Every week we take a look at what is trending in the accountancy and tax press and share items that we think will interest you. However, these are only outlines and where they relate to tax planning should not be acted upon without looking into them more completely as everyone’s circumstances are particular to them. You need to take specific advice appropriate to your own circumstances.

While every effort is made to deliver accurate, informative and balanced articles this content is general in nature and should not be used as the sole basis for making decisions.

 

 

MTD is Coming

We are now in the last full calendar year before Making Tax Digital for income tax (MTD) becomes a reality in April 2026.

HMRC has published more guidance but there are still gaps. For example, landlords will be interested in the Joint Property Notice which is expected to be published in the coming months. A draft version of this notice, which sets out record keeping and reporting easements for jointly owned property, was published back in December 2023 but the final version is still to come.

Guidance on digital record keeping and digital links should also be published shortly.

HMRC’s testing will expand further in April this year, with more taxpayers and agents eligible to join. To date, their aim has been testing small numbers of taxpayers covering a range of different circumstances. HMRC will now bring in greater volumes.

Over the next few months HMRC will write directly to taxpayers who they believe, on the basis of their 2023/24 self-assessment returns, are likely to be within MTD from April 2026.

Could this be the year MTD hits the headlines?

April 2026 will soon be upon us.

 

 

Fraud at Aberdeen Council

Michael Paterson, 59, was a team leader at Aberdeen City Council in the People and Citizens services team, originally being employed in 1988, and had worked there for 36 years. Investigations discovered he had been defrauding the council since 2006, showing no signs of stopping before he was caught by a colleague in 2023.

He had transferred £1,087,444 to his personal bank account from 655 council tax refunds which were still to reach the correct recipients. The council stated it expects to be able to recover the funds with no loss to the taxpayer.

He had been transferring council tax refunds of up to £3,000, ‘often on a weekly basis’, according to a report into the fraud by Audit Scotland.

Audit Scotland blamed the extensive period of the fraud on a lack of segregation of duties and monitoring in relation to council tax refunds. Paterson was therefore able to transfer balances between council tax accounts, input bank account details and process refunds without any further checking.

 

 

4.4m people still to file tax returns

Nearly a third of taxpayers have not submitted their 2023-24 tax return with just two weeks left before the deadline. Traditionally about 1 million will be expected to miss the deadline. Last year, HMRC collected a record £220m in late-filing fines.

HMRC has confirmed that 7.4m self-assessment taxpayers have filed their tax returns so far.

Last year over 11m tax returns were filed, with the number rising every year as tax becomes increasingly complicated and more taxpayers fall into self-assessment. This is only likely to get worse when pensioners start to breach the basic rate tax threshold of £12,570 due to the pension triple lock.

You may need to file a return if you:

• are newly self-employed and have earned gross income over £1,000;
• earned £150,000 or more;
• earned below £1,000 but want to pay Class 2 National Insurance Contributions (NICs) voluntarily to protect entitlement to state pension and certain benefits;
• are a new partner in a business partnership;
• have received any untaxed income over £2,500; and
• receive child benefit payments and need to pay the high-income child benefit charge because they or their partner earned more than £50,000.

It is vital to disclose profit on sales through online platforms as part of income and note that new rules introduced this January mean that the likes of eBay, Amazon, Facebook Marketplace and Airbnb, for example, have to provide annual reporting about transactions by consumers selling through their sites.

However, selling personal goods falls outside tax, if items are valued below £6,000, but anyone selling on a commercial basis for profit, and online content creators must pay tax.

One of the other bear traps is that the changes to the high-income child benefit charge (HICBC) raising the threshold to £60,000 from £50,000 does not impact the 2023/24 tax returns. How many people will be caught out?

From the current tax year, you’ll need to earn £60,000 to pay the high-income child benefit charge but for the 2023/24 year it’s still £50,000.

 

 

100% Tax on Spanish Property Purchases

Spain plans to introduce a punitive 100% property transaction tax for UK buyers of holiday homes in a bid to address a serious housing crisis across Spain.

The Spanish government plans to bring in legislation to impose 100% property transaction tax, the equivalent to stamp duty, on purchases of properties by non-EU citizens, although this would have to be passed through parliament before coming into force.

In 2023, Brits bought over 12,000 properties in the sunnier climes of Spain.

The tax levy is just a proposal at this stage so would take some time to come into law.

 

 

Directors can remove the address from the Companies House

From 27 January 2025, directors will be able to apply to suppress a residential address that has been used as the company’s registered office address.

If the residential address is the company’s current registered office address, it will have to be changed before applying for suppression of the home address. The fee will be £30 for each document.

While operating companies will be able to hide their addresses from public view, if the company is dissolved or the person is no longer acting as a director, then the first part of the postcode of the residential address will remain on the register even after paying to have it removed.

Addresses can only be changed by a company officer/director, a person with significant control (PSC), a member of the company, or a permanent representative of the company.

Applications can be made online or by post.

 

 

Higher Rate Taxpayers up 43%

In total 2.5m taxpayers will be paying higher and additional rate tax for the first time, with the situation unlikely to improve before 2029.

The number has risen 43% in the last 3 years.

There will be 6.3m higher rate taxpayers in the current tax year 2024-25, up 43% from 2021-22.

This is largely driven by the freeze on allowances and thresholds but changes to dividend tax and the reduction of the tax-free dividend allowance to £500 means that individuals earning income from dividends will face higher tax bills.

It is estimated that taxpayers will pay approaching £20bn in dividend tax this year.

The latest HMRC figures, released in December, showed that tax revenues from April to November hit a record high of £537bn, with a huge increase in capital gains tax (CGT) taking up £15bn.

Basic rate taxpayers can receive up to £1,000 in interest from savings accounts each year without paying tax, while higher rate taxpayers can receive up to £500. However additional rate taxpayers receive no allowance on savings interest, except when money is held in ISA products up to the annual £20,000 limit.

Income from stocks and shares ISA is protected from dividend tax so this can be an efficient way to save.

If you have a significant ISA portfolio you could therefore take all your income free of tax.

 

 

Office Temperature Disputes

In a recent survey, 42% of respondents said that the temperature of the office caused the most arguments at work. This is followed by 37% of people talking unnecessarily loudly and using speaker phones.

Other annoyances included communal spaces in the office being left untidy including leaving food and dirty dishes around the area. Others pointed to being unnecessarily included in an email chain and individuals taking credit for someone else’s work.

 

 

Christmas Tax Returns

92,800 people decided to spend their Christmas break completing their tax return

On 25 December, 4,409 people filed their tax returns,

In total 40,072 people filed their returns during these three days from Christmas Eve to Boxing Day. 23,731 filed on Christmas Eve.

52,800 people filed between 31 December and 1 January with 310 people filing between 11 pm and midnight.

On Christmas Day itself, 368 people filed their return between 3 pm and 3:59 pm, instead of sitting down to enjoy their Christmas lunch or watching the King’s speech. This was the busiest hour for HMRC’s website that day.

As for Boxing Day, 11,932 taxpayers decided to get their tax returns out of the way, with 1,108 of them choosing between 4 pm and 5 pm to do so.

38,000 individuals spent their New Year’s Eve filling in their self-assessment form, while over 24,800 people cured their hangovers by filing on New Year’s Day.

 

Questions?

If you have any questions about any of these, you know where to find us. If you prefer, just give me a ring on 07770 738770 or email me at alan.long@thelongpartnership.co.uk.