The Chancellor, John Healey, recently delivered his first budget which was focussed on measures to help those on lower incomes.  These measures are largely paid for with additional taxation on the banks but also some key changes affecting clients which are summarised below.

Income tax

Headline income tax rates on earned income and the tax bandings were unchanged which continues fiscal drag pushing more taxpayers into the higher tax bandings.  Rate increases for landlords and savers were announced which apply from 6 April 2027. 

Landlords

From 6 April 2027, the rate of tax paid by individuals receiving property income will increase by 4% on all current rates.  The increases will affect landlords in England, Wales and Northern Ireland at present. Whether the increases to landlord rates are adopted by the Scottish government in future budgets remains to be seen but seems likely.

The tax rates for landlords in England, Wales and NI will become:

Basic rate taxpayers                        -              24% property basic rate

Higher rate taxpayers                      -              44% property higher rate

Additional rate taxpayers                -              49% property additional rate and property trust rate

Savings

As with the introduction of the property rates, new savings rates are being introduced from 6 April 2027 and these affect all United Kingdom nations.

The tax rates for savers in the UK will become:

Basic rate taxpayers                       -              24% savings basic rate

Higher rate taxpayers                     -              44% savings higher rate

Additional rate taxpayers               -              49% savings additional rate and savings trust rate

The tax-free savings limit for basic rate and higher rate taxpayers of £1,000 and £500 respectively remain unchanged.

Given these higher rates and limited amount of tax-free allowances, you may want to consider tax efficient savings such as ISAs or premium bond, particularly for additional rate taxpayers.

ISAs

The previous chancellor has announced a proposal to reduce the amount that can be saved in a cash ISA to £12,000 from £20,000 applying from 6 April 2027.  This autumn statement reversed this proposal and the original £20,000 has been reinstated which is the limit for both cash and stocks and shares ISAs.

A new first time buyer ISA is to be introduced replacing the Lifetime ISA and operating in a similar way.

Capital gains tax

After much speculation leading up to the budget, the headline rates of capital gains tax remained unchanged. 

However, an important change was made to a capital gains tax relief known as Business Asset Disposal Relief (BADR) reducing the lifetime amount available from £1m to £500,000 for qualifying disposals taking place from 6 April 2027. 

A new capital gains tax ‘Founders Relief’ will be introduced following consultation, early signs are that this relief will not be widely available to small owner managed businesses.

Trading allowance

For the self-employed with modest levels of income, there has been a trading allowance of £1,000 in recent years to allow a small amount of income to be earned without the need to report under self-assessment.  This figure is also the amount that can be claimed as a flat rate for expenses where the income is above this amount and actual costs below £1,000.  From 6 April 2027 this level will increase to £3,000 which will benefit those with small amounts of self-employed income.

Benefits in kind

From 6 April 2027 there will be a change to the way in which benefits in kind are reported to HMRC.  The current system of preparing a form P11d will end for most benefit in kind reporting with clients most likely no longer needing to submit a form P11d after the 2026/27 tax year.

The change will affect cars, vans and medical insurance from 6 April 2027 and will require the monthly payroll to reflect a monthly benefit in kind.  For those receiving a salary from your company, an adjustment will be made on your monthly salary but for those who do not currently receive a salary, it will be necessary to report the benefit in kind in the same way as a salary.  The PAYE team will be in touch with clients in advance of the change for those clients affected.

National minimum wage

For those employing staff on the national minimum wage, please note that the rates will increase from 6 April 2027 to:

£13.20 for those employees who are 21 and over

£11.27 for 18 to 20 year olds

Self-assessment tax system for individuals

The self-assessment tax system for individuals has largely been unchanged for the last 30 years with payments being made in July and January each year and a tax return being due annually by 31 January following the end of the tax year.

One of the quieter announcements in the budget is likely to have a significant impact on clients in the future is a measure referred to as ‘timely payments in income tax self-assessment. It is in early stages but it would appear that HMRC are looking to move to a monthly payment system for self-assessment which will replace the current system of paying in arrears.

The proposal is for a new system to be in place from April 2029 which will require monthly payments to be made based on the prior year tax liability. These measures may be linked to the new ‘Making Tax Digital’ regime affecting the self-employed which requires quarterly reporting to HMRC of your income and expenses on a cash basis.

It remains to be seen how these measures will be transitioned into force as there are many problems with an assumption of a taxpayer’s tax liability remaining consistent and importantly, income is rarely earned consistently across the year with significant seasonality and irregular receipts e.g. dividends.

Whilst the detail may be scarce at this stage, it is likely to come into force and therefore for clients who tend to save for their next half yearly tax payment, it may be sensible to try and get ahead of the current payments in the next couple of years to reduce the impact of paying under the new system.

With Quarter 2 of Making Tax Digital (MTD) for Income Tax approaching, now is a good time to make sure your accounting software is set up correctly and your records are up to date.

Here are a few simple steps that can make a big difference:

📋 Get your software set up correctly

Taking the time to enter property details, link bank accounts, add ownership percentages and set up tracking categories correctly from the outset can save time and avoid issues later.

🏦 Make the most of bank feeds

Linking your bank accounts allows transactions to flow directly into your accounting software, reducing the need for manual data entry.

📂 Keep receipts and documents organised

Use your software's document or receipt features to upload paperwork as you go. This means less time spent searching for documents when you need them.

💳Keep business and personal finances separate

Using a dedicated account for business or property income helps keep your records clear and makes bookkeeping much simpler.

🔄Reconcile regularly

Spending a few minutes each week checking your transactions can help keep everything accurate and prevent a last-minute rush.

A quick reminder:

A quarterly update is not a full set of accounts or a tax return. It is simply a summary of your income and expenses submitted to HMRC. No tax is payable as a result of the quarterly update itself — your final tax position is dealt with through the end-of-year process.

⏰ Quarter 2 is fast approaching.

Once September comes to an end, there are just 37 days to submit your Quarter 2 update.

If you'd like support getting your software set up correctly or want to make Quarter 2 as straightforward as possible, get in touch to find out how we can help.

Last week, Practice Managers from Suffolk and Norfolk joined an interactive web workshop led by our Head of Primary Care Development Katy Drew

The session covered key updates to the 2026/27 contract and provided practical guidance on understanding and interpreting practice accounts.

Thank you to everyone who attended and contributed to the discussion.

We’ve partnered with the British Medical Association to create a series of short, practical guides (all under 1 minute) covering the new tax reporting requirements and what they mean for you.

These quick videos explain the key changes and the steps you need to take to stay compliant.

Watch the series here:
▶️ Episode 1
What is Making Tax Digital?
▶️ Episode 2
Making Tax Digital applies to you. What happens now?
▶️ Episode 3
Does Making Tax Digital apply to you? Here's how to check
▶️ Episode 4
Making Tax Digital tips

Last week, Alec James and Tony Martin hosted two insightful webinars covering the Annual Allowance and the McCloud Remedy — helping attendees better understand some of the key pension and tax considerations affecting NHS professionals.

The sessions explored:

🔹 Understanding Remedial Pension Savings Statements
🔹 How to Obtain Potential Tax Refunds
🔹 Paying New or Increased Tax Charges
🔹 2023/24 & 2024/25 Annual Allowance
🔹 The NHS Cost Claim Back Scheme

…and much more

With a wealth of knowledge and experience in this area, Alec and Tony always deliver valuable and practical guidance through these webinars.

This week, Alec James and Elizabeth Stutt attended talks in Tameside and Wrexham, on understanding the tax system and looking at career options for GP Registrars after qualification.

The talks covered some of the key financial and career decisions newly qualified GPs may face, with practical advice and insights into the different paths available after training.

Final Pay Control Charges (FPCC) are fees that a local government pension scheme can charge an employer if an employee’s salary rises a lot in the final years leading up to retirement which boosted that employees pension under certain circumstances.
 
One of our clients was recently issued with a significant charge.
 
After a detailed review and a strong challenge by our experts, we had the final pay control charge extinguished, saving our client £71,000.

If you have had issues with a final pay control charge, feel free to contact us for support.

Yesterday, Katy Drew delivered an insightful webinar on the newly announced 2026/27 GP contract, exploring the key funding changes and what they mean for practices.

During the session, Katy highlighted a number of important updates, including the replacement of PCN-level Capacity and Access payments with a practice-level GP reimbursement scheme.

This shift may have cash flow implications, as practices that previously received monthly Capacity and Access payments will now need to submit claims for reimbursement, potentially leading to delays in payment.

She also explained that Advice and Guidance payments have now been incorporated into core funding, changing how this income is received and managed.

While the contract assumes an initial 2.5% pay uplift, increasing cost pressures remain a concern. The 4.1% rise in the National Minimum Wage, alongside the DDRB’s recommended 3.5% pay increase, is expected to drive a rise in overall monthly wage bills.

These changes—and what they mean for practices—will be explored further in upcoming discussions.

This week Tony Martin, alongside Rebecca Reynard of GP Surveyors, recently hosted a webinar on Succession Planning, GP Property & Accountancy Essentials, covering a range of key topics relevant to GP partners and practice stakeholders.

The session explored:

🔹 Market Valuations
How GP properties are valued, with a focus on NHS-backed income streams, lease structures and market factors.

🔹 Financing Property Buy-ins
Key considerations for incoming partners, including funding options and lender requirements.

🔹 Putting a Lease in Place
An overview of lease types, key terms and the importance of securing NHS approvals.

🔹 Expense Responsibilities
Understanding obligations around repairs and maintenance, service charges and dilapidations.

🔹 Sale and Leaseback
What it involves, when it may be appropriate, and how it can be used to support succession planning.

🔹 Financial & Tax Considerations
Including the release of equity, repayment of existing mortgages, Capital Gains Tax and Business Asset Disposal Relief.

The webinar provided practical insights into the complexities of GP property ownership and highlighted the importance of careful planning and expert advice when navigating succession.

Big news. Bigger changes. 💡

Our Making Tax Digital leads Harry Palmer-Brown and Naila Anwar have had a busy February supporting British Medical Association members!

First, on 13th February, they headed to BMA Headquarters in London to deliver an in-person presentation on Making Tax Digital for Income Tax. Then, on 24th February, they took to the virtual stage for not one but two webinars for BMA members across the country.

Making Tax Digital for Income Tax is quite simply the most significant shake-up to the UK tax system in 30 years.

They covered:

✅ What MTD for Income Tax is and who it affects

✅ Key deadlines you can't afford to miss

✅ Practical steps to get MTD-ready

✅ Exemptions

✅ What it means specifically for doctors and healthcare professionals, including the benefits

The feedback was fantastic and the questions showed just how much confusion and concern is out there around this change.

If you'd like the same clarity and confidence our BMA attendees walked away with, we're here to help. 

To learn more about the BMA, click the link here Join the BMA

📩 Drop us an email or give us a call to find out more.

The Chancellor announced his Spring 2024 Budget, no doubt with one eye on the upcoming General Election. He did not announce any major policy changes, leading to speculation that there may be a further mini-Budget before voting day. Time will tell if any significant tax changes are announced in the coming months, but Alec James meanwhile provides a summary of the key points from Jeremy Hunt’s latest address at the dispatch box

Tax rates and bands

As in in the last few Budgets, income tax rates and lower tax brackets remain unchanged for 2024-25.

The exception, of course, being that, from 6 April 2024, the additional rate of income tax now takes effect with earnings over £125,140 – previously £150,000.

It had already been announced in the January 2024 Scottish Budget that the additional rate of tax would be increased from 45% to 48%.
The personal allowance, which was last increased from 6 April 2021, remains unchanged.

Many have seen that while there has been no increase in the tax rates, the freezing of the bands and personal allowances at a time when inflation has been running far higher than it has in the past means taxpayers are subsequently worse off.