In recent years, HM Revenue and Customs (HMRC) has increased its scrutiny of local companies, individuals, and international e-commerce businesses.   Cross-border transactions, personal asset declarations, and corporate compliance have become key areas for tax inspections. Every year, tens of thousands of people are targeted by HMRC due to avoidable errors, getting dragged into investigation processes that are time-consuming, stressful, and may even result in additional costs. Today, we have summarised the six major red flags that are most likely to trigger an HMRC tax investigation for both business owners and individual taxpayers.  By understanding the reasons that trigger the HMRC investigation system and taking simple steps to maintain compliance, you can avoid receiving that unwelcome tax notice letter. Six Common Mistakes That Could Trigger Investigations by HMRC 1. Living standards inconsistent with declared income If your lifestyle is significantly inconsistent with the income you declare to HMRC.  For example, are you reporting a modest income while driving luxury cars, living in high-value property, or taking frequent overseas trips?  HMRC's system will automatically trigger a risk alert. HMRC cross-references information from banks, the Land Registry, and even social media. Once the figures do not add up, an investigation is almost inevitable. You must accurately declare all sources of income, including various investments, rental income, and income from side businesses.  Utilise various tax-free allowances or tax reliefs to enjoy reductions legitimately. 2. Operating cash-based businesses In the eyes of HMRC, industries that rely mainly on cash transactions, such as catering, beauty salons, and repair services, fall into a high-risk category.  This is because cash flow is harder to track, making it easier to suspect under-reported income. If you operate a cash-based business, keeping detailed records is absolutely essential. You must establish a complete and clear recording system, including using till systems, recording every transaction, and depositing cash into the bank in a timely manner. If an HMRC check is triggered, these records will provide clear evidence of compliance. 3. Late filing or frequent errors Overdue declarations or multiple amendments to tax returns will lead HMRC to believe that your management is chaotic or that there are hidden risks, making it easier for you to be placed on a priority watch list. Prepare tax materials in advance and strictly adhere to deadlines.  Make sure to also seek assistance from professionals when necessary. 4. Failure to distinguish between personal and company accounts A common mistake made by many sole traders and small business owners is mixing personal and business accounts and funds. This not only makes income and expenses difficult to explain but may also lead HMRC to suspect improper expenditure. From the very first day of incorporating the company, you should use a separate business bank account and draw income through salary or dividends. 5. Unreasonable or excessive expense claims While claiming business expenses is legal, they must be ‘wholly and exclusively’ for the purpose of the business.  HMRC is very sensitive to expenditure on items where abnormal amounts can easily occur, such as travel, catering, and home office costs. For example, someone who rarely uses their mobile phone for work but claims the entire phone bill, or lists a family holiday as a ‘research trip’ is likely to draw scrutiny.   Only claim genuine business expenses, keep all receipts, and prepare explanatory materials if necessary. 6. Significant abnormal fluctuations in income or profit A sharp decline in declared income or profit margins can also trigger an investigation, especially if there is no obvious reason (such as an economic recession or business restructuring). If there are changes in your business, be sure to prepare relevant proof and explanations to ensure that the figures are documented and verifiable. The view from TB Accountants  In reality, these errors occur more frequently than you might imagine, and many people often do not realise they have done anything wrong until HMRC comes knocking.  As long as you possess the right knowledge and methods, many traps can be avoided.  The key is to raise awareness and keep good records.  If you have any uncertainty about your tax status, be sure to consult a professional accountant or tax advisor in a timely manner. Getting it right from the start can avoid trouble later on. For business owners with companies, the HMRC audit process is usually both time-consuming and cumbersome, with complex data requirements and strict standards. For this reason, we recommend consulting with a professional tax advisor.   Why TB Accountants? Professional Assurance : Our team includes ACA members and ACCA-certified professionals, delivering services to the highest industry standards. Responsive Service : We respond to your inquiries within 24 hours, ensuring efficient communication across time zones. Multilingual Support : Services available in English, Mandarin, Cantonese, Japanese, French, German, Spanish, Italian, Turkish, and more. Trusted by Clients Worldwide : Consistently praised by global clients for proactive, professional, and reliable accounting and tax support. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbagroup.uk  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

In the UK, whether you are employed or run your own company, PAYE (Pay As You Earn) is crucial and relevant to everyone. For employees, this system is used to deduct Income Tax and National Insurance contributions.  Every time an employer processes a payroll, they must correctly report PAYE; errors can lead to trouble.  For UK company directors, even if you are the only director, you must set up PAYE and run a payroll system if the company pays a salary exceeding the threshold. Generally, sole traders or self-employed individuals do not need to manage payroll because they are not employees of their own business.  However, if you employ staff, you must register as an employer and comply with the PAYE rules described below. Who needs to register for and set up PAYE A company must register as an employer and use the PAYE system if it pays any employee (including the director themselves) an annual salary that exceeds the minimum income threshold of £6,500 (for the 2025/26 tax year), or if it provides taxable benefits (such as a company car). Even if you are the company's only employee, HM Revenue and Customs (HMRC) requires payroll information to be reported through the Real Time Information (RTI) system. It is worth noting that if you plan to use a mixed income model of 'low salary + dividends' (a common practice for many limited company directors), you must still register for PAYE if the salary component exceeds the National Insurance (NI) earnings threshold.  How to register as an employer Registration can be completed on the HMRC official website, requiring only basic company information. Registration typically takes two weeks to process, so it is recommended to complete it before your first payday, rather than leaving it until the last moment. Once registration is successful, HMRC will send you two unique reference numbers via post: PAYE Reference Number Accounts Office Reference These two sets of numbers will be used for every payroll submission and tax payment.  Selecting the appropriate payroll management software When submitting reports to HMRC, you must use payroll software that complies with the Real Time Information (RTI) requirements.  Below are some popular options suitable for small limited companies or sole traders: FreeAgent: Has a built-in payroll module, suitable for single-person companies. Xero: Integrates accounting and payroll management. QuickBooks, Sage, BrightPay: Comprehensive features, suitable for businesses with multiple employees. HMRC Basic PAYE Tools: Free but limited in functionality, only suitable for very small employers. Alternatively, you may choose to hire a professional accountant to register the most suitable PAYE system and handle related tax filings on your behalf.  Paying yourself as a director  Most limited company directors choose the 'low salary + dividends' method to receive income, aiming to minimise Income Tax and National Insurance contributions while fully utilising their Personal Allowance. The three most common salary levels for the 2025/26 tax year are as follows: £6,500: Almost no tax reporting burden; no Income Tax or employee National Insurance is due, but some employer National Insurance is payable, and Corporation Tax relief is lower. This amount still counts towards the state pension qualifying years. £9,100: Slightly below the Secondary National Insurance threshold, meaning neither the employee nor the employer pays National Insurance. This also counts towards pension qualifying years. This level is suitable for single-director companies that do not qualify for the Employment Allowance. £12,570: Equal to the Personal Allowance. This is often the most overall tax-efficient option, especially if the company can claim the Employment Allowance. While this amount triggers Employer National Insurance Contributions (NIC), the additional salary qualifies for Corporation Tax relief, which usually compensates for the difference. Example If the company qualifies for the Employment Allowance (e.g. has two or more employees/directors), the first £10,500 of Employer National Insurance is waived, meaning a salary of £12,570 is completely tax-free and requires no National Insurance contributions. Even if the company does not qualify (e.g. only one director), paying a salary of £12,570 is still more advantageous.  You would pay £1,135.50 in Employer National Insurance Contributions but save approximately £1,326.25 in Corporation Tax, resulting in a net gain of about £190.75. Key reporting requirements  Whether you are paying yourself, your employees, or both, you must comply with HMRC's reporting requirements, including the following key forms: P45: Provided when an employee leaves the company. P60: The annual earnings summary given to the employee at the end of the tax year. P11D: Used to report benefits in kind. Starter Checklist: Used when a new employee joins and has not provided a P45 form. In addition, you need to submit Real Time Information (RTI) reports: Full Payment Submission (FPS): Submitted every time employee wages are paid. Includes details of wages, tax, National Insurance, and student loans. Employer Payment Summary (EPS): Used to report statutory payments (such as maternity pay) or claim deductions (e.g., Employment Allowance). Submitted when no payment is made or when an adjustment is needed. The view from TB Accountants Once you have completed PAYE registration and submitted payroll data, you must pay all due payroll tax and National Insurance by the deadline, or you may be charged interest or penalties for late payment.  Please also note that if you choose to pay electronically, the payment date is the date the funds arrive, not the date you initiate the payment. We have also summarised a few simple tips for staying compliant: Keep employee and director payroll records for at least three years. If you stop paying wages or no longer employ staff, notify HMRC promptly to close your PAYE account. Set reminders for P60, P11D, and tax payment deadlines. Ensure all Benefits in Kind are correctly valued and reported. 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 her teens, she travelled alone to Cambridge for her studies.  After working for a few years, she was headhunted by company with a high salary offer.  More than a year later, she returned to London to start a business from scratch... Over a decade later, she leads a team with offices and branches established globally, helping countless sellers easily navigate global tax and compliance challenges.  She is Sophie Lin, Founding Partner and CEO of TBA Group. Today, TBA has grown into a leading British financial and tax enterprise and a one-stop cross-border compliance service provider.  Its business covers European and American company registration, accounting and taxation, global VAT, European EPR, and GPSR compliance.  It has established long-term strategic partnerships with e-commerce platforms such as Amazon, eBay, AliExpress, and Walmart   Its service network spans over 20 countries worldwide, serving a cumulative total of more than 60,000 clients. The starting point of a lone traveller With over twenty years of experience in tax consulting and international business management, Sophie’s career spans multiple industries and borders. In 2009, she resigned from a high-paying position and returned to London to found TBA Group. Starting as a one-person company, she grew the firm to a team of 60 people.  In the beginning, Sophie placed advertisements on the Chinese Business Gazette, opening up new client channels step by step. With her Chinese background combined with her experience of growing up in the UK, Sophie possesses unique insights into the rhythm and cultural differences of the global market. This allows her to better serve those clients who plan to develop in the UK or have already started businesses locally. TBA Global: From local taxation to global cross-border business As a senior tax consultant and ACCA-certified accountant, the core business of TBA under Sophie's leadership was initially British local taxation. This included company registration, self-assessment registration, employee payroll calculations, corporate tax returns, and VAT calculations. When new EU VAT regulations were implemented in 2016, a large number of Chinese Amazon sellers fell into a tax compliance predicament.  Sophie and her team keenly captured this market opportunity, conducted in-depth research on the regulations, and successfully joined the Amazon SPN platform to become its tax service provider, further expanding the business into the global cross-border e-commerce field. Driven by the wave of globalisation, cross-border e-commerce is reshaping the international business landscape at an unprecedented speed. It not only promotes the cross-border flow of goods, services, and culture but also brings brand-new challenges to the global tax system.  Facing the rapid rise of emerging platforms like Temu and TikTok Shop, sellers need to respond flexibly within a complex and changing policy and market environment, and TBA has become a trustworthy partner. Today, TBA has established its headquarters and a Paddington office in London, UK, and has branches in Shenzhen, Xiamen, Hangzhou, Shanghai, and other places in China. Its business covers the EU, USA, Japan, Australia, the UAE, Canada, Mexico, and many other countries and regions, serving over 60,000 enterprises. The company has established long-term cooperative relationships with world-renowned e-commerce platforms such as Amazon, Walmart, eBay, and Temu. To meet the diverse needs of global clients, TBA provides multi-language service support in English, Spanish, Italian, French, Turkish, German, Japanese, Mandarin, and Cantonese. As market demands continue to change, TBA is expanding from a traditional accounting business to a more comprehensive tax and platform compliance services, gradually building an integrated service system for cross-border enterprises covering the globe. Facing the uncertainty of the global economy, TBA continues to expand the scope and depth of its services, helping clients steadily lay out their international markets and achieve sustainable development.  Building a global tax service brand Since its establishment, TBA has always used its professional strength to build a bridge for Chinese commercial operations to go global, helping global sellers achieve tax compliance and worry-free cross-border operations. When talking about the competitive advantages of Chinese companies going global, Sophie points out that supply chain integration capabilities, technological innovation, and digital operational capabilities are key factors.  As more and more Chinese brands strike an ideal balance between price and quality, relying on a strong manufacturing system and an increasingly perfect e-commerce ecosystem, Chinese companies are already able to respond quickly to international market changes and achieve localised growth through flexible innovation models. At the same time, the rise of generative AI is reshaping the fields of cross-border e-commerce and compliance services. As an innovative pioneer in the industry, TBA always stands at the forefront of technological development. The team led by Sophie actively integrates AI technology into business processes, significantly improving the efficiency of content generation, data processing, and customer service, whilst strictly controlling data privacy and regulatory risks. ‘At TBA and on our subsidiary SaaS system platforms, we deeply feel the transformative power of AI. It can automatically generate compliance documents and assist clients in efficiently completing complex tax returns. The introduction of AI not only reduces corporate operating costs but also brings a smoother user experience. Of course, we also closely monitor the legal, regulatory, and data privacy challenges brought by AI to ensure that every step of corporate development meets compliance standards’.  ‘Our goal is to build the world's largest cross-border e-commerce service ecosystem. It is not limited to tax services, but creates an open platform that allows more high-quality service providers to join and jointly serve both Chinese and global clients’.   Looking to the future, TBA will continue to work with partners in various fields of the cross-border ecosystem to provide one-stop solutions covering taxation, finance, and compliance, whether in the UK or across the world.  If you are looking for a trustworthy professional partner, we will help you move towards financial success with professionalism, responsibility, and innovation. 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 .

‘Mansion tax’ will have limited impact on property market, UK house prices still rise Nationwide Building Society stated that UK house prices continued to rise slightly in November, and it expects that the newly announced “mansion tax” in the Autumn Budget will have only a limited impact on the overall housing market.   According to the latest data, the average UK house price rose 0.3% month-on-month in November, higher than the 0.1% increase forecast by economists in a Reuters poll. The average price rose from £272,200 in October to £273,000 in November.   Last week, Chancellor Rachel Reeves announced that starting from April 2028, England will impose a new high-value property surcharge on homes worth £2 million or more — properties valued above £2 million will pay from £2,500 per year, while those worth over £5 million will pay £7,500.   Nationwide’s chief economist, Robert Gardner, said: “The property tax changes announced in the Budget are not expected to have a significant impact on the housing market. This high-value property surcharge applies to fewer than 1% of homes in England, and about 3% in London. Recently, the overall market has remained stable, and house prices continue to rise at a modest pace.”   Meanwhile, a lower interest-rate environment is also supporting the market. The Bank of England is currently keeping the base rate at 4%, and since inflation has likely peaked at 3.8%, lower than earlier forecasts, markets expect this will open the door to further rate cuts.   Sarah Coles, head of personal finance at Hargreaves Lansdown, also noted that some buyers had been waiting for the Budget announcement, and that 2026 could bring more positive factors. She said: “The UK property market typically picks up in January. Despite ongoing challenges, certain factors are providing support. The property tax introduced in this Budget affects only a very small part of the market.” Read more... Number of flu patients in hospital beds rises by more than 50%   The UK’s National Health Service (NHS) has stated that this year’s flu season has arrived earlier than usual and has not yet reached its peak, raising the possibility of the most severe flu outbreak in a decade. With Christmas approaching, flu cases are expected to continue rising. Meanwhile, strike action by thousands of junior doctors from the British Medical Association (BMA) will place additional pressure on the winter healthcare system.   Last week, hospitals in England saw an average of 1,717 flu patients occupying beds each day, including 69 in intensive care units. This figure is 56% higher than the same period in 2024, reaching the highest level since records began, and is also significantly higher than figures from 2023 and 2022.   Since the start of the autumn vaccination campaign, 16.9 million flu vaccine doses have been administered in England, including 8.4 million given to people aged 65 and above, maintaining stable coverage.   Additional data shows that last week, England had an average of 261 hospital beds occupied by patients with symptoms such as diarrhoea, vomiting or suspected norovirus — a sharp decrease compared with 751 cases during the same period last year.   This year’s flu wave is driven by a new H3N2 influenza strain. These letters and numbers refer to the virus’s surface proteins: haemagglutinin (H) and neuraminidase (N). Compared with other strains, this particular combination has a higher likelihood of causing severe illness, especially among older adults or those with underlying health conditions.   According to the UK Health Security Agency (UKHSA), flu symptoms develop rapidly, and extreme fatigue is common — a key difference from the more gradually developing symptoms of a common cold.   Read More... US and UK agree zero tariffs deal on pharmaceuticals for three years   Last week, the UK and the United States announced a new agreement under which UK pharmaceutical exports to the US will continue to enjoy zero tariffs for the next three years. In return, the UK agreed to raise the price cap that the National Health Service (NHS) pays for medicines and to increase overall drug spending.   This marks the first time in more than 20 years that the UK has raised the NHS threshold for evaluating drug prices. Before the agreement was reached, U.S. President Donald Trump had repeatedly threatened—or imposed—tariffs of up to 100% on certain branded drug imports, causing concern across the UK pharmaceutical sector.   Under the agreement:   The NHS will raise its threshold for determining that a “new drug is too expensive” by 25%, meaning the future price limit for approved new drugs will be higher. NHS drug spending will increase from 0.3% of GDP to 0.6% over the next decade. The cap on the amount pharmaceutical companies must repay to the NHS will be limited to no more than 15%, whereas last year this figure exceeded 20%. In exchange, UK pharmaceutical exports will remain exempt from U.S. tariff increases for the next three years.   White House spokesperson Kush Desai said the deal is “a historic step toward ensuring other developed countries pay their fair share.” UK Secretary of State for Business and Trade Peter Kyle responded that the move will “ensure that at least £5 billion worth of UK pharmaceutical exports continue to enter the U.S. market tariff-free each year, protecting jobs, attracting investment, and strengthening the UK’s position as a global life sciences hub.”   Official data shows that in the 12 months up to September 2024, the UK exported £11.1 billion worth of medicines to the United States, accounting for 17.4% of all UK goods exports during the period.   Over the past 18 months, several multinational pharmaceutical companies have shifted investment toward the U.S. due to dissatisfaction with the UK business environment:   GSK announced a $30 billion investment in the U.S. over the next five years. Merck (MSD) cancelled its £1 billion UK expansion plan. AstraZeneca paused its £200 million Cambridge R&D centre investment and announced a $50 billion investment in the United States.   The new agreement is expected to help boost the UK’s competitiveness in global pharmaceutical manufacturing and innovation. U.S. pharmaceutical company Bristol Myers Squibb has already announced plans to invest more than $500 million in the UK over the next five years for research, development, and production. 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 .

Recently, the UK's economic data has sounded the alarm once more.   According to the latest figures released by the British Retail Consortium (BRC) and KPMG, UK retail sales grew by only 1.6% in October 2025.  This figure is not only lower than September's 2.3% but also marks the slowest growth since May, with consumer momentum clearly weakening and the high street seemingly entering an 'economic winter' early. Retail growth stalls across the board: food and non-food sectors both suffer Analysis indicates that this slowdown in growth is comprehensive, not just limited to specific categories: Food sales growth narrowed sharply by 0.8 percentage points to 3.5%.  Helen Dickinson, CEO of the BRC, stated pointedly that this growth is primarily driven by price rises rather than an increase in volumes. This means people are actually buying less, but the amount spent appears higher due to inflation. Non-food sales have almost stagnated, increasing by only a marginal 0.1% year-on-year. Categories such as footwear, stationery, and electrical goods saw noticeable drops in sales. The mild autumn weather led to a backlog of seasonal items with everyone holding their breath, waiting for the 'Black Friday' discount frenzy on 28 November. Consumers' caution is not unfounded. Data from Barclays paints a more worrying picture: a third of consumers postponed major purchases last month, and two-fifths adjusted their financial arrangements due to anticipated budget changes. Crucially, there is a crisis of confidence.  The seven consumer and economic confidence indicators tracked by Barclays have all fallen for the first time since August 2022: The proportion confident in their household finances plummeted from 74% to 63%. The proportion confident in their own job security dropped to 44%, the lowest point since 2023. The proportion who feel they can afford to spend on non-essential items also fell to 51%. Barclays stated that spending through its credit and debit cards fell by 0.8% in October, with the largest drops seen in supermarkets, department stores, and discount shops. This directly reflects consumers' hesitation at the till. Unemployment rises to 5%: The job market sounds the alarm Simultaneously, the labour market is issuing a sharp warning.  According to the Office for National Statistics (ONS), the unemployment rate rose to 5.0% in the three months to the end of September. This is higher than the previous quarter's 4.8% and exceeds market expectations of 4.9%, marking the highest rate in four years. Behind the cold statistics lies a real redundancy wave.  Reports from HM Revenue & Customs (HMRC) show that the number of workers on company payrolls is falling, having decreased by 180,000 over the past year.  The biggest losses in employment were in the wholesale and retail, accommodation and food service, and IT sectors – precisely the industries that usually absorb the largest number of workers. A case study – if you run a retail business in the UK and face business pressure, what tax relief can you claim? In an economic downturn, the retail sector is often hit hardest.  If you operate a supermarket or other retail business in the UK and face a cash flow crisis or even bankruptcy risk, you should be aware of the following potential tax reliefs and mitigation measures: 1. Business Rates Relief Applicable conditions: If the rateable value of the supermarket property is below £12,000, it may be fully exempt from Business Rates; if it is between £12,001 and £15,000, the relief is gradually reduced.  Furthermore, temporary relief may be claimed if the property is empty, partially empty, undergoing refurbishment, or affected by severe local disruption (such as flooding, construction, etc.). How to apply: Submit an application to the local authority, providing supporting evidence for the property and a statement of financial circumstances. 2. R&D Tax Relief (Research and Development) Applicable conditions: If the supermarket has carried out trade-related R&D projects (such as innovative product display technology, supply chain optimisation, etc.), and meets the criteria for Small and Medium-sized Enterprises (SMEs) (fewer than 500 employees, turnover below €100 million, or balance sheet total below €86 million), R&D tax relief can be claimed. How to apply: Submit the declaration of R&D expenditure via the HMRC (Her Majesty's Revenue and Customs) online system, detailing the content, objectives, and outcomes of the R&D project. Employee-related assistance If your business pressures result in job losses, former employees may eligible and apply for Jobseeker's Allowance (JSA).  Unemployed staff members who are over 18, capable of working, and actively seeking employment may apply for JSA for up to six months to alleviate financial pressures. Some advice from TB Accountants Specific assistance policies may vary slightly by region (such as England, Scotland, Wales, and Northern Ireland), and tax relief is not automatically granted.  The key to a successful application is early planning, maintaining transparent communication with HMRC, and providing comprehensive financial evidence to demonstrate the difficult circumstances faced by your business.  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 26 November 2025, British Chancellor of the Exchequer Reeves announced the highly anticipated Autumn Budget. Before the speech, the Office for Budget Responsibility (OBR) rarely leaked data in advance, causing an uproar. However, this did not stop Reeves from announcing her economic reconstruction plan with a tough stance. After opening by pointing out that the OBR's early release of data was a 'serious mistake', Reeves announced this budget containing a total of £26 billion in tax increases, including the extension of the personal income tax threshold freeze, minimum wage increases, property taxes, and a new round of tax policy adjustments such as customs duties on e-commerce parcels. This Autumn Budget includes several tax measures aimed at businesses and individuals, covering areas such as venture capital, business rates, income tax thresholds, and high-value property taxes.  Personal income tax threshold freeze The government announced that the thresholds for personal Income Tax and National Insurance (NI) will be frozen for another three years until after 2028. This move means that as wages rise, more taxpayers will be pushed into higher tax brackets. Reeves admitted that this move would 'affect working people', but emphasised that the new tax reforms still ensure that 'the wealthiest bear the most'.  At the same time, she confirmed that the basic rate of income tax, Value Added Tax (VAT), and National Insurance rates will not be increased. Corporation Tax reform For local UK businesses, approximately 750,000 retail, hospitality, and leisure businesses will enjoy long-term preferential business rates.  At the same time, the support scheme for venture capital will be expanded, providing a three-year stamp duty exemption for companies listing in the UK.  In addition, companies will receive a 40% investment allowance, allowing more upfront capital investment to be included in the scope of tax relief. Customs duties on e-commerce parcels In the budget, Reeves clarified that customs duties will be levied on all parcels entering the UK to prevent online retailers from undercutting local shops with lower prices. Fuel duty freeze, new mileage tax for electric vehicles Fuel duty is frozen again for at least five months until September 2026. The rate has been frozen since the 2010-11 financial year.  Thereafter, the temporary 5p per litre cut implemented in spring 2022 will be gradually phased out. Additionally, the UK will implement a new mileage-based tax system for electric vehicles, which is expected to bring in £1.4 billion in tax revenue in the future: Electric vehicles: 3p per mile Hybrid vehicles: 1.5p per mile Dividend Tax & Asset Income Tax increase Tax rates on dividends, property income, and savings gains will be uniformly increased by 2 percentage points. Furthermore, Capital Gains Tax relief when selling a business to an Employee Ownership Trust will be reduced from 100% to 50%. Council tax surcharge on high-value properties Labour will impose an additional council tax on high-value properties: Properties worth over £2 million: Additional levy of £2,500 per year Properties worth over £5 million: Additional levy of £7,500 per year Gaming duty increase Remote gaming duty will be increased from 21% to 40%, and online betting duty will be increased from 15% to 25%.  Bingo duty will be abolished from April 2026. This is expected to increase revenue by more than £1 billion. Minimum Wage increase From April 2026, the minimum wage will be increased across the board, with specific adjustments as follows: 21 years and over: Hourly rate increases by 50p to £12.71/hour 18-20 years: Hourly rate increases by 85p to £10.85/hour Under 18s and apprentices: Hourly rate increases by 45p to £8/hour However, the business community has warned that following this year's wage increases and the rise in employer National Insurance costs, a continued rise in the minimum wage could lead to recruitment freezes or a reduction in new job openings. State Pension changes The UK government announced that from April 2029, salary sacrifice pension contributions exceeding £2,000 per year will be subject to National Insurance. Under the 'triple lock' mechanism, the State Pension will increase from April 2026: Old State Pension recipients: Increase of £440 per year New State Pension recipients: Increase of £575 per year Cash ISA reforms The tax-free deposit limit for Cash ISAs will be reduced from £20,000 per year to £12,000.  This is to encourage more funds to be invested in Stocks and Shares ISAs to promote long-term investment. However, savers aged 65 and over will retain the £20,000 tax-free allowance per year. Abolition of the two-child benefit cap The government will abolish the two-child benefit cap from April 2026.  Current policy stipulates that for a third and subsequent child born after 6 April 2017, the amount of benefits parents can claim is restricted.  After the cap is lifted, it is estimated that about 450,000 children will be lifted out of poverty. In addition, the Autumn Budget also includes the following new changes: Energy bill cuts: From April 2026, by lowering surcharges, average annual energy bills will be reduced by £150. Tax on ride-hailing services: Ride-hailing services such as Uber and Bolt will be subject to tax. Rail fare freeze: Regulated rail fares within England, for English operators, will be frozen for the first time in 30 years. NHS expansion: Investment of £300 million for NHS technology upgrades and the construction of 250 new community health centres. Defence spending: 2.6% of Gross Domestic Product (GDP) will be spent on defence. After the Budget is announced each year, the relevant tax measures and financial plans need to go through a series of parliamentary procedures before they formally come into effect.  Budget Resolutions will last for four days and are expected to end on 2 December (Tuesday).  If the Budget Resolutions are approved by the House of Commons on the final day of debate, they can take effect immediately, but to have permanent legal effect, they must also pass the Finance Bill. 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 .

The UK is poised to repeal its tariff exemption on packages under 135 pounds by March 2029 During the release of last week’s Autumn Budget, the UK government announced that it will abolish the current de minimis customs exemption for parcels valued under £135 by March 2029, and will launch a public consultation before the policy is formally implemented. This move is expected to have a major impact on Chinese cross-border fast-fashion platforms—such as Shein and Temu—that rely on rapid shipment of low-value goods. Under the current system, international parcels valued at under £135 can enter the UK without customs duties, and customs checks are relatively relaxed.   According to UK fiscal-year data, the UK received £3 billion worth of low-value parcels over the past year. The majority came from China and were sent mainly by e-commerce platforms like Shein and Temu, which depend on low-cost direct shipping.   For years, this small-parcel tax-exemption policy has drawn criticism from the UK retail industry, which argues that it allows foreign e-commerce platforms to compete at lower prices, thereby “undercutting domestic retailers and harming fair competition.”   British media have reported that many retailers have, in recent months, repeatedly urged Chancellor Reeves to reform the system as soon as possible.   The UK’s move aligns with the European Union’s approach. Although the EU currently exempts parcels valued under €150, it is moving toward eliminating that threshold. The European Commission last week proposed accelerating the removal of the €150 exemption in order to protect the competitiveness of businesses in the 27-member bloc. Meanwhile, in August of last year, the United States fully abolished its tax exemption for parcels valued under $800.   To prevent customs and logistics systems from becoming overloaded after the exemption is removed, the UK government will conduct a public consultation beforehand to design an alternative mechanism. Read more... The income tax freeze will push millions into higher bands   Chancellor Rachel Reeves has confirmed that the freeze on income-tax thresholds will be extended until 2028, and introduced a £26 billion package of tax increases in the Autumn Budget. Together, these measures mean that more people in the UK will face higher tax burdens in the coming years.   According to data from the Office for Budget Responsibility (OBR), as incomes rise with inflation while tax thresholds remain unchanged, more than 1.7 million people will be pushed into higher tax bands:   780,000 people will start paying income tax for the first time 920,000 people will be pushed into the Higher Rate band 4,000 people will fall into the Additional Rate band   In addition, based on estimates from wealth manager Quilter (assuming 5% annual wage growth and 3% inflation), all income groups will pay more income tax and National Insurance (NI) between the 2028/29 and 2030/31 tax years:   Salary £25,000: +£234 income tax; +£93 NI Salary £50,000: +£1,166 income tax; +£186 NI Salary £100,000: +£2,648 income tax; NI rises from £60 to £186   Even higher-income earners (£125,000–£150,000), who already face an effective marginal tax rate close to 60% due to the tapering of the personal allowance, will still pay roughly £1,279 more in income tax.   Quilter tax expert Rachael Griffin noted that if the personal allowance (£12,570) had been indexed to inflation since 2021, it would now be £15,714, while the higher-rate threshold (£50,270) would be £62,845. She warned that increasing the tax burden by “freezing thresholds” rather than raising headline tax rates undermines transparency in the tax system.   The OBR added that if thresholds were adjusted for inflation up to the 2030/31 tax year, the personal allowance would need to rise by £4,900 to £17,470, and the higher-rate threshold by £20,100. It estimates that the share of taxpayers paying higher-rate or additional-rate tax will rise from 15% in 2021/22 to 24% by 2030/31.   Separately, the UK will also restrict salary-sacrifice pension tax advantages starting in April 2029, meaning middle-income earners will face a “double squeeze”: any salary-sacrifice pension contributions above £2,000 per year will incur both employee and employer National Insurance charges.   For example, for an employee earning £60,000, sacrificing £6,000 into a pension would exceed the £2,000 limit by £4,000, requiring the employer to pay an additional £900 in NI contributions.   Read More... Sharp fall in UK net migration with drop in arrivals for work and study   According to newly released preliminary data from the Office for National Statistics (ONS), net migration to the UK fell to 204,000 in the year to June 2025—roughly two-thirds lower than the 649,000 recorded in the previous year. The sharp decline was mainly driven by a significant drop in non-EU migrants arriving via work and study routes.   The report states that arrivals of dependants on work and study visas fell by around 70%, making it the primary factor behind the drop in net migration. Prime Minister Sir Keir Starmer said the fall in net migration was “a step in the right direction.”   However, a separate set of figures released by the Home Office in the same period shows that the number of people seeking asylum has reached a historic high.   According to Home Office data up to September 2025, the total number of asylum applications reached 110,051, the highest since records began, although the backlog of pending cases fell by 36% compared with the same period in 2024. Among them, more than 36,000 asylum seekers were temporarily accommodated in hotels—an increase of 2% compared with September 2024.   In addition, in the year to September 2025, the number of people arriving in the UK after crossing the English Channel illegally in small boats rose by 53%, reaching 45,659, close to the 2022 peak of 45,774. This included 5,151 minors, of whom 2,700 were accompanied children.   Under the UK–France “one in, one out” pilot returns mechanism, 153 people have been returned to France, while 134 have been transferred from France to the UK. This includes one case of an individual who was returned on 16 October but crossed back to the UK again on 8 November by small boat (counted only once). 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 .

Since April this year, several new tax and employment regulations have come into effect, significantly increasing the tax burden for businesses in areas such as staffing, investment and profit distribution. At the same time, HMRC’s annual corporation tax statistics show that as of March 2024, corporation tax revenue rose by 10% year on year, reaching a record £93.3 billion. Given that the main corporation tax rate has risen from 19% to 25% (with the ‘small profits rate’ of 19% applying to companies with profits of £50,000 or less), this increase is unsurprising.  However, a 30% tax rate rise compared with only a 10% rise in revenue suggests that taxable company profits across the UK are actually falling. We have summarised several effective tax planning methods to help small and medium-sized enterprises legally and efficiently reduce their corporation tax burden and improve financial performance. 1. Claim every legitimate business expense The most straightforward way to reduce your corporation tax liability is to ensure that you claim every allowable business expense. Any expenditure that is ‘wholly and exclusively’ for business purposes may qualify for deduction, thereby lowering your taxable profit. Many small business owners overlook this, simply because they are unsure which costs are eligible.  You can claim expenses such as: Office equipment and software Business travel and accommodation Marketing and advertising costs Subscriptions and training Home office costs (for example, rent, electricity or broadband when working from home) For instance, if your company spends £10,000 on legitimate business expenses, you can save £2,500 in corporation tax at the 25% rate.  Missing any deductible cost is, in effect, giving money away to HMRC. 2. Use the Annual Investment Allowance (AIA) If your company purchases fixed assets such as machinery, computers or office furniture, you may be able to claim 100% tax relief through the Annual Investment Allowance (AIA). This allows you to deduct the full cost of qualifying assets from your taxable profits—up to £1 million each year. This means that if you spend £50,000 on new equipment, you can deduct the entire amount from your taxable profits. 3. Offset losses to reduce future tax If your company makes a loss in a financial year, you can use that loss to reduce future corporation tax bills. Losses can be carried back to offset previous profits or carried forward to offset future ones, reducing the tax due when the business becomes profitable.  For start-ups and growing businesses, this is an essential tax planning tool. 4. Invest in research and development (R&D) If your company is developing new products, improving existing ones or enhancing operational processes, it may qualify for R&D tax relief.  Eligible businesses can reclaim up to 27% of qualifying R&D expenditure, usually in the form of a tax credit. Even if the project is unsuccessful, you can still claim this relief. It is crucial to maintain clear records of all R&D costs, such as materials and subcontractor expenses. 5. Combine different tax reliefs strategically In a climate of rising costs and taxes, using multiple reliefs together can help protect profit margins. Beyond the R&D Tax Relief that supports innovation in technology and manufacturing, the UK government offers several other incentives: Small Business Rates Relief , which can save retail and hospitality businesses thousands of pounds in business rates annually Well-designed employee benefit packages that consider Benefit-in-Kind tax rules may allow you to boost staff satisfaction while optimising company tax efficiency 6. Reduce corporation tax through charitable donations Charitable giving not only reduces tax but also enhances corporate reputation and social impact.  Donations can take the form of cash, shares, equipment or pro bono services, but they must be unconditional and made to a charity recognised by HMRC. 7. Structure your income efficiently as a director-shareholder If you are a company director or shareholder, one of the most effective tax strategies is to receive a mix of salary and dividends, rather than all income as salary.  Paying yourself a modest salary (within your personal allowance or slightly above the National Insurance threshold) ensures National Insurance contributions are covered, while the remainder can be taken as dividends, which are usually taxed at lower rates. 8. Plan tax payments in advance Corporation tax is normally due nine months and one day after the end of your company’s accounting period. Setting aside tax reserves in advance helps avoid cash flow problems and ensures smooth payments. The view from TB Accountants In recent years, the decline in taxable profits among UK businesses may partly be due to the effects of capital allowance policies, but it may also reflect the deterrent impact of the higher corporation tax rate on foreign investment. Tax planning is essential for every business.  During the filing process, companies should ensure accuracy of data, maintain complete records and assess eligibility for all available reliefs in advance.   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 .

From 1 February 2026, Companies House will officially increase the Annual Filing Fee for existing companies and the Incorporation Fee for new companies. This adjustment is intended to support Companies House in enhancing its service levels, though it will result in increased costs for your business.  Therefore, all companies registered and operating in the UK, whether existing businesses or new incorporations, need to prepare for these changes by undertaking financial planning and ensuring compliance. What are the annual filing fee and incorporation fee change? Companies House has confirmed that from February 2026, the Annual Filing Fee will rise regardless of whether you choose the digital (online) or paper (postal) submission method: The fee for digital (online) submission will rise from the original £34 to £50. The fee for paper (postal) submission will increase from £62 to £110. The more significant increase for paper filing shows Companies House's commitment to encouraging businesses to adopt digital methods for submitting information.  Online filing is quicker and more accurate, helping to avoid missed deadlines and reducing system processing costs. For newly incorporated companies, the incorporation fee will also increase: The electronic incorporation fee will double from £50 to £100. The digital submission fee for the Confirmation Statement will also rise from £34 to £50. The fee for paper incorporation will increase from £71 to £124. However, it is worth noting that not all fees are increasing.  The fees for Voluntary Strike-off applications will decrease: digital submission will fall to £13, and paper submission will fall to £18.  This is one of the few 'beneficial' changes in this round of adjustments. Why are the fees being raised? Companies House explains that the fee increase has two main purposes: To support its digitisation and service upgrades, including improving technology systems, increasing information processing efficiency, and strengthening data security. To help the Insolvency Service carry out its regulatory duties, including company liquidations, director disqualifications, fraud investigations, and enforcement. Mandatory identity verification effective from 18 November 2025 In addition to the fee adjustments, Companies House has implemented a new Mandatory Identity Verification (ID Verification) system effective from 18 November 2025. All company directors and Persons with Significant Control (PSCs) must pass identity verification. Existing company personnel will have a 12-month grace period, with the deadline being 18 November 2026; new company incorporations will need to complete ID verification at the time of registration.  Verification can be completed in two ways: By registering via the official GOV.UK One Login website. By authorising an Authorised Company Service Provider (ACSP) to handle the process. The view from TB Accountants Overall, the magnitude of the Companies House fee increases may seem small, but in the long run, they will have an impact on business operations.  The cost pressure will significantly increase if a business continues to use paper submission methods.   However, transitioning to digital processes as soon as possible will not only save costs but also reduce the risk of human error and delay.  Furthermore, if a business fails to plan its budget in advance or ignores filing deadlines, it may be fined for delays or even suffer damage to its company reputation. Therefore, we recommend that business owners: Include the new fees in their 2026 budget plan and manage their finances appropriately. Prioritise using digital submission methods to avoid unnecessary extra costs. Strengthen internal compliance management to ensure all filings and records are timely and accurate. Consult a professional accountant or business adviser promptly when in doubt to receive accurate guidance. If you still have questions about the new regulations, fee changes, or the ID verification process, our professional accounting team can offer you one-to-one consultation and assistance to help you navigate these changes successfully.   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 .

Biggest overhaul of legal immigration model in 50 years announced Last week, the UK House of Commons released a draft reform of the permanent residency system titled “Earned Settlement”, aimed at restoring “order and control” to the immigration system. The new system is built around four key pillars—conduct, integration, contribution, and length of residence—and will significantly raise the threshold for obtaining Indefinite Leave to Remain (ILR).   According to the draft, the minimum residence requirement for legal migrants to apply for permanent settlement will be raised from the current 5 years to 10 years, applying to nearly two million migrants who have arrived in the UK since 2021. Those who already hold ILR will not be affected.   Although the system is becoming stricter, the Home Office emphasized that it will offer “fast-track settlement routes”to groups that make major contributions to the economy and public services, including:   NHS doctors and nurses: still eligible to apply for ILR after completing 5 years on a work visa; High-income earners: those earning over £125,000 annually can obtain ILR after 3 years; those earning over £50,000 can apply after 5 years; volunteer work and English proficiency will serve as additional bonus factors that may further shorten the timeline; Innovation and entrepreneurship talent (e.g., Global Talent and Innovator Founder visa holders): will continue to have access to a 3-year ILR route; Immediate family members of British citizens and certain groups such as BN(O) holders will continue to follow the 5-year route.   For migrants in low-paid roles, such as the roughly 616,000 people (including dependants) who entered between 2022–2024 on Health and Care Worker visas, the wait for ILR will extend to 15 years. This visa category, criticized for abuse, was closed earlier this year. For migrants who rely heavily on welfare benefits, the ILR requirement will be extended to 20 years—four times the current standard and the longest in Europe.   Those who entered illegally or significantly overstayed their visas will need to wait 30 years before being eligible to apply for ILR, drastically reducing their chances of securing long-term status in the UK.   Meanwhile, the new system also proposes that ILR will no longer grant eligibility for welfare benefits—benefits can only be accessed after naturalisation. This means ILR will no longer automatically entitle holders to claim social welfare or apply for social housing; they must first obtain British citizenship. Combined with plans to introduce penalties for abuses of the immigration system, the new framework is set to become one of the strictest and most selective permanent residency systems in Europe.   The Home Secretary stressed: “Immigration is vital to Britain’s past and future, but unprecedented levels of migration in recent years have impacted community safety and the capacity of public services. Settlement is not a right—it is a privilege that must be earned through contribution and integration.”   The system is currently in the pre-legislative consultation stage. Public consultation will close on 12 February 2026, and phased implementation is planned to begin in the spring of 2026.   Data published by the Labour Party indicates that even though net migration in 2024 has nearly halved, 1.6 million migrants are still expected to meet the criteria for ILR by 2030. Among legal work migrants, holders of Health and Care Worker visas make up the largest proportion, but because they are considered “low-skill, low-income, and low-tax-contributing,” the government views them as placing substantial pressure on public finances. Read more... Rail fares to be frozen for first time in 30 years   The UK government has announced that it will freeze rail fares in England and for rail services operating within England from this year until March 2027, marking the first comprehensive freeze on regulated rail fares in 30 years. The measure will bring substantial savings to millions of rail passengers, including those using season tickets as well as peak and off-peak return tickets between major cities.   Commuters who travel three days a week using flexi-season tickets will see significant reductions in cost:   Milton Keynes — London: £315 saved per year Woking — London: £173 saved per year Bradford — Leeds: £57 saved per year   This policy is part of the Labour government’s plan to build a publicly owned Great British Railways. Other reforms will include:   Introducing a metro-style tap-in, tap-out payment system Expanding the use of electronic tickets Investing in ultra-fast Wi-Fi services   Chancellor Rachel Reeves stated that the rail fare freeze “will ease financial pressure on households and make commuting, studying, or visiting friends and family easier.” Railway unions and passenger groups have also widely praised the move, saying it will improve affordability, encourage public transport use, and support more environmentally sustainable travel.   Read More... UK inflation rate hits lowest level in four months   According to the latest data from the Office for National Statistics (ONS), annual inflation fell to 3.6% in the year to October—the lowest level in four months—boosted by slower increases in household energy costs and a drop in hotel prices. However, after falling in September, food prices rose again.   The release of this latest inflation report comes less than a week before the highly anticipated Autumn Budget. Following the publication of the data, Chancellor Rachel Reeves stated: “Inflation and the cost of living are still placing a heavy burden on families across the country. I will take further action to bring prices down.” She emphasized that easing cost-of-living pressures is one of the main goals of the upcoming budget. The budget is expected to include tax rises and spending cuts to strengthen the government’s finances.   Although overall inflation fell in October, food and non-alcoholic drink prices remained the biggest upward pressure on the index. Annual food inflation rose from 4.5% in September to 4.9% in October, with bread, meat, fish, vegetables, chocolate, and confectionery all becoming more expensive, while fruit prices dipped slightly.   A decline in headline inflation means prices are still rising, but at a slower pace. Markets are hopeful that inflation has peaked, potentially paving the way for future interest-rate cuts. Even so, inflation remains above the Bank of England’s 2% target, and the next rate decision on 18 December will likely focus on the impact of prolonged higher rates on the economy.   Because inflation had hovered at a “sticky” 3.8% for several months, the Bank of England kept interest rates unchanged at 4% at its November meeting to prevent prices from accelerating too quickly.   However, the medium- and long-term outlook for prices and inflation will depend on various factors, including energy and commodity costs affected by global conditions and climate change.   Policies announced in the upcoming Autumn Budget may also influence inflation. There has been speculation that the Chancellor may reduce energy taxes to help contain price growth; spending cuts or tax increases could also have a deflationary effect. 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 .

Earlier in May this year, Prime Minister Keir Starmer formally announced a comprehensive reform of the UK’s immigration system through the publication of the New Immigration White Paper , introducing a series of restrictive measures.  Subsequently, on 1 July, the Home Office released a 138-page update to the Immigration Rules, marking the official implementation of the new policy. On 14 October, the Home Office issued a further Statement of Changes in Immigration Rules (HC 1333) , clarifying the implementation dates and details of several measures outlined in the White Paper. The reforms are widely regarded as the most significant overhaul of the system since Brexit, with major implications for visa-sponsoring employers, international students and foreign professionals seeking long-term residence in the UK. 1. Higher English language requirements for migrants Previously, most immigration routes required only a B1 level of English proficiency – basic conversational ability. Under the new rules, from 8 January 2026, the required English level for the Skilled Worker, High Potential Individual (HPI) and Scale-up visas will rise to B2. Applicants must now demonstrate the ability to live, work and study independently in an English-speaking country. The Home Office will require applicants to pass a Secure English Language Test (SELT) conducted by an approved provider, and the results will be verified during the visa process.  Those renewing existing visas will still need to meet the B1 requirement. 2. Graduate Visa shortened to 18 months From 1 January 2027, the validity of the Graduate Visa for international students who complete an undergraduate, master’s degree or equivalent qualification in the UK will be reduced from two years to 18 months. PhD graduates will continue to receive a three-year visa. Analysts suggest that this change will encourage graduates to enter the workforce more quickly, although it may reduce student visa applications in the short term and affect labour supply in certain sectors. Initial estimates indicate that annual student visa applications could fall by around 12,000. The financial impact through reduced visa and Immigration Health Surcharge income is expected to include a £27 million decrease in student visa revenue and a £23 million reduction from the graduate route. 3. More universities to be made eligible for the High Potential Individual Visa The High Potential Individual (HPI) visa, a two-year route for recent graduates of top global universities, has now been expanded to include graduates from the world’s top 100 institutions.  The annual quota will also increase to 8,000, with the number of applicants expected to double from 2,000 to 4,000. Between June 2024 and June 2025, there were 1,850 applications for this visa. The new rules will also allow student entrepreneurs to switch directly from a Student Visa to the Innovator Founder route to establish innovative businesses in the UK. 4. Broader eligibility for the Global Talent Visa The Global Talent Visa has also been refined, with expanded recognition of international awards and adjusted evidence requirements for architects and related professionals. For example, applicants in architecture may now submit evidence of achievements either as designated team members or contributors, or demonstrate individual accomplishments completed independently.. 5. Immigration skills charge increased by 32% The Immigration Skills Charge (ISC) paid by employers who sponsor foreign skilled workers and used to fund domestic workforce training will increase by 32%.  The fee will rise to £480 per sponsored worker for small businesses and charities, and £1,320 for medium and large employers.  This marks the first increase since 2017.  According to the government, the additional funds will be invested in developing the UK’s domestic skills base and reducing reliance on overseas labour.  6. Removal of Tier 1 Entrepreneur Visa rules From 6 July 2025, applicants will no longer be able to apply for entry clearance or leave to remain under the Tier 1 (Entrepreneur) Visa route. As this date has now passed, the relevant provisions for such applications are no longer valid. Existing Tier 1 visa holders may still apply for Indefinite Leave to Remain (ILR) under the original terms until 6 July 2027. 7. Adjustments to the Seasonal Worker Visa The rule governing the length of time seasonal workers must remain outside the UK before applying for a new Seasonal Worker Visa has also been revised.  Under the new regulation, workers may spend no more than six months working in the UK within any ten-month period—previously, this limit applied over a twelve-month period. This change offers employers greater flexibility when hiring seasonal labour. In addition, the updated Immigration Rules provide further clarification on the status of EU, EEA and Swiss citizens and their family members under the EU Settlement Scheme (EUSS).  They also introduce a new requirement for nationals of Botswana, including short-term visitors, to obtain a visa before travelling to the UK. The View from TB Accountants  In summary, this new round of immigration reform reflects a clear policy direction: higher thresholds for low-skilled migration, improved pathways for highly skilled professionals and entrepreneurs, and an emphasis on migrants contributing productively to the economy and integrating into society. For businesses, students and professionals alike, the reforms present both opportunities and challenges.   We expect that the UK’s immigration framework is likely to become even stricter in the coming years.   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 .

Many companies offer ‘non-cash benefits’ such as company cars, private medical insurance or gym memberships to attract and retain talent.  However, these perks also carry a tax cost: the Benefit-in-Kind (BiK) tax, which may have a greater impact on your take-home pay than you expect. From the 2025 tax year, the Benefit-in-Kind regime will undergo several changes: higher tax rates for electric vehicles, reclassification of certain car models, and the upcoming introduction of the ‘payrolling’ system for real-time taxation of benefits. Today, let’s look in detail at who pays Benefit-in-Kind tax, which benefits are taxable, and how to declare them legally and efficiently. What Is Benefit-in-Kind (BiK)? Benefit-in-Kind tax is levied by the UK government on ‘non-cash benefits’ provided by employers to employees.  In other words, any goods or services received as part of your employment but not paid in cash, such as a company car, private health insurance, employer-provided accommodation or gym membership, may be considered taxable benefits. This tax category was formally introduced in 2002, initially to discourage companies from avoiding tax by providing high-emission vehicles, and to promote more environmentally friendly fleet policies.  Over time, it expanded to include other benefits, such as: Company cars (for both personal and business use) Private medical insurance Gym memberships or other wellness schemes Employer-provided accommodation Mobile phones, travel expenses or work-related clothing Although most ‘fringe benefits’ can be subject to BiK tax, some, such as the Cycle to Work scheme, are tax-exempt.  Always confirm the tax treatment of your benefits with your employer or a qualified accountant. Who Pays Benefit-in-Kind Tax While the benefits are provided by the employer and reported to HMRC, the actual tax liability rests with the employee. In other words, the employer reports the value of the benefits, but the employee pays the tax. The Benefit-in-Kind amount appears separately on your payslip, clearly distinguished from regular salary income.  The corresponding tax is deducted automatically through the Pay As You Earn (PAYE) system, just like income tax. This means employees do not receive an additional tax bill—deductions are made directly from monthly pay. Because Benefit-in-Kind increases your taxable income, it can push you into a higher tax bracket. If the value of your benefits causes your total income to exceed a threshold, the portion above it will be taxed at a higher rate. For example: If an employee earns £45,000 annually and receives a £6,000 benefit (e.g. a company car), their taxable income becomes £51,000. This pushes part of their income into the 40% bracket instead of being entirely taxed at 20%: £12,570 tax-free £12,571–£50,270 taxed at 20% → £37,700 × 20% = £7,540 £730 above £50,270 taxed at 40% → £730 × 40% = £292 Total annual income tax: £7,832 In this case, the £6,000 benefit increases the employee’s tax by around £1,346—an effective BiK rate of approximately 22.4%. Employer Responsibilities While BiK increases employees’ taxable income, employers also face additional compliance obligations. Employers must pay Class 1A National Insurance on employees’ benefits, at a rate of 15%.  They are also required to file a P11D form annually, recording all benefits provided to staff. Why Companies Still Offer Benefits Despite the Tax Burden Although Benefit-in-Kind creates additional tax costs, many businesses continue to offer such benefits for several reasons: Attracting and retaining talent In the UK’s competitive job market, benefits packages often play a crucial role in attracting and retaining employees. Private health insurance, company electric vehicles and mental health programmes all contribute to overall job satisfaction beyond salary alone. Tax efficiency and optimisation opportunities While BiK is taxable, UK tax law provides reliefs and exemptions for certain benefits. With proper planning, companies can achieve a win–win outcome: lower tax costs and happier employees. For instance, in 2025, the BiK rate for electric vehicles will be just 3%, much lower than the 25–37% rate for petrol cars. Employers offering EVs may also claim capital allowances, with some models qualifying for 100% first-year allowance (FYA). Certain health checks, professional training, eye care and childcare support are classified as tax-exempt benefits, allowing employers to fully deduct their costs as business expenses. Enhancing tax efficiency and corporate image Providing HMRC-compliant benefits can help businesses manage taxable profits effectively and avoid the long-term tax burden of repeated pay rises.  At the same time, benefits like green vehicles and health initiatives can strengthen the company’s public image. Some advice from TB Accountants  Benefit-in-Kind tax is not merely an ‘extra tax’ but a policy tool encouraging both employers and employees to adopt more sustainable and efficient behaviours. Furthermore, HMRC plans to make the ‘Mandatory Payrolling of BiK’ effective from 6 April 2027. Once implemented, most employee benefits will no longer be reported via the annual P11D form but will instead be taxed automatically through payroll in real time. For further advice, arrange a consultation with our team.     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 .