Budget Statement 26 November 2025

Personal Tax Rates

Although it is fair to say that many of us were expecting more significant tax rate increases, in fact the “burden is being shared” in part by a freeze on personal tax thresholds for an additional 3 years to April 2031 (they were already frozen until April 2028) and also an increase in property, savings and dividend income tax as follows:

Income	From	Basic rate	Higher rate	Additional rate
Dividends	April 2026	10.75%	35.75%	39.35% (no change)
	Currently	8.75%	33.75%	39.35%
Savings	April 2027	22%	42%	47%
	Currently	20%	40%	45%
Property	April 2027	22%	42%	47%
	Currently	20%	40%	45%
Other income	– no change.

It should be noted that the new property income tax rates apply in England, Wales and Northern Ireland only – not in Scotland. The increase in dividend and savings income tax rates applies UK wide.

The rate at which discretionary trust distributions are franked is assumed to remain at 45%, although the publications are silent on this matter.

Salary Sacrifice on Pension Contributions

There have long been two different methods for giving employees tax relief on their pension contributions, but only one of them provides National Insurance (NICs) savings for both employees and employers. The government’s proposal is intended to “level the playing field” between the two methods, though it does so by adopting the approach that maximises the government’s tax take.

Under salary sacrifice, employees agree to reduce their contractual salary by a chosen amount, and the employer pays that amount directly into the employee’s pension before income tax and NICs are calculated. From April 2029, the income tax advantages will remain in place but NICs savings will no longer apply to contributions above £2,000.

For a higher-rate taxpayer using salary sacrifice, this change will effectively mean losing 2% of any contributions above £2,000 to NICs. Employers will also face a 15% NIC charge on the same excess - an additional cost that many employers currently return to employees through higher pension contributions.

‘Mansion’ Tax

A new annual charge, known as High Value Council Tax Surcharge (HVCTS), is being introduced on owners of residential property valued at more than £2 million.  The Valuation Office will undertake valuation exercises to identify the properties within the scope of HVCTS and this measure will take effect from April 2028.

Properties in scope will be banded based on the property value as follows:

Threshold (£m)	Charge
£2.0 - £2.5	£2,500
£2.5 - £3.5	£3,500
£3.5 - £5.0	£5,000
£5.0+	£7,500

Charges will increase in line with CPI each year from 2029-30 onwards.  A public consultation on details relating to the surcharge will be held in early 2026.  Of particular interest is the suggestion that there will be various reliefs and exemptions to come, as well as rules for more complex ownership structures.   It is not clear at the moment whether this charge will be in addition to ATED, for example, though the introduction of these charges does feel reminiscent of the initial introduction of the ATED charges – for which the charges went up and the thresholds went down as time went by!

Inheritance tax (IHT)

Unlike Budget 2024, Budget 2025 has not seen sweeping changes to IHT.  However, as is typical for Budget 2025, there has been tinkering around the edges.

Unused Pensions and Death Benefits

Unused pensions and pension death benefits will be subject to IHT regardless of whether the pension scheme administrators have discretion over the payment of death benefits.  However, death benefits passing to a spouse or civil partner or registered charities will continue to qualify for exemption.

Death in service benefits payable from both discretionary and non-discretionary registered pension schemes will be excluded from inheritance tax.

A mechanism will be introduced to allow personal representatives and pension scheme administrators to exchange all necessary information for IHT purposes and income tax due on pensions, where relevant.

Finally, personal representatives will be able to direct pension scheme administrators to withhold 50% of the funds due to pension beneficiaries for up to 15 months, to ensure enough money is held back to cover any potential IHT liability.  Pension beneficiaries will be jointly liable for IHT due on the pension, and solely liable for any pensions discovered after HMRC have issued IHT clearance.

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

Although, to the despair of our farming community, the government have steadfastly refused to repeal the family farm tax, a welcome announcement in the Chancellor’s speech was the introduction of transferability of any unused £1 million APR/BPR limit between spouses/civil partners, which has been long called for by the professional bodies.  Where the first spouse/civil partner died before 6 April 2026, the full £1 million allowance will be transferred to the surviving spouse.

IHT  Avoidance: Agricultural Property

Since 2017,  shares in non-UK companies deriving the majority of their value from UK residential property have effectively been treated as UK-situs assets for IHT purposes. This treatment has now been extended to shares of non-UK companies that hold UK agricultural property. This change will adversely affect:

• Individuals who are not long-term UK residents who own such shares
• Trustees of trusts who own such shares where the settlor is not a long-term UK resident

As a result, those shares will be treated as UK-situs for IHT purposes meaning they will be included in the individual’s estate on death and/ or within the trust’s 10-year principal charge regime.

Broadly, if Agricultural Property Relief (APR) applies, then 100% relief will be available on the first £1m of value and 50% on the excess. Depending on the circumstances, for individuals, this would mean an effective IHT charge of 20% on the value above £1m upon their death. For trustees, approximately a 3% IHT charge will arise every 10 years on the excess above £1m. The first 10-year charge will however receive relief on a rateable basis with reference to today’s date.

Capping IHT Trust Charges

Presumably in an attempt to stem the flow of billionaire non-doms leaving the UK, the government has announced that with retrospective effect to 6 April 2025, certain trusts created by individuals who were previously non-UK domiciled will have their 10-year IHT charges capped at £5 million per charge.

The cap only applies to trusts that held excluded property on 30 October 2024 and is intended to limit exposure to principal charges under the new residence-based IHT rules. In practical terms, this will only affect trusts with a value of over £83m and were settled by previously non-UK domiciled individuals.

While useful for many non-dom clients, sadly we fear this attempt may prove too little to late.

Settlors Becoming Non-Long Term Residents

Trustees of trusts with UK domiciled settlors who have left the UK and are now considered as non-long term resident settlors may have been hoping to avoid an IHT exit charge by ensuring that as at the date the settlor became a non-long term resident, the trust held UK situs assets.  However, unfortunately this rather nice loophole has been closed!  Now, trusts with settlors becoming non-long term residents will be incentivised to cease holding UK situs assets as soon as practicable.

Capital Gains Tax

Share Exchanges  

Although not formally announced in the Chancellor’s budget speech, as usual, the devil is in the detail and a sneaky amendment to the conditions for share-for-share relief has been announced in the accompanying budget documents.

‘Share-for-share relief’ applies (if certain conditions are met) when a shareholder exchanges shares in one company for shares in another company.   Although ordinarily, without the relief, the exchange of the original shares would be considered a disposal, share-for-share relief provides a capital gains tax (CGT) relief so that no disposal for CGT purposes is recognised on the exchange, and instead the new shares ‘stand in the shoes’ of the old shares.   This means that the base cost history of the original shares is transferred to the new shares and are relevant if there is a disposal of the new shares.  Such a relief is necessary to prevent a ‘dry’ tax charge from arising on a disposal that doesn’t give rise to any cash proceeds.

There are many commercial reasons why such an exchange occurs, for example, the merging or demerging of multiple businesses, the grouping of separate companies under one holding company, or the takeover by one company of another, and preventing a dry tax charge from applying ensures that tax liabilities don’t prevent such transactions from happening, especially when such transactions don’t release cash to pay the tax liability!

Historically, this valuable relief could apply where the exchange “is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to capital gains tax or corporation tax”.

In an effort to improve the effectiveness of the above anti-avoidance measures so that they apply more definitively to “those persons who have entered into arrangements where the main purpose, or one of the main purposes, of the arrangement is to secure a tax advantage that they would not ordinarily have been entitled to”, the above provision will be amended so that they now apply to those cases where a person has entered into arrangements where the main purpose, or one of the main purposes, of those arrangements was to secure them a tax advantage.

Rather than focusing on the reason or purpose of the overall transactions as the current rules do, the revised rules will instead target those cases where, as part of a commercial exchange or company reconstruction, additional arrangements have been put in place to obtain a tax advantage.

It is standard practice to apply to HMRC for clearance to obtain HMRC’s confirmation that they are satisfied that the transaction doesn’t fall foul of the anti-avoidance provisions and that the relief should therefore apply, and this practice will need to continue for future transactions, and indeed may be even more important!

It is too early to say how HMRC will apply this revised condition – one would hope that simple transactions that don’t include additional unnecessary steps that gain an additional tax advantage won’t be caught, but only time will tell.

Clearance applications that have been received by HMRC up to 26 November 2025 will still be dealt with under the previous provisions so long as the shares or debentures are issued within 60 days of today’s announcement, or if later, 60 days of receiving HMRC’s clearance decision.

Employee Ownership Trusts (EOTs)

Government has for a number of years wanted to encourage ‘John Lewis’ style ownership to try and replicate the success of the retailer. It did this through Employee Ownership Trusts which allowed founders to sell the majority of their shares into a trust which held shares on behalf of employees without incurring an up-front capital gains tax charge.

This relief is to be curtailed with immediate effect, bringing 50% of the chargeable gain into charge on the person selling the shares. Business Asset Disposal Relief and Investor’s Relief are disapplied where EOT relief is claimed. The Chancellor did not comment on how this policy fits with her express desire for businesses to start, grow and stay in the UK.

Changes for Non-residents

Temporary Non-Residence Rules and Post Departure Trade Profits

Revisions to the current temporary non-residence (TNR) rules will see the removal of references to ‘post departure trade profits’, being profits deemed to have been generated after departure from the UK. Under the previous TNR rules, there was no tax charge if the distribution or dividend had been made from post departure trade profits. For individuals returning to the UK on or after 6 April 2026, distributions or dividends received from a UK close company whilst in their period of temporary non-residency will now be reported to HMRC as they would have done prior to the measure if the income otherwise falls under the TNR regime. A tax deduction will be allowed for any foreign taxes suffered on the distribution or dividend whilst temporarily non-resident to avoid double taxation.

Abolition of the National Tax Credit on Dividends Received by Non-UK Residents

In order to align non-UK residents with UK residents, the notional tax credit which previously applied to UK dividends for non-UK residents will no longer be available.

Changes to voluntary National Insurance contributions for periods spent abroad

Voluntary national insurance contributions (NICs) can be made to add qualifying years to an individual’s record, increasing entitlement to a UK state pension.

Previously, non-residents who were working abroad were allowed to make cheaper NICs at Class 2 rates (currently £3.50 per week) rather than the more expensive Class 3 rates (currently £17.75 per week).

It has now been announced that from April 2026 non-residents will only be able to make Class 3 voluntary contributions, regardless of whether they are working. In addition, for new applications from April 2026, individuals must have either:

• Lived in the UK for 10 years in a row, or
• Paid at least 10 years of National Insurance contributions while in the UK

To note this does not affect voluntary NICs for time abroad before 6 April 2026. 

There will be transitional arrangements which will be announced at a later date.

Impacts for Entrepreneurs and Businesses 

Despite claiming early in her budget speech that the government’s job is to “make Britain the best place in the world to start up, to scale up, and to stay”, suggesting that attracting and retaining entrepreneurs and businesses is a priority, measures announced today and in the Chancellor’s previous Spring Statement seem to be contradictory to this mindset.

A separate document released by the Chancellor today promises to make the UK a place where companies can find the capital, talent, support and regulatory environment to both start-up and keep growing.  Whether sufficient changes are made to convince entrepreneurs to remain in the UK will remain to be seen, however we set out the changes that have been announced below:

There are some positives:

• New UK Listing Relief from Stamp Duty Reserve Tax
• Increasing the eligibility limits for the Enterprise Management Incentives (EMI) Scheme so that larger companies can retain talented employees by issuing share options
• Increasing the eligibility limits for Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) so that larger companies beyond the start-up phase can attract inward investment. In a classic case of give with one hand and take with another though, the tax relief that individual investors can benefit from is reducing for VCT investments
• Advanced Tax Certainty of Major Projects
• A call for evidence has been launched to seek input from investors and businesses to consider the impacts of existing schemes and future options to help support UK entrepreneurship

But also negatives:

• Restriction on CGT relief for disposals to Employee Ownership Trusts
• Increase in dividend tax rates from April 2026 – detrimental for Owner Managed Businesses (OMBs) who often remunerate themselves through a combination of salaries and dividends
• Changes to salary sacrifice pension arrangements, which will create higher employer NICs for employers who offer such pension arrangements to employees, as well as increase NICs for the employees that use a salary sacrifice arrangement for their contributions.
• Reducing capital allowance main rate writing down allowances from 18% to 14% from April 2026

There is also some curious thinking around whether employers should have statutory limits placed on their ability to have contractually binding non-compete clauses in their employee contracts. The logic being that perhaps some acorns would fall from the larger corporate trees to then create new startups in the UK. However, will such larger corporate trees want to be here if they lose their acorns so readily? And indeed, will the acorns feel the UK is a suitable place to germinate and grow?

Over the next year, the government has committed to examining how to incentivise investment into high-growth firms and to provide tax support for entrepreneurs and founders. Given the watering down of Business Asset Disposal Relief (rate increasing to 18% from 14% from 6 April 2026), the limits on Business Property Relief (BPR) for IHT and the increase in dividend tax rates, it’s hard to reconcile the government’s promises with their recent tax policy actions! Reversing some of these policies might seem like an obvious solution, but not one that the government seems keen to action at the moment.

Employee Share Schemes

Enterprise Management Incentives (EMI) Share Schemes

EMI is a valuable scheme which allows eligible businesses to award share options to qualifying employees in a tax efficient manner.  Options are awarded to employees to enable them to benefit from the future growth in value of the company and, as long as the relevant conditions are met, the later disposal of shares obtained via an EMI scheme is subject to CGT rates rather than income tax rates.  Given that the higher rate of CGT is charged at 24%, and income tax at 40% or 45%, this provides an attractive award and incentive to retain key employees.

Only companies under certain size thresholds can qualify for EMI schemes, but those thresholds are increasing from April 2026 for share awards issued after that date as follows:

Description	Current Thresholds	Expected Thresholds from April 2026
Company employee numbers	250	500
Company gross assets	£30 million	£120 million
Value of shares that can be issued under EMI	£3 million	£6 million
Maximum option holding period (to apply for all EMI options that are already in existence and haven’t expired or been exercised as well as new options)	10 years	15 years

This will enable companies to continue awarding employees with tax efficient share options as they grow, incentivising employees to stay and help support the future growth of the company.

EMI shares have strict reporting requirements and it is advised to agree valuations with HMRC prior to the granting of options.

Share Incentive Plans (SIP) and Save as You Earn schemes (SAYE)

Whilst EMI can be offered on a discretionary basis to select employees, SIP and SAYE schemes are schemes offered to all employees.  Both schemes offer tax-advantages to participants of the schemes, although are often used in companies that cannot qualify for EMI.

In 2023, a call for evidence was launched to obtain views on the use and effectiveness of the schemes, and a summary of those responses has been released today. Overall, the feedback for the schemes was positive, although several respondents highlighted possible improvements. The government has acknowledged the responses and said it will consider the suggestions for improvement, but no explicit changes have been announced yet.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT)

Increased Limits for Companies

 In an attempt to appease the entrepreneurial community and encourage growing businesses to remain in the UK, the Chancellor is increasing the annual, lifetime and gross asset limits applicable to companies using EIS and VCT schemes to raise inward investment.

EIS and VCT provide tax reliefs to investors, to encourage investment in riskier, newer companies.  Currently, individual investors can benefit from a 30% income tax reducer for investments made under an EIS or VCT scheme. As part of the changes to VCT investments however, the rate of Income Tax relief for individual VCT investors is reducing to 20% from 6 April 2026.

The changes to both schemes are summarised below:

Limit Description	Current Limits	New Limits from 6 April 2026
Maximum Company Gross Assets	£15 million before share issue and £16 million immediately after	£30 million before share issue and £35 million immediately after
Annual Investment that companies can raise	£5 million (£10 million for knowledge intensive companies)	£10 million (£20 million for knowledge intensive companies)
Lifetime Investment that companies can raise	£12 million (£20 million for knowledge intensive companies)	£24 million (£40 million for knowledge intensive companies)

The above increase in limits is anticipated to provide additional support to new and early-stage companies seeking outside investment.

If your company is considering raising funds via EIS, it is recommended to submit an advance assurance application to HMRC to ensure the shares will qualify for the valuable income tax relief that investors can benefit from. Once shares are issued, there are also further HMRC submissions to ensure the tax relief can be claimed.

Updates to Capital Allowances

Writing-Down Allowances (WDA)

The annual WDA main rate is set to be reduced from 18% to 14%. Businesses will still be able to receive relief for capital purchases; however, the full deduction will be deferred to a later date as it is being relieved at a slower rate. The change will come into effect from 1 April 2026 for incorporated companies and 6 April 2026 for unincorporated businesses.

New 40% First Year Allowance (FYA)

A new FYA will be available to use towards expenditure qualifying at the main rate (in addition to the current Annual Investment Allowance regime). The 40% allowance will have reduced restrictions, encouraging expenditure that would not otherwise be covered by other allowances, primarily being leased assets. The allowance will be available for both incorporated and unincorporated businesses and shall be available for expenditure incurred on or after 1 January 2026.

First Year Allowances for Zero Emission Cars and Chargepoints

The existing 100% FYA available for qualifying expenditure on new zero-emission cars will be extended by one year. In addition, the current 100% FYA for qualifying expenditure on electric vehicle chargepoints will also be extended by one year. Both allowances will be available to 31 March 2027 for companies and 5 April 2027 for unincorporated businesses.

Corporation Tax

Corporate Interest Restriction

Corporate Interest Restriction (CIR) restricts the ability of companies to reduce their taxable profits through excessive UK interest expense and other financing costs. The rules apply to companies that are within the charge of UK corporation tax and with net interest and other financing costs that exceed £2m per year.

Simplifications have been made to the administration of the CIR regime including the removal of the time limit to appoint a reporting company and the requirement to make the appointment by notice to HMRC. The amendment will be effective for CIR returns that end on or after 31 March 2026.

Advance Tax Certainty for Major Projects  

In the 2024 budget, the Chancellor announced that the government wanted to create a stable landscape for businesses in the UK. One measure that has been confirmed today is a new service launching in July 2026 that will provide a binding position on how tax rules will apply to major investment projects in the UK, before material investment has taken place.

Although the clearance process will bind the government against changing its interpretation of the law, it will not bind it against a change in case law or changes in legislation. Clearances will be issued for an initial period of 5 years but will take a pragmatic approach to reviewing clearances as it is noted that projects of this scale will often extend beyond this initial period.

Any entity will be able to apply, including both UK and non-UK resident entities, and applications can be made jointly where multiple entities are investing in a joint project. A major project will be defined as new investment planned on a specific project in the UK which isn’t a continuation of ordinary spending.

The service will cover a range of taxes including Corporation Tax, VAT, Stamp Taxes, PAYE and CIS and aims to have an average turnaround time of 90 days.

Initially, the services will be available for projects with in scope expenditure incurred in the UK over the life of the project (not including financing costs or the acquisition of shares or ownership in other businesses) of over £1 billion, however the service will be reviewed after the first year to see if there is a scope to expand the service.

Pillar 2 Multinational Top-up Tax and Domestic Top-up Tax

The Multinational Top-Up Tax (MTT) and Domestic Top-Up Tax (DTT) rules apply to multinational groups with annual global revenue that exceeds €750m and are in place to ensure that large corporate groups are subject to a global minimum rate of corporate tax of 15%. The government has proposed technical amendments to the legislation which will alter the calculation to conclude whether the multinational group is required to pay a top-up tax. The changes to the legislation will mostly take effect for accounting periods beginning on or after 31 December 2025. 

Reforms to Transfer Pricing, Permanent Establishments and Diverted Profits Tax

A consultation was held this summer to review the reforms to the UK’s transfer pricing, Permanent Establishment and Diverted Profit Tax rules. The government has confirmed primary legislation will be included in the Finance Bill 2025 to 2026 and in general, will be effective for periods beginning on or after 1 January 2026. Please find a summary of the key changes below: 

• Transfer Pricing - Most notably legislation has been introduced intending to exempt UK-UK transactions between companies within the scope of transfer pricing where there is no risk of tax loss. Changes have also been made to address gaps in the existing participation rules and to simplify the taxation of intangible transactions between related parties. 

• Permanent Establishment (PE) - The government is bringing the UK’s definition of a PE and how to attribute profits to a PE in line with the generally accepted international definition of a PE. It should be noted this will not affect UK’s double taxation treaties.

• Diverted Profits Tax and Unassessed Transfer Pricing Profits - Diverted Profits Tax (DPT) was introduced as a separate tax in 2015 with the aim of deterring large multinational groups from diverting profits away from the UK using contrived arrangements. Legislation has withdrawn DPT as a separate tax and instead, such profits are now within the scope of corporation tax, while maintaining the essential features of the DPT regime.

Transfer Pricing - International Controlled Transaction Schedule  

It has been confirmed that multinationals within the scope of the transfer pricing legislation will be required to annually to file an International Controlled Transactions Schedule (ICTS). An ICTS will need to be filed where businesses have relevant cross-border related party transactions and are one of the following:

• UK resident within the scope of the transfer pricing legislation
• UK resident with a foreign permanent establishment
• Foreign business with a UK permanent establishment

It is expected that the ICTS will be an annual filing requirement. The date that ICTS will be introduced is yet to be confirmed. However, expectations are that the rules will take effect for periods beginning on or after 1 January 2027. 

Changes to Charity Tax rules

VAT relief for businesses donating goods to charities

Currently, goods given to a charity by a business are deemed a zero-rated supply in limited circumstances only.

With effect from 1 April 2026, the government have introduced a new exception to the deemed supply rules when a business donates goods free of charge to a charity.  Where eligible goods are donated for onward distribution to people in need or for use in the charity’s services, businesses will no longer be required to account for VAT on eligible goods on their VAT return.

Changes announced previously

The government has introduced four changes to charity compliance rules. These changes will take effect for transactions on or after 1 April 2026.  Draft legislation was previously published on these measures in July 2025.

Tainted donations to charities 

The Tainted Charity Donation rules are in place to ensure the usual tax reliefs do not apply where it is found that a donor enters in to arrangements to obtain financial advantage in return for their donation. These rules are changing and HMRC will now be looking at the outcome of the financial transaction as well as the motivation to determine if the donation is tainted.

Approved charitable investments

Currently there are twelve different investment types that are recognised for charitable tax relief but only one of these is subject to the requirement that the investment must be made for the benefit of the charity and not for the avoidance of tax. This rule is changing to ensure all twelve types of investments are subject to the same requirement going forward.

Attributable income

As of April 2026, gifts that are left to charity in an individual’s Will must be spent on the charity’s charitable purpose otherwise the donation (or gift) will be subject to a tax charge.  There is concern from the professional bodies that this measure will discourage potential donors from leaving gifts in their Wills.  In particular, the draft legislation does not define the period in which funds must be applied to charitable purposes, which could have significant impacts on, for example, endowment funds.  We await clarification on this matter.

Sanctions for failure to meet tax obligations

These changes are still to be published but we are expecting further changes from April 2026 to give more powers to HMRC to sanction charities who do not comply with their tax obligations and filings. These powers may involve restrictions on claiming tax reliefs such as Gift Aid. More detail to follow on this.

Loan Schemes Settlement Opportunity 

Loan schemes were for some years used to compensate employees in anticipation that the loan would not be charged to income tax.  Several iterations of these schemes came about and there was much angst around HMRC arguably trying to act retrospectively. It now seems that the government wants to see the matter brought to a conclusion swiftly rather than prolonged further litigation. A review of the position and approach was therefore commissioned.

After a review by Ray McCann, government has accepted the recommendations of the report to encourage settlement in order to bring the matter to a close. In the government response, admission is made that HMRC have hardly covered themselves with glory on this matter, and perhaps this is as close to an apology as can be expected.

The report recommends a new settlement opportunity with suspended penalties and interest, and lower tax rates. In addition, the reduced settlement liability is to be further reduced by £5,000 – entirely removing those with the lowest liabilities from a tax charge altogether. Another measure which will hopefully have a longer-term impact is limiting the ability of promoters of tax avoidance schemes to provide services such as tax return preparation.

There is much more detail than we can summarise here, and can advise individually if relevant. We hope that the scheme (the details of which will be published in due course) will draw a line under the flip-flopping of the last few years and help taxpayers to move on worry-free. As yet, HMRC have not implemented the proposal, and the only information provided is for the existing settlement opportunity.

Compliance and Enforcement

Capital Gains Tax: Non Residency Capital Gains Tax

New legislation will specify that when considering whether a company is ‘property rich’ for the purposes of the non-resident CGT charge, for protected cell companies (PCC’s), one must look at the cell itself and not the company as a whole.

Promoters of tax schemes

Government continues to seek to stop promoters of tax avoidance schemes peddling schemes that don’t work for their own financial gain. The proposal is to provide HMRC with additional powers to stop promoters where schemes have no realistic prospect of success. There will also be civil and criminal penalties. It seems incredible to us that such scheme promoters continue to exist, despite efforts of successive governments to close them down.  We hope that HMRC will be given the resources to make use of these powers to prevent the many people who are unfairly targeted by these scheme promoters and suffer as a result.

Facilitating non-compliance

It beggars belief that some professional firms aid and even encourage non-compliance to an extent that HMRC believe that additional powers are required to prevent this activity. HMRC will be given powers to obtain information from advisers in situations where they believe the adviser has deliberately facilitated non-compliance, with new penalties for failure to comply with HMRC’s requests.

Personal tax offshore anti-avoidance

Budget 2024 promised an update to the current anti-avoidance rules which are complex and at times conflicting, so there is definitely scope here for improvement. The announcement today does not give details on any policies but promises continued engagement with stakeholders and representative bodies with regular updates and wider meetings. We will provide a more substantive update when further information is available.

Sundry

Low Value Import Relief Removal

Currently, all individual consignments of goods with a value lower than £136, can claim a 100% customs duty relief. This relief is to be withdrawn from March 2029.

Cryptoasset Reporting Framework

With the growth of cryptoassets, government has been working with OECD and other countries to agree an approach to share information between jurisdictions. UK based cryptoasset service providers will be required to collect information about UK resident customers.

Stamp Duty - UK Listing Relief

The government has announced an exemption from the 0.5% Stamp Duty Reserve Tax (SDRT) for a three- year period following a company listing on a UK regulated market.  The exemption, which will apply to all transfers of securities in a company following listing, is hoped to encourage the trading of such shares on the secondary market.

The relief will apply where shares in the relevant company are newly listed on or after 27 November 2025.

Modernisation of Stamp Duties 

The government is seeking to replace Stamp Duty and Stamp Duty Reserve Tax with a single tax due on the transfer of securities. As part of this simplification, it is also developing a digital services, to enable taxpayers to report and pay the new transfer tax for off-market transfers of securities.

No date has yet been announced for when such changes might take effect, and if Making Tax Digital is anything to go by, it might be a few years before the new digital service is available for use!

Electronic Invoicing

The process of electronic invoicing, also known as e-invoicing, is the digital exchange of invoice data between a buyer and seller’s financial systems even when the systems differ. The process of e-invoicing has been around for many years; however, it has had a relatively small uptake in the UK due to a lack of standardisation of approach and a lack of update by software providers.

It was announced today that the process of e-invoicing will be mandatory from 2029, where all VAT invoices must be generated and shared via this method of invoicing. A roadmap will be released in 2026, detailing how e-invoicing will be introduced prior to 2029.

Corporation Tax – Late Filing Penalties

The government has announced an increase to penalties for late filing for corporation tax. The changes are summarised below:

	Current Rate	New Rate
Return late	£100	£200
More than 3 months late	A further £100	A further £200
3 successive failures, return late	£500	£1,000
3 successive failures, more than 3 months late	£1,000	£2,000

The new penalties will be effective for corporation tax returns with a filing date that is on or after 1 April 2026.

Winter Fuel Payments charge

From the 2025/26 tax year, pensioners with total annual income over £35,000 and in receipt of a Winter Fuel Payment will be subject to a Winter Fuel Payments charge equivalent to the full value of the payment received. HMRC will automatically collect the payment from pensioners through PAYE tax codes unless they already file a Self-Assessment tax return. Pensioners can opt out of receiving the payment if they expect their income to exceed the £35,000 threshold.

We are here to help

As ever, we are here to help, please get in touch with your usual Charter Tax contact or email us at advice@charter-tax.com.