There is now less than 1 months to the self-assessment filing deadline for submissions of the 2024-25 tax returns. We urge our readers who have not yet completed and filed their 2024-25 tax return to file as soon as possible to avoid the stress of last-minute preparations as the 31 January 2026 deadline fast approaches.

You should also be aware that payment of any tax due should also be made by this date. This includes the remaining self-assessment balance for the 2024-25 tax year, and the first payment on account for the 2025-26 tax year.

Earlier this year, more than 11.5 million people submitted their 2023-24 self-assessment tax returns by the 31 January deadline. This included 732,498 taxpayers who left their filing until the final day and almost 31,442 that filed in the last hour (between 23:00 and 23:59) before the deadline!

There is a new digital PAYE service for the High Income Child Benefit Charge (HICBC). This allows Child Benefit claimants who previously used self-assessment solely to pay the charge to opt out and instead pay it through their tax code.

If you are filing online for the first time you should ensure that you register to use HMRC’s self-assessment online service as soon as possible. Once registered an activation code will be sent by mail. This process can take up to 10 working days. 

If you miss the filing deadline you will be charged a £100 fixed penalty (unless you have a reasonable excuse) which applies even if there is no tax to pay, or if the tax due is paid on time. 

There are further penalties for late tax returns still outstanding 3 months, 6 months and 12 months after the deadline. There are additional penalties for late payment of tax amounting to 5% of the tax unpaid at 30 days, 6 months and 12 months.

1 January 2026 – Due date for Corporation Tax due for the year ended 31 March 2025

19 January 2026 – PAYE and NIC deductions due for month ended 5 January 2026. (If you pay your tax electronically the due date is 22 January 2026).

19 January 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2026. 

19 January 2026 – CIS tax deducted for the month ended 5 January 2026 is payable by today.

31 January 2026 – Last day to file 2024-25 self-assessment tax returns online.

31 January 2026 – Balance of self-assessment tax owing for 2024-25 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2025-26.

1 February 2026 – Due date for Corporation Tax payable for the year ended 30 April 2025.

19 February 2026 – PAYE and NIC deductions due for month ended 5 February 2026. (If you pay your tax electronically the due date is 22 February 2026)

19 February 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2026. 

19 February 2026 – CIS tax deducted for the month ended 5 February 2026 is payable by today.

HM Revenue and Customs (HMRC) has recently issued a timely reminder about the support available to taxpayers as the Self-Assessment deadline nears. With 31 January 2026 fast approaching, many businesses, sole traders and individuals are understandably starting to feel the pressure of meeting their tax obligations. To help manage this, HMRC is highlighting the Time to Pay service, which allows taxpayers to spread their Self-Assessment tax bill over a series of monthly payments rather than paying everything in one lump sum by the deadline.

This update is particularly relevant as nearly 18,000 Self-Assessment payment plans have already been set up since the start of the tax year on 6 April 2025. It shows that many taxpayers are finding the flexibility afforded by Time to Pay helpful as part of wider financial planning.

What is the Time to Pay service?

Time to Pay is not a new concept, but recent publicity from HMRC serves as a useful reminder of how it works and why it might be helpful. Broadly, the service allows taxpayers who cannot pay their Self-Assessment tax bill in full by the 31 January deadline to:

• Set up a tailored repayment plan, spreading their liability over monthly instalments.
• Avoid late payment penalties by agreeing terms that reflect what they can realistically afford.
• Make use of online channels to set up a plan for bills up to a specified threshold without needing to speak to HMRC directly.

For many taxpayers with bills of up to £30,000, a payment plan can be arranged online via the Government Gateway or the HMRC app as soon as their Self-Assessment return has been filed. This avoids the need to call or negotiate directly with HMRC in many cases.

If the tax owed is more than £30,000 or if a longer repayment period is needed, the taxpayer can still seek support, but they will need to contact HMRC directly to discuss and agree terms.

Why this matters now

The Self-Assessment system requires businesses and individuals to calculate and pay their tax liabilities by 31 January each year. While many taxpayers plan for this in advance, unexpected circumstances, rising costs or irregular income can make it hard to settle the tax bill in full by the due date.

By promoting Time to Pay, HMRC aims to encourage taxpayers to act early, rather than waiting and risking automatic penalties and interest. An agreed Time to Pay arrangement can minimise stress around the deadline and help taxpayers manage cash flow more effectively through the winter months.

It is important to note that interest on the unpaid amount continues to accrue during the repayment period, and taxpayers should plan accordingly. However, the interest charged under a structured plan is usually less onerous than the cumulative impact of penalties that would otherwise apply if payments were missed or late.

Simple Assessment and other reminders

In addition to the Time to Pay service, HMRC is also reminding customers who have received a Simple Assessment letter that they do not need to complete a full Self-Assessment return. Instead, these customers have three months from the date of their letter to pay any tax owed for the 2024 to 2025 tax year.

Simple Assessment is issued where income tax cannot be collected through Pay as You Earn (PAYE) by employers or pension providers, and it simplifies the process for individuals who have relatively straightforward tax situations.

Conclusion

HMRC’s renewed emphasis on Time to Pay reflects an understanding that taxpayers often face real challenges in meeting lump sum tax obligations, especially in a period of ongoing cost pressures. Being aware of the support available and helping affected clients make the necessary arrangements sooner rather than later can make a meaningful difference to their financial wellbeing.

The recent Budget may not have delivered many dramatic headline changes, but as the detail settles, a number of important themes are beginning to emerge. Conversations with business owners suggest that concern is less about any single announcement and more about the combined effect of rising costs, higher personal tax exposure and increasing administrative demands.

These issues provide both a warning sign and an opportunity to plan more proactively.

Rising employment costs and staffing pressure

One of the most immediate challenges for many businesses is the rising cost of employing staff. Increases to minimum wage rates have a direct impact on payroll, but the wider effect often runs deeper. When entry level pay rises, expectations across the workforce frequently follow, leading to pressure on pay differentials and overall salary structures.

Employer National Insurance contributions and workplace pension costs continue to add to the total cost of employment. For businesses operating on tight margins, particularly in labour intensive sectors, this can quickly erode profitability. Some owners are already reviewing staffing levels, recruitment plans and working patterns to maintain control over costs.

Fiscal drag and higher personal tax bills

Another issue gaining traction is the continued freeze on income tax and National Insurance thresholds. As profits and salaries increase in line with inflation, more individuals are being pulled into higher tax bands without any meaningful increase in real income.

For owner managed businesses, this has a direct impact on decisions about salary, dividends and profit extraction. Dividend tax rates have risen in recent years; allowances remain static and the scope for tax efficient income planning has narrowed. The result is that after increases in remuneration, many business owners are paying more tax without a significant increase in take home pay (taxed earnings).

Fiscal drag can be easy to overlook, but over time it represents a significant and often underestimated increase in the overall tax burden.

Cash flow and financing costs

Higher interest rates continue to weigh heavily on businesses that rely on overdrafts, loans or asset finance. Even where inflation is easing, the cost of borrowing remains elevated, increasing monthly outgoings and putting pressure on cash flow.

Many business owners were looking to the Budget for measures that might ease short term funding pressures. In practice, most support is indirect, leaving businesses to manage higher financing costs alongside rising wages and operating expenses.

This has led some businesses to delay investment, hold back on expansion or prioritise cash retention over growth.

Investment decisions and uncertainty

Capital allowances and investment incentives still attract interest, but with growing caution. While reliefs can improve the tax efficiency of capital expenditure, uncertainty about how long they will remain in place makes long term planning more difficult.

Business owners are increasingly reluctant to base significant investment decisions solely on tax incentives that could change in future Budgets. Stability and predictability are now key factors in deciding when and how to invest.

Increasing compliance and administrative demands

Alongside cost pressures, businesses are also facing a gradual increase in administrative and reporting requirements. Developments such as the expansion of Making Tax Digital, Companies House reforms and enhanced transparency obligations all add to the compliance burden.

Individually, these changes may appear manageable. Collectively, they contribute to a sense that running a business is becoming more complex and time consuming, particularly for smaller organisations without in house finance teams.

A cumulative challenge rather than a single issue

What stands out following this Budget is not one specific measure, but the cumulative impact of multiple pressures moving in the same direction. Higher employment costs increased personal tax exposure, tighter cash flow and growing compliance requirements all reduce flexibility and increase risk.

This reinforces the importance of forward planning. Reviewing business structures, remuneration strategies, cash flow forecasts and investment plans can help you adapt to a more demanding environment and avoid reactive decision making.

How we can help

This is an ideal time to engage in meaningful discussions about your planning options. Small changes, implemented early, can often make a significant difference over time.

If any of these issues are affecting your business, please get in touch so we can help you review your position and consider the most appropriate next steps.

Many business owners reach a point where they begin to question whether the way their companies are arranged still suits their ambitions. Separate trading entities might have grown organically, acquisitions may have been made along the way or activities may have been kept apart for practical reasons. Over time, these associated companies can become difficult to manage as a whole. A group structure can therefore be an attractive way to bring order, improve tax efficiency and create a clearer long term strategy. The process is not as complex as many fear, although it does require careful planning to meet the legal and tax conditions needed for a clean reconstruction.

What a group structure achieves

A group structure allows the owners to place several companies under a single holding company. This creates a framework that links the entities while still preserving the limited liability of each. The holding company acts as the parent, which introduces the possibility of group tax reliefs, smoother dividend flows and better protection of assets. It also creates a tidier position for succession planning, investment and future exit options. For many owners, the appeal of a group is the sense that the business finally reflects its true scale, with the structure supporting the way the enterprise actually operates.

Improving the movement of funds

When associated companies are left separate, profits are locked within each company. This can restrict reinvestment because funds are not easily moved to where they are needed. A group structure can remove this constraint. Once the companies sit under a common parent, tax free dividends can be paid between members of the group. This allows one entity to support another without the friction of additional tax charges. It also improves the stability of the wider business because spare resources in one company can be redeployed quickly. For growth minded owners, this can be transformative.

Tax planning benefits

There are also clear tax planning advantages. Relief for losses is often one of the most immediate. Where a group exists, losses in one company can be set against profits in another, subject to standard rules. This can smooth tax liabilities and support companies that are either in early stage development or experiencing temporary cost pressures. Asset protection is another. High risk trading activity can be separated from valuable intellectual property or investment assets, which can sit in a different group company. If one part of the business experiences difficulties, the other parts may be better insulated from that risk.

How the reconstruction is carried out

Reconstruction tends to follow a familiar pattern. Usually, a new holding company is incorporated, and the shares of each existing company are transferred to it. In practice, the shareholders swap their shares in the old companies for shares in the new parent. If this is carried out correctly, the transaction can qualify for tax neutral treatment. The share exchange rules, together with the rules that apply to company reorganisations, allow ownership to be restructured without triggering capital gains or stamp duty charges. This is why professional advice is essential. The conditions must be met, and documentation must be prepared with precision.

Practical considerations to address

It is worth noting that liabilities, banking arrangements, contracts and licences may need to be updated. Banks often require new guarantees or revised facility letters. Landlords may need comfort that the covenant strength of the tenant is unchanged. Contracts that include change of control clauses must be reviewed, as the introduction of a holding company may trigger notification requirements. These matters are manageable, although they need to be handled with care so that business continuity is not disrupted.

Long term advantages of moving to a group

A group structure brings discipline and clarity. Owners gain a single place from which to view the business as a whole, which can lead to better decision making. Future investment rounds can be structured more easily because new investors can be brought into the parent company rather than individual subsidiaries. If an eventual sale is planned, a group can make it simpler to sell a division or ring fence a particular activity.

For many businesses, a group structure is a natural next step. It can unlock new opportunities, remove constraints and create a more resilient organisation. The key is to approach the reconstruction with a clear plan and good advice, so that the tax neutral status of the reorganisation is preserved. Once in place, the benefits tend to emerge quickly, and owners often wish they had acted sooner.

What the 2027 IHT change means

From 6 April 2027, the rules for passing on pensions after death will change in a way that affects many families. Under the government’s reforms, most unused pension pots and pension scheme death benefits will be brought into the scope of Inheritance Tax, IHT. This represents a major restructuring of how pensions are treated on death and removes an exemption that many individuals have relied on for long term estate planning.

Historically, unused pension funds, particularly in defined contribution schemes or arrangements where pension trustees could exercise discretion, have been treated as outside the estate for IHT. This meant that large pension pots could be passed to beneficiaries without an IHT charge, even where the remainder of the estate exceeded the nil rate band. The government believes this has created an imbalance in the system, because pensions have increasingly been viewed as vehicles for passing on wealth, rather than purely as retirement income.

The new rules aim to correct this imbalance and create a more consistent approach across all pension types.

What is changing, and who is affected

From 6 April 2027 onwards, unused pension funds and most pension death benefits will be included within a person’s estate for IHT calculations. This applies whether the benefits arise from a defined contribution plan, uncrystallised funds, unused drawdown balances or lump sums paid out following death.

There are very limited exceptions. The main excluded benefit is death in service cover that is paid from a registered pension scheme. These lump sum payments will remain outside the scope of IHT, so employees with this form of workplace protection will not see any change to the tax treatment of that particular benefit.

For most other pension pots, the value will now be treated in the same way as other assets, such as property, savings, or investments. Beneficiaries may therefore face an IHT bill where none existed before.

A key administrative point is that personal representatives, usually executors or administrators, will become responsible for reporting and paying any IHT due on pension assets. Earlier proposals suggested pension schemes might handle the payment; however, the government has confirmed that the responsibility will remain with the personal representatives. They will need to obtain valuations from pension schemes and include these figures when calculating the value of the estate.

Why the government is making this change

The government’s stated position is that pension IHT exemptions have created distortions in long term financial behaviour. Because pension assets could be passed on free of IHT, individuals could preserve pension wealth for inheritance rather than draw on it for retirement. The government believes that removing the exemption will ensure pensions are used primarily for retirement income rather than as an inheritance strategy.

In addition, there has been inconsistency in how different pensions were treated for IHT. Some older schemes or non-discretionary arrangements were already subject to IHT, while modern discretionary schemes were not. Bringing all schemes into the IHT regime creates a more even system.

What this means for estate planning and advisers

For many families, this reform will require a reassessment of retirement and estate planning decisions.

Estates that previously fell within the IHT threshold may now exceed it once pension values are included, creating an unexpected tax liability for beneficiaries. Larger estates may see a significant increase in the total IHT due.

Executors will also face new responsibilities. They will need to identify every pension scheme the deceased belonged to, request valuations, establish whether death benefits are payable and include those values within the overall estate calculation. Where beneficiaries receive pension death benefits, there may be cases in which the IHT must be paid before the benefit can be accessed, unless the scheme agrees to withhold a portion of the fund and settle the tax on behalf of the estate.

Beneficiaries will also need to understand how the change affects them. In some situations, a beneficiary may become liable for an IHT payment before receiving funds, which can create a cash flow challenge. Advisers will need to help clients plan for this possibility.

Planning considerations for pension holders

Anyone with a significant pension pot should review their estate planning. Points to consider include:

* Assessing the total value of pensions and other assets, to estimate any future IHT exposure.
* Considering whether drawing down pension funds during retirement, in a measured and tax efficient manner, would reduce the IHT burden on beneficiaries.
* Reviewing wills, trust arrangements and pension expression of wish forms to ensure they reflect current intentions.
* Exploring the use of lifetime gifts, pension contributions, charitable gifts or other estate planning tools where appropriate.

The key message is that pensions can no longer be assumed to sit outside the scope of IHT. For many individuals, particularly those with substantial defined contribution savings, early planning may avoid both tax surprises and administrative complications for loved ones.

The proposed council tax surcharge on high value homes, due from April 2028, has triggered a lively and sometimes sharp response across the press. While the headlines have focused on the “mansion tax” label, the underlying commentary has been more nuanced, splitting broadly into three camps: those who see it as a modest step towards taxing wealth more fairly, those worried about complexity and unintended consequences, and those in the property world who fear it sends the wrong signal to investors and high earners.

What has actually been proposed

The Autumn Budget confirmed a High Value Council Tax Surcharge for residential properties in England valued at £2 million or more, with effect from April 2028. The charge will sit on top of existing council tax and will be levied on owners rather than occupiers. Current guidance suggests four bands, starting at £2,500 a year for homes between £2 million and £2.5 million, rising to £7,500 a year for properties valued above £5 million. The government expects fewer than 1% of homes to be affected, concentrated in London and parts of the South East.

Supportive commentary: a small but symbolic shift

On the centre left, commentators have largely welcomed the surcharge as a cautious move in the direction of wealth taxation. One prominent Guardian piece described the measure as a “small but brave step”, arguing that raising around £400 million a year is less important than establishing the principle that expensive property should contribute more to local finances and public services.

Supportive articles tend to present the surcharge as a way to rebalance a system that has left long term property wealth relatively lightly taxed compared with earnings. They also note that the charge arrives at a time when broader Budget measures, including other tax rises, have drawn criticism for hitting working households. In that context, asking owners of £2 million plus homes to pay a few thousand pounds more each year is framed as politically and socially defensible.

Critical voices: valuation headaches and fairness concerns

By contrast, the Financial Times and other business focused outlets have highlighted practical and administrative risks. The Valuation Office Agency is already under pressure dealing with council tax and business rates disputes. Experts quoted in the financial press warn that identifying which properties fall above the £2 million threshold, particularly in areas where comparable sales are rare, could trigger a wave of appeals and strain an already stretched system.

There are also questions of fairness and regional impact. Some commentators point out that a fairly ordinary family house in parts of London may now trip the £2 million line, while far grander properties elsewhere in the country remain outside scope. This has prompted familiar worries that the policy could deepen a perceived London focus on tax design, even if only a small proportion of households are affected.

More broadly, several economic commentators have grouped the surcharge with a wider set of tax rises and freezes, warning that the overall package may act as a drag on growth and household living standards through to the end of the decade.

Property industry reaction: wary rather than panicked

Within the property industry, reaction has been wary but not apocalyptic. Trade press coverage talked of an “apprehensive” sector that had long expected some form of mansion tax, and which now regards the final design as less aggressive than feared.

At the same time, agents and landlords have warned that the measure could undermine sentiment at the top end of the market, especially when taken alongside other changes affecting landlords and higher rate taxpayers. Industry bodies note that the surcharge lands in 2028, by which time interest rates and house prices may have moved again, and suggest that the reputational signal, that the UK is becoming a higher tax environment for wealth holders, may matter as much as the direct cash cost.

Interestingly, early market data suggests that the announcement has not derailed the wider housing market. Nationwide, for example, has reported modest house price growth and emphasised that fewer than 1% of homes are in scope, meaning the broader market is unlikely to be affected in any material way.

Where does this leave homeowners and advisers

Taken together, the press reception paints the surcharge as a politically significant but fiscally modest measure. Supportive commentators see it as the thin end of a wedge that could, in time, lead to more comprehensive taxation of property wealth. Critics fear it adds yet another layer of complexity to a tax system already full of thresholds, bands and cliff edges, and may unsettle a small but economically influential segment of homeowners and investors.

For advisers and their clients, the message from the press is clear enough. This is not a mass market tax. However, for those with property interests at or above the £2 million threshold, it is another reason to review longer term plans, consider how assets are held, and keep a close eye on valuations as the Valuation Office Agency begins its work.