The Let Property Campaign (LPC) is an ongoing initiative by HMRC inviting individual landlords to disclose previously undeclared rental income.

Whether it’s due to oversight, misunderstanding of the obligations or changes in personal circumstances, many landlords find that they have underpaid their tax.

The LPC provides a structured, fairly lenient pathway to correct any issues.

What is the Let Property Campaign?

The LPC is designed to help residential landlords bring their tax affairs up to date. It applies to individuals renting out property in the UK or abroad, including those letting:

• Single or multiple residential properties
• Holiday homes
• Rooms in their primary residence
• Properties as non-resident landlords

The campaign is not open to companies, trusts or those renting non-residential property such as shops or offices.

Why participate?

The primary benefit of using the LPC is reduced penalties. Normally, penalties for undeclared income can be severe – up to 100% of the tax owed for UK income and up to 200% for offshore income.

Under the LPC, HMRC is more lenient, often reducing penalties significantly or even waiving them entirely if you are cooperative and proactive.

Landlords who make a disclosure under the campaign avoid the risk of formal investigation, which could lead to higher penalties, interest and the potential to be publicly naming on HMRC’s deliberate defaulters list.

The Disclosure Process

The LPC follows a four -stage process:

1. Notify HMRC

Landlords must first inform HMRC of their plans to disclose through the Digital Disclosure Service. Once registered, they will receive a Disclosure Reference Number (DRN) and must then submit their full disclosure within 90 days.

2. Prepare the Disclosure

During the 90-day period, landlords must:

• Calculate their rental income and allowable expenses
• Determine the tax owed, including interest and applicable penalties
• Identify how many years of under-declared income must be disclosed

The number of years depends on the behaviour that led to the underpayment:

• Up to 4 years if the taxpayer took reasonable care
• Up to 6 years if the mistake was careless
• Up to 20 years for deliberate or concealed errors

Importantly, the LPC covers all undeclared income  not just rental earnings. This could include other sources such as overseas income, dividends, or capital gains.

3. Submit and pay

The disclosure must be submitted online along with full payment. If immediate payment isn’t possible, landlords can contact HMRC to agree on a payment arrangement. Failure to submit within the 90-day window could mean losing any favourable LPC terms.

4. HMRC review and finalisation

Once the disclosure is submitted, HMRC will review it. In most cases, assuming the information is accurate and comprehensive, they will accept the disclosure without further queries. Landlords should keep records of all calculations and correspondence in case of future questions.

Past and future

Landlords should view the LPC not just as a one-time correction opportunity but as a prompt to keep improving their tax compliance.

HMRC is increasingly using data from letting agents, local councils, tenancy deposit schemes and the Land Registry to identify non-compliant landlords, so it’s a good idea to stay ahead and be proactive.

Also, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) starts from April 2026 for landlords with income over £50,000, and in 2027 for those earning over £30,000. Essentially, accurate reporting in digital form will soon be mandatory.

Need advice?

The Let Property Campaign is an important opportunity for landlords to correct past issues and keep any penalties to a minimum.

Professional advice is often worthwhile, and by acting now, you can avoid future penalties and prepare for the upcoming changes in tax reporting.

As Lune Vally accountants we help landlords with tax advice, accounting and more. Get in touch!

If you’re a director of a UK limited company, determining how to pay yourself – through salary, dividends, or a combination of both – is a crucial part of tax efficiency.

In this article we explore the pros and cons of each approach to help you make an informed decision.

Paying Yourself a Salary

Opting for a salary means your company pays you through the PAYE (Pay As You Earn) system. This salary is a deductible business expense, reducing your company’s Corporation Tax liability.

The Advantages

• Tax Deductible: Salaries reduce your company’s taxable profits.
• State Benefits: Regular salary payments contribute to your National Insurance record, maintaining your entitlement to state benefits and pension.
• Stable Income: Provides a consistent income stream.

Considerations:

Employer registration: If you decide to take a director’s salary, you may need to register your company as an employer with HMRC and enrol for Pay As You Earn (PAYE). This requirement applies even if you’re the only person working for your company.

National Insurance Contributions (NICs): Both employer and employee NICs apply, which increase the overall tax burden for your business.

Income Tax: Salaries are subject to Income Tax based on your tax band.

For the 2024/25 tax year, the personal allowance is £12,570. Earning up to this amount means you won’t pay Income Tax. However, NICs may still apply depending on your salary level.

Paying yourself through dividends

Dividends are distributions of your company’s post-tax profits to its shareholders. Dividend income is reported and taxed differently from salary income. It’s not paid through PAYE, and isn’t subject to Income Tax or National Insurance contributions.

Advantages:

• Lower Tax Rates: Dividend tax rates are generally lower than Income Tax rates.
• No NICs: Dividends aren’t subject to NICs, reducing your tax liability.
• Flexibility: You can time dividend payments to suit your financial needs and the business’ performance.

Considerations:

Profit dependency: Dividends can only be paid if your company has sufficient post-tax profits.

Tax-free allowance: For 2024/25, the first £500 of dividend income is tax-free.

Dividend Tax Rates for 2024/25:

•  Basic Rate: 8.75% on income between £12,571 and £50,270.
• Higher Rate: 33.75% on income between £50,271 and £125,140.
• Additional Rate: 39.35% on income over £125,140. ([1st Formations][4])

Combining Salary and Dividends

Many directors find that a combination of a modest salary and dividends offers the most tax-efficient approach. For instance, taking a salary up to the personal allowance threshold ensures no Income Tax is due, while the remainder of your income can be drawn as dividends.

By structuring your remuneration this way, you will pay less personal tax than by taking all your income as a director’s salary. Plus, you won’t pay employee NICs on your salary, and your company will be able to avoid, minimise, or offset any employer’s National Insurance liability.

Additional Considerations

Pension Contributions

Your company can make pension contributions on your behalf, which are deductible business expenses and can reduce your Corporation Tax bill.

Director’s Loans

While it’s possible to borrow money from your company, strict rules apply, and improper use can lead to tax penalties.

Family Involvement: If family members assist in your business, compensating them through salaries or dividends can be tax-efficient, provided it’s justified and complies with HMRC regulations.

In summary…

Choosing the right mix of salary and dividends depends on your company’s profitability, personal financial needs and long-term goals. An accountant can help you tailor a strategy that aligns with your circumstances and ensures you stay the right side of tax laws.

As Lune Valley accountants we work with limited companies and sole traders to provide tax advice, company accounting and payroll services. Get in touch with us today.

If you’re a director of a UK limited company, determining how to pay yourself – through salary, dividends, or a combination of both – is a crucial part of tax efficiency.

In this article we explore the pros and cons of each approach to help you make an informed decision.

Paying Yourself a Salary

Opting for a salary means your company pays you through the PAYE (Pay As You Earn) system. This salary is a deductible business expense, reducing your company’s Corporation Tax liability.

The Advantages

• Tax Deductible: Salaries reduce your company’s taxable profits.
• State Benefits: Regular salary payments contribute to your National Insurance record, maintaining your entitlement to state benefits and pension.
• Stable Income: Provides a consistent income stream.

Considerations:

Employer registration: If you decide to take a director’s salary, you may need to register your company as an employer with HMRC and enrol for Pay As You Earn (PAYE). This requirement applies even if you’re the only person working for your company.

National Insurance Contributions (NICs): Both employer and employee NICs apply, which increase the overall tax burden for your business.

Income Tax: Salaries are subject to Income Tax based on your tax band.

For the 2024/25 tax year, the personal allowance is £12,570. Earning up to this amount means you won’t pay Income Tax. However, NICs may still apply depending on your salary level.

Paying yourself through dividends

Dividends are distributions of your company’s post-tax profits to its shareholders. Dividend income is reported and taxed differently from salary income. It’s not paid through PAYE, and isn’t subject to Income Tax or National Insurance contributions.

Advantages:

• Lower Tax Rates: Dividend tax rates are generally lower than Income Tax rates.
• No NICs: Dividends aren’t subject to NICs, reducing your tax liability.
• Flexibility: You can time dividend payments to suit your financial needs and the business’ performance.

Considerations:

Profit dependency: Dividends can only be paid if your company has sufficient post-tax profits.

Tax-free allowance: For 2024/25, the first £500 of dividend income is tax-free.

Dividend Tax Rates for 2024/25:

•  Basic Rate: 8.75% on income between £12,571 and £50,270.
• Higher Rate: 33.75% on income between £50,271 and £125,140.
• Additional Rate: 39.35% on income over £125,140. ([1st Formations][4])

Combining Salary and Dividends

Many directors find that a combination of a modest salary and dividends offers the most tax-efficient approach. For instance, taking a salary up to the personal allowance threshold ensures no Income Tax is due, while the remainder of your income can be drawn as dividends.

By structuring your remuneration this way, you will pay less personal tax than by taking all your income as a director’s salary. Plus, you won’t pay employee NICs on your salary, and your company will be able to avoid, minimise, or offset any employer’s National Insurance liability.

Additional Considerations

Pension Contributions

Your company can make pension contributions on your behalf, which are deductible business expenses and can reduce your Corporation Tax bill.

Director’s Loans

While it’s possible to borrow money from your company, strict rules apply, and improper use can lead to tax penalties.

Family Involvement: If family members assist in your business, compensating them through salaries or dividends can be tax-efficient, provided it’s justified and complies with HMRC regulations.

In summary…

Choosing the right mix of salary and dividends depends on your company’s profitability, personal financial needs and long-term goals. An accountant can help you tailor a strategy that aligns with your circumstances and ensures you stay the right side of tax laws.

As Lune Valley accountants we work with limited companies and sole traders to provide tax advice, company accounting and payroll services. Get in touch with us today.

The Chancellor, Rachel Reeves, prefaced the Spring budget with a reminder that Labour was elected “bring change, provide security for working people and deliver a decade of national renewal”.

This has been made more difficult in recent months amid weaker-than-expected growth, and uncertainty in US markets pushing up borrowing costs. She said that the “global economy has become more uncertain.”

Overview for businesses

This budget has fewer direct implications for small businesses than the Autumn budget in October 2024. Importantly, there are no changes to tax.

The main focus of this budget is to cut the welfare budget and find money for new homes, government efficiency and defence.

Taxes

There are no further tax increases. However, the chancellor stressed the importance of detecting fraudulent behaviour, and highlighted the use of new technology to help HMRC crack down on tax avoidance. This could raise £1bn to the treasury.

Welfare cuts

The aim of benefit changes is to save £4.8bn by 2029-30. The health element of universal credit will be frozen for existing claimants until 2029-30 and reduced to £50 for new claimants in 2026-27, and subsequently frozen.

Personal Independence Payments (PIPs) will be reviewed and the government will introduce an additional eligibility requirement for the daily living element of the benefit.

£1bn has been allocated to employment support to help people back into work, plus £400m for jobcentres.

Spending

Defence spending is to rise to 2.5% by April 2027, funded by international aid cuts. The scrapping of NHS England will pass on savings for patient care.

£3.25bn is being invested in a new “transformation fund” to bring down the cost of running government. The first allocation from the fund is in AI tools to drive modernisation. Initial projects will look at the probation service and the foster care system.

The government is allocating £2 billion towards affordable housing next year. House building is predicted to hit a 40 year high, with 305,000 houses built a year, reaching a total of 1.3 million over the next five years.

To deliver this plan and to tackle trades skill shortages, the government is also allocating £600 million to train the next generation of construction workers in the UK. This will include creating new technical excellence colleges.

Inflation and growth forecasts

Inflation fell in February and is expected to average 3.2% this year before falling “rapidly”, in line with the Bank of England’s 2% target from 2027 onwards.

Growth measures include the third runway at Heathrow, planning and pension reform, and deregulation.

Ends.

Upcoming changes to the special tax rules for Furnished Holiday Lettings are set to shake things up from April 2025.

Announced in the March 2024, these changes essentially remove the tax benefits that holiday lets gain over other types of rental property businesses.

Here’s a rundown of what’s happening and how it might affect you.

What are the changes ahead?

1. Finance Costs Deduction: Currently, you can deduct mortgage interest in full as a business expense, but from April 2025, only a 20% tax reduction will apply. This could impact your taxable income. Could it put you into the next tax bracket or affect your eligibility for child benefit?
   
   
2. Tax Deduction for Furnishings: The initial costs of furnishing can currently be deducted for holiday lets, unlike other rentals – and again this ends in April. But if you’re replacing furnishings, that’s still deductible, as it is with other residential lettings.

• Capital allowances on fixtures. From April, you will no longer be able to claim capital allowances on central heating, air conditioning and alarms.
  
• Relevant earnings for pensions: Profits from holiday lets currently count toward pension contributions, but this perk will be history from 2025.

• Profit Allocation Flexibility: Previously, joint property owners could allocate the profits to themselves in any proportion. But from April the default is a 50:50 split, as with other types of lettings. Might you need to take action to put all profits in one name only, or to reflect the ownership split?

• Capital Gains Tax Changes: Special CGT reliefs, such as lower rates and rollover relief will no longer apply.

Why the changes?

The government aims to level the playing field by aligning tax treatment across different property lettings. This move is intended to simplify the tax system and encourage longer-term residential letting. It’s thought that the moves will raise £245 million a year by 2028/29.

Not everything is yet clear

Although the changes kick in from April 2025, some specifics are still pending government consultations. Keep an eye out for transitional provisions affecting capital allowances and losses.

Things to consider

If you’re thinking about selling your holiday let, doing so before 6 April could mean you can claim Business Asset Disposal Relief (BADR). You could therefore pay capital gains tax at 10% instead of 24%.

Another option is to stop renting the property as a holiday let before the deadline. You then have three years to complete the sale.

From April, brought-forward holiday let losses will be converted into normal property losses. If you have other property income, you can set the losses against profits from this overall, and not just the holiday let.

Let us help

For a more detailed assessment of how these changes could impact you, including potential adjustments to your taxable income and profits, get in touch. As small business and property accountants in the Lune Valley, we’re here to help you understand and prepare for these upcoming shifts in tax policy.

Running a small business comes with many challenges, but one of the most important is managing your finances effectively.

Being on top of your financial situation isn’t just about avoiding debt — it’s about giving your business the opportunity to thrive.

We have 10 top tips to help you stay in control of your finances and set your business up for success.

1. Keep accurate financial records. Make it a habit to record every transaction in your accounting system. Log in at least once a week. Then you’ll always have a clear picture of your cash flow and can quickly spot any issues.
   
   
2. Regularly review expenses. Business costs can pile up, and fine-tuning where your money goes can free up funds for more important investments. Keep an eye on energy costs, travel and tech to see where you could make savings.
   
   
3. Plan ahead. Having a solid business plan with clear financial projections will help you anticipate challenges and set achievable goals. It’s important to keep an eye on the big picture as well as the day-to-day.
   
   
4. Invest in tech. Invoicing apps can simplify the process of sending invoices, tracking payments, and even chasing late payments for you. Accounting software can help you monitor your cash flow, manage your records, and make tax filing easier. 
   
   
5. Separate business and personal. Separate your personal and business bank accounts. It will avoid confusion and make tracking your profits much easier. It simplifies your tax returns and gives you a clear view of your business’s financial health.
   
   
6. Pay yourself first. Set aside 10% of your profit as personal earnings. It will help make sure your business is profitable and helps give you a safety net for unexpected expenses.
   
   
7. Build and Maintain Positive Cash Flow – Offer early payment discounts or charge late fees to get your clients to pay on time. The sooner you are paid, the healthier your cash flow.

• Borrow while business is good. Don’t wait until your business is struggling to seek finance. Applying for a loan when your financials are in good shape will increase your chances of approval and give you more flexibility. Loans can be a great way to drive growth.
• Invest in marketing. Being clear about your audience, what they want and how to reach themis the way to grow and maintain sales. Well-planned marketing activities will quickly pay for themselves.

1. Stay on top of your tax. Know which taxes apply to your business and when they’re due. Paying your taxes on time helps you avoid hefty penalties and maintain good financial standing.

If you can, put money away in a separate account every time income is received. If you receive £1,000 put away £200 and don’t touch it. This will quickly build up to cover any tax liabilities once they are due.

Good financial management is crucial for any business – and if this is something you need advice on, talk to an accountant.

As specialist small business accountants in the Lune Valley, we love to share tips on tax and financial efficiency. Contact us today with your questions and we’ll be glad to help.

31 January is the annual self-assessment deadline, and it can be a stressful time of year for many. Here’s our guide to submitting your tax return and reducing the anxiety.

Who Needs to Submit a Tax Return?

Typical people who usually have to carry out self-assessment include:

• The self-employed
• People with more than one job
• People drawing a pension while continuing to work
• Directors and partners of limited companies
• Anyone earning a certain amount from investments (including rent from property)
• People claiming child benefits who have earned above a certain amount
• Anyone who receives a P800 form (this comes from HMRC stating that you didn’t pay enough tax).

Not sure if you need to complete a tax return? Check on the government website.

Our Top Tips

1. Start Early

Officially, you’re supposed to register for Self-Assessment by 5 October every year, but there’s no penalty for missing that deadline. To be safe, though, apply for your UTR (Unique Taxpayer Reference) at least 20 days before the submission deadline, as there is no such thing as a temporary or emergency UTR number.

A common mistake is losing your Government Gateway user ID – or forgetting to register. This can prevent you from filing your Self-Assessment tax return and result in penalties if you attempt to file close to the 31 January deadline.

To register, visit HMRC. You’ll need your National Insurance number, a UK address, and either a recent payslip, P60, or a valid UK passport. It may take up to 10 days to receive your activation code by post.

2. Don’t Be Late

There is an automatic £100 late filing penalty if your 2022-23 tax return is submitted after 31 January 2024 and penalties increase to £10 a day if you’re more than three months late.

Late payment interest of 7.75% and a 5% penalty on unpaid tax after 1 March 2024 could also apply.

3. Check If You Qualify for Marriage Allowance

This tax rebate applies to couples where one partner earns less than the personal allowance (£12,570 in 2023-24) and the other earns more but is not a higher-rate taxpayer. The lower earner can transfer up to £1,260 of their allowance, potentially reducing the couple’s tax by up to £252 a year.

4. Claim Gift Aid at the Higher Rate

If you’re a higher-rate taxpayer, donating through Gift Aid allows you to claim back the difference between the basic and higher tax rates on your donations. For example, donating £100 with Gift Aid makes the donation worth £125, and you can reclaim 20% of that – an additional £25.

Check your emails for receipts from sites like JustGiving to ensure you’ve recorded all eligible donations.

5. Plan for Payments on Account

Payments on account are advance payments towards your next tax bill, due by 31 January and 31 July each year. Each payment represents half of your previous year’s tax bill, including any Class 4 National Insurance contributions if you’re self-employed.

You won’t need to make payments on account if:

• Your last Self Assessment bill was under £1,000, or
• You’ve already paid over 80% of all tax you owe.

If your business is expanding, plan for potentially higher payments on account to avoid unwanted surprises.

6. Claim All Legitimate Expenses

Allowable expenses reduce your tax bill and include costs incurred ‘wholly and exclusively’ for business purposes, such as:

• Office costs (e.g., equipment, stationery).
• Travel expenses (e.g., fuel, parking, train fares).
• Staff salaries and pensions.
• Business premises costs (e.g., rent, utilities).
• Advertising and marketing.

Keep detailed records and receipts, as HMRC may request proof. Claiming illegitimate expenses can lead to penalties of up to 100% of the tax due.

7. Don’t Forget Pension Contributions

Higher-rate taxpayers often miss out on claiming tax relief for private pension contributions. Basic-rate relief is usually added automatically by your pension provider, but higher and additional-rate taxpayers must claim the extra 20% or 25% via Self-Assessment.

The rebate can be paid as a tax reduction, a refund, or through an adjusted tax code.

8. Double-Check the Details

Errors can delay your return or lead to penalties. Double-check:

• Your name is spelled correctly.
• Figures are accurate.
• Tax codes are correct.

Review your entries thoroughly before submission.

9. Seek Professional Advice

For complex finances, an accountant or tax advisor can help you identify savings, ensure compliance, and reduce stress. While there’s a cost involved, the benefits often outweigh the expense.

10. Keep Copies of Everything

After submission, save a copy of your return and confirmation. These records are invaluable for resolving discrepancies or preparing future returns.

Filing your tax return doesn’t have to be a nightmare. By starting early, staying organised, and using these tips, you can submit your return with confidence.

Worried about Self-Assessment? Let us help. As small business accountants in Lancashire, we’re here to support you with tax returns, accounting, payroll services and much more. Call us today.

Since the Budget announcement on October 30^th, concerns have been raised by the businesses and individuals who are affected by some of the key measures.

The biggest changes affecting small businesses are those to the employer National Insurance rate, the secondary threshold and the National Living and Minimum Wage. Read on to see how these might affect your business from April 2025.

A recap of the key announcements

The following changes will be introduced from April 2025.

• The rate of employers’ National Insurance Contributions NICs will increase from 13.8% to 15%
• The employee salary threshold – where employers pay NICs – is reducing from £9,100 to £5,000
• The Employment Allowance will increase from £5,000 to £10,500.
• The £100,000 eligibility threshold will vanish, meaning that more employers will qualify for the Employment Allowance
• The National Living Wage (NLW) (for those aged 21 and over) will increase to £12.21 per hour.
• The National Minimum Wage (NMW) (for those aged 18-20) will increase to £10 per hour.

Around 1.4 million UK businesses employ staff, most of which are micro and small businesses with up to 49 employees. Just 38,000 are medium-sized businesses (with 50-250 employees) and only 8,000 UK firms have 250 people or more. British small and medium-sized businesses employ nearly 60% of the UK workforce.

Counterbalance measures

To an extent, the National Insurance changes were counter-balanced by the increased Employment Allowance, which allows eligible businesses to reduce their liabilities. It will move from £5,000 up to £10,500 a year.

Eligible companies pay less in NI contributions on each payroll until the allowance is used up. With the removal of the £100,000 Class 1 liability limit, most employers will now be able to claim the allowance.

This move was an attempt by the Chancellor to protect small employers from increased NI contributions. She claimed that around one million employers will pay the same or less in employer NI contributions than previously.

Impact of the changes

The concern is that increasing employer NI contributions and the minimum wage could put strain on small businesses that have low profit margins or are making losses.

To cope with this new cost, businesses are considering recruitment freezes, reducing salaries or cutting future investment.

The political argument for introducing these additional costs is to boost future employment and economic conditions, by using the funds to invest in state schools, the NHS and public services.

What could it mean for you?

The best way to understand the real impact of the changes for your small business is with examples.

At the moment, an employee on the National Minimum Wage might typically work 120 hours a month at £11.44 an hour. Currently this is a monthly wage of £1,373, rising to £1,466 from April next year.

When including NI and a 3% employer pension contribution, the additional cost per employee per month is £167. Over a year it would be £2,004.

A business with 10 employees would therefore face an increase of more than £20,000 per year. If it qualifies for the employment allowance, the total would be reduced by £5,500 per year – leaving the business still needing to find an additional £15,000 in staffing costs.

If a business has three employees, however, the employment allowance would largely cancel out the additional NI and wage costs.

Plan ahead for April

It’s important to apply these changes to your own business to explore the impact and understand whether you need to make changes to your strategy from April next year.

Get in touch and we can help you work through specific numbers to help you plan ahead.

As specialist small business accountants in the Lune Valley, Lancashire we’re ideally placed to support you with payroll, tax and financial efficiency. Contact us today to see how we can help.

On Wednesday October 30 the Chancellor Rachel Reeves presented Labour’s first Autumn budget in 14 years.

She confirmed her priorities as putting ‘more pounds in people’s pockets’, improve living standards and restore economic stability. Overall, the budget measures will raise an additional £40 billion in tax.

Below, we explore key elements from the Budget that will affect small businesses and individuals.

National insurance increase

Employees will not pay more national insurance directly, but from April 2025 employers’ national insurance contributions will increase by 1.2 percentage points to 15%. The NI threshold reduces from £9,100 to £5,000.

Recognising the potential impact of this on Britain’s smallest businesses, Ms Reeves is increasing Employment Allowance from £5,000 to £10,500. The chancellor says this means 865,000 employers won’t pay any National Insurance at all next year, and over one million will pay the same or less as they did previously.

Minimum wage increase

Reeves confirms that the ‘national living wage’ – the legal minimum for over 21s – will increase by 6.7% to £12.21. This equates to £1,400 a year for an eligible full-time worker.

A single adult rate will be phased in over time, to eventually equalise pay for under 21s.

No rise to income tax

Income tax will not increase, and the ongoing freeze in income tax thresholds will end in 2028. This will reduce the flow of taxpayers moving into higher tax brackets as salaries increase with inflation.

Business rates

Businesses will receive 40% relief on business rates for retail and hospitality up to a cap of £25,000.

Capital gains and inheritance tax

Capital gains tax will increase, with the lower rate moving from 10% to 18%, and the higher rate from 20% to 24%.

The government is extending the freeze on the threshold for inheritance tax, allowing £325,000 to be inherited tax free; £500,000 where property is involved and £1m by passing allowances on to a spouse.

£2bn in tax will be raised by reforming reliefs for business and agricultural assets. Beyond £1m, such assets will attract inheritance tax at 20%.

State pension spending to increase

Labour will make sure that “the people who powered our country receive the pension they are owed”, and remains commitment to the triple lock. Spending on the state pension is projected to rise 4.1% in 2025-26, equating to a £470 increase for over 12 million pensioners in the UK.

Fuel Duty

The chancellor rejected the option to increase fuel duty, and is maintaining the 5p cut from the previous government.

Electric Vehicles

To continue to support the take-up of electric vehicles, existing incentives will be retained in company car tax from 2028. The government will also increase the differential between fully electric and other vehicles in the first rates of Vehicle Excise Duty, as of April 2025.

Stamp Duty

Reeves announces the government will increase stamp duty land surcharge for second homes by 2% to 5% from 31 October 2024. There are no changes to the duty rates for First Time Buyers or people moving home.

Other measures

The additional tax will be raised in a variety of ways, with further announcements including:

• A new levy on vape liquid, which will be increased in line with tobacco.
• A cut in draught duty by 1.7%, which equates a penny off a pint in the pub.
• The non-dom tax regime will disappear from the tax system from April 2025, impacting UK residents whose permanent home for tax purposes is outside the UK.  According to the Office for Budget Responsibility, this package of measures will raise £12.7bn over the next five years.
• Private school fees will now be liable for VAT, and private schools will lose business rates relief from April 2025.
• Air passenger duty is to increase, at a level of an additional £2 on an economy short haul flight. But the duty for private jet passengers will increase by 50% to around £450 per person.

Inflation and growth forecasts

The chancellor will maintain the Bank of England’s 2% target for inflation.

Inflation will average 2.5% in 2024, rising to 2.6% in 2025 and dropping to 2% in 2029. Inflation was at 1.7% in September, below the Bank of England’s 2% target, down from 11% in October 2022.

The Office for Budget Responsibility slightly upgrades its growth forecast for this year but adjusts them down in later years. GDP growth is forecast to be 1.1% in 2024 and 1.6% in 2030.

Want to explore in more detail what the latest rules will mean for you or your business? As leading small business accountants in the Lune Valley we’re happy to advise. Get in touch with us today.

Last year, HMRC received more than 130,000 reports of scams and phishing attempts. With fraudsters becoming ever more sophisticated in their attempts to fool us, it’s important to know what to look out for.

We round up the latest advice and examples of phishing and fraud.

Text or WhatsApp messages

The number of fraudulent text messages has increased by more than a third in the past year. HMRC does send texts out in some situations, but never asks you for personal information.

A common approach is to claim you are due a tax refund, supplying a link. HMRC only sends links to information on the gov.uk website or to HMRC website.

Don’t click on any links unless you are certain they are legitimate, and if the link is to a form requesting information, close it down.

If you have subscribed to the UK Government Channel on WhatsApp, you might receive occasional tax-related reminders. These will be single messages and you will not be able to reply. HMRC will not communicate with you for any other reason using WhatsApp.

Send any suspicious messages to HMRC on 60599 (network charges apply).

Letters

HMRC recently shared an example of a misleading fraudulent letter that has been in circulation. A copy is below. The letter requests the recipient to email copies of recent bank statements, filed accounts, VAT returns and passport information.

It’s a convincing-looking letter – but one clue is a long and complicated email address. All genuine correspondence from HMRC should end in @hmrc.gov.uk.

QR codes

HMRC does use QR codes in letters and correspondence. The QR code will usually take you to guidance on the GOV.UK website – and if not, the letter will explain the destination for the code.

You will never be taken to a page to input personal information.

Send any suspicious emails or other materials containing QR codes to phishing@hmrc.gov.uk and delete them.

Emails

HMRC will never send notifications by email about tax rebates or refunds.

Don’t click on links in a ‘tax rebate’ email or open any attachments. Never disclose personal or payment information.

Fraudsters are good at making email addresses look genuine – but you can often detect suspicious details by clicking on the sender name. If you are unsure, forward it to HMRC’s phishing address and then delete it.

Phone calls

People are reporting an automated phone call scam that suggest HMRC is filing a lawsuit against you, asking you to press a button to speak to a caseworker and make a payment. You should end a phone call like this immediately.

Other scam calls may refer to National Insurance number fraud, or offer a tax refund, and ask you to provide bank or credit card information.

To help HMRC investigate, share any call details such as the date and phone number used via this online form.

Refund companies

Some companies send emails or texts offering to claim tax refunds or rebates on your behalf, usually for a fee. These companies are not connected with HMRC in any way. You should read the ‘small print’ and disclaimers before using their services.

What to look for

Although online criminals work very hard to make their scams appear real, there can often be a few tell-tale signs that things are not as they seem. Watch out for:

• Spelling errors and untidy formatting
• Email addresses that don’t look genuine
• Any form that requests financial information or personal details
• Strange website addresses that are not part of gov.uk

Helpful rules to follow

The Metropolitan Police suggests following these rules to prevent fraud:

• Be suspicious of all ‘too good to be true’ offers and deals.
• Don’t agree to an offer immediately. Insist on time to get independent or legal advice first.
• Don’t hand over money or sign anything until you’ve checked someone’s credentials and their company.
• Never send money to anyone you don’t know or trust, or use methods of payment you’re not comfortable with.
• Never give banking or personal details to anyone you don’t trust.
• Always log on to a website directly rather than clicking on links in an email.
• If you spot a scam or have been scammed, report it and get help.

What to do if you fall victim to a scam

If you think you’ve fallen victim to fraudsters, contact Action Fraud on 0300 123 2040 or at Action Fraud.

Remember that if you’re a victim of a scam or an attempted scam, however minor, there may be hundreds or thousands of others in a similar position. Your information may be vital in completing the picture.

Don’t be embarrassed – many people fall victim to online crimes each year because fraudsters are experts at deception.

For further advice on tax, tax refunds and staying safe as a taxpayer, we can help. Get in touch with our team today.