If you had new income during the 2025/26 tax year that HMRC does not already know about, you may need to register for Self Assessment by 5 October 2026.

This deadline often catches people out precisely because it applies to those who do not think of themselves as needing to file a tax return.

It is not about filing or paying, instead it is about telling HMRC whether a tax return is needed at all.

This deadline applies to:

• Anyone who became self-employed during 2025/26 and has not registered before.
• Landlords with new rental income to declare for the first time.
• Anyone with other untaxed income, such as dividends, or a household affected by the High Income Child Benefit Charge for the first time.
• Anyone who stopped filing a return in previous years but now has income that brings them back within Self Assessment.

If you have filed a Self Assessment return for the previous tax year already, you do not need to register again.

HMRC will continue to expect a return from you each year until you formally leave Self Assessment.

Why it is worth acting now

Registering late does not stop you from filing, but it is treated as a failure to notify and can lead to a penalty geared to the tax eventually found to be owed, even where the amount involved is modest.

Registering also takes time to process. HMRC issues a Unique Taxpayer Reference once registration is complete and this can take a couple of weeks to arrive by post, so leaving it until close to the deadline adds unnecessary pressure ahead of the 31 January filing date.

If you think you may need to register for Self Assessment for the first time, or are not sure whether your circumstances require it, contact us well before 5 October and we will take care of the registration for you.

From September 2026, HMRC will begin signing up taxpayers to Making Tax Digital (MTD) for Income Tax where it believes they should already be in the regime but have not registered themselves.

This affects anyone with combined gross income from self-employment and property above £50,000 in 2024/25, unless an exemption applies.

HMRC estimates that up to 294,000 taxpayers could fall into this group, out of an expected first-wave population of around 864,000.

Why signing up yourself is better

It remains possible to sign up voluntarily, or for an agent to sign up a client, right up until HMRC intervenes. Doing so before HMRC acts has real advantages.

• You retain control over the details recorded, including business names and descriptions, which are far harder to correct once HMRC has processed the sign-up itself.
• For clients with more than one business or property, ensuring each is clearly named and distinguished in software is one of the biggest practical lessons from the first quarter.
• Agents are not notified when HMRC signs a client up directly, so proactive registration is the only way to have certainty over a client’s status.

HMRC plans to sign up taxpayers in stages from September, pausing the process around the Self Assessment filing deadline of 31 January 2027.

What we are doing

We are reviewing our client base now to identify anyone who may fall within scope but has not yet signed up, rather than waiting for HMRC’s letters to start arriving.

If you think this might apply to you, or you are simply unsure whether MTD for Income Tax applies to your circumstances, get in touch and we will check your position and, if needed, get you signed up on your own terms.

HMRC has continued its long-running campaign to identify landlords with undeclared rental income and recent activity shows just how much data it now draws on to do so.

Behind most of the letters landlords receive sits HMRC’s Connect system, which pulls information from more than 60 government and third-party sources to build a detailed picture of a person’s financial position.

The information that it uses can come from a variety of sources, including:

• The Land Registry, which flags property purchases, transfers and changes to title deeds.
• Tenancy deposit schemes, since a registered deposit creates a digital record that a property is being let.
• Letting agents, who are required to provide HMRC with details of the landlords they act for.
• Online platforms such as Airbnb and Booking.com, which now report income data directly to HMRC.
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None of these sources proves on its own that income has gone undeclared but taken together they build a pattern that could lead to a nudge letter through your door.

What a nudge letter means

A nudge letter is not a formal enquiry and does not mean a criminal investigation is underway.

It is a prompt inviting the recipient to review their position and come forward voluntarily through HMRC’s Let Property Campaign if anything needs correcting.

Landlords who do come forward voluntarily generally receive far better terms than those who wait for HMRC to open a formal enquiry, both in terms of penalties charged and the tone of any subsequent contact.

With the Let Property Campaign continuing to recover over £100 million a year from landlords and MTD for Income Tax now bringing many landlords into more frequent digital reporting, this is a good time to make sure rental income has been fully and correctly declared.

If you have received a letter from HMRC about rental income or simply want to check your position before HMRC gets in touch, speak to us.

A Personal Tax Account is a free online service from HMRC that gives you direct access to your own tax position, without needing to phone HMRC or wait for a letter to arrive.

If you haven’t created one already, then it is worth setting one up even if you already have an accountant, as it gives you visibility of things that we may not always see and lets you act quickly where something needs attention.

What you can do through your account

There are a variety of useful things that you can do via your account, once it is set up, including:

• Checking your current tax code to see exactly how HMRC has calculated it, including any adjustments for benefits or previous underpayments.
• Claiming a credit balance sitting on your Self Assessment account. This is worth knowing about in particular, since changes to HMRC’s systems mean agents can no longer always do this on a client’s behalf, so it may need to be done directly.
• Seeing an estimate of your tax liabilities coming up, giving you time to plan and set money aside rather than being caught out in January.
• Viewing your National Insurance record, check your State Pension forecast and update personal details such as your address.
• Checking for and claiming a tax refund online, rather than waiting for HMRC to identify an overpayment and write to you.

Signing up is straightforward

You will need to verify your identity, usually using a passport or driving licence, but the process only takes a few minutes and gives you ongoing access once it is complete.

You can set up or sign in to your Personal Tax Account at www.gov.uk/personal-tax-account 

If anything you see in your account raises a question, whether that is a tax code, a credit balance or an upcoming liability, come and talk to us about it before taking action.

HMRC can issue a new tax code several times in a single year and it is easy to assume that each one has been checked and is correct.

In practice, coding notices are often generated automatically and can contain errors that go unnoticed for months having a significant impact on a person’s take home pay.

A new code is frequently triggered once a tax return has been submitted, as HMRC updates its estimate of your income and allowances for the current year based on the figures just filed.

Agents can be kept out of the loop

One point worth flagging directly, which many taxpayers don’t realise, is that a coding notice sent to you is not always copied to your accountant or tax agent at the same time or at all.

HMRC’s systems do not automatically keep agents informed every time a client’s code changes, which means a new or incorrect code can be operated by an employer or pension provider for weeks before anyone supporting you has sight of it.

If your code changes and we are not aware of it, we cannot check it on your behalf, which is why responsibility for spotting a wrong code, at least in the first instance, sits with the taxpayer who receives the notice.

What to look out for

When a new coding notice arrives, whether by post or in your Personal Tax Account, it is worth taking a few minutes to check it against what you expect.

Here is what to look out for:

• The personal allowance and any adjustments shown and whether they still reflect your current circumstances.
• Any entries for benefits in kind, such as a company car, private medical insurance or untaxed interest, that may be out of date.
• Whether an estimated underpayment or overpayment from a previous year has been added to the code and whether the figure looks right.
• The overall code itself, checked against your latest payslip to confirm your employer is actually using it.

A wrong code left in place for a full tax year can mean months of overpaid or underpaid tax and underpayments in particular have a habit of arriving as an unwelcome surprise later on.

If you receive a new coding notice and are not sure whether it is correct, send us a copy as soon as it arrives.

We would rather check it with you now than untangle a problem with HMRC further down the line.

The first quarterly update under Making Tax Digital (MTD) for Income Tax fell due on 7 August 2026, covering the period from 6 April to 5 July for most sole traders and landlords with qualifying income above £50,000.

With that first deadline now behind us, a clearer picture is emerging of how the new system is working in practice and where the pinch points are likely to sit as we move towards the next quarterly update on 7 November.

The numbers tell part of the story

HMRC had expected around 864,000 sole traders and landlords to be mandated into MTD from April. In the end, roughly 570,000 signed up and just over 436,000 filed a first quarterly update.

That gap matters, as it means that a significant proportion of the expected population has either not signed up at all or signed up without yet submitting a return, which is why HMRC has confirmed it will begin signing up outstanding taxpayers itself from this month.

Where the friction has been

For firms and clients who have been through the process, a few recurring issues have stood out.

• Software onboarding took longer than expected, particularly for clients moving from spreadsheets to bridging software or a full bookkeeping package for the first time.
• Businesses with more than one trade or property portfolio needed clear, distinguishing names and descriptions set up in software from the outset, since these are far harder to correct once HMRC has processed a submission.
• Some clients treated the update as a full tax return and tried to make accounting adjustments before sending it, when in fact it is simply a summary of income and expense totals for the quarter.
• Digitally excluded clients and those with genuinely complex affairs needed early conversations about exemptions, rather than leaving the question until the deadline was close.

What this means for the next quarter

There are no penalty points for late quarterly updates during the 2026/27 tax year, which has taken some of the pressure off this first cycle, but it is still the legal duty of taxpayers, even if there is no immediate penalty.

That grace period will also not last indefinitely and the record-keeping habits built now will matter once penalties do apply.

If you are still finding your feet with MTD, or have not yet submitted your first update, get in touch.

We can help you choose the right software and get your records in order well ahead of the next deadline.

Donating to charity is its own reward, but if you are a UK taxpayer and you are not using Gift Aid, you are leaving money on the table for both you and the charities you support.

Used properly, Gift Aid can boost your donation by 25 per cent at no extra cost to you and (for higher and additional-rate taxpayers) can deliver a meaningful reduction in your own tax bill.

How Gift Aid works

When you make a Gift Aid declaration on a donation, the charity can reclaim the basic-rate tax (20 per cent) you originally paid on the income you used to make the gift.

In practice, that means:

• You donate £100
• The charity claims an extra £25 from HMRC
• The charity receives a total of £125

There is no cost to you for this part. The only requirement is that you have paid at least as much Income Tax or Capital Gains Tax in the tax year as the basic-rate tax the charity will reclaim.

The hidden tax saving for higher earners

This is where Gift Aid becomes a genuine planning tool.

For higher-rate taxpayers, Gift Aid extends your basic-rate band by the gross value of the donation. That means an additional 20 per cent of tax relief comes back to you through your Self-Assessment return.

For additional-rate taxpayers, the relief is 25 per cent.

A worked example. A higher-rate taxpayer donates £1,000 to charity:

• The charity claims an extra £250, taking the total donation to £1,250
• The donor can claim back £250 of higher-rate tax relief through their tax return
• The net cost of the £1,250 donation to the charity is £750

For an additional-rate taxpayer, the net cost falls to around £687.50.

The £100,000 threshold benefit

Gift Aid is particularly powerful for anyone whose income sits in the Personal Allowance taper zone between £100,000 and £125,140.

A Gift Aid donation reduces your adjusted net income by the gross amount of the donation. That can bring you back below the £100,000 threshold and restore some or all of your Personal Allowance, on top of the standard higher-rate relief.

In some cases, this produces an effective tax saving of around 60p in the pound.

The same logic applies for parents affected by the High Income Child Benefit Charge between £60,000 and £80,000.

Other ways to give tax-efficiently

Gift Aid is not the only option. Depending on your circumstances, you may also benefit from:

• Payroll Giving – Donations are made before tax through your salary
• Gifts of shares or property – Relief from both Income Tax and Capital Gains Tax
• Legacy gifts in your will – Charitable gifts reduce your estate for Inheritance Tax and gifts of 10 per cent or more of your estate can reduce the IHT rate from 40 to 36 per cent

Keeping the right records

To claim higher or additional-rate relief, you will need to keep:

• Records of the date and amount of each donation
• Confirmation of the Gift Aid declaration
• Receipts from the charities where available

These details should be included on your Self-Assessment return.

If you are a regular donor to charity or are considering a larger gift, speak to us about making the most of Gift Aid. We can help you maximise the value of your donations to good causes and the relief available to you in the process.

Inheritance Tax (IHT) is rarely a popular topic, but with the nil rate band frozen at £325,000 since 2009 and house prices rising, a growing number of estates are being caught in the net.

One of the most useful (and most under-used) reliefs available is the normal expenditure out of income exemption, often known simply as “gifts out of regular income”.

Used properly, it can move significant sums out of your estate immediately, with no seven-year rule to worry about.

What is the exemption?

In most cases, gifts made during your lifetime are treated as Potentially Exempt Transfers (PETs). They only fall outside your estate for IHT purposes if you survive seven years from the date of the gift.

The normal expenditure out of income exemption works differently. Gifts that meet its conditions are immediately outside your estate, regardless of how long you live afterwards.

There is also no upper limit on the amount, provided three conditions are genuinely met. To qualify, a gift must satisfy all of the following:

1. It must be made out of your income, not capital
2. It must be part of a regular pattern of giving, or made with the clear intention of becoming so
3. It must leave you with enough income to maintain your usual standard of living

The “regular pattern” point is the one most people misunderstand. The gifts do not have to be identical amounts on identical dates, but they should follow a recognisable rhythm.

Monthly contributions to a grandchild’s school fees, annual gifts to children to support their pension contributions or quarterly payments into a trust are all common examples.

Why income, not capital, matters

The exemption applies only to gifts out of surplus income. This usually means:

• Salary or pension income
• Interest from savings
• Investment income such as dividends and rent

Withdrawing from an ISA or selling shares to fund a gift would generally be treated as a capital gift.

Done sensibly though, regular income (after tax and normal living costs) can be passed on year after year with no IHT liability.

The importance of evidence

On your death, your executors will need to demonstrate to HMRC (using form IHT403) that the gifts were genuinely out of income and part of a regular pattern.

The clearer the record, the easier that conversation becomes, but this is an area where many otherwise valid claims fail.

Good practice includes:

• A written statement of intent at the start of the gifting pattern
• A clear record of income and expenditure each year
• Bank statements showing the income source and the gift leaving the same account
• Evidence that your standard of living was maintained

We help clients set this up properly so the exemption holds up to scrutiny later.

Why it is worth doing now

With unspent pension funds set to be brought into IHT from April 2027 and the nil rate band frozen for years to come, more estates than ever are going to face a 40 per cent tax charge.

Using the exemption from regular income year after year is one of the most powerful but overlooked ways to bring that future IHT bill down.

If you have surplus income and would like to pass more of it to family or other beneficiaries while reducing your future IHT bill, please get in touch with us today. We will help you set up the exemption properly.

A salary increase should be cause for celebration, especially with the current cost of living stretching even the largest paycheques.

However, in reality, for a growing number of UK earners, hitting certain income thresholds can mean keeping less of every additional pound than they expected.

Frozen tax bands, the tapering of the Personal Allowance and the High Income Child Benefit Charge all combine to create some genuinely punishing effective tax rates.

If you have just had a pay rise or are hoping for one soon, it is worth understanding exactly where the tax traps are easily sprung.

The £100,000 cliff edge

The most punishing of all is the loss of the Personal Allowance for earnings between £100,000 and £125,140.

The Personal Allowance is the £12,570 of income you can earn tax-free. Once your adjusted net income passes £100,000, that allowance is reduced by £1 for every £2 of income above the threshold, which means by £125,140 it has gone entirely.

On every pound earned between £100,000 and £125,140, you lose 40 per cent in higher-rate Income Tax plus a further 20 per cent through the lost allowance, giving an effective marginal rate of 60 per cent. Throw in National Insurance and your rate of take home pay shrinks even faster.

The High Income Child Benefit Charge

If you or your partner claim Child Benefit, another trap kicks in once either of your individual incomes passes £60,000.

Between £60,000 and £80,000, Child Benefit is gradually clawed back through the High Income Child Benefit Charge. Above £80,000, it has been wiped out entirely.

For a family with two children, this can add the equivalent of an extra eight to 10 per cent of marginal tax to that income band.

Combined with higher-rate Income Tax and National Insurance, some parents face effective marginal rates of around 60 per cent on income they had assumed would simply boost the household.

Frozen thresholds are quietly making it worse

Most Income Tax thresholds have been frozen since 2021/22 and are due to stay frozen until at least 2031, but wages continue to grow as employers battle with inflation to retain the best talent.

That mismatch is what the Office for Budget Responsibility calls “fiscal drag”. Every year, more people are dragged into higher-rate tax, the Personal Allowance taper or the Child Benefit charge simply because their pay has gone up with inflation, while the thresholds have not.

If you were a basic-rate taxpayer a few years ago, a couple of routine pay rises may have quietly pushed you into a much higher effective rate. Whilst you may still take home more cash than before after tax, a larger proportion of your salary is being taxed.

What you can do

There are several ways to reduce your adjusted net income so that you can continue to benefit from each new pay rise:

• Pension contributions – Increasing personal or salary sacrifice contributions reduces taxable income.
• Gift Aid donations – Allows you to extend your basic rate band and reduce adjusted net income for the £100,000 threshold.
• Salary sacrifice for other benefits – Cycle to work schemes, electric vehicles and additional holiday are all forms of tax efficient benefit in kind to consider.
• Timing of bonuses – Where flexibility exists, deferring income across tax years can help, so where possible ask if you can delay bonuses or other performance related pay.

If you have had a pay rise or expect to cross one of these thresholds in the current tax year, get in touch. We can model your position and help you take home more of what you earn.

If you have moved cash into a higher-paying savings account over the last couple of years, you are far from alone.

With interest rates climbing, savers have been chasing better returns. The problem is that many are now being caught by an unexpected tax bill they did not see coming.

Recent figures suggest the average savings tax bill for higher-rate taxpayers has now reached more than £2,300 a year, with HMRC quietly clawing back tax through PAYE coding adjustments.

For additional rate taxpayers the figure is closer to £7,000. And changes to ISAs on the horizon are likely to make things worse.

Understanding the Personal Savings Allowance

The Personal Savings Allowance (PSA) lets you earn a certain amount of interest each year without paying tax. The thresholds are:

• £1,000 for basic-rate taxpayers
• £500 for higher-rate taxpayers
• £0 for additional-rate taxpayers

With a five per cent easy-access savings account, a basic-rate taxpayer hits the PSA limit on around £20,000 of savings. A higher-rate taxpayer hits theirs on just £10,000.

Beyond those points, every additional pound of interest is taxed at your usual Income Tax rate of 20, 40 or 45 per cent.

Why so many people are being caught out

There are three reasons for the rise in unexpected tax bills.

First, interest rates have climbed sharply since 2022, while the PSA has stayed frozen since it was introduced in 2016.

Second, frozen Income Tax thresholds mean more people are now in the higher-rate band, where the PSA is halved or removed entirely.

Third, HMRC collects the tax automatically for most savers by adjusting their PAYE tax code. The first many people know about it is when their pay packet shrinks the following year.

If you complete a Self-Assessment return, the obligation is on you to declare interest from all your accounts each year.

The looming ISA changes

ISAs remain the simplest defence against savings tax. Interest earned within an ISA is tax-free, does not count towards your PSA and does not need to be declared.

Proposed changes would reduce the annual Cash ISA limit from £20,000 to £12,000 for under-65s from 2027, with the difference only available through Stocks and Shares ISAs.

HMRC has also announced a new 22 per cent tax rate on uninvested cash in Stocks and Shares ISAs.

For younger savers building a cash buffer, that is a significant tightening. It is likely to push more people into taxable savings accounts and increase the number caught out by the PSA.

What you can do

A few sensible steps will go a long way:

• Use your full ISA allowance as early in the tax year as possible
• For couples, make sure you are using both partners’ PSAs through individual accounts
• Consider whether NS&I Premium Bonds, gilts or other tax-efficient products might suit
• Keep a running record of interest earned each year so nothing surprises you

For savers approaching or already in higher-rate territory, professional advice can make a meaningful difference to your net returns.

If you are worried about an unexpected savings tax bill or want to make sure your savings strategy is as tax-efficient as possible, get in touch with our team. We will help you protect more of what you have worked hard to save.