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.

 

Side Hustle Sales Threshold

The annual trading threshold has been increased from £1,000 to £3,000 a year but the £1000 of sales exemption is unchanged.

This is likely to come into effect from 2027-28 tax year.

Up to 300,000 people, including those with side hustles, will no longer need to file a self-assessment tax return but will be able to notify earnings online and pay their tax bill.

This is only an administrative change to the threshold to take people out of self-assessment tax returns.

Tax will still be payable on applicable sales over the £1,000 tax free limit.

This change will not absolve you from the obligation to pay the tax where sales exceed £1000 which may have to be collected through other means.

 

Loss on Disposal of Shares

Normally where you dispose of shares at a loss, the capital loss is set against gains of the same tax year or carried forward for use against future capital gains.

Where you subscribed for these shares, you may be able to set the against your income for the current and/or previous tax year.

These need to be shares in a qualifying trading company and must meet various conditions.

If all of the conditions are met and the capital loss could be set against income, there is a limit on the amount that can be set sideways.

The limit is the greater of £50,000 or 25% of your adjusted total income for the tax year.

 

Tough Tax Times Ahead

There are significant rises in all minimum wage bands but especially for younger workers who may now find it harder to find minimum wage jobs.

The minimum wage increase is at the same time as the increase in employer national insurance. The extra employment allowance may soften the blow for some, but you cannot claim employment allowance if your business provides public services.

One question that has arisen is whether childcare providers, who are contracted by local authorities, are providing public services as they are being paid for by the state. Additional guidance is expected in due course from HMRC but this may just be to clarify the position of private nurseries and not where they are providing public services.

The other big change in the Autumn Budget was double-cab pickups being classed as cars again from 6 April, so if you are planning on replacing your double cab pickup, you would be wise to do it before 6 April.

Payrolling of benefits is coming in from April 2026. There is a voluntary scheme that you can participate now but the final scheme will be different.

In April 2026 there is also Making Tax Digital for income tax.

Interesting times ahead!

 

King Size Pickup Trucks

HMRC has confirmed most pickups will be classified as cars for benefits-in-kind

From 6 April 2025 for corporation tax and 6 April for income tax ‘the government will treat all double cab pickups as cars for certain tax purposes. The payload is the gross vehicle weight.

As well as this, the original definition HMRC was using for these vehicles was that the pickup has front and a rear passenger cab with four doors capable of seating four people plus the driver. Additionally, it will not matter whether the rear doors are hinged at the back or the front of the vehicle.

This will impact employers that have purchased or leased a vehicle after this date, and also employers that reallocated a vehicle to a different employee after this date. Transitional rules may apply up to 2029.

HMRC has now clarified that variants of double cab pickups will fall under this, including extended, extra, king, and super cab pickups unless they qualify for one of the exemptions. However, most cabs will be classified as cars when calculating the benefit charge from 6 April 2025.

One of the tests is whether the vehicle was originally constructed for the purpose of carrying goods but HMRC believes that ‘typically these vehicles are equally suited to convey passengers and goods and have no predominant suitability and so fail the test.

 

Income Tax Reporting Requirements

2024/25 Returns

CGT changes 

On 30 October 2024, the Chancellor announced in-year changes to the rates that apply to capital gains arising on assets other than residential property such as shares, land or cryptoassets. The basic CGT rate increased from 10% to 18%, and the higher CGT rate from 20% to 24%, with effect from Budget Day.

HMRC had already finished updating the 2024/25 SA100 return and was not able to go back and redesign it. If you intend to do your own tax return and you have disposals taxable at the new rates you will need to use an HMRC calculator to calculate and report an “adjustment figure” in box 51 of the SA108 to get to the right CGT position for the year.

2025/26 Returns 

Starting and stopping 

If you are an unincorporated business you will need to  include the date of commencement or cessation.

Close company disclosures

For 2025/26 onwards, you must disclose whether you are a director of a close company, and the return must also include:

• the name and registered number of the close company
• the amount of dividends received from the close company, which must be declared separately from other dividends, and
• details of the highest percentage of share capital held in the year.

2026/27 returns 

Individuals with turnover over £50,000 will be reporting under Making Tax Digital (MTD).

 

Tax-Evasion Whistleblowers

HMRC is planning to offer large rewards to whistleblowers who report tax fraud.

There will be a new reward scheme to encourage informants to come forward to HMRC about tax fraud.

This is apparently based on the Internal Revenue Service (IRS) model that has proved invaluable to the authorities in the United States (and also one in Canada).

The UK reward scheme for informants, which is set to be launched later in 2025, will look to target serious non-compliance in large corporates, wealthy individuals, offshore and avoidance schemes.

The compensation for whistleblowing could be significant and will be a proportion of the tax take, ensuring that the scheme raises more money than it costs.

The percentage has not yet been determined but, could be up to 25%.

This could literally mean that disgruntled employees or ex-employees of large corporates with high-quality information about fraud will become millionaires for the cost of a phone call, courtesy of HMRC and HM Government.

Will accountants be allowed to benefit from the scheme?

 

HMRC Free Online Corporation Tax Filing Service

On 6 March 2025, HMRC announced that it would close its online service for filing company accounts and corporate tax returns on 31 March 2026.

This corporate filing service is a very efficient way to file the annual CT600 return with the accompanying accounts, and as part of the same task, send the company’s accounts for the same period to Companies House. The service automatically converts the figures in the accounts to the required iXBRL format and completes most boxes on the corporate tax return.

However, the service is restricted to relatively simple smaller companies. To use this free online filing service the company must be a single trading company (not in a group), registered in the UK, with turnover not exceeding £632,000, and/or rental income of no more than £5,200.

From 1 April 2026, all companies will have to use commercial software to file their annual accounts and tax returns to HMRC.

Those companies will also have to find commercial software to submit their accounts to Companies House as, from a date to be defined, all accounts filed at Companies House will have to be submitted digitally using third-party software.

Any company with an accounting period ending after 31 March 2025 will have to use commercial software to file their accounts and tax return, unless they file those accounts early.

 

Hair Transplants Not VAT Exempt

A recent case involved a medical practice specialising in hair restoration surgery that treated conditions related to hair loss, and in particular androgenetic alopecia, with hair loss noted as not being a medical condition itself, but rather a potential symptom.

They considered that it was treating patients for medical conditions, as opposed to providing aesthetic surgery, and therefore believed its supplies to be exempt for VAT purposes.

The company’s expert noted that several of the patients believed that hair loss had affected their self-confidence and so the surgery improved their overall health, defined by the World Health Organization (WHO) as including a mental health component. The expert also believed that the surgery would help protect the skin from “photodamage, minor trauma and thermal insult”

The Tribunal found that the hair transplant services fell outside the medical exemption for the patients in question, while making it clear similar situations would need to be considered on a case-by-case basis. VAT was therefore chargeable in this case.

 

Inheritance Tax – APR/ BPR and Trusts

At the Autumn Budget 2024, the Chancellor announced a cap on the amount of property which can benefit from the maximum rate of APR or BPR.

From 6 April 2026, a new £1m cap will be introduced for individuals, setting an upper limit to the combined amount of qualifying agricultural and business property that can receive 100% relief from IHT. After that combined cap has been exceeded, any remaining property which would currently qualify for 100% APR or BPR will only receive relief at 50%.

The bulk of the consultation is focused on the implications for relevant property trusts containing qualifying agricultural or business property.

When assets are put into a relevant property trust, there are three occasions for charge: on entry into the trust, at each 10-year anniversary, and on exit.

From 6 April 2026, any entry charge on qualifying business/agricultural assets placed into trust will depend not just on the size of the transfer and the available amount of nil rate band, but also the individual’s £1m allowance, which will mean looking back at previous gifts or transfers in the past seven years.

Gifts and transfers into trust of qualifying property made prior to 30 October 2024 will not be included when determining how much of the £1m allowance is available.

Once the trust has been set up, trustees will have their own £1m allowance for 100% relief on agricultural and business property which will be applied on exits and 10-year charges.

However, any agricultural or business asset such as a partnership share which might previously have been ‘valued’ for IHT purposes using only the book cost in the accounts (on the basis that the precise value was not relevant since 100% APR/BPR was available and there were no CGT issues) will now need to be properly assessed at market value to ensure the £1m allowance is not breached.

 

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.