Author Archives: accounts

Seven million people started new jobs in 2025

New figures published by HMRC show that more than 7 million people started a new job in 2025, an increase of around 300,000 compared with the previous year. The announcement also highlights the growing number of people moving into new roles or careers.

According to HMRC, the spring months are the busiest period for recruitment. In 2025, more than 1.8 million people began new jobs between April and June.

HMRC is encouraging jobseekers and those starting a new role to download the HMRC app, which provides quick access to essential employment and tax information. The app allows users to view details that employers often request when someone starts a new job, including their National Insurance number, employment and income history, tax code and PAYE records such as a P60.

The app had more than 2.7 million new users in 2025. Among the most frequently used features are the ability to download a PAYE employment history, access a digital National Insurance number and use a tax calculator to estimate how much tax is paid on salary.

HMRC’s Chief Customer Officer, said:

“Applying for a job or starting a new job can be hard work in itself. But the HMRC app provides you with handy access to everything you need to make the admin side of things a little easier – especially important for young people who may not know what information an employer requires. Download the HMRC app to save yourself some time and stress and avoid those first day jitters.”

Source:HM Revenue & Customs | 09-03-2026

Tax allowances frozen for 2026-27

It was confirmed as part of the Autumn Budget that the Income Tax thresholds will continue at their current levels for a further three years, extending the freeze until April 2031. This means that most tax allowances are to remain frozen for 2026-27 and beyond.

As a result, the personal allowance will stay at £12,570, while the higher rate threshold will remain at £50,270 for taxpayers across most of the UK (with different thresholds applying in Scotland). National Insurance thresholds will also remain fixed over the same period.

Keeping these thresholds unchanged means that many taxpayers will gradually pay more tax as their earnings increase over time. This effect, commonly known as fiscal drag, occurs when wages rise but tax bands do not. As incomes grow due to inflation or pay increases, a larger portion of earnings becomes taxable, and more people move into higher tax brackets.

In practical terms, the continued freeze is likely to push increasing numbers of taxpayers into the 40% higher rate band and, for some, the 45% additional rate band. Others who previously earned below the personal allowance may also begin paying Income Tax for the first time. Although tax rates themselves remain unchanged, the overall tax burden rises as more income becomes subject to tax.

Fiscal drag is influenced by several factors, including government policy on tax thresholds, inflation levels and wage growth. In periods of rising wages or high inflation, the impact of frozen thresholds becomes more pronounced. For taxpayers the impact of fiscal drag effectively operates as a stealth tax over time.

Source:HM Revenue & Customs | 09-03-2026

Changes to the calculation of Income Tax

A number of changes to the taxation of dividends, property income and savings income were announced in the Autumn Budget 2025. These measures will affect the rates at which different types of income are taxed and will be introduced in stages over the next few years.

From April 2026, the tax rates applying to dividend income will increase by 2%. The ordinary dividend rate will rise to 10.75%, while the upper dividend rate will increase to 35.75%. The dividend additional rate and the dividend trust rate will remain unchanged at 39.35% as will the dividend allowance at £500.

Further changes will apply from April 2027. Income Tax rates on both property income and savings income will increase by 2%. For the 2027–28 tax year, property income will be taxed at 22% (basic rate), 42% (higher rate) and 47% (additional rate). Savings income will also be taxed at the same rates.

Alongside these rate changes, the government is also reforming how Income Tax is calculated by altering the current ordering rules that determine the calculation of Income Tax. Under the current system, savings and dividend income are treated as the highest part of an individual’s income. Most other income, such as employment, pension or trading income, is grouped together as “non-savings, non-dividend income” and taxed first.

Under the new rules, the revised order of taxation will be:

  1. Income that is not property, savings or dividend income
  2. Property income
  3. Savings income
  4. Dividend income

These changes to the calculation of Income Tax are intended to better reflect the different nature of income sources and ensure the new tax rates for property, savings and dividends operate as intended.

Source:HM Revenue & Customs | 09-03-2026

Increase in company late filing penalties

After the end of its financial year, a private limited company must prepare full annual accounts and submit a company tax return. In most cases, the tax return must be filed within 12 months of the end of the accounting period it covers, and filing must be completed online.

There are penalties for the late submission of company tax returns. The filing penalties will increase for company tax returns where the filing date falls on or after 1 April 2026.

The penalties are designed to encourage companies to file their Corporation Tax returns by the required deadline. Fixed penalties for late filing were originally set in 1998 and have remained unchanged since then. Over time, inflation has significantly reduced the real value of these penalties and therefore their deterrent effect. In real terms, the penalties are now worth roughly half of what they were when first introduced.

The increase in company late filing penalties will see the doubling of fixed penalties. From 1 Apri 2026, a return that is filed late will attract a penalty of £200 instead of the current £100. If the return is more than three months late, the penalty will increase to £400, compared with the current £200. Higher penalties will continue to apply where a company repeatedly files late returns. Where there are three successive failures to file on time, the penalty will increase from £500 to £1,000, and where the return is more than three months late after three consecutive failures, the penalty will rise from £1,000 to £2,000.

Ensuring that company tax returns are submitted on time will help companies avoid unnecessary penalties and additional compliance costs.

Source:HM Revenue & Customs | 09-03-2026

Accelerate Return on Investment

The speed with which a business can achieve a return on investment is often just as important as the size of the return itself. When investments begin generating benefits quickly, the financial impact can be felt much sooner, improving cash flow and strengthening overall business resilience.

In periods of economic uncertainty, including times when input costs such as energy, materials, or finance are rising, faster payback periods become particularly valuable. Projects that recover their costs quickly reduce risk because the business is exposed to changing economic conditions for a shorter period of time. Once the initial investment has been recovered, any continuing savings or additional income effectively becomes a financial gain.

For example, many energy efficiency improvements such as LED lighting, improved heating controls, or better insulation can often pay for themselves within a relatively short period. After the initial costs have been recovered, the continuing reduction in energy bills becomes a direct improvement to profitability.

A faster return on investment can also free up capital for further improvements. Once the first project has repaid its cost, the savings generated can be reinvested into other efficiency measures or growth opportunities.

For business owners, this highlights the importance of prioritising investments that deliver early financial benefits. Quick wins not only improve profitability but also create momentum for further improvements across the business.

Source:Other | 08-03-2026