Hello everyone,

With the arrival of autumn we have the Budget to look forward to in November, tax returns to complete and MTD to prepare for and an update on our cycle ride last weekend. As ever, if there are any questions please do get in touch.

Kind regards, 
Simon

Autumn Budget – the Budget is set for 26 November 2026 and as ever there are numerous rumours circulating as to what may be in the Budget. Given the current economic outlook and state of government finances, there is not likely to be a lot of good news for individuals and businesses as it is anticipated there will be tax rises to fill some of the fiscal shortfall.

At this stage we can only speculate as to what may be in the Budget. Due to election promises there are unlikely to be any changes to income tax and employee national insurance although allowances and tax rate bands will remain unchanged. Capital gains tax is rumoured to be under review with a possibility of changes in rates or scope with limitations on private residence relief and outside possibility. In addition to current proposed inheritance tax changes, there are suggestions on a review of gift reliefs and the 7 year rule and removal of the residence nil rate band. Given the current cost of pension tax reliefs, it is likely that some changes are being consider however the challenge government has is how to raise money without discouraging savings.

As we cannot predict what will be in the budget, the best approach may be to continue to make full use of existing reliefs and allowances (e.g., ISAs and pensions), if you are planning  any actions in the current tax year that could be impacted by the Budget then it may be worth completing them prior to Budget day.

Inheritance Tax – there are already two major changes to IHT due to come in, in 2026 there will be significant reductions in the availability of business and agricultural property reliefs with 100% relief limited to the first £1m and then in 2027, unused pension funds will be included in estates.

Some people may have been relying on a combination of business and agricultural property reliefs and exemption for unspent pensions to reduce their exposure to IHT to a minimal or acceptable amount, this may no longer be the case. Many will have taken the view that IHT was not something that they need to consider, however with the changes coming in and the continued freeze in the nil rate band, IHT will affect more people in the next couple of years.

Do you know what you are worth? It may be more than you think and so you may be within the charge to IHT already or when pension assets come within the net in April 2027. So what can be done  to mitigate potential IHT charges? The starting point is to review your assets so you know the scale of the issue and can then consider what to do (if anything). In the next newsletter we will consider options and possible steps to protect your wealth.

Tax returns – we would ask that clients continue to send in their tax return and accounts details as soon as they are available and by no later than 30 September. We are aiming to complete all tax returns by 30 November 2025 this year so help us to achieve this target by sending in your papers once they are ready.

Making tax digital for income tax starts in April 2026 for those with combined trading and rental income over £50,000 in the 2024/25 tax return. So once your tax return is completed for last year, you will know whether you are within the MTD reporting rules for next year. For anyone not already using software for record keeping, the sooner you make the transition the more prepared you will be for the upcoming changes. Please speak with us to discuss your options.

Annual Leave
We shall be away from the office from 25 September to 7 October. We may not have regular internet access but will be checking emails from time to time and respond to urgent matters as necessary.

Annual Cycle Ride for Building Better Futures International update
We completed our annual Cycle ride for BBFI at the week-end and luckily most of the day was dry. We visited 27 churches and covered a little over 30 miles in all.

BBFI works in Tamil Nadu, Southern India to help marginalised women living in rural villages by providing training and education to enable them to support themselves and their children. Training is provided for tailoring, hand loom weaving and animal husbandry as well as providing tuition centres for local children which transforms their educational results.

For more information on the work of this charity see Building Better Futures International. If anyone would like to sponsor us please do get in touch or visit the website to donate.