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Welcome...
To November's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.
Please contact us for advice in your own specific circumstances. We're here to help!
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| The Chancellor dismisses wealth tax as 'mistake' |
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With the Autumn Budget merely weeks away, Rachel Reeves said it would be a "mistake" to impose wealth taxes she described as "unproven", even as she hinted that further tax rises could still be on the way.
She argues that existing measures like inheritance tax reforms and abolition of the non-dom regime already target wealth. Ms Reeves further questions the revenue potential of a wealth tax, referencing Switzerland's model (they have a wealth tax but no inheritance tax).
There is a clamour from within the Labour Party, including former leader, Neil Kinnock, to impose some form of wealth tax. They believe that a 2% tax on assets over £10 million could raise £11 billion in revenue.
However, the Chancellor outlined two autumn priorities: boosting economic growth for working families and securing revenue for public services. Despite this stance, Reeves is preparing to raise at least £20 billion in new taxes in the upcoming Budget to fill the fiscal shortfall inherited by the Government
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| How the Chancellor could raise money without taxing the rich |
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With the Government promising not to raise income tax, National Insurance or VAT, what options are left for them to try and fill the gap in public finances? They say that those with the broadest shoulders should bear the brunt of the tax burden, but the Chancellor says she has ruled out a wealth tax.
Economists are suggesting that the Government will have to break its promise which will target average earners as well as the wealthy. For example, a 1% increase in the basic rate of income tax could raise £6.5 billion, costing average earners £250 per year extra. A more palatable option might be to extend the tax threshold freeze beyond 2028, which could raise £7-10 billion annually due to 'fiscal drag'.
They believe that VAT and fuel duty could be reformed - the latter has been frozen since 2011, and it is believed a 1% increase could raise £240 million. It would have a knock-on effect of increasing VAT revenue as well. Regarding VAT, exemptions under the current system could cost £89 billion by 2029 so reducing those would raise revenue but may hit poorer households. The Chancellor could also reduce the VAT registration threshold - it is one of the highest in the OECD. A reduction from £90k to £30k could raise £2 billion.
None of these would prove popular with the electorate, so introducing hypothecated taxes could be an option. This is where taxes raised are earmarked for specific services, such as the NHS or social care. However, past attempts have been scrapped by previous governments.
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| Tax evasion crackdown on dodgy employers |
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The crackdown targets fraudulent use of "umbrella companies" - sometimes legitimate but often used by rogue operators who fail to pay employment taxes while acting as the worker's nominal employer. From April 2026 new laws make recruitment agencies legally responsible for ensuring correct employment taxes are paid for temporary workers; where no agency is used the end client company will be liable.
The Treasury says the change stops wilful tax avoidance, protects honest employers from unfair competition, and prevents workers being left in vulnerable positions; the change is presented as part of the government's wider tax compliance agenda.
HM Treasury estimates about 275,000 workers a year are supplied by cowboy operators using umbrella companies to evade tax. HMRC will be able to pursue agencies or end clients when umbrella companies fail to pay the right tax. The government expects the reforms to raise nearly £900 million in year one and almost £3 billion over five years.
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| HMRC warns home workers about rogue tax advisors |
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HMRC has issued a warning to people working from home about tax refund scams. Some companies and online ads offer to submit work-from-home tax claims on behalf of employees, taking commission from refunds and risking fraudulent claims.
HMRC advises that you always check eligibility before claiming, submit claims directly through HMRC to avoid fees and risk, and be wary of promises of "easy money" - if it sounds too good to be true, it probably is.
HMRC highlights three major warning signs of bad tax agents: asking you to sign a blank tax return, requesting your Government Gateway ID, and claiming to be endorsed by HMRC. Legitimate advisers should ask for receipts and let you review and approve returns before submission.
Steps you should take before using a tax agent include checking their credentials (look for accreditation with bodies like ICAEW or CIOT), reading the fine print and understanding what you're signing - some agreements give agents long-term control over your tax affairs, and knowing the fees. You remain responsible for any incorrect claims, even if submitted by an agent.
As a reminder, here are the Work-from-Home tax relief rules:
- Eligibility: Only claim if you're required to work from home (e.g., no office space or impractical commute).
- Valid Expenses: Business-related costs like phone calls or energy for your workspace.
- Excluded Items: Rent, broadband, or anything used outside work hours.
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| November Questions and Answers |
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Q: I am widowed, and my £550,000 estate (includes my home) will be left to my children in a family trust deed. It was executed in 2017. Will they pay tax?
A: These types of trust were sold as a way to keep a home safe from inheritance tax or care costs, the idea being that your home wouldn't count towards your estate. However, this only works in specific circumstances.
If you have continued to live in the house without paying a market rent to the trustees, HMRC treats it as a gift with reservation, so the property remains part of your estate for inheritance tax purposes. If you are paying the market rate for rent, this could remove the reservation but will be creating taxable income for the trust.
With an estate of £550,000 you are covered by available allowances: the £325,000 nil-rate band plus a £175,000 residence nil-rate band, together shielding up to £500,000. This is doubled if you and your deceased partner were married (or in a civil partnership).
It should be noted that the residence nil-rate band applies only when the property passes directly to children or grandchildren. If the house is held in trust, HMRC may deny the relief unless the trust deed gives your children a clear entitlement; discretionary trusts risk losing the relief.
Q: I have a SIPP (self-invested personal pension) and will become a higher-rate taxpayer this tax year. How do I claim the additional tax relief?
A: As you are no doubt aware, whilst you are a basic-rate taxpayer, when you make a personal SIPP contribution, HMRC adds 20% basic-rate tax relief directly into your pension. For example: you pay £80; HMRC adds £20, so the gross contribution is £100 and the £20 is added automatically to the SIPP.
If you pay tax at more than 20%, you can claim additional tax relief (the extra 20% if you are a 40% taxpayer) via your self-assessment or by completing HMRC's online form / writing to HMRC after the end of the tax-year you wish to claim the relief for. Any extra relief is returned to you or used to reduce your tax bill; it is not paid into your pension.
Q: I'm selling my house to someone whose house I am buying. It is worth £50,000 more than mine, so can I gift my home and just pay stamp duty on the £50,000?
A:Whilst a property that is gifted in full does not incur stamp duty, this situation would likely be seen as linked transactions and fall under HMRC's anti-avoidance rules. These are in place to prevent the gifting of properties in both directions and one party paying the difference in their values.
Also, if there is an outstanding mortgage of £40,000 or more, stamp duty is payable on that rather than the property's value. The mortgage would have to be taken on by the new owner (subject to eligibility checks) or paid off in full.
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1st
- Corporation Tax payments are due for companies with a year-end of 31st January.
19th
- For employers operating PAYE, this is the deadline to send an Employer Payment Summary (EPS) to claim any reduction on what you'll owe HMRC.
- It is also the deadline for employers operating PAYE to pay HMRC by post, for October.
22nd
- Deadline for employers operating PAYE to pay HMRC electronically, for October.
30th
- Corporation Tax Returns (CT600 form) are due for companies with a year-end of 30th November.
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