WELCOME TO HARBOUR KEY'S FEBRUARY 2025 E-NEWSLETTER
Congratulations to our compliance team who successfully filed all our client’s self-assessment tax returns ahead of the 31 January filing deadline. Every year we comment on how each year is getting tougher and tougher and this year was no different. The pressure is firstly caused by the increase in the number of individuals who need to file returns, together with the level of complexity, and then the provision of information being left to the last month. It does always seem to be the usual suspects who are late year after year………………………
Figures released by HMRC show that the number of returns filed on time was slightly down from 2022-23, with 11,509,810 returns received on time down from 11,581,962 in the previous year. However, HMRC can still raise around £110m from recalcitrant taxpayers with 9.5% of liable individuals missing the 31 January deadline. The number of people who filed their return on deadline day was 732,498, with the most common time being 16:00 to 16:59 when 58,517 people filed. 31,442 left it to the very last-minute filing between 23:00 and 23:59.
Late payment interest charges, and penalties will arise if you don’t make the required tax payment. There is a 5% surcharge calculated on the tax unpaid at the end of February, and further charges at six months and 12 months. We would advise that if you have made the payment, you check you tax account to make sure HMRC have allocated correctly, or your bank made the payment, as Barclays had an IT outage on 31 January, resulting in customers not being able to make any payments. HMRC has assured customers affected by the Barclays Bank outage that they will not incur fines for late tax payments due to the IT glitch. If you can’t make a payment, you need to contact HMRC asap for a payment plan.
HMRC ENQUIRIES RAISE £46bn
According to analysis by law firm Pinsent Masons, the tax office raised £45.7bn from tax investigations, a 28% rise from the £35.7bn recorded the previous year. HMRC is investing more in enquiries and compliance check work and plans to invest £1.6bn over five years to recruit additional compliance and debt management staff. The findings come as no surprise to team HK, as we have seen a significant increase in compliance checks, enquiries, nudge letters, with the increasing power of HMRC information gathering Connect IT software.
We have provided aSUMMARY of the areas where we believe HMRC will pay particular interest in 2025.
With the increase in the risk of an enquiry or compliance check, our best advice is that consideration be given to taking out tax investigations fee services, if a policy is not already in place, for example via membership of a professional organisation like The FSB, or via a legal expenses insurance policy. We can arrange cover with Professional Fee Protection Limited, details of which can be found HERE.
PRE TAX YEAR PLANNING
As we finish reporting the 2024 tax year, the end of the 2025 tax year approaches. Now is a good time to consider your financial position and check whether you have taken full advantage of the tax reliefs and exemptions that are available, as well as prepare for the new tax year (you have less than two months). We will be contacting our corporate clients with a 31 March year-end to consider any corporate planning, which will also be a good opportunity to catch up.
The October Budget announced several tax changes, some of which take effect 6April 2025, for example the business asset disposal relief rate increases from 10% to 14%, or the changes in the thresholds on which stamp duty land tax is payable.
Please note our planning checklist which is intended to provide a guide to the opportunities that we believe may be worth considering. There are many tax-saving measures available and steps that can be taken to improve your tax position, without significant effort. We have listed some planning points to consider which may help reduce your taxes for this tax year (ending 5 April) or prepare for the next, if implemented now. The impact of taxation is only one element in looking at your financial planning, you should also be considering such issues as your savings, investment performance and succession planning. Always take professional advice when deciding your tax planning or investment strategy using a FCA regulated financial adviser.
TAX PLANNING CHECKLIST 2025
WANT TO BE AN ANGEL INVESTOR IN A CYBER SECURITY BUSINESS?
Gloucestershire is a hotbed for the UK's cybersecurity sector, built around the Government’s GCHQ being based in the county. CyNam, the Gloucestershire-focused cyber and tech network is calling on potential investors, entrepreneurs and stakeholders to fund and support early stage emerging technology businesses in the county.
There is risk investing in early-stage business, but this risk can be mitigated if the company, and your investment qualifies for one of the Government approved tax relief schemes, for example the Enterprise Investment Scheme (EIS). More details to these tax efficient reliefs can be found in our Tax Planning Checklist.
Anyone interested, please contact us and we can connect you with CyNam.
DATES FOR YOUR DIARY
- Key Tax dates for the period 1 February 2025 to 31 December 2025;
- 26 March 2025 - Spring Fiscal Statement.
Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call on 01452 713277
