According to recent reports, driven by rising living costs and political uncertainty, hundreds of thousands of savers withdrew £2.2 billion from their pensions early last year. New data released through a Freedom of Information request shows that over five years, the number of savers opting to access their pension flexibly ahead of retirement has increased by 18%. Why are so many choosing to dip into their pension pots early rather than waiting until full retirement age? 1. Shifts in pension investment strategy prompt early withdrawals In the latest Budget, Rachel Reeves announced plans to create a £25 billion ‘superfund’ to encourage pension investment in domestic infrastructure, clean energy and start-ups. This reform aims to deliver stronger long-term returns by pooling pension assets and investing them in bigger projects — but it also introduces fresh uncertainty: Investment risk concerns: Some savers fear their pension savings could be channelled into high-risk sectors like start-ups or emerging industries, which could make their portfolios more volatile. For example, the SAUL pension scheme at the University of London suffered short-term losses during the 2022 gilt crisis due to portfolio adjustments, shaking confidence in pension investment strategies. Liquidity worries: The new policy requires more pension money to flow into illiquid assets (such as property or infrastructure). This could limit people’s ability to access cash when needed. As a result, some choose to withdraw funds early to safeguard their money from potential losses and keep it flexible, avoiding possible future liquidity restrictions. After all, if you suddenly need cash but can’t withdraw it easily, the financial consequences can be significant.   2. Tax changes create an incentive to withdraw early Tax policy changes taking effect from 6 April 2025 have a direct impact on pension withdrawals: Capital Gains Tax increase: From 6 April 2025, the main rate of Capital Gains Tax will rise from 20% to 24%, while Business Asset Disposal Relief will gradually increase to 18%. This leaves pension holders facing bigger tax bills, encouraging them to cash in before the new rates apply. Pension bond returns: Although the Budget extended the sale of pension bonds, the one-year bond rate remains at just 2.8% — lower than many had hoped. Some savers feel the return on leaving money in a pension account is too modest, preferring to withdraw and reinvest elsewhere or spend it now. Global taxation rules: From April 2025, the UK will adopt a residence-based worldwide tax system, meaning non-domiciled residents may have to pay higher tax rates when bringing overseas income into the UK. This could motivate some people to withdraw their pensions early to avoid higher future tax burdens. 3. Economic pressures and the rising cost of living Today’s economic climate in the UK is increasing people’s dependence on pension savings: High inflation and living costs: In 2025, UK inflation remains above target. Rising energy and food prices are adding to household financial strain. Some people feel forced to access their pensions early just to cover daily expenses or cope with emergencies. Higher housing costs: The Budget has lowered the stamp duty threshold for first-time buyers, pushing up the cost of purchasing a home. Some are tapping into their pension savings to fund deposits — especially with expectations that property prices will keep rising. Impact of the rising State Pension age: With the UK gradually raising the State Pension age, some nearing retirement might worry about receiving less in the future. This has prompted some to retire early and access their pension savings sooner.   4. Facing the UK pension challenge — tips for tax residents Over many decades, the UK has built a multi-pillar pension system combining the State Pension, occupational pensions and private pensions. Yet the system faces growing challenges. An aging population is placing ever greater pressure on public finances and social security, raising concerns about the sustainability of the State Pension. Meanwhile, repeated economic shocks, high inflation and rising living costs limit real income growth — deepening people’s reliance on pensions while making it harder to preserve and grow pension wealth in a volatile environment.   With that being said, here are some ways to protect yourself against a potential pension squeeze: Diversify your investments: Don’t rely solely on the State Pension or workplace pensions. Consider allocating some money into shares, bonds or funds, spreading risk across multiple assets. For example, investing in solid global funds can give you exposure to growth in different countries and sectors. Boost your private pension savings: Make the most of tax reliefs and maximise your personal pension contributions where possible. Delay retirement: Postponing retirement can increase your total pension contributions and raise your future payout. It also gives you more time to build personal wealth and ease pension shortfalls. (Of course, work a couple of extra years only if it suits you — it’s you doing the extra hours!) Stay informed about policy changes: Keep up to date with government updates on pensions — such as changes to investment strategy or tax rules — so you can plan your finances ahead and adjust your pension assets to match policy directions.     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, ‘buy-to-let’ has remained a popular topic of conversation in the UK. Despite increasing tax burdens, tighter regulations and rising borrowing costs, many Britons and overseas landlords still hope to build wealth and supplement their retirement income through rental property. A new survey reveals that even amid changes to stamp duty relief and an uncertain housing market, a third of Britons still want to own their own rental property and earn income as landlords. But given the latest tax changes, is property investment really still the easy route to passive income it once seemed to be?   A third of Britons reportedly still want to be landlords According to a recent survey by Market Financial Solutions, despite rising taxes, tighter rules and a gloomy market outlook, one in three Britons would like to own a rental property. Enthusiasm is especially high among young people: over half of respondents aged 18 to 34 plan to become landlords in future, whereas only 14% of those over 55 expressed interest. One might argue that an 18-year-old has yet to fully consider the pros and cons of letting property — and that many over-55s are already landlords and therefore not dreaming of it in the same way. Is buy-to-let still a solid bet? For many investors, buy-to-let is more than just an investment — it is seen as a form of private pension: build up a property portfolio during working life, then rely on rental income to provide stable earnings in retirement. There is also a widespread belief that house prices will generally rise in the long run, while rental income can generate healthy cash flow in the meantime. The Market Financial Solutions survey found: Over half of respondents agreed that property is a safe and stable investment. 60% of adults believe investing in property is an effective way to build long-term wealth. 37% would rather put their money into property than shares.   Taxes and new regulations take turns ‘squeezing’ landlords In the past, buy-to-let was a robust alternative to shares and other assets — but today, heavier taxation has squeezed profit margins. Over the past few years, landlords have faced an increasingly tough environment. Since 2016, higher taxes and stricter rules have hit the buy-to-let market hard. According to estate agent Hamptons, the total number of rental properties in the UK has fallen by around 300,000 in the past nine years, with more landlords selling up than new investors entering the market. For UK resident landlords: From 1 April 2025, stamp duty on second homes and additional properties (including rental property) will return to the pre-2022 graduated rates: £0–£125,000: 5% £125,001–£250,000: 7% £250,001–£925,000: 10% £925,001–£1,500,000: 15% Over £1,500,000: 17% For non-UK resident landlords: There is an extra 2% surcharge for overseas buyers, added on top of the above rates. This means overseas landlords pay the UK resident rate plus 2% — on a tiered basis. In addition, Labour’s proposed Renters’ Rights Bill is expected to become law this year. This will: Ban ‘no fault’ evictions. Limit rent rises to once per year. Ban ‘bidding wars’ and introduce various other restrictions.   How much profit do landlords make when selling? According to Hamptons, in 2024, landlords selling property in England and Wales made an average profit of £103,640, with an average return on investment of around 70% over a typical holding period of 11–12 years. Of course, location makes all the difference. For example, someone who bought in London in 2009 will likely have seen their property double in value. By contrast, a landlord who invested in Middlesbrough has seen prices rise by only about 23% since 2009 — most of that gain coming in the past three or four years. Looking ahead, the direction of house prices remains uncertain. Current forecasts suggest that by 2029, average UK house prices may rise by 23.4% — so a £300,000 home today could be worth around £370,000. What about rental yields? Paragon Bank’s latest data shows that as of April 2025, the average gross rental yield for buy-to-let in the UK is 7.11% — the highest since 2011. For example, a £200,000 rental property could generate £14,220 a year in rental income (before tax). Compared to savings accounts which generally offer less than 5%, this is clearly attractive. However, landlords must pay agency management fees (about 10%) and bear the costs of finding and vetting tenants, drawing up inventories and maintaining the property (such as boiler or plumbing repairs). If there is a mortgage, interest payments will also eat into net profits.   Most landlords now hold property through a company Faced with increasingly tough tax treatment of private landlords, many now choose to hold rental properties through a limited company. This means registering property to a company — such as a Special Purpose Vehicle (SPV) — rather than in a personal name. This process, known as ‘incorporation’, can help landlords boost their buy-to-let returns. In 2024, a record 61,517 new buy-to-let companies were set up — a 23% increase on the previous year. The reasons are clear: Companies pay Corporation Tax instead of personal Income Tax — often at a lower rate. Companies can deduct 100% of mortgage interest before paying tax, whereas private landlords can only claim back 20% — a major difference for higher-rate taxpayers (40%). Between February 2016 and February 2025, the number of companies holding buy-to-let properties in the UK rose from 92,975 to 401,744 (source: Daily Mail). Industry estimates suggest that 70% to 75% of new buy-to-let purchases now use a company structure. Of course, this approach also has costs: companies must prepare and file annual accounts, hire accountants, and sometimes pay for statutory audits. Mortgage rates and arrangement fees are generally higher for company loans too. Inflation and rising living costs limit real income growth — deepening people’s reliance on pensions while making it harder to preserve and grow pension wealth in a volatile environment.   Some advice from TB Accountants So, back to our opening question: is buy-to-let still profitable? Over the past decade, buy-to-let has gained a reputation for becoming less attractive. Yet surveys and market data show that this ‘traditional’ way to build wealth through bricks and mortar remains resilient — and still appeals to many who want to hold tangible assets. However, with shifting tax policies and an evolving market, buy-to-let is no longer simply ‘easy money’. Instead, it demands careful tax planning, professional advice and a clear understanding of the market. You need to assess not only a property’s potential for capital growth but also your personal income and tax position — and choose the right size and structure for your portfolio. If you decide to hold property through a company, you will need expert help to handle bookkeeping, tax returns and annual accounts, and to claim all allowable deductions.     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 has announced the ‘biggest financial regulation reforms in a decade Last week, UK Chancellor Rachel Reeves announced what she called the "biggest financial regulatory reform in a decade." The move aims to invigorate financial markets by cutting regulatory “red tape,” with the broader goal of stimulating overall economic growth. According to the Treasury's plan, the so-called "Leeds Reforms" include: Reducing cumbersome regulatory provisions Promoting financial innovation Loosening mortgage restrictions (allowing borrowing of more than 4.5 times annual income) Streamlining accountability rules for senior banking executives Reviewing the post-2008 “ring-fencing” rules separating retail and investment banking Launching a stock market investment campaign funded by the financial industry One of the changes attracting the most public attention is the lowering of the mortgage threshold for first-time homebuyers. For example, Nationwide Building Society has lowered the income requirement for its 95% mortgage scheme from £35,000 to £30,000 for individual applicants, and from £55,000 to £50,000 for joint applicants. The Bank of England estimates that around 36,000 people per year could benefit from this change and realize their dream of homeownership. However, the policy has sparked polarized reactions. Supporters argue that it helps more people get on the property ladder and own a home. Critics worry it may encourage unaffordable debt levels, increasing the risk of home repossessions. The Daily Telegraph even featured these concerns on its front page, questioning whether such “high-risk loans” might destabilize the financial system. Beyond support for homebuyers, Reeves also plans to establish an "Investor Concierge Service" — assigning dedicated government contacts to major foreign investors. Reeves has made it clear that she wants to attract more private investment into the UK by relaxing regulation, in part to ease fiscal pressures. After years of excessive borrowing, the UK’s sovereign debt market is already under strain. Notably, Reeves has repeatedly described the reforms as having a "ripple effect" on the wider economy — a phrase that has drawn concern from some left-leaning think tanks, who worry this is simply a rebranded version of “trickle-down economics” — giving advantages to the wealthy and corporations, in the hope that prosperity will eventually reach ordinary people. While some aspects of the reform package may be seen as reasonable adjustments, deeper concerns remain. Analysts argue that the UK's overreliance on the financial sector — coupled with chronic underinvestment in infrastructure and manufacturing — is the true root of its sluggish economic growth. As a result, most industry observers view these reforms as a bold gamble by Reeves, made under pressure from fiscal constraints, weak investment, and high public expectations. She is betting on the financial sector to jumpstart growth, while also signaling an open invitation to global capital. But history has shown: financial liberalization does not come without cost. Read more... 16 and 17-year-olds will be able to vote in next general election The UK government has announced that it will lower the voting age to 16, granting approximately 9.5 million people the right to vote for the first time — marking the most significant electoral reform since 1969. This decision means that in future UK general elections, all 16- and 17-year-olds will have the right to vote — no longer limited to local elections in Scotland and Wales. The move not only fulfills a key Labour Party manifesto pledge from last year, but also signals a major structural shift in the UK’s democratic system. According to the UK government’s statement, the key points of the reform include: Granting full voting rights to 16- and 17-year-olds for all levels of elections (local, regional, and national) Expanding the total number of registered voters to potentially over 58 million (up from 48.2 million currently) Among the newly eligible voters, around 9.5 million had previously been excluded from voting Scotland and Wales had already allowed voting from age 16 in local parliamentary elections Deputy Prime Minister Angela Rayner said: “For too long, public trust in democracy has been in decline. We must tear down barriers to participation and give more people the opportunity to have a say in how our country is run. This is a key part of our Plan for Change and fulfills our promise to extend voting rights to 16-year-olds.” In addition, to further boost electoral participation, the Labour government also announced that UK bank cards will now be accepted as valid voter ID, a move that has sparked security concerns. Other accepted forms of ID will now include digital versions of documents such as veterans' cards and driving licenses. The government will also roll out a digital Voter Authority Certificate, allowing voters to verify their identity electronically. Read More... UK unemployment rises and wage growth slows as jobs market ‘weakens’ According to the latest data released by the UK Office for National Statistics (ONS), the unemployment rate rose to 4.7% in the three months to May, reaching its highest level since June 2021. At the same time, average wage growth slowed from 5.3% to 5%, further confirming signs of weakness in the UK labour market. The increase in unemployment exceeded market expectations (which had forecast 4.6%) and has intensified pressure on the Bank of England ahead of its upcoming interest rate decision on August 7. Although inflation rose to 3.6% in June, well above the Bank’s 2% target, the economy has contracted for two consecutive months — with GDP falling 0.1% in May and 0.3% in April — making an interest rate cut widely anticipated by markets. The data also showed a sharp slowdown in private sector wage growth, falling from 4.3% in April to 3.7% in May. Meanwhile, UK job vacancies declined for the 36th consecutive month, dropping to 727,000 in June, indicating weak employer confidence and sluggish labour demand. For Chancellor Rachel Reeves, the combination of economic slowdown and rising unemployment presents a dual challenge. With widespread expectations of tax increases in the autumn budget, the weakening economic outlook further narrows her room for policy maneuver. The Federation of Small Businesses (FSB) partly blamed government policy for the economic strain. Its policy chair Tina McKenzie stated: “Increasing employment taxes, introducing 28 new labour regulations, and planning to raise employer pension contributions — this is not the right path to promote jobs and growth.” While most economists believe an August rate cut is almost certain, opinions diverge on the path beyond that. The National Institute of Economic and Social Research (NIESR) warned that inflation remains high, and the Bank of England may need to wait until next year for further cuts. Paul Dales, Chief UK Economist at Capital Economics, observed that businesses are trying to offset rising pension and minimum wage costs by raising prices, but a more common response has been layoffs, which could suppress inflation over the medium term. He predicted: “The Bank of England will gradually lower interest rates from the current 4.25% to around 3%.” Additionally, a June labour market report jointly released by the Recruitment and Employment Confederation and KPMG found that the number of job seekers is increasing at the fastest rate since November 2020, signaling the sharpest decline in employment confidence since the pandemic began. 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, a growing number of British pensioners have opted to retire abroad—especially in EU countries. According to the latest analysis, tens of thousands of UK retirees living in Europe are enjoying what some are calling a ‘hidden perk’: receiving as much as £35,000 a year in State Pension income, with little to no UK tax liability. By contrast, millions of pensioners residing in the UK are paying income tax on their growing pension income. What lies behind this stark contrast? And how do the UK’s Double Taxation Agreements (DTAs) protect pensioners who receive income from overseas? Let’s explore why retiring in Europe is being viewed by many older Britons as a tax-efficient strategy—and what legal mechanisms make it possible. Tens of thousands of UK pensioners in Europe legally receive full pensions tax-free According to August 2024 data from the Department for Work and Pensions (DWP), there are currently 480,906 UK State Pension recipients living in EU countries. Of these, around 42,000 receive pensions exceeding the UK’s personal allowance of £12,570—and yet pay no income tax on that income to the UK government. Some receive up to £35,500 per year—equivalent to roughly £680–£690 per week. The reason many UK pensioners abroad escape the UK tax net is due to the complexities of international tax law, particularly the UK’s network of Double Taxation Agreements with EU countries.   Higher-than-standard pension recipients – not everyone receives the same The UK’s State Pension system is nuanced, and some individuals qualify for significantly more than the standard full pension (£11,976 per year or £230.25 per week in 2025/26). Some pensioners may receive up to three times that amount. These higher payments often come from additional entitlements, such as: Earnings-related schemes under the former State Earnings-Related Pension Scheme (SERPS), which may provide an extra £11,356 annually; Deferred pension claims, where delaying your State Pension results in higher eventual payments; Or periods of high contribution under the previous pension system. Double Taxation Agreements: the ‘tax passport’ between the UK and EU So why don’t these EU-based pensioners pay tax in the UK? It all comes down to Double Taxation Agreements (DTAs), which prevent individuals from being taxed twice on the same income in different countries. Specifically, for retirees: If a UK national resides in an EU country such as France, Spain, or Germany, And that country has a DTA with the UK, Then their UK State Pension is usually taxed only in their country of residence. If that country either doesn’t tax foreign pensions or has low rates, the pensioner can receive their full pension tax-free or with minimal tax. Examples: France has complex rules but many British retirees achieve low tax liabilities through strategic planning Portugal previously offered a 10-year zero-tax policy for foreign retirees (this has since changed) Spain does tax pensions, but allowances and deductions can result in a relatively light tax burden   UK-based retirees face growing tax pressure Unlike their European-based counterparts, pensioners in the UK are increasingly subject to income tax on their pensions. Since 2021, the UK’s personal allowance (£12,570) has been frozen and will remain so until at least 2028. Meanwhile, the State Pension is rising annually under the triple lock. In April 2025, the full new State Pension increased by 4.1%, reaching £11,973 per year. This means even modest increases in pension income—or small amounts of additional income—can push individuals above the tax threshold and trigger basic rate tax of 20% or more. As of now, around 3.3 million UK-based pensioners have pension incomes above the personal allowance and are liable for tax.   Is it worth moving to Europe to reduce your tax bill? As this analysis shows, tax treatment for UK pensioners no longer depends solely on income levels—but also on where they live. A person with identical work history and pension contributions may enjoy dramatically different after-tax income simply because they live in France rather than Manchester. That said, while retiring to Europe might sound attractive for tax reasons, it comes with some important caveats: Does your chosen country tax pensions? Each country has different rules—professional advice is essential. Healthcare and residency rights: post-Brexit, access to healthcare and residency in the EU has become more complex for UK nationals. Exchange rate fluctuations: The value of your pension in euros may vary with GBP/EUR rates. Cultural and lifestyle adjustments: Language, customs, and day-to-day living can pose adaptation challenges.   Some advice from TB Accountants While Double Taxation Agreements can offer meaningful tax relief for British retirees abroad, they are not a perfect solution. In practice, these arrangements have raised new questions about fairness: pensioners in different locations can be subject to completely different tax regimes, even if they’ve paid into the same system. As the UK's relationship with the EU continues to evolve, DTAs may be renegotiated, and domestic tax policy may shift—potentially affecting how pensions are taxed both at home and overseas. If you are planning to claim your UK pension or are considering retiring abroad, we strongly recommend engaging in professional tax and financial planning. After all, the comfort of your retirement depends not just on how much you receive—but on how much you keep after tax.     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 Daily Telegraph , UK Deputy Prime Minister Angela Rayner submitted a memo to Chancellor Rachel Reeves ahead of the Spring Budget, proposing a series of tax reforms aimed at significantly increasing government revenue. The document outlined eight tax measures, including reinstating the pension lifetime allowance and raising the corporation tax rate for banks from 28% to 30%. These proposals were expected to generate £3–4 billion per year in additional revenue. However, in the Spring Budget announced on 26 March 2025, these recommendations were not adopted. Instead, the Chancellor chose to reduce public spending to meet the fiscal rules set by the government. This decision has revealed growing divides within the Labour Party on the direction of economic policy. Despite this, with the UK’s public finances still under pressure, discussions around tax increases are intensifying ahead of the Autumn Statement. Whether you're a high earner or part of a regular household, early financial planning is becoming essential to brace for potential rises in tax liability. In this article, we’ve compiled eight key personal tax reliefs and allowances still available, along with how to apply for them. These will help you manage your tax planning more effectively and protect your wealth. Save or bookmark this guide for future reference. Tax relief: what can be claimed? In the UK, anyone paying tax has the potential to apply for various forms of tax relief. However, not all allowances and schemes are available to everyone—eligibility depends on personal circumstances, income sources, and the types of expenses incurred.   Personal Allowance The personal allowance is one of the most fundamental and widely applicable tax reliefs for UK taxpayers. As of the 2025/26 tax year, the standard personal allowance is £12,570. If your total taxable income for the year does not exceed this amount, you will not pay any income tax. There are exceptions to this, including: If your income exceeds £100,000: for every £2 over this threshold, your personal allowance is reduced by £1. Once your income reaches £125,140, the personal allowance is completely withdrawn. Non-residents: you may not be entitled to the personal allowance unless you are from a country with a double taxation agreement with the UK. Marriage allowance transfers: if you or your partner transfer part of the allowance, your available personal allowance will be adjusted accordingly. How to apply: If you're employed or receiving a pension, HMRC will usually apply the personal allowance automatically via your tax code. If you're self-employed or have additional income (such as rental income, dividends, or foreign earnings), you'll need to submit a Self Assessment tax return where the allowance will be applied. Marriage Allowance The marriage allowance is a legal tax relief that enables married couples or civil partners to transfer up to £1,260 of unused personal allowance from one partner to the other. This can save up to £252 a year in income tax (at the 20% basic rate). Eligibility requirements: You must be in a legal marriage or civil partnership. One partner must have income below the personal allowance (£12,570). The other partner must be a basic-rate taxpayer (earning between £12,571 and £50,270 in England and Wales, or up to £43,662 in Scotland). Neither partner should be a higher-rate or additional-rate taxpayer. How to apply: The lower-income partner can apply via the HMRC website. Once approved, the allowance will automatically apply every year until cancelled or eligibility ends. You may also backdate your claim to any qualifying tax year from 6 April 2021, provided both partners were eligible during the same year.   Personal Savings Allowance (PSA) The PSA allows individuals to earn a set amount of savings interest without paying tax. It applies to interest earned on bank accounts, fixed-term savings, and some investment products. For the 2024/25 tax year, the rules are: If your non-savings income (such as salary or pension) is less than £17,570, you qualify for the £5,000 “starting rate” for savings – meaning you may earn up to £5,000 in savings interest tax-free. In addition to this, eligible taxpayers may also claim the PSA: Basic-rate taxpayers: up to £1,000 interest tax-free Higher-rate taxpayers: up to £500 interest tax-free Additional-rate taxpayers: not eligible   Individual Savings Accounts (ISAs) ISAs are government-backed, tax-efficient accounts that allow you to earn interest or investment gains without paying income tax or capital gains tax on the returns. There are several types: Cash ISA Stocks and Shares ISA Innovative Finance ISA Lifetime ISA (LISA) Junior ISA Each ISA type has its own annual contribution limits and eligibility criteria. For the 2025/26 tax year, the total annual ISA allowance is £20,000 per person (including a maximum of £4,000 for LISAs).   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 more to get £150 off energy bills Recently, the UK government announced a significant expansion of the Warm Home Discount scheme, doubling the number of households eligible for winter heating support. This winter, up to 2.7 million additional households are expected to benefit, including nearly one million families with children. ● Substantial expansion of eligibility Under the new rules, any household receiving means-tested benefits will automatically receive a £150 discount on their energy bill, regardless of the size, type, or energy rating of their home. This change removes previous restrictions based on property conditions, allowing more low-income families to keep warm during the cold season. Previously, the discount was limited to households receiving the guaranteed element of Pension Credit or meeting specific home energy efficiency criteria. ● Costs may be passed on to consumers, but the government pledges to offset them The expansion will be funded upfront by energy companies, and the cost may be covered by slightly increasing the standing charge on all customers’ bills. As a result, consumers may see a small rise in their bills this autumn. However, the government has promised to offset this potential increase by reducing energy company expenditures and improving debt management, to minimize the burden on households. ● Possible new round of bill increases Although the energy price cap for the summer has already lowered household bills and policy measures have reduced standing charges, the continued rise in global oil and gas prices means that industry experts generally expect gas and electricity bills to increase again starting in October. ● Automatic compensation scheme to cover more situations In addition to expanding the discount, the UK government also plans to broaden the automatic compensation scheme for energy customers. The new proposals include automatic compensation if customers experience excessive waiting times when calling their energy provider, or if they receive unusually high bills due to delays in adjusting direct debit payments. At the same time, the government aims to speed up complaint handling: currently, energy companies have eight weeks to respond to customer complaints. The new rules will reduce this to four weeks. If no response is received within four weeks, the complaint will be automatically escalated to the Energy Ombudsman for further handling. At present, customers are already entitled to automatic compensation in certain scenarios, such as when errors occur during a switch to a new supplier. Read more... Chancellor considers softening inheritance tax changes amid non-dom backlash According to reports, Chancellor Rachel Reeves is considering proposals to ease the planned inheritance tax reforms. This move is seen as one of her efforts to “retain” wealthy foreign residents in the UK following her announcement to abolish the non-domiciled (non-dom) tax regime. The new policy, known as the Foreign Income and Gains (FIG) regime, came into effect on April 6th. It fundamentally changes how non-domiciled individuals are taxed by abolishing the remittance basis and imposing global taxation on any income or gains earned outside the UK. When announcing the new FIG regime, Reeves stated, “Those who make the UK their home should pay taxes here.” Although the policy is expected to raise about £12.7 billion over five years, it has also triggered a significant exodus of wealthy individuals — in 2024 alone, the UK saw a net outflow of 10,800 millionaires, a year-on-year increase of 157%. This includes 78 centi-millionaires and 12 billionaires. Facing strong opposition to the new regime, Reeves has made slight adjustments to the transition arrangements and is now considering amending the legislation that took effect in April. The current law requires all UK residents’ worldwide assets to be subject to a 40% inheritance tax, including assets held in trusts. The independent Office for Budget Responsibility (OBR) forecasts that an additional 12%–25% of non-domiciled residents could leave the UK this year, potentially causing significant unforeseen economic impacts and further capital outflows. A report by the Adam Smith Institute predicts that by 2030, this could result in the loss of around 44,000 jobs and an accumulated economic loss ranging from £3.2 billion to £111 billion. Many of the departing millionaires pay nearly £400,000 in taxes annually; their departure would equate to losing the tax contributions of around 529,200 average taxpayers, posing long-term consequences. Read More... Interest rates held at 4.25% by Bank of England Last week, the Bank of England decided to keep its base interest rate unchanged at 4.25%, aligning it with the current inflation rate and maintaining it at its highest level in over a year — above the Bank’s target rate. Bank of England Governor Andrew Bailey said that the rate is “still on a gradual downward path” and hinted that a rate cut could happen as early as August. However, he cautioned, “The global situation is highly unpredictable.” The Bank warned that tensions in the Middle East could have a knock-on effect on the UK economy. Since its last meeting in May, oil prices have risen by 26% and petrol prices by 11%, driving up energy costs and overall prices, which will influence future interest rate decisions. Meanwhile, the Bank slightly raised its forecast for the UK economy but noted that underlying growth remains “weak.” So far this year, the UK’s economic growth has been uneven — strong in early 2025 but shrinking sharply in April. The autumn budget’s various tax measures have also led to signs of weakness in the labour market. Some companies have cut pay for certain employees and raised prices to offset rising costs, but results have been mixed. For the year to May, the inflation rate stood at 3.4%, still above the Bank’s 2% target, and is expected to rise slightly to 3.5% later this year. However, it is forecast to fall back to around 2.1% by 2026. Interest rates are the Bank’s main tool to keep annual inflation at or near its target. The theory is that raising rates increases borrowing costs, encouraging people to cut spending, which lowers demand for goods and helps curb price rises. But this must be balanced carefully, as high rates can hurt the economy by causing businesses to delay investment in production and jobs. Despite higher UK tax revenues in April, they were not enough to prevent public sector borrowing from rising to £17.7 billion in May, up from £17 billion a year earlier — the second-highest monthly level on record. The current budget deficit — which measures the shortfall in day-to-day spending — remained below the Office for Budget Responsibility’s (OBR) forecast. The OBR had predicted a deficit of £13 billion for May, but the actual figure was £12.8 billion. Most economic forecasting bodies, including the International Monetary Fund and the Bank of England itself, have downgraded the UK’s growth outlook for this year. This could reduce long-term tax revenue and may force the Chancellor to cut spending further or raise taxes to fill the gap. 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 .

UK's pension triple lock to cost three times more According to the latest report by the UK Office for Budget Responsibility (OBR), annual spending on the country's "Triple Lock" pension policy is projected to reach £15.5 billion by 2030—three times more than initially anticipated—raising serious concerns over the long-term sustainability of public finances. What is the "Triple Lock"? Introduced in 2011, the Triple Lock guarantees that the UK state pension increases each year by the highest of three measures: inflation, average earnings growth, or 2.5%. The OBR notes that this policy, combined with a growing number of pensioners, has pushed state pension spending from around 2% of GDP in the 1940s to approximately 5% today—equivalent to £138 billion. By the early 2070s, this figure is expected to rise to 7.7% of GDP. Richard Hughes, Chair of the OBR, stated: "The Triple Lock is just one of many ageing-related spending pressures. In the long run, the UK’s public finances are on an unsustainable path." The report also warns that government debt will continue to rise, partly due to recent reversals of planned spending cuts and the reinstatement of benefits such as the Winter Fuel Payment. Currently, state pensions are the second-largest area of UK government spending after healthcare. Over the past 13 years, pension increases driven by non-wage factors have occurred eight times—highlighting the cost volatility tied to inflation. In April 2025, pensions will rise by 4.1%, reflecting wage growth: New State Pension (for those retiring after 2016): £230.25 per week, an annual increase of £472 Basic State Pension (for those retiring before 2016): £176.45 per week, an annual increase of £363 While the Labour government has pledged to retain the Triple Lock during this parliamentary term, debate continues over whether the policy is financially justified. The independent Institute for Fiscal Studies (IFS) has recently recommended scrapping the Triple Lock in favor of linking pensions to inflation, with growth targets aligned to average income levels, to build a fairer and more sustainable pension system. However, many elderly advocacy groups strongly oppose any change, arguing that weakening the policy would push more pensioners into hardship amid the ongoing cost-of-living crisis. Read more... Donald Trump announces 30% tariff on imports from EU Last week, U.S. President Donald Trump issued a statement on his social media platform, Truth Social, announcing that a 30% tariff will be imposed on imports from the European Union starting August 1. The move sparked an immediate and forceful response from EU officials. Trump stated that the U.S.–EU trade relationship has long been “imbalanced,” with the U.S. facing a massive trade deficit that he described as a national security threat. In a letter addressed to the EU, he wrote: “Our trade relationship with the European Union has been under discussion for many years. We must put an end to this long-standing, large-scale, and persistent trade deficit. This situation is caused by your tariff regime and non-tariff barriers. Our relationship is far from reciprocal.” The 30% tariff will affect a wide range of high-value European goods—including French cheese, Italian leather, German electronics, and Spanish pharmaceuticals—which are expected to see significant price hikes in the U.S. market. European Commission President Ursula von der Leyen responded swiftly, warning that if the U.S. proceeds with the tariff plan, the EU will take "proportional and reciprocal countermeasures." She stated: “The EU is one of the world’s most open and fair economies. We remain willing to negotiate and reach an agreement before August 1. But if the U.S. insists on moving forward, we will take all necessary steps to protect EU interests.” She further warned that such tariffs could seriously disrupt critical transatlantic supply chains. In a parallel move, Trump also announced a 30% tariff on Mexican goods, citing Mexico’s failure to adequately curb drug trafficking. Mexico’s Ministry of Economy confirmed it is in ongoing discussions with the U.S. in hopes of reaching an alternative solution before the August 1 deadline. The U.S. had previously announced a 20% tariff on EU goods but postponed its implementation. Currently, EU products are subject to a standard 10% tariff. In May, amid stalled trade talks, Trump had threatened to raise tariffs to 50%, though that increase was delayed at the last minute. Despite ongoing negotiations, no consensus has been reached on a U.S.–EU trade agreement. The EU has warned that if talks fail, it is prepared to impose tariffs on hundreds of U.S. products, including beef, auto parts, beer, and Boeing aircraft. Read More... HMRC confirms new income tax change starts next April The UK tax authority, HMRC, has officially confirmed that the Making Tax Digital (MTD) initiative will come into effect on 6 April 2026 for sole traders and landlords with annual income over £50,000. This marks the most significant reform to the tax system since the introduction of Self Assessment in 1997, ushering in a fully digital era for personal income tax reporting in the UK. Starting 6 April 2026, all sole traders and landlords with annual gross income above £50,000 will be required to digitally record their income and expenses and submit quarterly updates using MTD-compatible software. The rollout will expand further: From April 2027, those earning over £30,000 will be included. By 2028, the threshold will drop again to include those earning over £20,000. The MTD scheme aims to increase efficiency, reduce errors, and give taxpayers greater year-round visibility of their tax obligations—eliminating the stress of last-minute submissions. Important Notes: The "qualifying income" under MTD refers to total gross income before expenses—including earnings from self-employment and property rentals. For businesses already registered for VAT, enrollment in MTD for VAT was automatic. An independent report found that over 2 million businesses have benefited from the MTD for VAT system: 69% reported at least one positive impact, 67% said it helped reduce record-keeping errors. 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 emerging reports, HMRC is preparing major reforms to the salary sacrifice scheme in a bid to plug a multibillion-pound hole in the UK’s public finances. This comes after the government has already reduced the Winter Fuel Payment and may remove the two-child benefit cap. If the salary sacrifice scheme is reformed, it could not only reshape the structure of workplace pay in the UK but also significantly impact both tax liabilities and pension contributions for millions of ordinary employees. What is a salary sacrifice scheme? A salary sacrifice is a contractual arrangement between an employer and employee that allows the employee to give up a portion of their gross salary in exchange for non-cash benefits. These typically include additional pension contributions, childcare support, or commuting benefits. Because the sacrificed salary is excluded from taxable income, employees pay less Income Tax and National Insurance (NI). Employers also benefit from reduced NI contributions. It’s estimated that around 50% of UK businesses use this scheme, covering over 10 million workers, making it a key tax-efficient component of modern pay structures. The main driver behind the proposed reforms is the UK’s mounting fiscal pressure. Rising welfare costs, high borrowing rates, and international trade uncertainties have created a significant budget shortfall, reportedly worth tens of billions of pounds. HMRC estimates that by limiting salary sacrifice tax advantages, it could generate an additional £10 billion annually—an attractive solution to the Treasury’s challenges. Soaring tax bills and shrinking pensions: a double blow for the average taxpayer Higher taxes and reduced disposable income One of the key changes being considered is the reclassification of previously untaxed benefits as taxable income. For instance, a middle-income earner with a £30,000 annual salary who sacrifices £200 per month for pension contributions would see their taxable income increase by £2,400 per year under the new rules. For low-to-middle income workers who depend on such arrangements to reduce their tax burden, this change could lead to a noticeable drop in take-home pay—an unwelcome development during a time of rising living costs. Damage to workplace pension savings The salary sacrifice system is a major pillar of the UK’s occupational pension model, with around 37% of companies using it to boost employee pension contributions. If the reforms go ahead, workers would need to pay out of their post-tax income to maintain their current pension savings. This raises the cost of saving. Alternatively, keeping pre-tax contributions the same would reduce the total amount going into their pensions by 10% to 15%. This could leave many employees, particularly those reliant on employer-supported schemes, facing a larger retirement income gap. Increased cost of additional benefits Beyond pensions, popular salary sacrifice benefits like childcare vouchers, cycle-to-work schemes, and commuter support would also be affected. For example, a qualifying household could currently save around £933 in taxes annually through childcare vouchers. If reclassified as taxable, parents would need to pay the full cost from net income—raising the effective cost of childcare. For families living in high-cost areas such as London, reduced support could force a rethink in childcare arrangements, potentially even leading some parents to reduce their working hours and face both income and caregiving pressures. Shrinking benefits or soaring costs: a growing employer-employee dilemma Should the reforms be implemented, employers will face a difficult choice. Maintaining existing benefit levels would raise their National Insurance contributions (15% of increased gross salary), potentially adding tens of thousands of pounds annually to payroll costs for SMEs. On the other hand, reducing benefits could drive employee dissatisfaction and staff turnover—particularly risky since 37% of occupational pension contributions depend on salary sacrifice.  Some companies are already exploring ‘benefit monetisation’, converting perks into post-tax pay. However, this could further erode employees’ real income and net benefit from compensation packages.   Rising fairness concerns: why is the 'squeezed middle' always hit hardest? As in school exams, the ones most nervous are the average students—not the top scorers, nor those who’ve already given up. Similarly, HMRC’s crackdown on salary sacrifice seems poised to impact middle-income earners the most. The National Institute of Economic and Social Research has warned that while wealthier individuals may use tools like capital gains tax planning and private trusts to avoid negative effects, those earning £30,000–£50,000—the backbone of UK taxpayers—have no such options. They also struggle to absorb the expected £500–£800 yearly rise in tax burden. Trade unions have argued that shifting the cost of fiscal reform onto wage earners only deepens a troubling form of ‘reverse fairness’, where the hardworking majority shoulders the biggest share of income tax—already around 70%—with little room left to manoeuvre. How taxpayers can respond: 3 steps to manage tax rises and benefit cuts As changes loom, taxpayers should act early to prepare. Key steps include: Restructure salary packages – Prioritise contributions into statutory pension schemes that may still retain tax benefits. Build a post-tax savings buffer – Use ISAs and other tax-free savings tools to offset pension shortfalls. Reassess benefit budgets – Quantify the actual cost of losing benefits like childcare and commuting support, and create targeted budgets to cushion the impact. For employers, the challenge is finding a balance between compliance and retention. Some early adopters are exploring flexible benefit schemes linked to salary growth in an effort to soften the blow for staff.   For individuals and businesses looking for UK taxation services, use our contact form to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

After a sharp drop in property transactions in March—caused by buyers rushing to complete before April’s stamp duty changes—the UK housing market rebounded in May. House prices rose again, with the annual growth rate climbing to 3.5% and the average property price reaching £273,427. As the property market remains active, more homeowners are finding themselves liable for capital gains tax (CGT) when selling second homes, renting out property, or inheriting real estate. In this guide, we’ll walk you through the structure of CGT, how it’s calculated, and practical strategies for managing it. Whether you're an investor or a homeowner, understanding your tax responsibilities is key. What is capital gains tax and when is it payable? Capital gains tax (CGT) is charged on the profit made when selling an asset that has increased in value. It applies when the selling price exceeds the original purchase price. From 30 October 2024, the CGT rate for property will align with the rate for other assets: Basic rate taxpayers: 18% (applies if the capital gain, combined with other income, remains within the basic tax band) Higher and additional rate taxpayers: 24% The annual CGT exemption for the 2025–26 tax year remains at £3,000. Couples holding property jointly may use a combined allowance of £6,000. Note that unused allowance cannot be carried forward to future years. CGT is added to your total income for the year, meaning it can push you into a higher tax bracket—making advance planning essential.   CGT applies to UK property in the following cases: Sale of a second home or buy-to-let property Sale of inherited or gifted property, based on the increase in value In certain circumstances, even sale of your main residence may trigger CGT It’s worth noting that most main residences qualify for Private Residence Relief, which exempts them from CGT. This also includes an additional exemption for the final nine months of ownership. For individuals entering care homes or those with disabilities, the exemption period may be extended to 36 months. Scope and exceptions of capital gains tax Main residence and other exemptions In general, the sale of your main residence is not subject to CGT. However, exceptions apply if: The property exceeds 5,000 square metres in total land area Part of the property is used for business purposes A large portion is sublet The property was purchased solely for resale at a profit You may also be exempt from CGT under the following conditions: Gifts to a spouse, civil partner, or a registered charity are usually exempt If the property is classed as a business asset, you may qualify for relief If the property is occupied by a dependent relative, an exemption may apply Second homes and rental property These properties are liable for CGT when gains exceed the annual exemption. Whether sold entirely or partially rented, it’s important to calculate the gain and allowable deductions accurately. Example: A taxpayer sells a second property during the 2025–26 tax year. The property was purchased for £120,000 and sold for £220,000, with £5,000 in legal and estate agent fees. The gain is £95,000. After deducting the £3,000 allowance, CGT is due on £92,000. If the seller’s annual income is £25,000, the gain may be subject to both 18% and 24% tax bands, resulting in approximately £20,563.80 in CGT. Inherited and gifted property Inherited properties are revalued at the date of death, and no CGT is due upon inheritance. However, CGT applies to any increase in value from the date of inheritance to the date of sale. For gifted property, if the donor retains some benefit or use of the property (a ‘gift with reservation’), the valuation date for CGT purposes may differ—resulting in a different tax outcome.   Special case: overseas property sales UK tax residents are liable for CGT on overseas property sales, though double taxation agreements (DTAs) may help avoid being taxed twice. Rules are more complex if your permanent residence is outside the UK, so it's wise to seek expert advice. Some advice from TB Accountants If you're a non-resident landlord with UK property or a UK resident selling overseas real estate and you're unsure about the tax implications, contact our team. With 16 years of experience, we offer free one-to-one consultations and can help you build a personalised tax strategy.   For individuals and businesses looking for UK taxation services, use our contact form to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

HMRC's urgent warning to seven million UK households over tax rates According to the latest data from HM Revenue & Customs (HMRC), more than 7 million households across the UK will soon receive letters from the tax authority warning them that they are about to be affected by the “frozen income tax threshold” policy. This policy will push more earners into higher tax brackets, increasing their tax burden. Data shows that by the 2025/26 fiscal year, an additional 500,000 people will be subject to the 40% higher-rate tax, bringing the total number of people paying this rate above 7 million for the first time. Back in the 2021/22 fiscal year, the number was only 4.4 million. Laura Suter, Head of Personal Finance at UK investment services provider AJ Bell, said: “The frozen tax thresholds affect everyone, including retirees and anyone earning above the £12,570 tax-free allowance. But the people who will really feel the pinch are those who find themselves unexpectedly pushed into the higher tax bracket due to pay rises.”She further explained: “Once your income exceeds £50,270, every extra pound earned is taxed at 40% instead of the basic 20%. This means that even if you get a raise, it may not make a noticeable difference to your take-home pay.” Additionally, nearly one-fifth of all UK taxpayers now fall into the 40% tax bracket. This rate, once reserved for high earners, is becoming increasingly common. In response, a UK government spokesperson stated: “We inherited the policy of freezing income tax thresholds from the previous Conservative government. However, Chancellor Rachel Reeves has made it clear in her latest budget and spring statement that she will not extend the freeze.” The government has also pledged to uphold its commitment not to raise the basic, higher, or additional income tax rates, nor increase employee National Insurance or VAT, in order to protect workers’ take-home pay. In fact, the freeze on personal tax allowances was first introduced during the COVID-19 pandemic by then-Chancellor Rishi Sunak and later extended to 2028 by his successor Jeremy Hunt. For the 2025/26 fiscal year, income tax thresholds in England, Wales, and Northern Ireland are as follows: ● Personal allowance: £12,570 — No income tax is due on earnings up to this amount. ● Basic rate (20%) — Applies to income up to £37,701. ● Higher rate (40%) — Applies to income between £37,701 and £125,140. ● Additional rate (45%) — Applies to income above £125,140. If your annual income exceeds £100,000, your personal allowance starts to taper: ● For every £2 earned over £100,000, £1 of the personal allowance is lost. ● Once income reaches £125,140 or more, the personal allowance is reduced to zero.   This means individuals at this level pay tax on all their income with no tax-free allowance. Read more... U-turn in UK Welfare Reform: Planned Fiscal Savings May Evaporate Last week, Chancellor Rachel Reeves was seen in tears in the House of Commons, sparking public speculation that the Labour government is descending into turmoil following a chaotic vote on welfare reform. Many believe Reeves could be “sacked” for failing to uphold fiscal balance. Recently, Prime Minister Keir Starmer announced plans for major concessions on the welfare reform bill, proposing a series of changes to the Personal Independence Payment (PIP) system. However, under pressure from over 120 Labour MPs who opposed the move, the government scrapped the reform just 90 minutes before the scheduled Commons vote. They also announced a delay in implementing new assessment standards for new applicants, pending a broader review. This decision means that the anticipated fiscal savings from the reform will be significantly reduced — or possibly vanish altogether. PIP is a key UK benefit for people with long-term physical or mental health conditions. Currently, 3.7 million people receive it. It is composed of two parts: ● Daily Living Component: ○ Standard rate: £73.90 per week ○ Enhanced rate: £110.40 per week ● Mobility Component (not part of the current reform): ○ Standard rate: £29.20 per week ○ Enhanced rate: £77.05 per week In March this year, the government proposed tightening the daily living assessment criteria for new PIP applicants, aiming to save around £5.5 billion annually by 2030. With the plan now stalled, Labour may achieve zero net savings between now and the 2029/30 fiscal year. Another major benefit under review is Universal Credit (UC). Its basic monthly amount is: ● £400.14 for single claimants over 25. Those deemed unable to work due to health conditions can receive an additional £423.27 per month. The government had planned to reduce this supplement through several measures: ● Limiting eligibility to those aged 22 and over ● Cutting new claimants’ supplement from £97 to £50 per week, and freezing it until 2029/30 ● Initially planning to freeze the existing higher-rate supplement, but now deciding to increase it in line with inflation By 2029/30, the basic amount of Universal Credit will rise to £106 per week. With these reforms now watered down, Chancellor Reeves’ hopes of funding spending without large tax increases are fading. The Labour Party’s struggles are widely interpreted as a sign that the UK is on a path toward higher taxation. Read More... The EU is considering imposing high tariffs on Chinese electric vehicles According to the latest industry data, one in every ten cars sold in the UK in June this year was made in China. Emerging Chinese brands such as BYD, Jaecoo, and Chery Omoda have been expanding rapidly in the UK market. In recent months, Chinese car brands have seen a particularly sharp rise in sales — even as most G7 countries have imposed steep additional tariffs on Chinese imports. Data from the Society of Motor Manufacturers and Traders (SMMT) shows that in June, around 18,944 vehicles from Chinese-owned brands — including MG (Morris Garages) under SAIC Group and Polestar — were sold in the UK, making up 10% of total car sales, up from 6% in the same month last year. In contrast, as of May this year, Chinese automakers held only a 4.3% market share in the EU, 1.6% in Germany, 2.7% in France, and 9.2% in Spain. Analysts commented: “The UK has not yet imposed tariffs, and the growing popularity of EVs presents a huge opportunity for Chinese manufacturers. Moreover, unlike France and Germany, the UK does not have a large domestic auto industry to protect.” Currently, most EU member states support imposing high tariffs on electric vehicles imported from China, with rates potentially reaching up to 45%. Canada has also announced steep tariffs, set to impose a 100% duty on Chinese-made electric vehicles. 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 the UK Treasury recently confirmed the reinstatement of this year’s winter fuel allowance, expectations have grown for further tax rises in the upcoming autumn budget. Since the new tax measures came into effect in April 2025, Chancellor Rachel Reeves’ drive to boost Treasury revenue has started to deliver visible results. In just the past month alone, HMRC collected nearly £800 million in inheritance tax (IHT), marking the second-highest monthly figure ever recorded.  According to recent forecasts, inheritance tax revenue is expected to exceed £9 billion in the 2025/26 financial year—an all-time high. This trend reflects not only a tightening of tax policy but also raises serious concerns about intergenerational wealth transfer for many families. More families dragged into the inheritance tax net Current data shows that the majority of estates subject to inheritance tax are, in fact, of relatively modest size—perhaps surprisingly so. This trend is directly linked to the Labour government’s decision to freeze the tax-free threshold for inheritance tax. At present, the nil-rate band remains fixed at £325,000 and will stay frozen until 6 April 2028. Any amount above this threshold is taxed at 40%. In a context of rising inflation and wage growth, this static threshold means more taxpayers are being pushed into higher tax brackets, increasing their effective tax burden. As a result, many families not previously considered wealthy are now being swept into the scope of IHT. Pension and AIM stock exemptions under threat From April 2027, pensions will become subject to inheritance tax—although the specific rules are still to be confirmed—adding a further layer of uncertainty to legacy planning. In addition to this change, existing reliefs may also be reduced. Currently, shares listed on the Alternative Investment Market (AIM) are exempt from inheritance tax. However, new proposals may reduce this relief by 50%, or eliminate it entirely. This introduces potential complications for individuals using AIM stocks as part of their IHT planning strategy. Inheritance tax has become a ‘cash cow’ Nicholas Hyett, investment manager at Wealth Club, pointed out that in the last 20 years, the UK’s inheritance tax revenue has grown from £3.3 billion to £8.2 billion.  This is prompting more families to seriously consider early planning for intergenerational wealth transfer. With IHT rules becoming increasingly complex, lifetime gifting is emerging as an effective way to pass on assets, allowing families to benefit while the giver is still alive and potentially reducing future tax burdens. One key rule you need to know about is the seven-year rule. What is the seven-year rule? The seven-year rule is a central principle in UK inheritance tax. It states: If you gift a significant asset and die within seven years of the transfer, the value of that gift may still be counted as part of your estate and could be subject to inheritance tax (unless covered by available exemptions). In other words, only if you survive seven years after making the gift will it become entirely exempt from inheritance tax. According to HMRC, the following are considered gifts: Cash or bank transfers Property or land Shares (both listed and certain unlisted stocks) Personal items such as furniture, jewellery, and artwork Aside from the £3,000 annual exemption, most other gifts fall into one of two categories: potentially exempt transfers (PETs) or chargeable lifetime transfers (CLTs). Tax tapering – a partial relief if you don’t survive seven years The good news is that even if you don’t survive the full seven years, you may still qualify for taper relief, which reduces the amount of inheritance tax payable depending on how long you lived after making the gift. Time between gift and death Effective tax rate 0–3 years 40% 3–4 years 32% 4–5 years 24% 5–6 years 16% 6–7 years 8% Recording gifts to avoid disputes While HMRC may not automatically be aware of every gift made, your estate’s executor is legally required to declare all relevant gifts in the inheritance tax return. For this reason, it is vital to keep accurate written records. Each record should ideally include: Date of the gift Value or estimated worth Name of the recipient HMRC’s official IHT403 form can be used to systematically record all lifetime gifts. Protection options if your gift exceeds the tax-free allowance If your total gifting exceeds your personal allowance (currently £325,000 per person), you may want to consider one of these insurance options: Gift inter vivos policy A decreasing-term life insurance policy Pays the inheritance tax due on a gift if you die within seven years Cover amount follows the taper relief schedule Typically cost-effective Level term assurance Best suited for gifts within the tax-free threshold Fixed cover for seven years Pays out if you pass away during the policy term Some advice from TB Accountants As the UK tightens its tax policies—especially in the area of inheritance tax—it’s essential for families to take proactive steps in wealth transfer and estate structuring. The key message is simple: the earlier you start gifting, the more potential there is for tax efficiency. Planning ahead isn’t just about saving tax—it’s about protecting your loved ones from future financial stress. As the saying in the industry goes: intergenerational giving moves wealth where it’s needed most. Lifetime gifting isn’t about dividing assets early—it’s about careful planning and making informed choices. Understand the seven-year rule, know the types of gifts that apply, and consider the impact of tax and appropriate protection strategies.   For individuals and businesses looking for UK taxation services, use our contact form to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

For those preparing to start a business, establishing a company in the United Kingdom is, in reality, a fairly straightforward process. Once your documents are ready and your application is submitted, you could have your own registered company within just 24 hours. For most entrepreneurs, your business will likely fall under the category of a Small and Medium-sized Enterprise (SME). In the UK, however, being classified as an SME is not merely a reference to your company’s size. It also means you may be eligible for a wide range of exclusive government support schemes and financial incentives. In March 2025, the UK government officially launched a new Board of Trade aimed at coordinating policy, offering targeted support, and helping 5.5 million SMEs across the country expand their exports and achieve sustainable growth. Let’s explore what qualifies as an SME, why SMEs are so important to the British economy, and what practical steps you can take if you’re planning to launch your own business. What is an SME? A business must meet both of the following criteria to be considered a Small or Medium-sized Enterprise (SME): Fewer than 250 employees Annual turnover not exceeding £44 million or a balance sheet total of no more than £38 million This classification applies to all types of business structures, including limited companies, partnerships, and sole traders. Whether you run a coffee shop, a beauty salon, or an online design studio, as long as your business falls within these thresholds, you are likely to be considered an SME—and therefore eligible for a number of official benefits such as grant schemes, tax reliefs, and start-up subsidies designed to help your business grow.   Why are SMEs so vital to the UK? As of early 2024, SMEs accounted for 99.9% of all UK businesses, with 99.2% of them classified as small enterprises (fewer than 50 employees). These companies collectively employ around 60% of the UK workforce and contribute approximately £2.8 trillion to the economy every year. Despite being relatively modest in size, SMEs are the backbone of local communities, high streets, and digital marketplaces. Think of your favourite independent coffee shop, neighbourhood gym, or local restaurant—all are likely SMEs that shape our day-to-day lives and consumer experiences. Recognising their vital role in employment and innovation, the UK government is continually expanding its support framework for SMEs, with the aim of fostering a more inclusive, agile, and resilient business environment. Key government support for SMEs To support this vibrant sector, the UK government has rolled out a wide range of funding initiatives, tax reliefs, and business support programmes specifically for SMEs. Some of the most accessible and impactful include: 1. Government funding and loan support The British Business Bank, a government-owned development bank, offers tailored loan schemes, funding information, and business advisory services to SMEs across the country. It also helps businesses connect with regional support networks and tools. 2. Investment schemes and tax incentives In addition to the British Business Bank, the government has introduced various schemes to promote SME financing, including: Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) – which offer income and capital gains tax reliefs to investors who fund SMEs. Capital allowances and investment tax credits – particularly for projects focused on R&D or sustainability, allowing businesses to claim enhanced deductions.   3. Tax relief programmes R&D tax relief for SMEs From 2024, the previous SME and large company schemes were merged into a single programme. Under the new framework, SMEs can claim a 20% above-the-line credit, with an effective benefit of roughly 16.2%. In cases where R&D expenditure represents at least 30% of total costs, R&D-intensive SMEs may be eligible for a cash repayment of up to 27%. Note that HMRC has introduced stricter compliance checks for R&D claims, including mandatory pre-notifications, detailed supporting documentation, and proper handling of subcontracted work. Employment Allowance From April 2025, the Employment Allowance (which reduces employer National Insurance contributions) has been increased from £5,000 to £10,500, and previous restrictions on who can apply have been lifted. Business Rates Relief Retail, hospitality, and leisure businesses can benefit from a 40% business rates discount for the 2025/26 tax year, with further reductions planned for 2026/27. Small businesses with properties valued at £12,000 or less may qualify for full exemption, while those between £12,001 and £15,000 are eligible for tapered relief. Annual Investment Allowance This scheme allows businesses to deduct the full value of eligible machinery and equipment purchases from taxable profits in the year of purchase—providing an immediate reduction in tax liability. Ready to take the first step? If you're thinking about launching a business in the UK, consider following these five key steps: Define your business model and target customer base Choose the appropriate legal structure (e.g. sole trader, limited company, partnership) Register your company in the UK (TBA Accountants can assist with registration; for overseas founders, we also offer UK business address services) Set up your financial infrastructure, including opening a business bank account and installing accounting software (we can help you manage filings and compliance so you can focus on growth) Launch your operations and develop your marketing channels Some advice from TB Accountants From business planning and company formation to tax compliance and financial systems, we strongly recommend speaking with a professional adviser early in your journey. This ensures your foundation is not only compliant but also scalable.   For individuals and businesses looking for UK taxation services, use our contact form to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .