Ward Goodman
May 22, 2025

Big changes are coming to inheritance tax (IHT) – and if you’re a business owner, landowner, or have a sizeable pension pot, you need to be thinking ahead. Two major changes to inheritance tax rules are on the horizon – one scheduled for April 2026, the other for April 2027. Both are likely to reshape how estates are taxed, with potentially major implications for families, business owners, and landowners.

Here’s what’s changing, who it will affect, and what steps you can take today to stay ahead.

What’s Changing?

1. Business Property Relief (BPR) and Agricultural Property Relief (APR)

From April 2026, the government plans to tighten the rules around BPR and APR – two reliefs that have traditionally played a crucial role in passing on farms and businesses without triggering a hefty tax bill.

Under the proposed changes:

• The first £1m of combined agricultural and business property will continue to receive 100% relief, with 50% relief on amounts over £1m
• AIM-listed shares will be affected — from April 2026, they will qualify for only 50% Business Property Relief, regardless of value, and will not benefit from the new £1 million 100% relief allowance.

This change marks a real turning point. Until now, many family businesses and agricultural estates have managed to stay out of the IHT net altogether. But with reliefs being capped, more of these estates will now face sizeable tax bills.

An Example: Take a couple with a business valued at £1.8 million. Under current rules, Business Property Relief could potentially cover the full amount. But once the cap kicks in, only the first £1 million would qualify for 100% relief. The remaining £800,000 would be eligible for only 50% relief – meaning £400,000 would be subject to inheritance tax. At the standard 40% rate, that results in a £160,000 tax bill that wouldn’t have existed under the current system.

2. Pensions to Be Included in IHT (from April 2027)

Pensions have traditionally been a very tax-efficient way to pass on wealth. Currently, most pension pots fall outside of a person’s estate for IHT purposes.

That’s expected to change. From April 2027, subject to final confirmation and legislation:

• Unused pension pots will be included in the taxable estate.
• The nil-rate band, which is currently set at £325,000, will be applied across both pensions and other assets, reducing the overall tax-free allowance available elsewhere.
• There’s also the potential for double taxation – with pensions being hit by both IHT and income tax on withdrawal.

Add to that the probate complications, as executors will need to coordinate with pension providers and potentially settle tax liabilities before beneficiaries can access funds.

Who Will Be Affected?

These changes will hit:

• Business owners who assumed their enterprise could be passed on tax-free.
• Farmers and landowners with agricultural property that previously qualified for 100% relief.
• Wealthy individuals with large pensions, especially those in drawdown or with unused pension pots intended for inheritance – particularly where values exceed the current nil-rate band of £325,000.

It’s not just the ultra-wealthy who need to pay attention. Plenty of families will find that previously exempt estates now face a substantial IHT bill unless they act soon.

What You Should Do Now

1. Review Your Estate Plan

Work with a financial planner such as Ward Goodman to assess how these changes could affect your estate. If you’re relying on BPR or APR, look at the current value of your assets and how much relief might still be available post-2026.

2. Use the Current Rules While You Can

We’re in a window where the existing legislation still applies. That makes now the ideal time to act. If you’re considering gifting business or agricultural property, or reorganising your affairs, doing so before the changes come into effect could protect more of your wealth.

3. Consider Trusts

Trusts can help manage how assets are passed down and provide flexibility when navigating changing tax rules. While they’re not a one-size-fits-all solution – and come with their own rules – they remain a valuable planning tool, especially in light of reduced reliefs.

4. Reassess Your Pension Strategy

If your pension forms part of your estate plan, now is the time to revisit it. Consider:

• Reviewing your nomination forms to make sure they’re up to date.
• Looking at how your pension is invested and whether any drawdown strategies need adjusting.
• Seeking advice on whether life insurance or other protections might be needed to cover future IHT.

5. Start Planning Early

The worst position to be in is reacting at the last minute. By planning ahead, you have more options and more control. Leaving it until after April 2026 or 2027 could limit your choices and increase your tax exposure.

Consideration also needs to be given to how any IHT will be funded and the cash flow impacts this may have on a business.  With the right planning, a managed succession strategy can significantly mitigate the risks arising from the new BPR regime. 

Final Thoughts

The proposed changes to IHT are far-reaching and will affect more families than many realise. But with the right planning, you can still take control and protect your legacy.

At Ward Goodman, we help individuals and families plan ahead with clear, practical advice. Whether you’re a business owner, a farmer, or someone with a significant pension pot, we’ll help you navigate these upcoming reforms and develop a plan that works for your circumstances.

Now is the time to act – before the rules change.

Maximise Your ISA Allowance

You’ve got up to £20,000 to put into ISAs this year, and any growth or income from those investments will be tax-free. That’s a pretty generous opportunity. Couples can each use their own allowance, effectively sheltering up to £40,000 from tax.

Not sure where to invest just yet? No problem. You can still pay into your ISA and leave it in cash until you’ve made up your mind. One common approach is the so-called ‘bed and ISA’ — where you sell existing investments to use up your Capital Gains Tax allowance, and then buy them back inside your ISA wrapper. Just be cautious; timing and market movements can catch you out, so it’s worth speaking to a professional.

Don’t Forget Junior ISAs

Got kids or grandkids? Junior ISAs let you stash away up to £9,000 per child, tax-free. They’re a great way to set children up for big life events — like education or their first home. And while only a parent or guardian can open a JISA, anyone can pay into it. Grandparents, godparents, aunts, uncles — everyone can get involved. It’s a tax-smart way to pass wealth down the generations.

LISA – Lifetime ISAs

If you’re aged between 18 and 39, a Lifetime ISA could be well worth a look. You can put in up to £4,000 this tax year, and the government will top it up by 25%. That’s an extra £1,000 just for saving. You can use a LISA to buy your first home (as long as it’s under £450,000) or keep it until you’re 60 and use it towards retirement. Just be careful — if you withdraw the money for anything else, you’ll get hit with a penalty.

Review Your Pension Contributions

Pensions remain one of the most tax-efficient ways to save for the future. For most people, the annual allowance is £60,000 — or 100% of your earnings, whichever is lower. And if you didn’t use all of your allowance in previous years, you might be able to ‘carry forward’ some of that unused room.

High earners should watch out for the tapered annual allowance. If your adjusted income is over £260,000, your allowance starts to shrink, potentially down to £10,000. On the flip side, even if you’re not earning, you can still contribute up to £2,880 a year and get a government top-up to £3,600. That’s free money just for saving.

Consider Timing for Capital Gains and Dividends

Your Capital Gains Tax (CGT) allowance is now just £3,000 for the year — so if you’re planning to sell assets like shares, timing matters. Couples can double up, and spouses can transfer assets between each other to make the most of both allowances. Don’t wait until March to start thinking about this.

The dividend allowance has also been cut right back — just £500 this year. If you hold dividend-paying shares in a regular trading account, you could end up with a surprise tax bill. Tucking those investments inside an ISA or pension can help you avoid that.

2025/26 Tax-Free Allowances at a Glance

To help you keep things straight, here’s a quick look at the main tax-free allowances for this year:

Note: These figures apply to the 2025/26 tax year and could change in future.

Final Thoughts On Planning Ahead

We get it — tax planning probably isn’t the most exciting item on your to-do list. But doing it early means fewer surprises and better outcomes. There’s still plenty of time to act, and making the most of your allowances now could mean paying less tax and building more wealth over time.

Whether it’s putting more into your ISA, revisiting pension contributions, or exploring how best to pass on wealth to family — it’s worth having the conversation sooner rather than later. And if you want help navigating the options, our team at Ward Goodman is always here to support you with tailored advice.

Ward Goodman
May 20, 2025

Halifax, the UK’s biggest mortgage lender, has just rolled out a new remortgage offer – and on the surface, it looks like one of the cheapest deals around right now. But there are a few strings attached. It’s not open to everyone and can only be accessed through whole-of-market brokers like us at Ward Goodman.

We’re able to offer deals like this that you won’t find going direct to the lender. And more importantly, we help you figure out if it actually makes sense for your situation – not just if it looks good on paper.

Halifax Remortgage Offer Key Features:

• Only through intermediaries – You won’t find this on a comparison site. It is only available to intermediaries such as Ward Goodman.
• Headline rate – One of the lowest currently available.
• Loan range – Applies to mortgages between £250,000 and £2 million.
• Fee – A substantial £1,999 up front (more than double what many other lenders are charging).

Compared to Others:

Take Barclays, for instance – they’re offering a 3.95% rate on loans from £100,000 with a far lower fee of just £995.

What It Actually Costs:

That low Halifax rate might catch your eye, but when you factor in the fee, the deal starts to look a bit different. Spread over a two-year fix, that £1,999 adds roughly £83 a month to your repayments. That’s why looking beyond the rate is essential – and exactly what we help our clients do.

What’s Happening in the Market?

• Rates are slipping down – Sub-4% deals are becoming available, especially if you’ve got plenty of equity.
• Shorter fixes are cheaper – Two-year deals tend to offer better rates than five-year options right now.
• Big-picture economics – Global events (like tariff threats from US President, Donald Trump) could put pressure on growth, which might push interest rates even lower.

What This Means for Borrowers

Why It Pays to Use a Whole-of-Market Mortgage Adviser

When you work with an adviser like us – someone who can access the entire market – you get more than just a list of deals. You get:

• Honest comparisons of what’s really out there
• Advice personalised to your goals and plans
• A clearer picture of total costs – including fees, flexibility, and exit charges
• Access to deals not available direct

In short, we help you avoid costly surprises later.

This Halifax deal could be great… for the right borrower. It’s aimed at those with bigger loans, who don’t mind the high fee and can tick all the lender’s boxes. But for plenty of people, it might not stack up once the numbers are crunched.

At Ward Goodman, our job is to help you work through all of that. Whether it’s this Halifax remortgage deal or something else entirely, we’ll show you what fits best based on your circumstances – not just the marketing headline.

Speak to an Expert

Thinking about remortgaging? Want to know what deals are right for you? Give Adrian Seager a call on 01202 875900. He’s our in-house mortgage specialist and is fully authorised by the FCA (No. 221867).

We offer independent, whole-of-market mortgage advice. That means no bias, and no upselling – just honest guidance to help you make a smart choice.

** Your home may be repossessed if you do not keep up repayments on your mortgage.

Ward Goodman
May 14, 2025

Life, as we all know, doesn’t always stick to the script. Sometimes, later in life, things can take a significant turn, and one of the trickier paths to navigate is divorce after you’ve passed 50. It’s becoming more common, this “grey divorce” as some call it, and it brings with it a unique set of financial puzzles that really need some careful thought and, let’s be honest, probably some expert help.

Here at Ward Goodman, we get that this isn’t just about numbers; it’s a big life change with plenty of emotions involved. Our aim is to offer some clarity and support, helping you get your head around the key financial bits and pieces as you step into this new phase.

The Paradox of “Grey Divorce”: Why It’s Rising While Overall Divorce Rates Fall

It’s a bit of a head-scratcher, isn’t it? You hear about overall divorce rates in the UK actually going down, which might make you think marriage breakups are becoming less common. But then you look at folks over 50 – what they call “grey divorce” or “silver splitting” – and the picture is quite different. It’s definitely on the up. This makes you wonder what’s going on, why later life is seeing more couples parting ways even as things seem to be stabilising for other age groups.

To give you an idea of the numbers, back in 2022, the total number of divorces in England and Wales hit a real low – the lowest since way back in 1971, at around 80,000. That’s a pretty big drop from the year before. Yet, if you zoom in on the over-50s, the trend is the opposite. Since the 1990s, the rate of divorce in this age group has actually doubled! And in 2021, around one in four divorces involved someone over 50. It really highlights how different the experience of relationships can be depending on where you are in life.

So, what’s the story behind this? Why are more people deciding to go their separate ways after 50? Well, there are a few things that seem to be playing a part:

• Living Longer, Wanting More from Life: Let’s face it, people are living much longer and healthier these days. If you’re in your 50s or 60s, you could still have a good few decades ahead of you. The idea of staying in a marriage that isn’t making you happy for all that time just doesn’t sit right with a lot of people anymore. As the research pointed out, retirement isn’t the full stop it used to be; it’s a new chapter, and some people want to make the most of it.
• More Women Standing on Their Own Two Feet: It’s great to see that more women, especially in later generations, have their own financial security. This independence can be a real game-changer. It means that staying in an unhappy marriage because you feel you have to financially is less of a barrier than it might have been for previous generations.
• Times Are Changing: Society’s views on divorce have shifted a lot. It’s not the taboo it once was, and that can make it easier for older people to consider it as an option without feeling the weight of judgment.
• Kids Grown Up and Gone: The “empty nest” thing is real. Once the kids have flown the coop, some couples might find that the main thing holding them together was raising their family. When that focus goes, they might realise they’ve grown apart or want different things for their future.
• Looking for What Makes You Tick: Later life can be a time for some serious soul-searching. People might have a renewed sense of wanting to pursue their own interests and find personal fulfillment, and sometimes that means a change in their relationship.
• A Less Stressful Way to Part Ways: The introduction of “no-fault” divorce in 2022 might also be playing a role. It can make the whole process less confrontational, which might be a relief for older couples who just want a clean break without the drama of assigning blame.

Ultimately, this rise in “grey divorce” seems to be down to a mix of us living longer, having more freedom and different expectations for our later years, and a shift in how we view relationships and personal happiness. It’s a reminder that life and relationships are always evolving.

Splitting What You’ve Built Together: Property and Pensions

When you’ve been together for a while, you tend to accumulate some pretty significant assets, and for most couples, the big ones are property and pensions. How these get divided when you divorce can really shape your financial future, so it’s important to get it right.

The Family Home: That place you’ve built memories in often holds a lot of emotional weight, not to mention financial value. When a couple parts ways, you’ve got to figure out what happens to it. Maybe one person buys the other out? Perhaps you sell up and split the proceeds? Or sometimes, you might even delay selling, especially if there are still kids at home.

Getting a proper handle on what the property is actually worth is the first step – a professional valuation is usually a good idea. And if someone wants to stay put, they’ll need to sort out things like mortgages or maybe even look into options like equity release (we’ll touch on that in a bit).

Pensions: Planning for Your Future: Pensions, built up over years of work, are a crucial part of your retirement plans. And yes, they’re also part of the pot when you divorce. The courts have a few ways they can deal with pensions, including:

• Pension Sharing Order: This basically splits the pension pot right there and then, creating separate pensions for both of you.
• Pension Attachment Order (Earmarking): This used to be more common, where a chunk of the pension would be paid to the ex-spouse when it started being drawn. You don’t see this as much now.
• Offsetting: Here, the value of the pension is balanced against other assets, like the house.

Given that pensions can be a bit of a minefield in terms of rules and regulations, and they have such a big impact on your later years, getting some solid financial advice here is really key to making sure things are fair for everyone. The newsletters from Ward Goodman consistently highlight the importance of understanding financial regulations and planning for the future, which absolutely applies here when navigating pension division during divorce. 

Sign-up to the Ward Goodman free financial and business advisory newsletter today.

Tax Considerations When Selling Assets in Divorce

When a couple separates, selling jointly held assets such as property, shares, or investment portfolios is often part of the process. However, it’s important to understand that these transactions can trigger Capital Gains Tax (CGT) or other tax liabilities, depending on the timing and nature of the assets involved.

For example, if investments are sold as part of a divorce settlement after the end of the tax year in which the couple permanently separated, CGT may apply to any gains above the annual allowance. With the CGT exemption now reduced to £3,000 per individual for the 2025/26 tax year, careful planning is more important than ever.

This is where Ward Goodman offers a real advantage. As financial planning and tax specialists, our team can help you understand the full tax implications of your divorce, including:

• Whether asset disposals will attract CGT
• How best to time or structure sales to minimise your tax bill
• Strategies such as spousal transfers before separation deadlines, or using losses to offset gains

These are complex decisions with long-term financial consequences. By working with our advisers, you can avoid costly mistakes and protect more of your wealth as you plan your next chapter.

Looking at Your Options: Buying Someone Out and Equity Release

As we mentioned, if one of you wants to keep the family home, they might need to “buy out” the other person’s share. This could involve dipping into savings or taking out a new mortgage.

For those over 55, equity release might also be something to consider. It’s a way to get some of the cash tied up in your property without actually having to sell it. You could get a lump sum or even regular income, secured against your home. But, and it’s a big but, you really need to understand the long-term implications of this, like how it might affect what you can leave to others and the potential for interest to build up. Getting independent financial advice is absolutely crucial to figure out if this is the right path for you.

Why Getting Good Advice Matters, Especially Now

Navigating divorce finances at any age is tough, but it’s particularly crucial after 50, with retirement on the horizon. Getting advice from Ward Goodman can really help by:

• Clarifying your financial situation.
• Showing how settlements can impact your future.
• Guiding you through pension sharing.
• Assessing your property options.
• Creating a plan personalised to your next chapter.

Divorce is emotionally draining enough without financial worries. Getting professional help gives you a clearer view of your future, boosting your confidence. Don’t feel you have to go it alone – contact the Ward Goodman team today and let’s get your financial future on track.

In fact, about one-third of UK adults (32%) admit they feel too uncomfortable to discuss money with friends or family. It’s no surprise that silence around financial matters can create tension and uncertainty at critical times.

In this post, we’ll look at the dangers of not speaking up and the positive financial outcomes that can come from clearly communicating with the people you trust. We’ll also cover the real steps you and your loved ones can take to begin having these important conversations starting today.

The Risks of Avoiding Financial Conversations

Avoiding financial conversations with family members can lead to serious misunderstandings and unnecessary conflict. When expectations about inheritance, business succession, or financial support are not addressed openly, assumptions will often fill the void. This can cause frustration, strained relationships, and even legal disputes when the time comes to manage an estate or transfer wealth.

Some key risks of avoiding these conversations may include:

• Families falling out over money they thought they’d agreed on
• Estates mishandled because no one knew the plan
• Tax bills taking a huge bite out of what could have stayed in the family
• Family members struggling because they were promised help – and then didn’t get it.
• Years of trust, gone in a single, unnecessary dispute

And recent trends seem to back it up:

• Court disputes over inheritance are on the up, with 9,625 applications to challenge a will in 2022/23 – a 40% increase compared to four years earlier.
• Financial stress is a big issue, with 35% of UK couples saying recent money pressures have strained their relationship, and 28% arguing more about money.

Unspoken assumptions are particularly dangerous when it comes to estate planning. Without clarity, family members may have differing beliefs about who will inherit what, how responsibilities will be shared, or how assets should be managed. These situations can escalate quickly, adding emotional stress to already difficult times. By not having these conversations now, you risk leaving a legacy of confusion instead of security.

The Benefits of Open Financial Dialogue

Talking about money with your family isn’t exactly anyone’s idea of fun. But leaving things unsaid? That usually leads to confusion, arguments, and a lot of stress when it matters most.

The truth is, having these conversations early builds trust. It gives everyone a clear view – not just of the plans you’ve made, but of the responsibilities they might be asked to take on someday.

What happens when families are willing to talk?

• People know exactly what’s expected of them. No guesswork.
• There are fewer surprises, fewer misunderstandings – and far fewer disputes.
• Everyone is on the same page about goals and long-term plans.
• When the time comes to settle an estate or transition a business, it actually goes as smoothly as it should.
• Most importantly, trust between family members gets stronger, not weaker.

And here’s the thing:  Starting these talks isn’t just about protecting your assets. It’s about giving your family peace of mind – the kind that comes from knowing there’s a plan, and that they’re part of it.

Practical Steps to Initiate the Conversation

No two families are the same – and there’s no single script for talking about money. But a few things can make those conversations easier and more effective.

First, pick your moment carefully

Trying to start a serious conversation at a family barbecue, or during a busy holiday, rarely works. Look for a quiet time when everyone’s relaxed and can really focus. The right setting makes a difference.

Next, be open and clear

It’s not always easy, but honesty matters.

Explain your plans, and why you’ve made them. Share your thinking, not just your decisions. People are much more likely to understand – and respect – choices when they hear the reasoning behind them.

Stories help, too

Talking about money in the abstract can feel cold. But telling a story about a family that avoided conflict through planning, or one that faced problems because they didn’t – makes it real.  Stories stick with people. Facts often don’t.

And finally, don’t be afraid to get help

Even the most open families can hit rough patches.

Bringing in a professional can keep discussions on track and take the heat out of sensitive topics.  

At Ward Goodman, we’re experienced in guiding families through these conversations, offering advice that’s clear, impartial, and built around what matters most to you.

Taking the First Step Towards Financial Harmony with Ward Goodman

Starting financial conversations may feel uncomfortable at first, but it is one of the most important steps you can take to protect your family’s future. Clear communication today can help prevent confusion, conflict, and missed opportunities tomorrow.

Yet despite how important preparation is, nearly two-thirds of UK adults still do not have a will in place. Without clear plans, families are often left unprepared, facing difficult decisions at the worst possible time.

We encourage you to take proactive steps by discussing your financial wishes, plans, and concerns openly with your loved ones. Whether it’s planning for the succession of a business, managing an estate, or preparing the next generation, having these discussions early will ensure your legacy is preserved and respected.

If you would like expert guidance on facilitating family conversations or structuring your wealth transfer plans, Ward Goodman is here to help. Our experienced team can provide personalised advice and support to give you and your family complete peace of mind. Contact us today to find out more about how we can support your family’s financial future.

Since 2011, HMRC has offered a free online service that allows small companies to file their annual accounts and Corporation Tax return (CT600) together in one step. This joint filing system also forwards accounts to Companies House, simplifying compliance for small, unrepresented businesses.

The service was widely used by small companies with straightforward financial affairs, including dormant companies and some incorporated charities, as it eliminated the need for commercial filing software.

Why is the service closing?

HMRC and Companies House have announced the joint service will close permanently on 31 March 2026.

The system is outdated and no longer meets current digital standards or evolving legislative requirements. HMRC is encouraging businesses to switch to modern commercial software that offers improved functionality, such as automated checks and compatibility with updated filing obligations. Companies House is also moving toward a fully digital future, supported by reforms introduced under the Economic Crime and Corporate Transparency Act.

Who will be affected?

This change primarily impacts small companies and unrepresented businesses currently using the joint filing service. Most companies already use dedicated software or an accountant, so will see minimal disruption.

Accountants may also need to assist clients who have been self-filing through HMRC’s portal, ensuring they transition smoothly to compliant software ahead of the deadline. Although, this is unlikely to impact many businesses as an accountant would normally already be using appropriate software to file their clients accounts and Corporation Tax Return.

What should businesses do before the service closes?

To avoid disruption, affected businesses should begin preparing now:

• Choose a new filing method: Select an HMRC-approved commercial software package that can submit CT600 returns and iXBRL accounts. Alternatively, engage a professional accountant to manage your filings.
• Back up your records: Download and securely store copies of your past returns filed through HMRC’s portal. After 31 March 2026, you won’t be able to access them. HMRC recommends downloading the last three years of filings.
• Transition early: Get familiar with the new software or processes well before the deadline. This helps avoid issues when the HMRC service is withdrawn.
• Check eligibility for paper filing (if applicable): In rare cases, such as dormant companies or charities, paper filing may still be permitted – but this requires HMRC approval and is not the default.

How will companies file returns after the closure?

From 1 April 2026, businesses will need to file their accounts and tax returns separately with HMRC and Companies House:

• For Corporation Tax: Returns must be submitted using commercial software that supports CT600 forms, tax computations, and iXBRL accounts. The HMRC portal will no longer be available.
• For Companies House: Businesses can continue using WebFiling or suitable third-party software to submit their accounts. While paper filing is still allowed in limited cases, Companies House plans to mandate software-only filing in the future.
  

Many businesses will find it efficient to adopt integrated software that handles both filings. These tools often include compliance checks and digital record-keeping features that can streamline the process.

Final thoughts

Although the closure of the filing service may seem to be a hassle for many, the move reflects HRMC’s shift towards securing and modernising digital compliance. Companies that act early will reduce the risk of non-compliance and benefit from improved tools for managing their financial reporting.

If you’re unsure how to prepare for these changes, Ward Goodman is here to help. Our expert team can support you in selecting the right software, handling the transition, or managing your filings directly. Get in touch today to ensure your business remains compliant and well-prepared.

Ward Goodman
May 2, 2025

ICAEW recently hosted a live seminar at Chartered Accountants’ Hall in London, bringing together experts from HMRC, leading software providers, and accounting professionals to discuss the upcoming rollout of Making Tax Digital (MTD) for Income Tax. Here’s a summary of the key insights from the day.

Covered during the day:

HMRC

The day began with a talk from Craig Ogilvie, Director of Making Tax Digital (MTD) at HMRC. He gave an overview of the MTD timeline and stressed the importance of clients signing up early, ahead of the April 2026 deadline. Over 700,000 sole traders and landlords whose combined income from self-employment and property exceeds £50,000 will be mandated into MTD in 2026. This threshold will reduce to £30,000 in 2027 and £20,000 in 2028.

Craig outlined several benefits of starting early and joining the testing phase, including better real-time tracking of finances and more proactive tax planning, helping to avoid the January 31st rush.

Key points clarified:

• Once enrolled in MTD, you are committed for at least three years. You would need to fall below the income threshold for three consecutive years to exit the regime.
• A separate submission will be required for each source of sole trade income, but property income may be grouped into a single submission if appropriate.
• HMRC will issue an estimated tax liability after each quarterly update is filed. This is not payable and the usual payment deadline remains in place, it is to provide the taxpayer with an estimate for their information only. 
• Individuals who previously submitted their tax returns via the HMRC online portal will no longer be able to do so once signed up to MTD; filing must be done through commercial software.

Software providers

We spoke to multiple accounting software providers, including Xero, Sage, and Dext, to explore their MTD solutions. Each provider demonstrated how quarterly updates can be prepared and submitted using their platforms, giving us a better understanding of the options available.

Panel

The day concluded with a panel discussion featuring Rebecca Benneyworth MBE (lecturer, writer, and tax consultant), Manoj Varsani (CEO of Hammock, accounting software for landlords), and ICAEW practice member Aaron Patrick. The panel was hosted by Lindsey Wicks, Senior Technical Manager of Tax Policy at ICAEW. They discussed how MTD will impact accounting firms and highlighted the need for firms to build closer client relationships through regular contact.

Key takeaways:

• Individuals need to prepare for MTD – it is approaching quickly.
• Those not currently using accounting software will need to adopt a digital solution and should speak to us for advice on the best options.
• Feedback from software test groups has been largely positive.
• Late payment penalties are increasing, making it even more important to stay on top of filings and payments.

Questions:

• Filing deadline for submissions: 7th of the month following the quarter-end.
• Quarter-end dates: Default quarter-ends are 5th July, 5th October, 5th January, and 5th April. An election can be made to move to calendar month-ends (30th June, 30th September, 31st December, and 31st March).
• Submissions: These are cumulative – any errors can be corrected in the next quarter’s update.
• Will HMRC offer a free portal? No, all submissions must be made through third-party software.

Late payment penalties

From 2026, stricter penalties will apply for late tax payments under MTD for Income Tax. If a balancing payment, or an amount due after an amendment or assessment, is not paid within 15 days of the due date, a first penalty of 3% of the unpaid amount will be charged. If payment remains outstanding after 30 days, an additional 3% penalty will apply.

Beyond this, a daily penalty equivalent to 10% annually of the outstanding balance will accrue until the debt is cleared. These charges are in addition to the standard interest that HMRC applies to overdue tax.

Importantly, if a Time to Pay arrangement is agreed with HMRC before the relevant deadlines, these penalties can usually be avoided.
Please note: The previous late payment penalty rules will continue to apply for tax liabilities outside of MTD (for earlier tax years).

Need help preparing for MTD? Our expert tax team can guide you through the transition. Get in touch today or learn more about Making Tax Digital.

Understanding Salary Sacrifice & Its Tax Benefits

Salary sacrifice is an agreement between employer and employee in which the employee gives up a portion of their gross salary in return for a non-cash benefit – such as additional pension contributions, a cycle-to-work scheme, or an electric vehicle lease. Crucially, the sacrificed element of the employees salary is not subject to income tax or National Insurance (NI), making these arrangements tax-efficient for both parties.

For employees, this can mean a higher overall value from their remuneration package. For employers, it offers a legitimate way to reduce employer NI contributions and reinvest savings into other areas of the business. HMRC recognises salary sacrifice schemes, and certain benefits – like pensions, EV schemes, and workplace nursery places – retain full tax and NI advantages.

By integrating salary sacrifice into remuneration structures, businesses can align tax planning with employee wellbeing – enhancing the overall efficiency of their reward strategy.

Tackling Rising Employer National Insurance (ER NI) Costs

From April 2025, employer NI contributions are set to rise from 13.8% to 15%, increasing the pressure on payroll budgets. At the same time, the threshold for employer NI is reducing, meaning more of an employee’s salary is now liable for these contributions.

For businesses with a sizeable workforce, these changes could result in tens of thousands of pounds in additional annual costs. Implementing salary sacrifice schemes offers an immediate and HMRC-approved method to mitigate these increases.

When an employee sacrifices part of their salary for a qualifying benefit, the employer no longer pays NI on that portion. For example, if an employee sacrifices £2,000 towards their pension, the employer saves £300 under the new 15% rate. Multiplied across the workforce, these savings can significantly ease the burden of increased payroll taxes.

Enhancing Auto-Enrolment Pension Schemes

Pension contributions remain one of the most tax-efficient uses of salary sacrifice. Under a standard auto-enrolment arrangement, employees and employers contribute a set percentage of salary into a workplace pension. However, when pension contributions are made via salary sacrifice, the employee reduces their taxable income, and both parties save on NI.

This approach maximises take-home pay while boosting pension savings. For instance, an employee earning £40,000 who contributes 5% (£2,000) into their pension via salary sacrifice could save around £160 a year in NI. At the same time, the employer saves £300 on their contributions.

Many employers choose to share part of their NI savings by increasing their contributions or investing in financial education for staff. Not only does this improve pension outcomes for employees, but it also demonstrates a commitment to long-term staff wellbeing – a valuable asset in today’s competitive labour market.

Making Electric Vehicles (EVs) More Accessible for Employees

Electric vehicle (EV) salary sacrifice schemes have surged in popularity, thanks in part to the UK government’s low Benefit-in-Kind (BiK) tax rates for zero-emission vehicles. Currently, the BiK rate for electric company cars is just 3%, rising only gradually over the next few years to 5%. This makes EVs far more affordable when accessed through a salary sacrifice scheme compared to personal leasing.

Under such schemes, employees sacrifice a portion of their gross salary to lease an EV, covering costs such as insurance, servicing, and maintenance. They only pay tax on the small BiK value, while avoiding income tax and NI on the salary used to fund the lease.

For example, an employee choosing a £40,000 electric vehicle could end up saving over 30-60% compared to leasing privately. Through salary sacrifice, they might pay tax on a Benefit-in-Kind (BiK) value of just £800 (2% of the car’s list price), resulting in an annual tax cost of around £160 for a basic rate taxpayer. Meanwhile, the employer saves £600 in National Insurance – 15% of the £4,000 salary reduction (from £40,000 to £36,000) assuming monthly lease payments are £333.33 – while also strengthening their sustainability credentials.

Introducing an EV salary sacrifice scheme is a practical way for businesses to support environmental goals while offering a compelling benefit to employees – without increasing payroll costs.

Supporting Employee Benefits & Staff Retention

In a tight recruitment market, employee benefits play a key role in attracting and retaining talent. A well-structured benefits package, including salary sacrifice options, allows businesses to offer more value without significantly increasing costs.

From pension contributions to EV schemes, childcare support to additional annual leave, salary sacrifice enables employees to access meaningful benefits in a tax-efficient way. This improves financial wellbeing and provides a sense of personalisation in how employees engage with their compensation.

Employees who feel supported financially are more likely to stay, perform well, and speak positively about their employer. In fact, many employers report improved morale, reduced staff turnover, and stronger engagement after introducing flexible benefits through salary sacrifice.

By helping employees stretch their income further, businesses not only improve retention but also enhance their reputation as an employer of choice.

Final Thoughts

Salary sacrifice is more than just a tax planning tool – it’s a strategic approach to managing costs, strengthening employee benefits, and supporting long-term business resilience. As employer NI rates rise and financial pressures mount, integrating salary sacrifice schemes can help UK businesses future-proof their operations.

Whether enhancing pensions, introducing EV schemes, or reducing NI liabilities, salary sacrifice offers practical, compliant solutions that benefit both employers and employees. Now is the time for business owners to review their reward strategies and consider how these schemes can deliver real value.

If you’d like to explore how salary sacrifice can support your business objectives, our expert team at Ward Goodman is here to help. We provide tailored advice on remuneration planning, tax efficiency, and employee benefit strategies to suit your business goals. Get in touch today to find out more.

Ward Goodman
April 17, 2025

The UK government has announced an important change to the Income Tax Self-Assessment (ITSA) reporting threshold, which could benefit around 300,000 people. The move aims to simplify tax obligations and will mainly benefit individuals with low levels of extra income, including those with freelance work, online sales, or occasional income from hobbies or casual side hustles.

What Is the Current Threshold and How Does It Work?

Those who currently earn more than £1,000 each year in gross income from self-employment or trading activities are required to file a Self-Assessment tax return with the UK tax authorities HMRC. This includes a wide range of activities, including freelance work, online selling, and casual services such as dog walking or tutoring. The £1,000 threshold which refers to gross income, is commonly known as the “trading allowance,” and provides a tax free exemption up to this amount. Anyone who earns over £1,000 must report their income to HMRC and as a result, may be subject to taxation.

Upcoming Changes to the Threshold

The UK government recently announced plans to increase the ITSA reporting threshold from £1,000 to £3,000 within the current parliamentary term, which extends until 2029. This change means that anyone earning up to £3,000 annually in gross income from trading income or side activities will no longer be required to file a Self-Assessment tax return.

It’s important to note that while the requirement to file a tax return will be lifted for incomes between £1,000 and £3,000, tax may still be due on earnings over £1,000. The government intends to introduce a new online service to facilitate the reporting and payment of any tax owed within this income bracket.

When Will the Changes Come into Force?

Although the exact implementation date has not been confirmed, the government has committed to implementing this change within the current parliamentary session, concluding by 2029. Taxpayers should continue to adhere to existing reporting requirements until the new threshold has been put in place.

Who Will Be Affected?

The announcement will no doubt be warmly received by around 300,000 taxpayers believed to be currently undertaking small-scale trading activities and side hustles. HMRC estimates that 98% of these individuals are self-employed – many of whom do not have full-time employment, but instead rely on modest earnings from casual work, online sales, or freelance services. 

Final Thoughts

The proposed increase in the Self-Assessment reporting threshold represents a much simpler way to handle tax responsibilities for many small traders and side hustlers. By reducing administrative burdens, the change looks to promote entrepreneurial activities while making it easier for the self-employed to keep on top of their tax administration.

At Ward Goodman, we are committed to keeping our clients informed about such developments and providing guidance suited to your specific circumstances. If you have questions about how this change may impact your tax obligations or require assistance with tax planning, please do not hesitate to contact our team of experts.

Source

https://www.gov.uk/government/news/boost-for-side-hustlers-as-300000-people-to-be-taken-out-of-tax-returns-government-announces

Ward Goodman
April 15, 2025

Electronic invoicing, or e-invoicing, is set to revolutionise the way businesses handle transactions by enabling the digital exchange of invoice information directly between buyers and suppliers. Recognising its potential to enhance efficiency and reduce administrative burdens, the UK government has initiated a public consultation to promote the adoption of e-invoicing across the country.

What Exactly is E-Invoicing?

E-invoicing refers to the electronic exchange of invoice data between businesses and government entities in a structured format. Unlike traditional paper invoices or PDFs sent via email, e-invoices are generated, transmitted, and processed digitally without manual intervention. This process improves accuracy, reduces administrative costs, and speeds up payment cycles.

The core principle of e-invoicing is automation. By integrating invoicing software with accounting and tax systems, businesses can maintain compliance with regulatory requirements while reducing the risk of errors and fraud. Many countries, including the UK, are moving towards mandatory e-invoicing to enhance transparency and streamline financial transactions.

E-invoicing is already widely used in sectors such as retail, manufacturing, and government procurement. It allows businesses to manage their cash flow more effectively by ensuring timely payments and reducing disputes caused by invoice discrepancies.

Government Consultation on E-Invoicing

On 13 February 2025, HM Revenue & Customs (HMRC) and the Department for Business and Trade (DBT) launched a 12-week consultation aimed at standardising and increasing the use of e-invoicing among UK businesses and the public sector. This initiative seeks to gather insights on how e-invoicing can streamline processes, reduce errors, and improve VAT return accuracy. The consultation period is open until 7 May 2025, and businesses are encouraged to participate by submitting their views to help shape the future of invoicing practices in the UK. More details can be found in the official government press release: Government Sets Out Plans for E-Invoicing Overhaul.

What the Government Hopes to Achieve

The main objective of the consultation is to explore the feasibility of a more widespread and standardised e-invoicing framework, reducing reliance on traditional paper invoices. By promoting e-invoicing, the government aims to:

• Enhance Efficiency: Streamline invoicing processes, cutting down administrative burdens for businesses and public sector organisations.
• Reduce Tax Evasion and Fraud: Improve the accuracy and traceability of financial transactions, assisting HMRC in tackling VAT fraud and tax evasion.
• Boost Productivity: Ensure businesses, particularly SMEs, benefit from improved cash flow through faster invoice processing and payments.
• Support Environmental Sustainability: Decrease the reliance on paper invoices, reducing carbon footprints and promoting digital transformation.
• Harmonise International Standards: Align the UK with global best practices, making cross-border transactions smoother and more efficient.

Benefits of E-Invoicing

Adopting e-invoicing offers several advantages for businesses:

• Error Reduction: Automating invoicing processes minimises manual data entry errors, leading to more accurate financial records.
• Faster Payments: E-invoicing expedites invoice delivery and approval cycles, resulting in quicker payments and improved cash flow.
• Cost Savings: Eliminating paper-based invoicing reduces expenses related to printing and postage, as well as decreases administrative burdens.
• Improved VAT Compliance: E-invoicing enhances the accuracy of VAT returns, aiding compliance and potentially reducing the VAT gap.

What are the Implications for Businesses?

The standardisation of e-invoicing may have several implications for UK businesses including:

• Software Requirements: Businesses may need to adopt or upgrade accounting software that supports e-invoicing standards. Platforms such as QuickBooks, Xero, and Sage already offer e-invoicing capabilities, but companies should ensure their systems comply with any future regulations. The use of structured formats like XML, UBL, or PEPPOL may become necessary for compliance and seamless integration with HMRC systems.
• Mandatory Adoption Considerations: The consultation explores whether e-invoicing should become mandatory, which could require businesses to adapt promptly.
• Scalability for Different Business Sizes: Small and medium-sized enterprises (SMEs) may face unique challenges in resource allocation and technological readiness compared to larger corporations.

Ward Goodman’s Tips to Prepare for E-Invoicing

Businesses can take proactive measures to prepare for potential changes:

• System Assessment: Evaluate your current invoicing systems to determine compatibility with e-invoicing standards and identify any necessary upgrades.
• Staff Training: Implement training programmes to equip staff with the skills needed to manage e-invoicing processes effectively.
• Engage with the Consultation: Participate in the consultation by submitting feedback before the 7 May 2025 deadline. Businesses and individuals can share their views through the official government consultation portal on GOV.UK, where a dedicated feedback form and email address are available for responses. More details can be found here: UK Government Consultation on E-Invoicing.

Ward Goodman’s View on the Consultation

“Ward Goodman view the consultation into e-invoicing as a positive step towards using technology to become more efficient. E-invoicing will help reduce error’s made by business owners within their record keeping and help them spend less time working in their business and more time working on their business. A lot of business’ will find they will be compliant with e-invoicing after implementing some minor tweaks to how they operate and so this isn’t a change to be nervous about but one to embrace”

How Ward Goodman Can Help

Ward Goodman is committed to assisting clients in transitioning to e-invoicing by offering services such as system audits, implementation support, and compliance guidance. We can provide you with additional training to ensure you understand e-invoicing and its requirements whilst ensuring you are also getting the most out of the system you use. Our ongoing assistance ensures that businesses adapt smoothly to e-invoicing requirements.

Final Thoughts

E-invoicing presents a significant opportunity for UK businesses to enhance efficiency, reduce costs, and improve compliance. By staying informed and proactively preparing, companies can navigate this transition effectively and position themselves for future success.