology and resources for the tax system, aiming to raise a further £1 billion over the coming years through anti-avoidance and anti-fraud measures. Declaring crypto gains So which tax applies to your crypto profits? The Property – Digital Assets Act, introduced in September 2024, confirmed for the first time that cryptoassets and NFTs fall under the definition of ‘personal property’. It clarified that income from digital assets – such as profits realised when selling or exchanging cryptocurrency – is subject to Capital Gains Tax (CGT) and must be reported on your Self-Assessment Tax Return. 1. Capital Gains Tax (CGT) in the UK Capital Gains Tax is charged on the profit you make when you sell, dispose of, or transfer an asset. It applies to (but is not limited to): Sale of shares, funds and bonds Sale of property (excluding your main residence) Sale of cryptoassets (Bitcoin, Ethereum, etc.) Sale of precious metals, art and high-value collectibles Gifting assets (other than to a spouse) or transferring them into a trust From 6 April 2025 (the start of the 2025/26 tax year), the annual CGT exemption will be: Individuals: £3,000 Trusts: £1,500 This means that if your total net capital gains in a tax year are below £3,000, no CGT is due, and you do not need to file a CGT return (unless in specific cases such as large-value gifts). Couples jointly holding assets can use a combined exemption of £6,000, but unused allowances cannot be carried forward. Note: The CGT annual exemption has been cut sharply in recent years – from £6,000 in 2023/24 – as part of the government’s push to increase CGT revenues. 2. CGT Tax Rates From 30 October 2024, CGT rates on property gains were aligned with those for other assets: Basic rate taxpayers: 18% (where total taxable income plus gains remains within the basic rate band) Higher and additional rate taxpayers: 24% Example:If your annual income is £20,000 and you realise a £12,600 gain from selling crypto, after deducting the £3,000 allowance, your taxable gain is £9,600. Your total income plus gain is £29,600 – still within the basic rate band. CGT due: £9,600 × 18% = £1,728 Some advice from TB Accountants HMRC has made it clear – full information disclosure will be mandatory from 2026. If you have crypto gains, now is the time to: Check your registered personal details on all platforms are accurate. Organise your historic transaction records and prepare tax documentation. File proactively and remain fully compliant. Seek professional advice promptly if in doubt. Our UK-based tax specialists can help you with CGT calculations and tax planning, assist with preparing and submitting your Self-Assessment return, advise on high-net-worth asset structuring, and support you in the event of an HMRC investigation.   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 .

Protests have recently broken out outside migrant hotels across the UK, with public anger over illegal immigration continuing to escalate. From London, Leeds, Norwich and Bournemouth to Portsmouth, Southampton and Nottinghamshire, furious residents have taken to the streets waving national flags and chanting slogans. Their criticism is directed at the huge cost to taxpayers of housing asylum seekers, and at the public safety concerns they believe are fuelled by the government’s immigration policies. Migrant accommodation hotels spark safety fears – protests erupt across the country The immediate trigger for the latest wave of anger was an incident in Epping, Essex, where an asylum seeker was charged with sexually assaulting a 14-year-old girl by allegedly attempting to kiss her. The accused, 41-year-old Hadush Kebato from Ethiopia, had arrived in the UK as a refugee just eight days earlier and was staying in a local hotel that has been used for years to house single male asylum seekers. Although Kebato has denied the charges and remains in custody, the case has intensified fears over public safety in areas accommodating large numbers of migrants. For two consecutive weeks, protests involving more than 100 people have taken place locally, with anti-immigration demonstrators clashing with pro-migrant supporters. Police have imposed restrictions and arrested 18 people during the unrest. Last week, Epping District Council passed a motion formally calling on the government to “immediately and permanently close” the migrant accommodation hotel in the area.   Norwich protests led by veterans The Epping case is only one example of the broader public dissatisfaction over the perceived risks posed by large-scale refugee arrivals. Outside the Brook Hotel in Norwich, hundreds of people waving Union flags gathered in protest. Led by military veterans, some camped overnight outside the premises. Some protesters claimed that two migrants previously housed at the Brook Hotel had been convicted of sexual offences in the past three months: Dan Tesfalul, from Ethiopia, was sentenced to eight years for rape. Rashid Al-Wali, from Yemen, received a 20-month sentence for sending sexual messages to members of an anti-paedophile group posing as a 14-year-old boy. Refugees accommodated in London four-star hotel – taxpayers footing £226,800 weekly bill While the issue of migrant hotels was already in the spotlight, UK media revealed that the Home Office plans to house some asylum seekers at the Britannia International Hotel in Canary Wharf, London – a four-star establishment – inflaming tensions further. When open to the public, a standard room at the hotel can cost up to £425 per night. Reports indicate that the Home Office has agreed to pay £81 per night for 400 rooms, resulting in a weekly cost of £226,800. The UK’s migration and housing crisis – twin pressures tearing society apart In addition to safety concerns and the controversy over hotel costs, the UK faces a worsening housing crisis, which has become a major source of frustration for citizens and legal immigrants alike. According to a recent report from the Centre for Policy Studies (CPS), the UK has a housing shortage of 6.5 million homes. The current level – 446 homes per 1,000 people – is far below the European average of 542 per 1,000, ranking second-worst in Europe, ahead only of Ireland. In England, and particularly in London, the problem is most severe, with just 427 homes per 1,000 residents. To match the European average, London alone would need to build an additional 1.1 million homes – not counting those who would like to move to the capital but cannot afford to do so.   The view from TB Accountants High property prices have made it difficult for young people in the UK to buy a home, deepening divides between urban and rural areas, between the east and west of the country, and between ethnic and social groups. When taxpayers see public funds used to house illegal migrants while they struggle to pay mortgages or rent, frustration and protest are inevitable. Immigration’s impact on housing supply and demand may also be quietly creating a long-term ‘hidden fiscal liability’.  When migration inflows are not effectively controlled, spending on education, healthcare and welfare can rise sharply. While the short-term costs of accommodation may appear manageable, they can evolve into structural deficits over time. In today’s unstable global climate, the combination of migration and housing pressures could become a ‘ticking time bomb’ for the UK – and may be one of the most decisive issues in the next general election.   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, an increasing number of workers in the UK have chosen to take on part-time work to earn extra income – for example, delivering food in the evenings, selling handmade crafts online, freelancing, or helping friends with various tasks. Flexible side jobs have become an important way to cope with the rising cost of living and to pursue financial independence. However, did you know that no matter how informal or temporary a side job may seem, as long as it generates income, HM Revenue & Customs (HMRC) may require you to declare it and pay tax? If handled incorrectly, you could face penalties, backdated tax bills and interest charges. The rise of part-time work in the UK – all income is taxable by default With the cost of living and inflation on the rise, combined with the growth of digital platforms such as Deliveroo, Etsy, Upwork and Airbnb, taking on a side job in the UK has never been easier. As of April 2025, there are over 1.2 million people in the UK with a second job – a number that continues to grow, with more people hoping to achieve early retirement or build wealth through extra income. Whether you are working weekends in a supermarket or selling handmade jewellery on Etsy, any financial gain you make may be subject to tax. HMRC can obtain information about your income through: Employer PAYE records Bank accounts and online payment platforms (such as PayPal) Online platforms and third-party data Transaction records from joint business activities Even cash income must be declared. HMRC now uses advanced data-matching systems, and failing to declare taxable income can be treated as tax evasion, triggering an investigation. How to pay tax on two jobs – how personal allowance is allocated For the 2025/26 tax year (6 April 2025 to 5 April 2026), the Personal Allowance is £12,570 – the amount of income you can earn tax-free in the year. Each person can only have one Personal Allowance, which means that no matter how many jobs you have, only one can benefit from it. Your Personal Allowance is usually applied to your main job – the one with the highest income – while all income from your second job is taxable from the first pound you earn. Your actual tax depends on your tax code. Your main job typically uses a standard tax code such as 1257L, meaning you receive the full annual Personal Allowance of £12,570. Your second job usually does not receive any allowance and may be taxed under the BR code (20% basic rate from the first pound), D0 (40% higher rate) or D1 (45% additional rate), depending on your total income. For example: Mr L earns £30,000 a year from his main job and £8,000 a year from a weekend job: Main job: £12,570 is tax-free, the remaining £17,430 is taxed at 20% Second job: All £8,000 taxed at 20% (BR code) This does not include National Insurance, student loan repayments, or benefits adjustments. A special case – if both jobs earn below £12,570 If each job earns less than £12,570 a year, you can apply to HMRC to split your Personal Allowance – for example, £9,000 for your main job and £3,570 for your second job. This method works best when both incomes are stable and predictable. If you are unsure of income stability, it is safer to allocate the full allowance to your main job to avoid underpaying tax and facing a bill at the end of the year. If your combined income pushes you into a higher tax bracket, you should inform HMRC so they can adjust your second job’s tax code and avoid a large bill later. Regularly checking your payslips, keeping your tax code up to date, and informing HMRC of changes are key to avoiding over- or under-payment of tax. How National Insurance is paid National Insurance (NI) is calculated separately for each employer – unlike tax, the allowance is not shared. If your earnings from each job are above £242 per week in the 2025/26 tax year, you will have to pay Class 1 NI contributions on both jobs. If your second job is self-employed or freelance If your second source of income is as a freelance writer, online seller, landlord (e.g. Airbnb), photographer, designer, consultant, or similar, the rules are different. Self-employed individuals must register for and complete a Self Assessment tax return each year. What you need to do: Register with HMRC by 5 October following the start of self-employment File your tax return on time each year Pay Class 2 and Class 4 NI contributions if applicable Keep records of your income and expenses for tax reporting and deductions For the 2024/25 tax year, first-time Self Assessment taxpayers must register with HMRC by 05 October 2025 to obtain a Unique Taxpayer Reference (UTR). Paper returns must be filed by 31 October 2025, while the online filing deadline is 31 January 2026 at 23:59. We recommend using tax software or hiring a qualified accountant to improve accuracy and reduce your tax burden. What is the £1,000 trading allowance? You might be wondering: if my side income is below the £1,000 trading allowance threshold, do I still need to pay tax? If your total gross income from self-employment, freelancing, gig work, side jobs, online sales, or short-term services in a tax year is £1,000 or less, you usually do not need to file a tax return or register as self-employed. This is known as the ‘trading allowance’. If your total self-employed or side job income exceeds £1,000 (before expenses), you must: Register as self-employed (if not already registered) File a Self Assessment tax return Either deduct your actual business expenses from income or claim the £1,000 allowance when calculating taxable profits Important reminders: If HMRC tells you to file a tax return, you must do so even if you earn less than £1,000 If you have multiple side jobs and the total income exceeds £1,000, you must file a return For property rental income, the £1,000 ‘property allowance’ may apply separately from the trading allowance, allowing up to £1,000 for each category   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 .

State pension alert: DWP called to raise payments to £586 a week and slash retirement age to 60 The UK Department for Work and Pensions (DWP) has recently revealed a highly controversial reform proposal that suggests increasing state pension payments to £586 per week and lowering the retirement age to 60.   This initiative was launched by a citizen named Denver Johnson, who started a petition on the official UK Parliament website, outlining three major changes:   Significant increase in pension payments – £586 per week, calculated based on the national living wage for a 48-hour work week, equivalent to an annual income of around £30,000; Earlier pension eligibility – reducing the state pension age from its current level to 60, allowing more people to enjoy benefits earlier; Protection for overseas pensioners – introducing annual increases for British retirees living abroad, addressing the issue faced by nearly 500,000 expats whose pensions have been frozen for years.   If implemented, the weekly state pension would rise from the current £221.20 to £586, more than doubling the existing amount. However, the petition has so far attracted only about 5,000 signatures, still far from the 10,000 required to trigger an official government response. To reach 100,000 signatures, which would prompt a debate by the Petitions Committee in Parliament, the campaign needs much broader public support.   Financial experts, however, remain skeptical. Karen Barrett, founder of financial advisory firm Unbiased, commented: “This sounds like an unrealistic dream with enormous implementation challenges. The cost of pensions is already a major burden for the government, and doubling payments would significantly increase fiscal pressure.”   The proposal could also lead to higher taxes, as the current personal allowance is £12,570, while the suggested pension level would exceed £30,000 annually, which would push recipients into a higher tax bracket.   Currently, only about half of new state pension claimants receive the full amount, which requires 35 years of National Insurance contributions. For those on the old state pension scheme, the basic amount is just £176.45 per week.   Want to know more about UK pensions? Check out our previous posts: Can You Claim UK Pensions Tax-Free After Moving to Europe? Will Cross-Border Pension Payments Be Double-Taxed? Everything You Need to Know About UK Pension Annuities: The Right Way to Secure Passive Income in Retirement Global Trend of Raising Retirement Age: At What Age Can You Retire in the UK and How Much Will You Get？ Read more... Online fashion retailer Shein’s UK sales leap by a third to more than £2bn Latest public data reveals that online fast-fashion retailer Shein has seen its UK sales surge by one-third, surpassing £2 billion. In 2024, the company’s profits are expected to rise 56%, reaching £38.2 million, overtaking British rival Boohoo and closing in on Asos. Shein, headquartered in Singapore but originally founded in mainland China, primarily focuses on fashion products but has recently expanded into categories such as toys and beauty products. Despite posting £38.2 million in operating profit and paying £9.6 million in corporate tax, Shein’s strong performance is putting pressure on UK Chancellor Rachel Reeves. Under the UK’s current de minimis exemption for low-value parcels, fast-growing online retailers like Shein and Temu benefit significantly. The rule allows overseas sellers to ship goods valued at £135 or less directly to UK consumers without paying customs duties. This policy effectively lowers costs for these platforms, intensifying competition with UK retailers and the high street. Globally, changes to low-value import tax exemptions have also drawn attention. In May 2024, the United States scrapped its de minimis exemption for Chinese goods. The European Union is also planning to phase out its low-value parcel duty relief: From July 2025, all low-value imports, regardless of price, will require detailed declarations to comply with the EU’s new customs security system (ICS2). From March 2028, the EU plans to abolish the current rule that exempts goods valued at €150 or less from customs duties. Instead, a flat handling fee of €2 will apply to such parcels. Importers enrolled in the new Trust and Check Trader scheme may see this fee reduced to €0.50. Read More... UK Cuts Dividend Tax Allowance Twice: 3.6 Million Investors Now Face Tax As UK government borrowing rises, the Treasury is expanding the tax net to increase revenue. According to the latest data from HM Revenue & Customs (HMRC), an increasing number of ordinary investors will now have to pay dividend tax, with basic-rate taxpayers becoming the main group affected for the first time. In the 2024/25 tax year, an estimated 3.67 million individual investors will be liable for dividend tax, a record high and almost double the number from 2022/23. Data obtained by wealth management firm Quilter under the Freedom of Information Act shows that the dividend allowance has been cut twice in the past two years: April 2023: reduced from £2,000 to £1,000 April 2024: further reduced to just £500 HMRC modelling indicates that these consecutive cuts have caused the number of dividend taxpayers to rise from 1.9 million in 2022/23 to 3.08 million in 2023/24, and it is expected to reach 3.665 million in 2024/25. Among them, basic-rate taxpayers (20%) will make up the largest group for the first time: around 2.15 million individuals are expected to have taxable dividend income, with 1.11 million required to pay tax, many for the first time. Rachael Griffin, tax and financial planning expert at Quilter, commented: “Dividend tax is quietly widening its reach. What used to be a niche tax affecting only high earners and business owners now impacts millions of ordinary investors.” Dividend Tax Rates for 2024/25: Basic rate: 8.75% Higher rate: 33.75% Additional rate: 39.35% With the allowance reduced to £500, dividend tax is projected to raise £450 million in 2024/25, rising to £810 million, £860 million, and £940 million in subsequent years (2025/26 to 2027/28). Although HMRC states that many affected investors will not need to register for Self Assessment, with tax collected via PAYE or simple assessment, some individuals will still need to file a tax return. We remind investors that, in an environment of falling interest rates and reduced cash appeal, many people are turning to investments for growth. To mitigate tax exposure, consider making full use of ISAs, pensions, and other tax-efficient tools. If you are unsure about the rules or need help with compliant reporting and tax planning, you can scan the QR code below to book a free one-on-one consultation with our UK tax specialists.   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 .

A new wave of global tax negotiations is quietly unfolding. Following significant progress made by the G7 nations on the global minimum tax and the crackdown on multinational tax avoidance, the United States has agreed to remove Section 899 – a retaliatory tax clause against foreign companies – from the ' Big Beautiful Bill' . This move spares UK-based businesses from what could have been an enormous additional tax burden. The breakthrough brings a degree of stability to the international tax environment and sends a positive signal to businesses currently operating in the UK or planning to expand internationally via the UK. 1. UK businesses protected – US-UK tax conflict averted Section 899 of the Big Beautiful Bill had been proposed as a retaliatory tax provision aimed at foreign firms not in line with global minimum tax standards. UK companies were likely to be the most directly affected: had it been enacted, a substantial number of British multinationals would have faced punitive tax increases in the US, significantly undermining investment confidence and trade between the two nations. Concerned over the looming threat, British businesses quickly urged the government to intervene. The new Labour Chancellor, Rachel Reeves, faced this tax controversy as her first major challenge. She promptly opened discussions with US Treasury Secretary Scott Besant, taking business concerns directly to the negotiating table. Fortunately, the outcome was favourable. The US agreed to drop Section 899, the G7 nations reached consensus on compatibility between US and global tax frameworks, and joint efforts to implement the OECD’s global minimum tax agreement will now proceed. This not only diffused potential economic confrontation between the UK and US, but also signalled that Britain is prepared to defend the interests of its domestic companies in the international tax arena. 2. G7 nations drive global minimum tax reform As the US eases back from unilateral tax penalties, the G7 countries are jointly advancing the OECD’s ‘Base Erosion and Profit Shifting’ (BEPS) Pillar Two policy – the Global Minimum Tax. This mandates that multinational corporations must pay at least 15% effective tax rate, regardless of where profits are booked or transferred. The aim is clear: to curb tax haven practices, ensure fair tax distribution across jurisdictions, and establish a level global playing field. Historically, many large companies shifted profits to low-tax jurisdictions such as the Cayman Islands or Ireland via complex legal structures, dramatically reducing their tax liability. While technically legal, these practices disrupted fair competition and undermined national revenues. 3. A window of opportunity for UK businesses The UK remains one of the world’s most established offshore company jurisdictions and international investment hubs. It continues to optimise tax policy, corporate governance structures, and business support measures – making it an increasingly attractive destination for Chinese and international enterprises. Flexible Company Structures Limited Company (Ltd): The most common type, suitable for international trade, e-commerce and consulting. Easy to register. Limited Liability Partnership (LLP): Transparent structure, often used for tax planning. Public Limited Company (PLC): Ideal for larger businesses and those planning a public listing. Efficient Company Formation No physical presence required for directors Overseas investors can use registered office address services Incorporation usually completed within 24 hours Banking & Cross-border Transactions UK companies can open local or digital bank accounts (e.g. Revolut, Wise) Support for multi-currency settlements in GBP, USD, EUR Facilitates global trade and supply chain operations Corporate Tax Incentives Corporation Tax Relief The standard UK corporation tax rate is 25%, but small businesses with profits under £50,000 benefit from a reduced 19% rate. For high-income individuals, this can be significantly more tax-efficient than personal income tax at the same thresholds. Business Expense Deductions Allowable expenses reduce taxable profits, including: Office supplies Employee salaries, pensions and benefits Business travel (e.g. car, public transport) Training and education Advertising and marketing costs Utilities (electricity, water, internet) Rent and property expenses Insurance premiums (e.g. business, property) Capital Allowances Companies may deduct part or all of capital expenditure from their tax bill. For example, vehicles purchased in the company’s name – especially energy-efficient models – may qualify for additional relief. R&D Tax Relief Qualifying research and development spending can be deducted at up to 230%, with the potential for cash refunds. Patent Box Scheme Eligible patent-derived income is taxed at just 10%. SEIS/EIS Investment Reliefs Start-ups can attract angel investors and venture capital via generous tax incentives – including up to 50% income tax relief for individual investors. Ongoing compliance requirements After forming a UK company, businesses must meet annual tax and reporting obligations – even if no trading takes place. This includes: Confirmation Statement Annual Accounts Corporation Tax filing PAYE and National Insurance (if applicable) VAT returns (if VAT-registered) While most of these are annual requirements (VAT may be monthly or quarterly), deadlines vary. As highlighted above, there are many tax benefits available, but navigating the timing and structure of these obligations requires careful planning. If you’re unsure about how to file, when to file, or how to use tax reliefs properly, it is strongly advised to consult a qualified tax advisor or accountant. Some advice from TB Accountants The G7 agreement on the global minimum tax regime provides reassurance to UK businesses operating within an increasingly complex international tax landscape. It also reaffirms Britain’s status as a strategic location for corporate headquarters, financial compliance, and global asset planning.     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 .

Rachel Reeves needs to put up taxes to cover £40bn deficit The UK’s National Institute of Economic and Social Research (NIESR) recently released its latest report, stating that, due to slowing economic growth and persistently high inflation, the UK government’s fiscal shortfall is now estimated to have exceeded £40 billion. To close this gap, Chancellor Rachel Reeves is likely to have little choice but to raise multiple taxes in the Autumn Budget, especially after reversing welfare cut policies.   This forecast could break Labour’s general election manifesto pledge not to balance the books by raising personal income tax.   According to NIESR’s calculations, to fill the current £41.2 billion deficit and restore a fiscal buffer of nearly £10 billion, the Treasury would need to raise more than £51 billion in extra revenue. In reality, the options are limited—either raise taxes, cut spending, or increase borrowing. Since borrowing could undermine market confidence and government departments are already under severe strain, tax hikes are seen as the most likely route.   NIESR stated that increasing both the basic and higher rates of income tax by 5 pence per pound (equivalent to 5 percentage points) could fill the budget gap. Other measures under discussion include extending the freeze on personal income tax thresholds and lowering the tax-free allowance for cash ISAs.   Freezing tax thresholds could raise around £8 billion. Raising the basic rate to 25% and the higher rate to 45% could completely eliminate the shortfall.   NIESR senior economist Stephen Millard noted: “If the Chancellor wants to maintain a £9.9 billion buffer, she will need to find £51 billion in new revenue or savings every year by 2029–30.”   Last month, the Chancellor already hinted that, due to the removal of welfare restrictions, the government would have to raise taxes, though she did not specify which ones.   Meanwhile, public sector pay demands are growing louder, and spending pressures in immigration, justice, defence, and education continue to mount. Labour backbenchers—especially after successfully blocking cuts to the winter fuel allowance and disability benefits—are expected to oppose reductions to other promised public spending in the Budget.   The Office for Budget Responsibility (OBR) had forecast in March that the fiscal deficit would fall in 2025–26, but the latest official figures show that in just the first three months of this financial year the deficit reached £44.5 billion, £5 billion higher than expected.   With weak economic growth, stubborn inflation, and rising public spending pressures, the UK’s public finances face tough choices. Conservative spokesperson Mel Stride criticised Labour for “mismanagement” and for “always relying on tax hikes because they don’t understand the economy.” Reeves will face the challenge of balancing fiscal discipline with election pledges in the Autumn Budget. Read more... HMRC could claw back VAT from private school advance fee schemes According to multiple UK media reports, HM Revenue & Customs (HMRC) is considering reclaiming taxes from parents of private school pupils who used “advance payment” schemes to avoid paying Value Added Tax (VAT). Statistics show that in just the past year, such arrangements brought in over £500 million in prepayments for the UK’s top private schools.   An analysis by The Telegraph found that many wealthy families, before January 2024, paid several years’ worth of tuition fees upfront to avoid the 20% VAT introduced under Labour’s new policy. During the election campaign, Labour had clearly stated in its manifesto that it would impose VAT on private school fees, and the policy was formally announced by the Treasury on 29 July 2024.   Prestigious private schools, including Winchester College and Eton College, strongly encouraged parents to use this scheme before the policy took effect, triggering a “payment rush.”   Brighton College: received £50 million in prepayments last year, compared with £60 million in total annual tuition fee income. Eton College: collected nearly £53 million in advance fees.   Annual boarding fees (including VAT) at both schools are around £63,000. The government has said that removing tax breaks for private schools is expected to raise £1.8 billion annually by the 2029–30 academic year, funding the recruitment of 6,500 new teachers and improving the quality of state education (state schools currently educate 94% of UK pupils).   However, tax lawyers have warned that these advance payment schemes carry significant legal risks. Many schools treat parents’ prepayments as “deposits,” deducting the annual fees from them year by year.   From a VAT perspective, however, the tax point is usually set when the fees for each academic year are invoiced. If, at the time of payment, the price and service period were not explicitly fixed, HMRC could still demand backdated VAT in the coming years. This means that parents who have already paid hundreds of thousands of pounds could still receive tax repayment notices years later. Read More... Interest rate cut to lowest level in more than two years Last week, the Bank of England announced a 0.25 percentage point cut to its base interest rate, bringing it down to 4% — the lowest level in more than two years. This marks the third rate cut this year and the fifth adjustment since last year’s peak of 5.25%.   Despite a recent rebound in UK inflation and continued rises in energy and food prices, the Bank made what it called a “difficult and delicate” decision. Governor Andrew Bailey said: “We chose to cut rates today, but this was a carefully balanced decision. Rates remain on a downward path, but every step in the future must be cautious and gradual.”   For the general public, the base rate directly affects the cost of mortgages, consumer loans, and other borrowing: Mortgages: Several lenders have already reduced rates ahead of the announcement, with some products now below 4%. For those whose fixed-rate mortgages are about to expire, this is undoubtedly good news. Variable-rate mortgages: Industry data shows the average monthly repayment will fall by about £29. Savings: Deposit rates will also decline, and savings returns are expected to shrink in the coming weeks.   The Bank still has three more policy meetings this year to discuss rates. While the Governor has hinted that further cuts are possible, he stressed that the outlook remains “uncertain.” Markets broadly expect the next cut to come at the November meeting. Forecasts suggest that by 2026, the base rate could fall to 3.5%.   Meanwhile, inflationary pressures persist. In June, the UK’s Consumer Prices Index (CPI) rose to 3.6%, an 18-month high. The Bank projects inflation will climb further to around 4% in September; food inflation, currently at 4.5%, could rise to 5.5% before Christmas. However, the Bank expects inflation to slow in the fourth quarter of this year, drop to an average of 2.5% in 2026, and return to its 2% target by 2027.   On economic growth, the Bank raised its 2025 GDP growth forecast from 1% to 1.25%, offering a short-term boost to the public finances.   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 the latest data from the British Retail Consortium (BRC), annual food inflation in June rose to 3.7%, up from 2.8% in May – the largest monthly increase in nearly a year.  That means you may now be spending an extra £5–10 per week on food – equivalent to the cost of a coffee or half a dozen eggs. Even more concerning is that this surge is not a temporary blip but a warning sign of the sustained dual impact of the climate crisis and shifting tax policy on the agricultural system. The price hike breakdown: ‘climate tax’ and ‘policy tax’ on the dinner table Vegetable and fruit crisis: Potato prices have risen by 20% year-on-year, carrots by 38%, and olive oil by 40% due to disease outbreaks affecting olive trees in Italy. The Fresh Produce Consortium notes that 65% of the UK's fresh fruit and vegetables are imported. Severe droughts in southern Europe are driving up supply chain costs. The chocolate crisis: West Africa – which produces three-quarters of the world’s cocoa – has been hit by drought, heavy rains, and crop disease, slashing production and nearly doubling some chocolate prices. Staple food alert: Wheat and barley are expected to yield 15–20% less due to spring droughts. A new round of price increases is anticipated for everyday essentials like bread and pasta. Tax and National Insurance: The Hidden Forces Behind Price Rises 1. The 'cost chain' of labour From April 2025, the UK government increased the employer National Insurance rate from 13.8% to 15%, while slashing the threshold from £9,100 to £5,000. Research by the British Chambers of Commerce (BCC) shows that this change has raised average staffing costs in the retail sector by 4.2%, with supermarkets and food processors most affected. M&S and Sainsbury’s are reportedly incurring nearly £200 million in additional annual staffing costs – equivalent to £1.80 more in labour cost for every £100 of goods sold. These costs are being passed directly to consumers: Tesco raised the price of its own-brand bread by 5p in June, while Asda increased average dairy prices by 3.2%. The Food and Drink Federation (FDF) estimates that for every one percentage point increase in employer National Insurance, food prices rise by 0.7%. 2. Farming’s ‘cost trap’ Figures from the National Farmers' Union (NFU) show that average UK farm profit margins have dropped from 6.8% five years ago to 3.1% in 2025. 42% of small to medium farms say they have ‘no choice but to raise prices to stay afloat’. This has contributed to a 9.3% year-on-year rise in the price of locally grown vegetables – significantly above the overall food inflation rate. 3. Supply chain ‘butterfly effect’ While the UK government has temporarily removed tariffs on 89 imported food items (including pasta and fruit juice), adjustments to the VAT system continue to increase costs. A less visible impact comes from cross-border transport: haulage firms have raised shipping fees by £8 per tonne due to higher National Insurance costs for drivers. This has raised the import cost of Spanish citrus fruit by 6.7%, which is now being reflected on supermarket price tags. 4. Consumer ‘stress test’ Households are now being squeezed by shrinking income and rising expenses. The freezing of personal tax thresholds has effectively increased the real tax burden, while rising food prices are acting as a form of hidden wage cut. The Resolution Foundation think tank estimates that a typical dual-income household earning £40,000 will see its disposable income fall by £1,200 in 2025 compared to 2023. Of that drop, 38% is attributed to higher food costs. This pressure is especially acute among low-income families: those earning under £20,000 now spend 16.2% of their income on food, up from 14%. According to Kantar, this has led to an 8% fall in fresh produce purchases and a shift toward cheaper processed foods. Climate Under the Microscope: Extreme Weather and Policy Pressure Combine Crop Death Spiral The Met Office reports that spring 2025 saw the driest and hottest conditions in a century, with soil moisture reaching record lows. With rising tax pressure, farmers lack the resources to invest in water-saving irrigation systems, worsening crop failures. In eastern England, a key potato-growing region, reduced water supply led to a 23% drop in yields. Combined with rising labour costs, retail potato prices have surged 20% year-on-year. Agricultural Vicious Cycle To cope with combined climate and tax stress, 15% of UK farms have reduced organic planting in favour of higher-yield crops that require more fertiliser. This has pushed up organic food prices by 12.8% – twice the rate of regular food inflation. Experts warn that this short-term move could accelerate soil degradation and pose long-term risks to crop yields. Global Shockwaves Brazil has raised its soybean export tax from 8% to 12% to fund rainforest conservation efforts. This has increased feed costs for UK livestock farmers by 11%, contributing to meat price hikes. Chicken breast prices in UK supermarkets have risen for six consecutive months, with a total increase of 14.2%. Who is paying the price? The double hit on low-income families Spending Gap Rising food prices now account for a significantly larger share of spending in low-income households – up to 1.5 times that of higher-income households. Following a 4.1% food inflation rate in May, sales of supermarket own-brand items rose 12% year-on-year, while fresh produce purchases fell 8%. Invisible Hunger The UN reports that over 700 million people globally faced hunger in 2023, and this figure is expected to climb in 2025. In the UK, food bank usage has exceeded one million for three consecutive years. Meanwhile, increased tax revenue demands have led the government to cut its food aid budget by 12%. When climate crisis meets tax reform, food price inflation in the UK is no longer the result of a single factor. Each rise on a supermarket shelf reflects the complex interplay between ecological strain and economic policy. For consumers, understanding how these forces work can help with smarter budgeting, tax planning and sustainable choices. Ultimately, the key to solving this crisis lies not only with policymakers but also with every household’s dinner table.      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 .

For UK tax residents, the standard personal allowance is £12,570 per tax year. Income falling within this threshold is exempt from income tax, while any amount above it is taxed according to the relevant bands. Typically, this personal allowance is fixed. However, in light of rising living costs and frozen tax thresholds, HMRC has recently promoted a practical tax-saving measure – the Rent a Room Scheme. Under this scheme, if you live in a UK property and rent out a furnished room in your main home, you could effectively boost your tax-free income to £20,070 per year. What is the Rent a Room scheme? The Rent a Room Scheme allows resident landlords to earn up to £7,500 per year tax-free by letting out a furnished room in their main residence. This amount is on top of the standard £12,570 personal allowance. If the room is jointly let (for example, with a spouse or partner), the exemption is halved to £3,750 per person. You may qualify for the scheme if: You are renting out part of your main residence The room is furnished The tenant could be a student, lodger or part-time worker You operate a bed and breakfast or guesthouse You live in the property (you do not need to own it) The scheme does not apply in the following circumstances: The property has been converted into self-contained flats The room is unfurnished The space is used as an office or for business purposes The property is not your main home You live overseas and rent out a property in the UK How to apply for the Rent a Room Scheme If your rental income does not exceed £7,500 per year (around £625 per month), the tax exemption applies automatically and you do not need to file a tax return. If your rental income is higher, you must report it through Self Assessment and elect to use the Rent a Room relief. Alternatively, you may choose not to join the scheme and instead declare your rental income and deductible expenses in the usual way. This may be preferable if you incur a loss, as the loss can potentially be offset against other rental profits. Example Ms W owns a house in London and rents out a furnished bedroom to a student at £600 per month. This brings in £7,200 annually – under the Rent a Room threshold – so she does not need to pay tax or file a return for it. Combined with the £12,570 personal allowance, she effectively receives £19,770 tax-free. If she also earns a small amount of income (up to £300), she may still not be required to pay tax. Other key tax reliefs for landlords in 2025/26 In addition to the Rent a Room Scheme, landlords may also benefit from the following tax reliefs for the 2025/26 tax year (starting 6 April 2025): Property Income Allowance If your total rental income is under £1,000 for the year, you can use this allowance instead of declaring expenses. If income exceeds this amount, you must use the standard method. Allowable Expenses You can deduct expenses that are wholly and exclusively incurred for the rental, including: Repairs and maintenance Insurance Letting agent fees Legal and professional services Replacement Domestic Items Relief This allows you to deduct the cost of replacing everyday household items such as furniture or appliances with like-for-like or equivalent-quality items. Upgrades are not eligible. We have previously published guidance on Making Tax Digital for landlords and on claiming relief for property maintenance. You can refer to earlier articles for more details. Some advice from TB Accountants The UK is currently experiencing what is known as ‘fiscal drag’, where inflation and frozen thresholds result in more taxpayers being pushed into higher tax bands. Against this backdrop, the Rent a Room Scheme is a simple and legitimate way to reduce your tax bill. If you have a spare room in your home, consider turning that unused space into a tax-free source of income. We also recommend staying up to date on any changes for the 2025/26 tax year, especially relating to Stamp Duty and Capital Gains Tax (CGT). If you are planning to buy a new property or sell a rental one, it is important to understand the latest rules and avoid unexpected costs.        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 Brits Buying Gold Coins to Avoid Taxes This year, the number of British investors purchasing gold coins has hit a record high, aiming to avoid the impact of the capital gains tax (CGT) increase introduced in April—while also profiting from the recent gold price surge. According to a report released last week by the Royal Mint, online transactions of gold bars and coins reached historic highs in Q1 of the 2025–26 UK fiscal year, with coin sales up 115% year-on-year. The World Gold Council echoed this trend, noting a 17% increase in UK demand for gold bars and coins compared to the previous year.   In a survey of 14,000 customers, 42% listed legal tax mitigation as the main reason for buying gold coins; another 26% said it helped them "preserve wealth." Under UK tax law, coins produced by the Royal Mint—including all gold, silver, and platinum coins—are legal tender and thus exempt from CGT for UK residents. However, all non-Royal Mint gold, silver, and platinum coins, as well as gold and silver bars, are subject to CGT.   Louise Street, Senior Market Analyst at the World Gold Council, said the tax benefits of gold coins have "increased gold’s appeal" in recent months. Gold has traditionally been seen as a safe haven asset. Its price has soared this year amid geopolitical tensions and concerns about U.S. tariffs. As of August 1st, gold was trading at around $3,350 per troy ounce in the UK. It has also benefited from growing concerns over rising commodity costs and is often used to hedge against inflation. Capital Gains Tax (CGT) applies to profits from selling investments, businesses, second homes, stocks, and other assets. In recent years, CGT rules have changed drastically. The previous Conservative government slashed the CGT allowance from £12,300 in 2022–23 to just £3,000 in 2024–25. In last October’s budget, Chancellor Rachel Reeves raised CGT rates from 10%–28% to 18%–32%. Still, some wealth managers note that gold is extremely liquid—it can be sold at any time, even in tight markets, with almost no delay. However, owning gold coins may come with additional practical costs such as storage, insurance, and transaction fees. If you're considering gold investments, it’s important to speak with a professional tax advisor to fully understand the risks and benefits. Read more... High Tax Pressure Could Keep UK Prices Climbing A recent British Retail Consortium (BRC) survey of retail CFOs revealed that 85% of businesses have already raised product prices following increases in employer National Insurance contributions and the national minimum wage. The survey covered over 9,000 UK stores across all retail sectors. Notably, 65% of retailers expect further price hikes in the coming year. The BRC stated that rising tax-related costs were a key driver of these price increases. Dual increases in employer NI and minimum wage have significantly raised labor costs, which retailers are now passing on to consumers.   Official data reflects this inflationary trend. In June, the UK Consumer Price Index (CPI) rose 3.6% year-on-year—the highest in over a year, and possibly exceeding the Bank of England’s projected September peak of 3.7%. Based on these figures, the BRC warned that food inflation may hit 6% by year-end. With the holiday shopping season approaching, British households will likely face increased financial pressure, especially on essentials like groceries and daily necessities.   To cope with mounting cost pressures, most retailers have already taken austerity measures. The survey shows: 42% froze recruitment and paused new hiring 38% reduced store staff Another 38% cut investments in expansion or technology upgrades Retail contributes around 9% of total UK employment. Facing a worsening business climate, most CFOs remain pessimistic. About 56% expressed a negative outlook for the next 12 months, while only 11% felt optimistic. Read More... EU to Eliminate Passport Stamps from October According to UK media, from October 12, physical passport stamps will be replaced by the EU’s Entry/Exit System (EES). All non-EU travelers—including UK citizens—will need to complete fingerprint and facial scans when crossing EU borders. This new system was originally set to roll out in November last year but was delayed due to technical issues. The current plan aims for full implementation across all member states by April 10, 2026.   Biometric data will be collected at departure points—airports, ports, or train stations—via dedicated kiosks. Passengers will scan their fingerprints and have their photos taken, along with passport data input. The process is free. For regular tourists, the data will remain valid for 3 years. For those who overstay the 90-day visa-free period without a visa, data will be retained for 5 years. Upon future re-entry, border officers can verify stored biometric data without repeating the process. The EU expects this system to streamline border checks. Travelers with e-passports may use automated e-gates for faster passage. The EU states that the EES will significantly reduce wait times by pre-registering visitor data and simplifying ID checks. To ease land border traffic, France has already set up border points in Dover Port, Folkestone Eurotunnel Terminal, and London St. Pancras Eurostar Station. Self-driving travelers can register in their vehicles using handheld devices. In May, the UK and EU reached an agreement: after EES is launched, registered UK citizens will be able to use EU e-gates. Some EU countries like Germany and Bulgaria have already started allowing UK travelers to use e-gates, with more expected to follow. 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 .

One of this summer’s most talked-about limited editions in the UK has undoubtedly been the strawberry and cream sandwich from Marks & Spencer (M&S). Despite online criticism over its £2.80 price tag and accusations of ‘shrinking’ ingredients, the product has consistently sold out upon release. However, this viral hit has unexpectedly triggered a VAT (Value Added Tax) controversy, which could prompt an investigation by HMRC – and may even mean that some consumers have overpaid tax. M&S's Strawberry Cream Sandwich: Dessert or Sandwich? At the centre of the VAT debate surrounding M&S’s strawberry cream sandwich is a question of classification. The product draws inspiration from Japanese fruit sandwiches (known as Sando) and consists of sweet bread filled with cream and strawberries, sold in ready-to-eat packaging in supermarkets. Ordinarily, this would be classed as a cold sandwich – considered a basic food item like bread, vegetables, fruit or milk – and therefore taxed at 0% under UK VAT rules. However, given its soaring sales, HMRC has begun to question whether the product should instead be classified as a dessert – a category that generally attracts the standard 20% VAT rate. What Foods Are Taxed as Desserts? Under UK VAT legislation, the following are considered ‘confectionery’ and subject to the standard 20% rate: Sweets, chocolates, ice cream Any sweetened, processed food commonly eaten with the hands – such as doughnuts or cake bars In the case of the M&S strawberry cream sandwich, the bread component is sweet (similar to sponge cake), the filling consists of sweetened cream and fruit, and consumers typically eat it with their hands. Based on this, HMRC’s classification of the product as ‘confectionery’ seems at least somewhat justified. M&S has yet to issue any public comment on the VAT treatment of the product, and HMRC has also remained silent. However, with continued public interest and professional scrutiny, the matter may ultimately be taken to court.   How Food Classification Affects VAT As this case illustrates, determining the correct VAT treatment for food can often be ambiguous. Many UK food items fall into a grey area between 0% and 20% VAT, and several high-profile cases have gone to court as a result. Jaffa Cakes: Cake or Biscuit? This familiar snack, consisting of a sponge-like base, fruit filling and a chocolate coating, has been at the centre of a longstanding VAT debate. If classed as a cake, it qualifies for 0% VAT; if classed as a chocolate-covered biscuit, it is taxable at 20%. Ultimately, Jaffa Cakes were deemed to be cakes – and therefore VAT-exempt. Mega Marshmallows: Confectionery or Cooking Ingredient? Another famous dispute involved Mega Marshmallows. The manufacturer argued they were primarily for roasting over a fire, but HMRC contended that since they were typically eaten with the hands, they qualified as confectionery and should be taxed at 20%. The case remains in dispute and has reached the UK courts, again highlighting the complexity of food-related VAT rules. Packaging and Sale Method Also Affect VAT Beyond food type, the method of sale can influence VAT liability. For example, items sold individually may be taxed differently compared to when sold as part of a meal deal. A common example is dipping sauces: when sold separately, they may be considered cold takeaway food and attract 0% VAT. This issue came to a head in a dispute between KFC and HMRC. In 2019, Queenscourt, the supplier of KFC’s sauces, applied for a VAT refund on the basis that the sauces should be taxed at 0% when sold as part of takeaway meal deals – just as they are when sold alone. However, HMRC disagreed, arguing that sauces are not standalone food items but are designed to enhance the meal. Therefore, when included as part of a hot food package, they should be taxed as part of a single standard-rated supply. In June 2024, the court ruled in favour of HMRC. As a result, KFC not only lost the legal case but was ordered to repay £75,000 in VAT – plus legal fees. For more on this case, see our earlier article: KFC’s Costly VAT Dispute with HMRC.   The view from TB Accountants The VAT treatment of food in the UK is highly complex. Whether you’re a consumer, food supplier, restaurant owner or supermarket operator, VAT rules will directly affect the prices you pay or charge – and influence your ability to reclaim or deduct VAT. It’s also important to note that even if HMRC currently treats a product as zero-rated, it can reassess the classification within two years – or up to four years if it believes all relevant information wasn’t disclosed at the time. That’s why it’s essential to keep accurate records of your past transactions and business activity. If you are involved in the food industry or considering investing, it’s advisable to speak to a qualified tax advisor first.       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 .

On 6 June 2025, China’s State Administration of Taxation officially released the Administrative Measures for Tax-Related Information Reporting by Internet Platform Enterprise (STA Bulletin [2025] No. 15, ‘Bulletin 15’). Dubbed by the industry as ‘China’s version of DAC7’, many observers have noted that this marks the start of a new era of full transparency and deeper regulation in the cross-border e-commerce sector. The new regulations impose high-frequency, high-dimensional reporting obligations on platforms. They also introduce automatic identity and transaction data matching for sellers—signalling the end of the grey-area practices involving offshore platforms, offshore income, and missing declarations.  Given the situation, many have wondered – does Hong Kong still offer a low-tax advantage for businesses? Summary of Key Provisions - Three Core Mechanisms Clarifying Platform Responsibilities and Reporting Obligations 1. No exemption for global platforms Major cross-border e-commerce platforms—including Amazon, eBay, Temu, and TikTok Shop—are required to report tax-related data to the tax authorities, regardless of whether they are registered in China or overseas, as long as the transactions involve Chinese sellers or users. 2. Data regulation: identity and transactions Platforms must report sellers’ identity details (including Unified Social Credit Code, identity documents, and contact details) and transaction data (such as gross sales, refunds, net income, and order volume) on a quarterly basis. 3. Three-tier responsibility tracing mechanism Domestic platforms: Direct reporting by licensed entities Overseas platforms: Must establish a domestic operating entity or appoint a local agent Failure to report or false reporting: Fines between CNY 20,000 and CNY 500,000, with severe cases facing suspension or business rectification In addition, a dynamic comparison and tax warning system has been launched. This ‘dual-matching mechanism’ compares platform-reported data against self-declared data from taxpayers. If there is a significant discrepancy (e.g. platform income exceeding CNY 100,000 in a quarter but a zero-tax declaration), the system will automatically trigger a warning and initiate an audit. Higher Compliance Thresholds - Hong Kong’s Low-Tax Advantage Remains In recent years, registering a Hong Kong company has remained a popular choice for mainland Chinese businesses. Even as global tax compliance standards tighten, Hong Kong retains a central role in cross-border corporate structures due to its unique advantages. 1. Tax benefits: a simple system and low rates As a globally recognised low-tax jurisdiction, Hong Kong continues to attract mainland enterprises in 2025 with its favourable tax structure: Corporate Profits Tax is only 16.5%, with the first HKD 2 million of profit taxed at just 8.25% No VAT, customs duties, or dividend tax Offshore income may be exempt if it meets territorial source rules and substance requirements Although Hong Kong has implemented the BEPS 2.0 global minimum tax regime from 2025—introducing a 15% minimum tax rate for multinational groups—small and medium-sized e-commerce businesses can still apply for exemptions through legitimate offshore operation and economic substance strategies. 2. Offshore tax exemption remains valid Hong Kong’s tax regime is based on the territorial source principle, allowing tax exemptions for non-local income, provided the following conditions are met: Suppliers and customers must both be non-Hong Kong residents Contracts, warehousing, and deliveries must occur outside Hong Kong No physical office, employees, or market activities in Hong Kong Since 2019, the Hong Kong Inland Revenue Department has strengthened its review of economic substance. Applications lacking business evidence or relying on ‘paper-only’ offshore claims are likely to be rejected. Moreover, Hong Kong companies are legally separate from mainland Chinese entities, and there are no actual business operation requirements, allowing companies to exist as shell entities. This brings two strategic benefits: Tax-compliant structural planning Flexible attribution of income and identity separation depending on business and tax considerations Under the condition of regulatory compliance, using a Hong Kong company for signing contracts and receiving payments allows some separation from mainland identity, offering flexibility for asset planning and global reporting. However, when applying for offshore exemption or preferential treatment under a double tax agreement (DTA), genuine business substance is essential—including premises, staff, and board records. 3. Flexible cross-border payment arrangements Aside from tax benefits, Hong Kong also offers: Multi-currency corporate bank accounts (e.g. HSBC, Bank of China, Standard Chartered) for receiving payments globally Integration with mainland NRA accounts for two-way cross-border fund flows No mandatory foreign exchange settlement and more flexible fund deployment For cross-border sellers, Hong Kong companies can serve as a funding hub, centralising global payments and redistributing them globally or to mainland accounts through legitimate channels. Hong Kong has also signed double taxation agreements with 45 countries, enhancing strategic flexibility in fund mobility. 4. Government subsidies and R&D support The Hong Kong SAR Government continues to enhance its support for SMEs. In 2025, multiple subsidy schemes remain available for non-listed companies registered in Hong Kong: BUD Fund: Supports expansion into mainland China or ASEAN, with a maximum of HKD 7 million per enterprise Technology Voucher Programme (TVP): Subsidises IT system purchases, with a cap of HKD 600,000 per year R&D Tax Deduction: First HKD 2 million of R&D expenditure receives a 300% deduction, effectively reducing taxable profits   Some advice from TB Accountants As China’s cross-border e-commerce tax regime undergoes a full-scale reform, practices like private account collections and anonymous operations are no longer viable. Only by implementing multi-faceted strategies—such as substantive operations, sound tax planning, and structured identity separation—can businesses remain competitive in the evolving global tax landscape. If you would like tailored advice on optimising your UK personal or corporate tax position, or structuring your cross-border e-commerce business, contact our expert team at TB Accountants.  We also offer one-to-one Chinese-language support to help you find personalised solutions to suit your business needs.     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 .

Reeves should consider ending pension triple lock and charging for NHS treatment According to The Guardian, the International Monetary Fund (IMF) has suggested in its annual assessment report on the UK economy that Chancellor Rachel Reeves should consider ending the pension "triple lock" system and introducing charges for some NHS services, particularly targeting high-income earners, in order to ease mounting fiscal pressure.   The report notes that as the population continues to age, spending on health and pensions in the UK will keep rising. By 2050, government spending is projected to increase by around 8% of GDP, significantly higher than the 5.5% average among other advanced European economies.   At the same time, global economic uncertainty is also on the rise.   Although Reeves' new fiscal rules introduced in October last year have enhanced the credibility and effectiveness of fiscal policy, the IMF warns that if economic growth falls short of expectations or interest rates rise suddenly, the current rules may be breached. As such, the IMF believes Reeves needs to create more "fiscal space" in the next budget to avoid frequently adjusting tax or spending policies, which could undermine policy consistency.   In its recommendations, the IMF suggests:   Abolishing the pension triple lock (which increases pensions annually by the highest of wage growth, inflation, or 2.5%), and instead linking increases solely to the cost of living; Introducing co-payments for higher-income individuals for certain NHS services, while protecting vulnerable groups, to ensure a fairer income-based contribution to public healthcare; Expanding means testing for welfare benefits to improve the efficiency of public resource allocation.   The IMF also noted that if the UK wants to achieve its economic growth goals, it faces significant challenges due to tight fiscal conditions, the complexity of necessary reforms, and a turbulent global environment—such as potential trade wars sparked by a possible return of former U.S. President Donald Trump.   Facing a growing fiscal deficit and spending pressures, Reeves has already introduced measures like raising employer National Insurance contributions starting April 2025 to boost revenue. However, with the government's recent U-turns on welfare policy, fiscal pressures have further intensified, and many expect she may be forced to announce substantial tax hikes in the upcoming autumn budget.   In response, Reeves stated that the IMF’s report validated her policy choices aimed at reviving the UK economy. She added that she will continue to push for reforms to address the UK’s “deep-rooted economic challenges and global headwinds.” Read more... Campaigners targeting dozens of UK councils in push for four-day week South Cambridgeshire District Council has recently become the first local authority in the UK to officially adopt a permanent four-day week, allowing employees to work just four days a week on full pay. This move is triggering a ripple effect across the country, with more than 24 local councils now included on a list of those exploring the adoption of a four-day week—and more expected to follow.   According to the 4 Day Week Foundation, local councils in Edinburgh, Belfast, Bristol, Glasgow, Fermanagh, and Omagh are currently examining the feasibility of joining the initiative. Additionally, three other councils are reportedly preparing to take concrete steps, though their names have not yet been disclosed. A further 16 councils have engaged in discussions with the Foundation and are now listed as target participants.   Since January 2023, South Cambridgeshire District Council has been piloting the four-day workweek for over a year, with employees delivering 100% of the output in just 80% of the time.   An independent evaluation conducted by Salford University, the University of Bradford, and the University of Cambridge found that 21 out of 24 public services either maintained or improved performance. The number of job applicants more than doubled (up over 120%), staff turnover dropped by over 40%, and the council saved nearly £400,000 in temporary staffing costs alone.   In February 2023, the UK launched the world’s largest-ever four-day workweek trial, involving over 50 companies. After participating, many of these companies chose to make the model permanent. Now, the concept is spreading from the private sector to the public sector, potentially paving the way for a nationwide transformation of working norms.   According to recent data, as of January this year, over 200 private companies in the UK have permanently adopted a four-day workweek—reducing working hours without cutting pay. This shift is increasingly being seen as a win-win for employee wellbeing and business productivity. Read More... MPs calling for a wealth tax vote ahead of Labour’s Budget As the UK government’s borrowing levels soar, 26 cross-party Members of Parliament (MPs) have jointly signed a motion calling for a parliamentary debate on a “wealth tax” ahead of the upcoming autumn budget.   According to reports, this early day motion (EDM)—backed by 26 MPs—proposes a 2% annual wealth tax on individuals with personal assets exceeding £10 million. Supporters claim that the tax could generate up to £24 billion annually, offering a potentially significant tool to address the UK’s fiscal deficit.   The wealth tax is a direct levy on a person’s net worth—including property, investments, savings, and valuable items—regardless of their annual income. Unlike income tax, it targets what you own, not what you earn.   Experts in UK tax policy have pointed out that just 10 ultra-wealthy individuals could contribute around 15% of the total tax revenue, with 80% of the revenue coming from fewer than 5,000 people.   However, the same experts also caution that “all taxation involves trade-offs.” In their view, a wealth tax could reduce investment and savings, which might lower GDP and hinder job creation and long-term economic growth.   Opposition to a wealth tax is also substantial, with several key concerns:   Capital flight: The wealthy are highly mobile and could relocate themselves or their assets to low-tax jurisdictions; Enforcement challenges: Wealth is often held in diverse asset types (e.g., art, antiques, private vehicles), making it difficult to accurately value and monitor; Potential economic disruption: Critics argue it could discourage investment and business activity, with long-term negative effects on economic vitality.   Currently, the Labour Party maintains its election pledge not to raise taxes on ordinary workers, meaning no changes to income tax, VAT, or National Insurance (NI). As a result, Chancellor Rachel Reeves may need to get creative with tax policy—possibly exploring reforms to inheritance tax, capital gains tax, or land value tax instead.   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 .