Author Archive: Muhammad Zia

Spring Statement offers no support for struggling businesses, warns Rotherham Taylor Limited

One of Preston’s leading firms of accountants, Rotherham Taylor Limited, has expressed concern following the Chancellor’s Spring Statement, which offered no direct support for businesses.

Despite the Government’s focus on balancing the budget and stimulating growth, businesses across the UK are left to shoulder the burden of rising taxes, higher employment costs, and expanding compliance requirements, with no new reliefs or incentives to drive growth and innovation.

While additional spending in areas like defence and housing was announced, many businesses will need to find ways to adapt to these challenges independently.

“Businesses have been left to fend for themselves, with no indication of how the Government plans to support them through this challenging period,” says Rebecca Bradshaw, Director at Rotherham Taylor Limited.

“The lack of measures to help businesses absorb the increased costs introduced in the Autumn Budget and ensure long-term sustainability is deeply worrying. Many will be forced to make tough decisions, including reducing staff or scaling back investments.”

Regardless of the lack of relief for business, there is still an optimistic outlook for the economy, with revised GDP growth forecasts showing improvements each year from 2026 to 2029.

By the end of the forecast period, the economy is projected to be larger than previously anticipated in the Autumn 2024 Budget.

While the Chancellor assured that there would be no further tax increases, she made clear that the Government is focused on cracking down on tax evasion.

Through continued investment in HMRC’s technology and a 20 per cent increase in the number of tax fraudsters charged each year, the Government plans to raise an additional £1 billion in revenue.

“While reducing tax evasion is important, this strategy will likely place even more pressure on businesses,” says Rebecca.

“With the Government investing heavily in HMRC’s capacity to track down tax fraud, businesses can expect more audits and greater scrutiny of their tax affairs.

“This will increase the risk of errors and potential penalties for companies, further complicating an already difficult business environment.”

A key point not addressed in the Chancellor’s speech, but outlined in the broader Spring Statement document, is Labour’s plan to expand Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA).

It has been confirmed that from April 2028, sole traders and landlords with annual incomes over £20,000 will be required to submit quarterly updates to HMRC regarding income and expenses. Additionally, anyone already using the scheme will face harsher penalties for late payments starting this April.

“For many small businesses, sole traders, and landlords, the reduction of the threshold to £20,000 represents an increase in the administrative burden,” says Rebecca.

“This change could mean more work and higher compliance costs for small businesses that may not be equipped to handle the technical demands of MTD without support, training and possibly new systems.”

Alongside the fiscal measures announced in the Spring Statement, rumours before the speech suggested that the Government was considering instituting a £4,000 annual cap on cash ISA contributions.

Investors currently benefit from a £20,000 tax-free allowance, which can be split between cash ISAs and stocks and shares ISAs.

While the Chancellor did not confirm any changes to the ISA structure in her statement, the Government has been looking at reforms to encourage more investment in equities, aiming to boost retail investment and support long-term growth.

The proposed reforms could have significant implications for savers who currently rely on cash ISAs as a safe haven for their funds.

“There is concern that a cap on cash ISAs could discourage individuals from saving in a secure, low-risk environment,” Rebecca warns.

“For businesses, this could lead to a shift in investment behaviour, with potential impacts on the broader economy and consumer spending.”

Although Wednesday’s announcement may not have brought any major surprises, businesses should not become complacent.

“Now is the time for business owners and individuals to evaluate their current position, reassess their planning strategies, and work closely with their accountant to prepare for what lies ahead,” concludes Rebecca.

Data protection fees are rising – What landlords need to know

The increase to data protection fees payable by data controllers to the Information Commissioner’s Office (ICO) by 29.8 per cent has come into effect.

Data controllers are now required to pay the new fee rates relevant for their tier.

Here is what you need to know about the fee increases and how you will be affected.

Fees increase across all tiers

There are currently three tiers of fees payable annually by data controllers, based on the size and turnover of organisations:

  • Tier One: Micro organisations with a maximum turnover of £632,000 or no more than 10 members of staff.
  • Tier Two: Small and medium organisations with a maximum turnover of £36 million or no more than 250 members of staff.
  • Tier Three: Large organisations that do not meet criteria for tier 1 or tier 2.

The increase in fees for each tier is shown below:

Tier Old fees New fees
One £40 £52
Two £60 £78
Three £2,900 £3,763

 

A £5 discount applies to payments made by Direct Debit across all tiers.

Are there any exemptions?

You don’t need to pay a fee if you are processing personal data only for one (or more) of the following purposes:

  • Staff administration.
  • Advertising, marketing and public relations.
  • Accounts and records.
  • Not-for-profit purposes.
  • Personal, family or household affairs.
  • Maintaining a public register.
  • Judicial functions.
  • Processing personal information without an automated system such as a computer.

Members of the House of Lords, elected representatives, and prospective representatives are also exempt from the data protection fee.

Even if you are exempt from paying a fee, you still need to ensure compliance with your other data protection obligations.

What this means for landlords

As a landlord, you are required to pay the data protection fee if you handle your tenants’ personal information electronically.

This includes use of CCTV and storing personal data on a computer or mobile phone device.

Failure to comply could result in a fine of up to £4,350.

You must pay the data protection fee every 12 months – each fee covers a 12-month period from the renewal date, rather than the payment date.

However, the ICO will not consider your business covered by the data protection fee until they receive your payment.

Next steps

Most landlords need to register with the ICO. If you have not and think you may be required to, it is essential to register as soon as possible to avoid falling foul of the law.

If you are already registered with ICO, check when your renewal date is coming up and make sure you have noted the new fee you will be required to pay.

Additionally, you should establish whether your business will remain in the same tier. If your annual turnover and members of staff have increased or decreased, you may fall under a different tier and be required to pay a higher or lower fee.

For more information about the data protection fee and managing costs, contact our expert property team today.

Non-resident landlords – Tax rules, reliefs, and exemptions

A landlord who lives abroad for more than six months of the tax year is considered to be a non-resident landlord by HMRC.

This means that different rules apply when it comes to taxation. Here is a quick overview of your tax obligations as a non-resident landlord.

Non-resident landlord companies

If your company is not based in the UK but owns properties in this country which it rents out, it is classed as a non-resident landlord.

Since 6 April 2020, non-UK resident landlord companies that have UK property income have been charged Corporation Tax.

This means that you must register for Corporation Tax and file Corporation Tax returns with HMRC.

The current Corporation Tax rates for company profits are:

  • 25 per cent for companies with profits of £250,000 or more.
  • 19 per cent for companies with profits of £50,000 or less.
  • A “marginal” rate will taper in between £50,000 and £250,000.

Any non-resident company running a UK property business or receiving UK property income, is liable for Corporation Tax on its rental profits. Any gains arising on the disposal of UK property are also subject to Corporation Tax.

Additionally, if the property is suitable for residential use but is not let out on commercial terms, you may also have to pay Annual Tax on Enveloped Dwellings (ATED).

Non-resident landlord individuals

The scheme for individual non-resident landlords is that a return must be submitted, and tax accounted for, to HMRC on a quarterly basis, payment being due 30 days after the end of each quarter.

Where there is a letting agent, the amount subject to tax is the rent less expenses for that quarter, with possible adjustments when expenses have exceeded rent in any quarter.

If there is no letting agent, the tenant should deduct tax at the basic rate from the gross rent and remit this to HMRC, unless annual rent is less than £5,200, in which case rent may be paid over gross.

It is, however, possible to apply to HMRC for exemption from the scheme, so that the landlord can receive the gross rent.

For an application to be accepted, it must be shown either that all UK tax obligations have been met (or that there have been no UK tax obligations) before making the application, or that it is not expected that there will be any UK tax liability for the year in which the application is made.

Landlords may still be entitled to UK personal allowances (which can be used against letting income) despite being non-resident. The main categories of those entitled are British and European Economic Area citizens.

An annual claim form will normally have to be submitted to HMRC.

For non-resident landlords, the default is that tax must be deducted from the rent before it is paid to the landlord by either the letting agent or the tenant. This tax must be paid to HMRC within 30 days of each quarter end and a report sent to HMRC by 5 July following the end of the tax year.

To get your UK rental income paid gross, without deduction of UK tax, you can apply using the NRL1 form.

Property disposal and Capital Gains Tax (CGT) for non-resident landlords

If you are not resident in the UK and you dispose of UK residential property, you must report the disposal to HMRC within 30 days of the conveyance of the property.

This also applies to gifts (other than to a spouse or civil partner), in which case the disposal is deemed to have been made at its current open market value.

This additional reporting requirement is still required even if you are registered to submit a tax return.

Since April 2015, non-residents have been required to pay CGT on the sale of UK residential property, and this was extended to the sale of all UK property from April 2019.

The rules are complex, but generally there are three ways for a non-resident to calculate the gain or loss from the sale of UK property:

  1. The “normal” method: Calculating the gain over whole period of ownership.
  2. The ‘time apportionment’ method: Calculating the gain over the whole period of ownership and then time apportioning the gain from the relevant rule change date.
  3. The ‘rebasing’ method: Calculating the gain from the relevant rule change date. This involves using the relevant rule change date market value instead of the original purchase price and only claiming for capital expenses incurred since that date.

If you purchased the property after the relevant rule change date, only the normal calculation method is available.

However, you may be entitled to the UK annual CGT exemption (£3,000 for 2024/25) to offset against any gain made.

Our property taxation services

Due to the complex requirements of the HMRC scheme for non-resident landlords, it is essential to seek expert legal advice.

At Rotherham Taylor, we have specialised in looking after the personal taxation affairs of private individuals for over 45 years.

We have considerable experience with clients in the property industry and have links with a number of property management agents.

Our understanding of the agent’s responsibilities, particularly with regard to taxation, enables us to liaise closely with them to provide the maximum benefit to their clients.

Through providing taxation services to landlords, we have developed our services for both UK-resident and overseas individuals, and act for landlords from many different countries who let residential property in the UK.

We’ll help you prepare additional forms, submit claims for UK allowances, and liaise with your managing agent to avoid or minimise retention of tax from your net income.

You can trust us to advise you on the payment of liabilities and help you take advantage of any tax-saving opportunities.

At Rotherham Taylor, we’re proud to be your forward-thinking advisers. Contact our property team today for expert tax advice.

How to prepare for Making Tax Digital as a landlord

HM Revenue & Customs (HMRC) is introducing Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) – and if you are a landlord earning over £50,000 per year, this means changes are coming in April 2026.

Here’s what you need to know about the upcoming changes to tax reporting under MTD for ITSA and how you can prepare.

MTD for ITSA – what’s changing?

While you currently file your Self Assessment (SA) tax return once a year, MTD for ITSA will mean a move to more regular, digital reporting.

From 6 April 2026, landlords with an income of £50,000 or more will need to:

  • Keep digital records of your income and expenses.
  • Submit quarterly updates to HMRC using MTD-compatible software.
  • Complete an end-of-period statement (EOPS) and final declaration annually.

Landlords with an income of between £30,000 and £50,000 will also need to comply with these changes from April 2027. Eventually, landlords earning £20,000 or more will be required to comply with MTD for ITSA, although a deadline for this has not been announced.

The changes under MTD for ITSA are designed to make tax reporting more efficient and reduce errors.

However, adapting to a brand-new system can feel overwhelming.

With the first letters from HMRC arriving from April 2025, now is the time to start preparing.

Determine whether you will be affected

You’ll need to add together all property and sole trader income to calculate your total income for the year. This includes rental income but also revenue from other ventures.

If you earn £50,000 from property alone, or from a combination of property and sole trader income, you will need to comply with MTD for ITSA from April 2026.

HMRC will be writing to affected taxpayers based on their 2023-24 Self-Assessment returns.

Some landlords may qualify for an exemption due to age, disability, or lack of access to digital tools. If you think this may apply to you, we can assist with your application.

Landlords who are registered as limited companies should continue to share limited company accounts and company tax returns with HMRC and Companies House.

Set up the right software

MTD requires you to use compatible software to keep records and submit updates.

If your accounting software is “MTD-compatible,” this means it has the facility for VAT Returns to be filed with HMRC and receive information back from HMRC directly, such as confirmation that a VAT Return has been received.

HMRC has published a list of accounting software providers who currently have MTD-compatible software.

However, if you are unsure which software is best for you, we can help you find the right solution for you and your business.

Many of our landlord clients are already using computer-based accounting packages such as Xero, Sage or QuickBooks as part of our RT Clarity service.

These packages will not only future-proof your business in readiness for each new Making Tax Digital requirement in the coming years, but they will also enable you to share financial information in real time with our team and quickly produce bills and invoices.

Decide when to sign up

HMRC has provided two options for landlords to sign up.

Option one is to sign up early for the 2025-26 tax year.

HMRC is currently piloting the MTD for ITSA system to develop an effective service.

If you are a landlord, you can voluntarily sign up for MTD for ITSA – meaning you will start using compatible software to keep business records digitally and send quarterly Income Tax (IT) updates to HMRC instead of filing an annual SA tax return.

Taking part in this voluntary sign-up period gives you time to get used to MTD for ITSA before it becomes mandatory, with access to HMRC’s specialist support team and expert advice from your accountants.

Landlords who will not be required to comply with MTD for ITSA from April 2026 can also choose to sign up early.

The second option is to wait until April 2026 to comply with MTD for ITSA.

If you choose this option, it is still worth testing new software and reporting systems well in advance to make sure you are ready for the 2026-27 tax year.

How we can help

Transitioning to MTD for ITSA can seem difficult and scary – but it doesn’t have to be.

At Rotherham Taylor, our expert accountants can support you with MTD for ITSA every step of the way, from choosing compatible cloud accounting systems to helping you meet your quarterly reporting requirements.

We are so confident in our basic debit and credit knowledge that we will work with any software you choose.

Our specialist service RT Clarity provides a range of available software providers, enabling you to access your bookkeeping information using the software provider of your choice, for an all-inclusive fee.

Whether you are already an expert or just starting out, our team will make sure you get the most out of online accounting, empowering you to handle the transition to MTD for ITSA with ease.

If you need to comply with MTD for ITSA in 2026, it is vital to prepare now. Contact us today for expert, tailored advice.

How can I protect my estate in light of upcoming changes to Inheritance Tax?

Putting in place well thought out plans to provide for your loved ones when you are no longer here can provide peace of mind for you and your dependants.

You will want to make sure that your wealth is passed on to the right people, with maximum ease and minimal Inheritance Tax (IHT) liability.

However, upcoming changes to IHT could disrupt your carefully laid plans – so a review of your estate plan is essential.

Here is what you need to know about the upcoming IHT changes and what you need to do to protect your estate.

Business Property Relief

If your estate includes business property, changes to the tax liability on such property might be affected.

The Autumn Budget introduced significant changes to Business Property Relief (BPR) under IHT, effective from April 2026.

BPR is a valuable relief that can reduce the value of a qualifying business property by either 50 per cent or 100 per cent under the current rules.

This decreased value applies to both lifetime gifts and transfers on death, and can significantly reduce your IHT liability.

However, under the new rules, 100 per cent tax relief on business assets will be capped at £1 million per individual, with relief 50 per cent thereafter.

This means your Executors and beneficiaries will be liable to pay a higher rate of IHT upon your death.

Whether or not you run your business with your family, the provision you make in your Will can have a major influence on future decision-making.

Our distinctive perspective means we are able to advise on wider considerations, including structuring the business and navigating the potential tension between emotional bonds and commercial demands.

Our team can help you think through the options and understand the implications for management, providing effective incentives and managing your exposure to tax.

Pensions

While many pension pots currently fall outside of IHT calculations, from April 2027 the Government plans to include pensions within the scope of IHT.

This change, combined with the freeze on IHT thresholds until 2030, means that more estates will likely exceed the £325,000 IHT threshold.

In light of these changes, you may want to consider making an expression of wish form if you do not have one already.

An expression of wish form is a document that directs your pension provider on who should receive your pension benefits when you pass away.

Reviewing and potentially updating this form will make certain that your pension aligns with your current wishes.

For example, leaving your pension to a spouse can help reduce the IHT burden on your estate, as assets passed to a spouse are generally exempt from IHT.

Reviewing your Will

With the upcoming changes in IHT, it is growing increasingly important to give consideration to tax planning when making a Will.

It is essential to prepare a Will now if you have not already done so.

If you have an existing Will, then it might be time to review it and make amends to mitigate the impact of IHT changes.

We can assist you in reviewing your Will periodically and following major life events such as marriages, divorces and birth of children to ensure that it reflects your current wishes.

Ways to reduce IHT

There are several ways in which you can prepare your Will and estate plan to minimise IHT liabilities.

For example, you can potentially save tens of thousands of pounds by leaving your main home to a direct descendent.

You can also secure significant tax reductions through charitable donations.

A flexible Will, such as one that includes a discretionary trust, allows you to adapt your asset distribution based on future changes in tax laws, making it a potentially favourable option.

With a discretionary trust, your estate can allocate assets to beneficiaries at the trustee’s discretion, which can help manage how and when assets are distributed, potentially reducing IHT liabilities.

This structure offers a flexible approach, allowing trustees to make decisions that align with both your intentions and current tax laws, providing peace of mind that your assets are protected even as laws change.

Additionally, you may want to review your lifetime gifting strategy.

Making gifts can reduce the IHT burden on your estate.

However, gifts must be made seven years prior to your death to be exempt from IHT, so early planning is vital.

Gifts must comply with current laws, including those related to taxes and ownership transfers.

For instance, transferring real estate as a gift requires proper registration in accordance with property laws to ensure that the transfer is recognised legally.

Legally documenting each gift’s details including its date, value, and recipient is a safeguard against potential future legal disputes.

For example, you need to be clear about the terms of the gift to avoid the creation of an implied trust.

If the donor appears to retain some control over the gifted asset, it may not qualify as a gift for legal or tax purposes and could lead to disputes or unintended tax consequences.

Our knowledge of tax planning and our clients’ financial arrangements means we are well positioned to advise on making tax-efficient bequests.

Secure your legacy with careful estate planning

The preservation of wealth and protection of assets requires careful, focused planning. This often involves the use of Trusts as a shelter for family capital and should be considered as part of your overall tax planning strategy.

At Rotherham Taylor, we provide a discreet estate planning service that covers trust planning and administration, review of Wills, IHT planning schemes, and arrangement of life assurance to cover potential tax liabilities.

We can help you understand which reliefs might apply to your estate and ensure you are making the most of these opportunities.

For tailored advice on what IHT changes mean for your estate, get in touch with our expert accountants today.