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AI and the future of work: why healthcare remains resilient

As artificial intelligence becomes embedded in everyday business activity, many clients are asking how it might affect their industry and long term prospects. While some sectors face significant disruption, healthcare and social care stand out as the most resilient major industry as AI develops.

The core reason is demand. Healthcare is driven by long term demographic trends rather than technology cycles. An ageing population, rising life expectancy and an increase in long term and chronic conditions mean that demand for medical and care services continues to grow steadily. This underlying pressure alone limits the scope for workforce reduction, even where productivity improves.

AI is already playing an important role in healthcare. Diagnostic support tools, medical imaging analysis, appointment scheduling, triage systems and clinical note drafting are becoming increasingly common. However, these technologies tend to support professionals rather than replace them. Clinical decisions still require judgement, context and accountability, all of which remain firmly human responsibilities.

Much of the value delivered in healthcare and social care is also relational. Patients need explanations they can understand, reassurance at stressful moments and ongoing support rather than one off interventions. In social care in particular, the service is inseparable from human presence. While technology can assist with monitoring and coordination, it cannot replicate empathy, trust or personal interaction.

In short, while AI will reshape how healthcare operates, it is far more likely to change how people work than to remove the need for them.

Source:Other | 01-03-2026

Meaning of trade for tax purposes

The meaning of trade for tax purposes, often referred to as HMRC’s “badges of trade” test helps determine whether an activity is a genuine business or simply a personal hobby. While the test is not definitive, it provides important guidance on how HMRC views different activities. At some point, what starts as a hobby may evolve into a taxable trade. Understanding this distinction is important in order to assess whether an activity has become commercial in nature, meaning it could be subject to tax.

As part of their investigation into whether a hobby has evolved into a trade, HMRC typically examines the following badges of trade:

Profit-seeking motive
The number of transactions
The nature of the asset
The existence of similar trading transactions or interests
Changes made to the asset
The manner in which the sale was carried out
The source of finance used
The interval of time between purchase and sale
The method of acquisition

It is important to note that there is no statutory definition of the term ‘trade.’ The only statutory clarification available is that ‘trade’ includes a ‘venture in the nature of trade.’ As a result, it is the courts that have provided a definition of what constitutes a 'trade,' and these decisions serve as a framework for guiding HMRC's assessments when disputes arise.

The badges of trade have proven to be valuable indicators in numerous cases, providing practical guidance in distinguishing between a hobby and a taxable trade or business.

Source:HM Revenue & Customs | 23-02-2026

Which supplies are zero rated for VAT?

Understanding which supplies are zero rated for VAT is essential for any business. A zero-rated supply is still a taxable supply, but it is charged at a 0% VAT rate. This distinction is important because VAT incurred in making a taxable supply can still be recovered. Therefore, a business that only makes zero-rated supplies can register for VAT in the usual way, allowing it to reclaim VAT on costs associated with producing these supplies, many of which may have been charged at the standard 20% rate.

Businesses that sell zero-rated supplies are often in a repayment position with HMRC, meaning they can recover the VAT they have incurred on purchases without having to charge VAT on their sales. This can provide a cash flow advantage, especially for businesses with high input costs relative to their zero-rated sales.

Some common examples of zero-rated supplies include:

Books and newspapers (including electronic versions)
Women’s sanitary products
Children’s clothes and shoes
Motorcycle helmets
Most goods exported from England, Wales, and Scotland to countries outside the UK
Most goods exported from Northern Ireland to countries outside the EU and UK
Goods supplied from Northern Ireland to a VAT-registered EU business (VAT number must be valid)

Source:HM Revenue & Customs | 23-02-2026

Tax effects of letting out part of your home

If you have tenants living in your property, it is important to understand the Capital Gains Tax (CGT) implications. In most cases, there is no CGT to pay when you sell a property that has been your main residence, as the gain is covered by Private Residence Relief (PRR). However, if you have let out part of your home, your entitlement to full PRR may be restricted.

However, you may be entitled to letting relief, provided you lived in the property at the same time as your tenant. Letting relief is only available where there has been shared occupation between homeowner and tenant.

The maximum letting relief available is the lower of £40,000, the amount of PRR due, or the gain attributable to the part of the property that was let. For example, if you rented out a large bedroom representing 10% of your home and later sold the property at a gain of £75,000, you would qualify for PRR on 90% of the gain (£67,500). The remaining £7,500 would relate to the let portion. As this is lower than both £40,000 and the PRR due, the full £7,500 would qualify for letting relief. In this scenario, the entire £75,000 gain would be covered by PRR and letting relief, meaning no CGT would be payable.

You are not considered to be letting out your home if you have a lodger who shares living space with you. Also, if children or parents live with you and contribute towards household expenses, this is not normally treated as a formal letting for CGT purposes, and full PRR is likely to remain available.

Source:HM Revenue & Customs | 23-02-2026

When not to charge VAT

When issuing invoices, it is important to apply the correct VAT treatment. In some cases, that means not charging VAT at all. Although most UK businesses charge VAT at the standard rate of 20%, there are other rates and categories that may apply. Understanding these distinctions can help you avoid costly errors and penalties.

In addition to the 20% standard rate, there is also reduced VAT rate (5%) and a zero VAT rate (0%). Even though zero-rated supplies are charged at 0%, they are still within the VAT system and must be recorded correctly on your VAT return.

There are two main categories where VAT is not charged: exempt supplies and supplies that fall outside the scope of VAT. Although no VAT is charged in either case, the rules and reporting requirements are different.

Exempt supplies are goods or services on which no VAT is charged. Common examples include insurance, postage stamps and health services provided by doctors. If your business only makes exempt supplies, you cannot register for VAT and you are not able to reclaim VAT on your business costs.

Supplies that are outside the scope of VAT fall completely outside the UK VAT system. In these cases, VAT cannot be charged and VAT on related costs cannot usually be reclaimed. Examples of supplies outside the scope include goods or services bought and used outside the UK, statutory fees such as the London Congestion Charge and goods sold as part of a private hobby.

If VAT has been charged incorrectly, the error must be corrected. The process for doing so depends on the amount involved and when the mistake occurred. Acting promptly can minimise disruption and potential penalties.

If you are unsure whether VAT should be charged on a particular supply, we would be happy to help guide you on this issue.

Source:HM Revenue & Customs | 23-02-2026