Further freeze of income tax bands

The Chancellor may consider extending the current freeze on Income Tax bands, increasing the income tax burden on many in future years.

If total annual income is close to tax band limits, consider possible actions each tax year to keep income below a higher tax band rate.

• Make personal pension contributions

• Give to charity using charitable Gift Aid

• Consider whether income can be tax free

• Change investment income to capital growth

• If self-employed consider whether incorporation suits

• If owner/director consider remuneration options from the company

Other actions to consider

• Pay bonuses prior to Budget to secure the current national insurance rates

• Consider the mix of salary, dividend and pension for director/shareholders

• Bonus waivers – These are arrangements where an employee agrees to forgo a bonus, they are entitled to in lieu of it being invested in their pension.

• Tax advantaged employee plans can deliver value to employees based on future share price growth, while mitigating income tax and national insurance payable through participation for the employee and employer. 

• If based in Scotland, consider the impact of the heightened Scottish rate bands as regards earned income when reviewing the stated points above.

Documents for your clients and prospects

Pdf             Self-employed flyer           Word          Self-employed flyer

Pdf.            Company flyer                  Word          Company flyer

ProActivTax software and resources that can help

RemReview software

Pension Allowance

BizReview software

Use one of our panel of experts

Restrictions on pensions

There are a number of ways the Chancellor could attack pensions.

• The tax free lump sum available to take out of pensions could be reduced or abolished increasing the amount of of tax due when cashing in pensions,

• The lifetime limit on pension values could be reintrdouced thereby bringing back a tax charge for high value pension pots.

• Tax relief on pension contributions could be restricted or withdrawn reducing the benefit of paying contributions into a pension.

• National Insurance Relief on employer contributions could be abolished. 

Possible actions to consider

• Seek independent financial advice taking into account the current value of pension pot.

• Depending upon current value of pension pot, consider making pension contributions (personal or employer contributions) up to annual maximum prior to Budget to secure tax relief at today’s rates.

• If over pensionable age, consider options in respect of pension pot, and whether to start taking funds out. We would strongly recommend talking to your independent financial adviser int his respect, and consider the tax implications of the options reviewed. 

Documents for your clients and prospects

Pensions in overview

ProActivTax software and resources that can help

RemReview software

Pension Allowance

Use one of our panel of experts

Individual Savings Accounts (ISA’s) may be restricted

ISA's may be restrticted reducing the amount which can be invested each year or the beneficial accounts could be completely withdrawn stopping any future contributions.

• Where possible open / pay contributions up to maximums into ISAs

• If not already in place, consider if Lifetime ISA’s and junior ISA’s could be of benefit.

Documents for your clients and prospects

Pdf            ISA flyer               Word         ISA flyer

Capital Gains Tax rate increases

Possible Capital Gains Tax rate increases, restriction or withdrawal of tax reliefs

• If looking to sell assets, then consider bringing sale forward prior to the 2025 Autumn Budget to secure the disposal at the current rates of tax and reliefs. The date the sale becomes irredeemable, or contracts exchanged is the date of disposal.

• If looking to transfer a business to a company, then consider incorporating the sole-trader or partnership business prior to Budget.

• Consider selling business to an Employee Ownership Trust. If correctly set up no capital gains tax will arise.

ProActivTax software and resources that can help

BizReview software

Incorporation system

Use one of our panel of experts

Stamp duty loophole closures / reliefs tightened or withdrawn

• If buying property, then you may wish to consider completing the purchase prior to the budget to ensure the purchase is made using the current rates and reliefs.

• Look to see if the Stamp Duty Land Tax (SDLT) surcharge/Land Transaction Tax (LTT) Higher Rate Charge can be avoided – for example if buying 6 or more residential properties or an unmarried couple and only one owns another residential property or the property is of mixed use or the property is deemed to be uninhabitable.

• As regards the SDLT surcharge/LTT Higher Rate Charge make the client aware that if they sell the previous main residence within 36 months of acquiring the new one you can help them reclaim the surcharge back.

• Look to see if the overall LTT charge (Wales) can be mitigated by claiming Multiple Dwellings Relief (MDR) where the transaction involves the purchase of more than one dwelling in a single or linked transaction.

• Look to see if the overall Land & Buildings Transaction Tax (LBTT) charge (Scotland) can be mitigated by claiming Multiple Dwellings Relief (MDR) where the transaction involves the purchase of more than one dwelling in a single or linked transaction.

• As regards the LBTT ADS make the client aware that if they sell a residential property which had been a main residence of theirs within the 36 months before acquiring the new one and they subsequently sell it within 36 months post the new acquisition, you can help them reclaim the supplement back. This ’36 month period is reduced to 18 months if the new main residence was acquired before 1^st April 2024.

ProActivTax software and resources that can help

Property Tax Reclaim Resource

Tax specialist

Increase in National Minimum Wage

• Make clients aware of the current NMW rates and new rates once announced in the Budget

• Make clients aware of the penalty implications and the NMW pitfalls such as training time, uniform costs, travel time, bonuses and tips for example

• Offer a NMW review service

How ProActivTax can help

Watch our NMW webinar. Please ask for a special viewing of the latest webinar.

Consider transferring your payrolls to UK based payroll provider introduced through ProActivTax.

Inheritance Tax – Agricultural Property Relief (APR) and Business Property Relief (BPR) restrictions from April 2026, with a new £1 million limit

• Carry out an IHT review factoring in the APR / BPR restrictions to see the impact this might have on the IHT position from April 2026 and start planning early.

Explore options including transfer into trust, gift holdover relief elections, reorganising the ownership between spouses/civil partners, growth shares; restructuring the business, maximising IHT reliefs on other assets e.g. using the annual IHT exemption, regular gifts out of income, making use of the 7-year rule, SEIS/EIS share investment (subject to taking qualified IFA advice).

Review existing wills.

Couples could consider transferring assets between spouses to maximise use of the new £1 million limit, which itself is not transferable.

Documents for your clients and prospects

Pdf   Inheritance Tax             Word Inheritance Tax

ProActivTax software and resources that can help

ARQ-Pro software

TaxBoost software

IHT System

Tax specialist

From April 2026 the rate of Business Property Relief (BPR) on qualifying Alternative Investment Market (AIM) shareholdings will reduce from 100% to 50% on all holdings.

From April 2026 the rate of Business Property Relief (BPR) on qualifying Alternative Investment Market (AIM) shareholdings will reduce from 100% to 50% on all holdings.

• Review investments with your independent financial adviser and consider implications and whether changes are necessary and possible. Care is needed to make sure that actions aren’t taken to save Inheritance Tax at the expense of other things such as return on investment.

• Explore options including transfer into trust, gift holdover relief elections, reorganising the ownership between spouses/civil partners, growth shares; restructuring the business, maximising IHT reliefs on other assets e.g. using the annual IHT exemption, regular gifts out of income, making use of the 7-year rule, SEIS/EIS share investment (subject to taking qualified IFA advice).

• Review existing wills

Documents for your clients and prospects

Pdf   Inheritance Tax             Word Inheritance Tax

ProActivTax software and resources that can help

ARQ-Pro software

TaxBoost software

IHT System

Tax specialist

IHT – Pensions brought into the IHT net from April 2027

• Review existing wills.

• Carry out a IHT review factoring in estimated pension values to see the impact pensions might have on the IHT position from April 2027 and start planning early.

• After taking qualified IFA advice, consider taking the tax-free lump sum and gifting it away to start the 7 year clock going.

• Consider implications of recent announcements, especially death in service benefits.

Documents for your clients and prospects

Pdf   Inheritance Tax             Word Inheritance Tax

ProActivTax software and resources that can help

ARQ-Pro software

TaxBoost software

Tax specialist

Business Asset Disposal Relief (BADR) rate increases to 18% in April 2026

• Consider incorporating sole-trader or partnership business prior to April 2026

• Plan to sell / exit business before April 2026

• Consider selling to an Employee Ownership Trust. If correctly set up no capital gains tax will arise.

ProActivTax software and resources that can help

Biz Review software

ARQ-Pro software

Incorporation system

Tax specialist

Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is going ahead

From April 2026 with turnover in excess of £50,000.

From April 2027 turnover in excess of £30,000 will be caught by MTD-ITSA rules.

From April 2028 turnover in excess of £20,000 will be caught by MTD-ITSA rules.

• As 2024/25 tax year figures are the starting point, carry out an MTD review of all those clients who may be affected and offer an MTD review.

• Factor in any considerations regarding the impact of the tax year basis of assessment

• Look at the feasibility of incorporation or creating a partnership. MTD for companies is no longer happening. The date for MTD for partnerships has not yet been announced.

ProActivTax software and resources that can help

BizReview

Making Tax Digital Hub

Basis period reform Resource

Incorporation system

Price MTD services using EffectivePrice

Manatory payrolling of benefits 

Mandatory payrolling of most benefits will be introduced from April 2027, although employers can start earlier. Employment related loans and accomodation are not initialy part of the mandatory obligations, although employers can voluntary include them.

• Review employer clients where you already prepare P11D submissions, consider the implications of the changes and prepare your clients.

• Review employer clients who may also be affected and promote your payroll services, including the mandatory payroll submissions.

ProActivTax software and resources that can help

Consider outsourcing payroll through ProActivTax panel.

Price payroll services using EffectivePrice