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Welcome...
To April'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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Government is urged to scrap 'arbitrary' inheritance tax system
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The Institute of Economic Affairs (IEA) is urging the UK government to abolish inheritance tax (IHT), calling it 'arbitrary, complex and distortionary.' Nearly half of OECD countries do not tax inheritances passed to adult children, making the UK a relative outlier.
IHT currently charges 40% on estates above £325,000, or £500,000 when a main residence is passed to children.
The IEA argues the tax penalises wealth that has already been taxed through income tax, NI, and VAT. It discourages investment and entrepreneurship and creates unnecessary administrative burdens (it costs the government £66m annually just to collect). It says even a cautious government could raise the tax-free threshold, reduce the 40% rate and simplify gifting rules.
The government recently faced backlash from farmers after attempting to remove tax breaks for family farms. Following protests, ministers reversed course and raised the agricultural assets threshold to £2.5m. So, it remains to be seen if further changes to the IHT system will be made.
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Gulf expats worried about tax bill after UK return
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British citizens living in Gulf states have been returning to the UK because of the conflict involving Donald Trump's war with Iran. Many left suddenly for safety reasons, not intending to change their tax residency status.
Returning earlier than planned can trigger the UK's five-year temporary non-residency rule, an anti-avoidance measure. If someone becomes UK-resident again within five full tax years, capital gains made abroad may become taxable in the UK. This is catching out people who sold assets while abroad assuming they were outside the UK's tax scope.
Tax advisers say families are 'troubled' by the unexpected liabilities. Many did not consider residency day-count rules during an emergency evacuation. HMRC has updated guidance to allow war as an 'exceptional circumstance,' but accountants argue the rules remain narrow and restrictive.
Experts urge HMRC to take a more pragmatic and sympathetic approach given the extraordinary situation. Staying in the UK after the initial crisis often does not qualify as an exceptional circumstance under current rules.
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Chancellor concedes there was a valid argument for not increasing job taxes
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The Chancellor, Rachel Reeves, admitted there was a 'valid argument' against her decision to raise employers' National Insurance contributions. She defended the increase as necessary to fund public services, especially the NHS, which received a £29 billion annual uplift.
Critics argue her admission comes too late for businesses and workers already affected. The TaxPayers' Alliance said the tax rise inevitably reduced job opportunities, pointing to rising youth unemployment. Some argue that reversing the employer NI increase would help businesses and improve job prospects for young people.
ONS data shows 957,000 young people (16 - 24) were classed as NEET (not in education, employment, or training) in the last quarter - an increase of 11,000 from the previous period.
Ms Reeves said that the Government was expanding apprenticeships and pointed to her 'youth guarantee' which promises paid work for young people who've been out of education or employment for 18 months.
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HMRC tax receipts and National Insurance contributions report
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HMRC regularly releases a bulletin to update on the amount of tax and NI receipts it receives. The latest report revealed a couple of new records and reflects the impact caused by the Chancellor's changes to various tax regimes.
Total gross HMRC tax and NICs receipts for April 2025 to January 2026 equalled £784.9 billion. This was £65.6 billion higher than the same period last year.
Income Tax, Capital Gains Tax & NICs Total were £460.7bn (up £52.0bn year-on-year). PAYE was £388.2bn (up £39.1bn). Self-Assessment brought in £70.3bn (up £12.8bn). January 2026 SA receipts are the highest on record.
Total VAT receipts were £154.3bn (up £9.0bn) with January 2026 VAT receipts being the highest on record. The growth was influenced by inflation and shifts in consumer spending.
Business Taxes, which include Corporation Tax, the Bank Levy, Digital Services Tax, and the Energy Profits Levy totalled £81.8bn (up £1.8bn). There were record-high December 2025 receipts due to strong onshore Corporation Tax receipts.
Stamp Taxes and Annual Tax Enveloped Dwellings (ATED) were £17.0bn (up £1.9bn). Receipts were influenced by Stamp Duty Land Tax (SDLT) rate changes, increased transaction volumes around Budget periods and the threshold changes effective from April 2025.
Inheritance Tax (IHT) totalled £7.1bn (up £0.1bn). The slightly higher receipts were linked to increased asset values and frozen thresholds (to 2030/31).
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April Questions and Answers
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Q: I've received a letter from HMRC stating I have a drop in my tax-free allowance, so my tax code will change from April. My salary has not increased this past tax year, so why the change?
A: HMRC sends updated tax codes throughout the year, not just at the start of the tax year. These updates reflect changes in personal circumstances, such as income shifts or savings interest earned. For you, it would appear to relate to the latter.
Banks report savings interest (outside ISAs) directly to HMRC. If your interest exceeds your Personal Savings Allowance, HMRC adjusts your tax code to collect the tax automatically.
Allowances depend on income:
£17,570 to £50,270 income - you can earn £1,000 savings interest tax-free
£50,270 to £125,000 income - you can earn £500 tax-free
£125,000+ income - you cannot earn any interest tax-free
Q: I'm in receipt of an NHS pension, contribute to a private pension and think I've become a higher rate taxpayer. I've never done a tax return before - how do I claim the tax relief please?
A: It is important to note that your two pension schemes work in different ways.
The NHS pension scheme uses 'Net Pay', whereby contributions are taken before income tax is calculated. This means the person automatically receives full tax relief, including higher-rate relief if they qualify.
A private personal pension uses 'Relief at Source' which means contributions are made from after-tax income. The provider adds basic-rate relief (20%) automatically. If the person is a higher-rate taxpayer, they may be entitled to additional relief, which must be claimed by completing a self-assessment tax return.
Please get in touch if you would like us to assist you further with this.
Q: As the end of the tax year approaches, what should I check to maximise my tax allowances?
A: Many tax allowances reset on the 6th of April each year. If they are not used up before the reset, they can be lost forever. It is worth reviewing your options throughout the year and not leaving it to the last minute.
I'm sure you're aware that you can put up to £20,000 into an ISA each tax year, but it's worth checking how much of that allowance you've used.
A much-overlooked area is that of pension contributions, as these can reduce taxable income. Most people can invest up to £60,000 a year and receive tax relief.
If you are married, or in a civil partnership, with one of you a basic rate taxpayer and the other a non-taxpayer, the latter can transfer part of their personal allowance to the former.
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1st
- Corporation Tax payments are due for companies with a year-end of 30th June.
5th
- The end of the current tax year (2025/26). Use up any remaining tax allowances or reliefs by this date.
6th
- The new tax year (2026/27) begins. Most changes to tax rules and other measures mentioned in the latest Budget will take effect from this date.
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, as well as the Final Payment Summary (FPS) for the previous tax year.
- It is also the deadline for employers operating PAYE to pay HMRC by post, for March.
22nd
- Deadline for employers operating PAYE to pay HMRC electronically, for March.
30th
- Corporation Tax Returns (CT600 form) are due for companies with a year-end of 30th April.
- It is also the deadline for submitting the Annual Tax on Enveloped Dwellings (ATED) return and making the associated payment for the period covering 1 April 2025 to 31 March 2026.
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Please contact us if we can help you with these or any other tax or accounts matters.
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