Tax Services Archives

Tax Defaulting in Croydon: HMRC’s Crackdown on Non-Compliant Businesses

Posted on 6 April 20266 April 2026 by Farazia Gillani

Tax defaulting in Croydon has moved back into focus following an update to HM Revenue & Customs’s (HMRC) “current list of deliberate tax defaulters” on GOV.UK. The list was updated on 26 March 2026 and publishes details where HMRC has charged penalties for deliberate defaults involving more than £25,000 of tax and where the taxpayer did not secure the maximum penalty reduction by fully disclosing the defaults.

In the latest publication, several entries are linked to Croydon addresses, including a BOXPARK-linked food business: WTP Croydon Ltd (formerly trading as What the Pitta). HMRC’s published figures for that entry show £146,629.43 of tax on which penalties were based and a £64,150.37 penalty for a period of default from 1 July 2017 to 31 January 2023.

HMRC’s deliberate defaulters list really means

HMRC’s deliberate defaulters publication is not a general “late payment” list. It is a specific legal regime that allows HMRC to publish identifying details after an investigation, after deliberate-default penalties are charged, and once those penalties are final (for example, once an appeal window has passed, an appeal is determined, or a contract settlement is agreed).

Publication is permitted where the penalties involve tax of more than £25,000 and the person did not achieve the maximum reduction available through full disclosure. In other words, disclosure behaviour matters: people can keep their details off the list by cooperating and fully disclosing from the outset of a compliance check.

A few points that are easy to miss but crucial for reading the list correctly:

Addresses are time-specific. HMRC explicitly warns that the address shown is the one associated with the person or business at the time of the default—and that current occupants at that address may have no connection to the published person/business.
The figures are not “total debt”. HMRC notes the amounts shown relate to the tax/duty on which penalties are based, and the list “does not necessarily represent the full default of the taxpayer”.
Publication is time-limited. Details remain on GOV.UK for a maximum of 12 months, with HMRC typically reviewing and updating the list quarterly to keep within that legal limit.

HMRC also makes clear that the list itself is time-bounded and not archived for the National Archives, reinforcing that it is designed as a deterrent mechanism rather than a permanent record.

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Tax defaulting in Croydon – The BOXPARK case study

The BOXPARK-linked entry matters because BOXPARK is not just another high street unit—it is a highly visible venue. BOXPARK Croydon was developed as a container-based food and drink destination beside East Croydon station, with the council publicly backing the regeneration narrative around a “gateway” location.

Council-backed launch and funding context

Croydon Council published its intention to support bringing a Boxpark marketplace to Ruskin Square, explicitly describing the stripped and refitted shipping-container design and the aim of creating a year-round events courtyard.

A council key-decision document (April 2015) records approval of a £3,000,000 loan to support delivery, alongside references to a programme of council-backed activity and operational support (including a five-year pop-up programme and a viability grant).

Later local reporting also describes the council redirecting an “Ambition Festival” budget towards BOXPARK-related launch/event activity and refers to additional subsidies in the first years of operation.

Vendor pressures in the early years

It is important to separate venue trading conditions from tax conclusions. HMRC’s listing is about deliberate defaults and closed penalty positions; it does not, by itself, explain why a business got into difficulty or how cash flow was managed.

That said, contemporary reporting from 2018–2019 describes pressure points commonly faced by street-food operators in container venues: significant fixed costs, footfall volatility, and churn among traders. For example, one report described monthly rents and service charges totalling £2,750 (£2,000 rent plus £750 service charge) for a trader at the time and noted a sharp reduction in listed outlets between late 2016 and early 2018.

A later report quoted tenants discussing typical combined rent/service-charge costs of around £3,000 per month (plus electricity), alongside complaints about footfall and event-day disruption.

Croydon entries on the HMRC list updated 26 March 2026

The table below summarises the Croydon-linked (address-associated) entries visible on HMRC’s current list updated 26 March 2026, including the BOXPARK-linked takeaway and other sectors (commercial vehicle sales, property development, care, and property income).

Listed name (as published by HMRC)	Trade/occupation (HMRC description)	Address context (HMRC wording)	Period of default	Tax on which penalties are based	Penalty charged	Penalty as % of tax (calculated)
WTP Croydon Ltd (formerly trading as ‘What the Pitta’)	Takeaway	Formerly of Unit 9, Boxpark, 99 George Street, Croydon, CR0 1LD	1 Jul 2017 to 31 Jan 2023	£146,629.43	£64,150.37	~43.8%
J-Mech Waste Solutions Ltd	Commercial vehicle sales	Formerly of 93 Southbridge Road, Croydon, CR0 1AJ	1 Mar 2022 to 30 Sep 2022	£598,945.00	£568,997.75	95.0%
Lionwood Ltd	Building developer	Formerly of 29 Banstead Road, Purley, CR8 3EB	1 Aug 2023 to 31 Dec 2023	£50,258.21	£42,719.45	~85.0%
Leiston Old Abbey Ltd	Residential care home	Formerly of 4 Arkwright Road, Sanderstead, CR2 0LD	1 Apr 2019 to 31 Mar 2021	£44,410.75	£31,087.52	~70.0%
Maria Jose De Souza Campos	Property income	Formerly of 31 Hardcastle Close, Croydon, CR0 6XQ (and another address)	6 Apr 2017 to 5 Apr 2020	£34,940.40	£20,178.06	~57.8%

Two practical cautions are worth repeating when an address is high-profile (like BOXPARK):

HMRC states that the address is the one associated at the time of the default, and current businesses trading at the same site may be unrelated.

Underpaid tax, penalties, and what the published figures do not tell you

The “nearly £150k” framing seen in local discussion is consistent with the published tax figure for WTP Croydon Ltd: £146,629.43 is close to £150,000, and that can be enough to trigger strong public reaction because publication is designed to deter deliberate non-compliance.

But there are three important technical limits to what you can conclude from the published table:

HMRC Publishes Only the Tax and Penalty Figures

HMRC releases two key numbers in each entry:

The amount of tax or duty on which the penalty is based
The penalty charged by HMRC

However, the list does not explain the underlying issue. For example, it does not state whether the case involved the following:

VAT underpayments
Corporation Tax errors
PAYE or payroll failures
A combination of several tax issues

This means the published entry gives only a financial snapshot rather than a detailed narrative of the compliance failure.

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The Published Tax Figure May Not Reflect the Full Default

Another important clarification is that the amount labelled as “tax” in the list does not necessarily represent the total liability discovered during HMRC’s investigation.

HMRC explicitly notes that:

The figures shown relate only to the tax on which the penalty calculation is based.
The actual amount owed to HMRC may be higher.
Additional liabilities may have been settled separately during the investigation process.

Because of this, readers should not assume that the tax figure shown equals the full underpayment identified in the case.

Penalty Percentages Can Vary Widely

The relationship between the tax amount and the penalty can differ significantly across cases.

For example, Croydon-linked entries on the March 2026 list show penalties ranging from around 44% to 95% of the tax involved.

This variation occurs because HMRC calculates penalties based on several factors, including:

The behaviour of the taxpayer (careless vs deliberate actions)
Whether the taxpayer disclosed the issue voluntarily
The level of cooperation during the investigation
The timing of disclosure and corrective action

Businesses that make an early disclosure and cooperate with HMRC often receive lower penalties and may avoid public naming altogether.

If you are checking the list for due diligence (suppliers, landlords, franchise partners), here is the approach we recommend in practice:

Treat the list as a risk flag, not a complete case file.
Cross-check publication timing. HMRC only keeps details up for 12 months and updates regularly (often quarterly). A person may disappear because the legal time limit expired, not because the situation “improved”.
Remember there is no right of appeal against the decision to publish (separate from appeal rights on tax/penalty decisions), so the correct moment to manage exposure is early—before penalties become final and publication criteria are met.

How We Help Businesses in Croydon Stay Tax Compliant

At Apex Accountants, we help Croydon businesses reduce the risk of painful compliance surprises and reputational damage.

We typically support clients with:

Tax compliance health checks (VAT, PAYE, and CIS where relevant) to spot weaknesses before HMRC does.
Bookkeeping clean-ups so returns are supported by reliable records and the right evidence trail.
Disclosure support where errors are discovered, focusing on early, complete, and well-structured disclosure in line with HMRC expectations.
Penalty and appeal support by working with your legal/tax advisers on the evidence and timeline behind HMRC decisions (especially where deliberate behaviour is alleged).
Cashflow planning around tax liabilities, including support preparing information that can help with HMRC engagement when a business is under pressure.

Conclusion

The March 2026 HMRC publication puts a sharper lens on tax defaulting in Croydon, not because the borough is unique, but because the list makes deliberate compliance failures visible—often with headline figures that are easy to misunderstand without context.

For local readers, the BOXPARK-linked entry is a reminder of two parallel truths: high-profile venues can amplify reputational fallout, and the published figures are still a narrow slice of a wider compliance story (time-bounded, address-specific, and not necessarily the full amount owed).

FAQs about the HMRC deliberate tax defaulters list

1. What is the HMRC deliberate defaulters list?

It is a GOV.UK publication where HMRC can publish identifying details of people or businesses that have been charged penalties for deliberate defaults involving more than £25,000 of tax, once penalties are final.

2. How often does HMRC publish or update the list?

HMRC reviews the list regularly and says changes are usually made on a quarterly basis, partly to ensure entries are not published longer than the 12‑month legal maximum.

3. How long do names stay on the list?

A defaulter’s details are held on GOV.UK for a maximum of 12 months from the date first published.

4. Can you avoid being named and shamed?

HMRC advises taxpayers involved in a compliance check to disclose errors early, cooperate, and resolve the check promptly—because that affects penalty reductions and publication risk.

5. Can you go to jail for tax evasion in the UK?

Being on the deliberate defaulters list relates to civil penalties and is not the same as a criminal conviction. Separately, serious tax fraud offences can be prosecuted and can carry substantial custodial sentences, with the Sentencing Council noting maximums that include 14 years’ custody for certain fraudulent evasion offences, and life imprisonment for “cheat the public revenue.”

UK Tax System for Expats Explained – Who Must Still Pay UK Tax?

Posted on 3 April 20263 April 2026 by Nida Umair

Many people move abroad and assume that ends their UK tax position. In practice, it often does not. The UK tax system for expats can still apply in several situations. At Apex Accountants, we regularly see expats caught by UK tax rules because they still have UK income, return to the UK too often, keep a home here, sell UK property, or come back after a short period overseas. UK tax is driven mainly by residence status and specific UK connections, not by where you feel permanently settled.

The key point is simple. You can live abroad and still be drawn into the UK tax system in several different ways. You might become a UK tax resident again under the Statutory Residence Test. You might stay non-resident but still have to pay UK tax on rental income, wages for UK workdays, or gains on UK property. You might also face extra rules if you return to the UK after a short spell overseas.

Understanding the UK Tax System for Expats

Why many people still get caught by UK tax for expats

The most common mistake is thinking there is one simple “day count” that keeps you safe. There is not. The UK uses the Statutory Residence Test, which looks at automatic overseas tests, automatic UK tests and then the sufficient ties test. Your position is tested tax year by tax year. That means someone can be non-resident one year and resident the next, even if their lifestyle feels broadly the same.

The first route: becoming UK tax resident again

For many expats, the biggest risk is drifting back into UK residence without realising it. HMRC says non-residents only pay UK tax on their UK income, while residents normally pay UK tax on all their income, whether it comes from the UK or abroad. That is why residence status matters so much.

A quick guide to the residence rules for expats

Rule area	What it means
Automatic overseas tests	These can keep you non-resident if you meet strict day and work limits
Automatic UK tests	These can make you resident automatically
Sufficient ties test	If no automatic test applies, your UK ties and UK day count decide the outcome

HMRC’s automatic overseas tests include two headline day limits that expats often rely on. If you were a UK resident in one or more of the previous 3 tax years, you usually need to spend fewer than 16 days in the UK to meet the first automatic overseas test. If you were not a UK resident in any of the previous 3 tax years, the second automatic overseas test usually requires fewer than 46 days in the UK. There is also a third overseas test for people working sufficient hours overseas, provided UK workdays stay below 31 and total UK days stay below 91.

On the UK side, the clearest trigger is 183 days or more in the UK in the tax year. There is also a home test. HMRC says you may become a resident if there is at least one 91-day period in which you have a UK home and spend enough time there, while spending fewer than 30 days in any overseas home.

Also Read: Could Returning to the UK Trigger a Returning Expatriates UK Tax Bill? What You Need to Know

The “ties” that catch expats out

If none of the automatic tests settle your status, HMRC applies the sufficient ties test. This is where many expats run into trouble. The number of ties needed depends on how many days you spend in the UK and whether you were a resident in any of the previous 3 tax years. For someone recently resident in the UK, even 46 to 90 UK days can be enough if they have at least 3 ties.

The main ties include the following:

Family tie: for example, a UK resident spouse, partner or child under 18 in the UK in the relevant way.
Accommodation tie: a place to live in the UK available for at least 91 continuous days, with enough nights spent there.
Work tie: UK workdays can matter, especially where more than 3 hours of work are performed on enough days.

This is why casual visits can become risky. Staying with family, keeping a UK flat, doing a few work trips, or spending more time here during school holidays can shift the result.

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The second route: staying non-resident but still paying UK tax

Many expats are surprised to learn that leaving the UK does not remove UK tax from UK income. GOV.UK is clear that you usually have to pay tax on your UK income even if you are not a UK resident. That includes things like pension income, rental income, savings interest and wages.

Common areas where tax still applies

Income or asset	Why it matters
UK rental income	Usually remains taxable in the UK
UK workdays	UK tax for expats can apply to work performed here
UK property sales	Non-residents must report all disposals of UK property or land
UK pensions and other UK income	Treaty relief may help, but the UK position still needs checking

Rental income is one of the most common traps. You need to pay tax on UK rental income if you rent out a property here. If you live abroad for 6 months or more per year. HMRC classifies you as a non-resident landlord for these purposes, even if you are still a UK resident for tax. Tax may be deducted by a letting agent or tenant unless HMRC approves gross payment through the relevant application route.

Double taxation agreements can help if the country where you live also taxes that income. GOV.UK says you may be able to claim full or partial relief, depending on the treaty. But that does not mean you can ignore the UK side. It means you need the position reviewed properly.

The third route: selling UK property while abroad

This is another major area where expats get caught. If you are not resident in the UK, you must report all sales of UK property or land even if you have no tax to pay. That applies to residential and non-residential property.

For UK residential property sold on or after 27 October 2021, the reporting and payment deadline is generally within 60 days of completion. GOV.UK warns that you should not wait until the next tax year to deal with it, because interest and penalties may apply.

This is often missed because people assume no tax means no filing. That assumption is wrong for non-residents selling UK property. Even where a loss arises, or relief means little or no tax is due, the reporting duty can still apply.

The fourth route: returning to the UK too soon

Some expats leave the UK, realise gains or receive income abroad, and then return within a few years expecting those transactions to stay outside the UK tax net. HMRC’s temporary non-residence rules are designed to stop that. HMRC states that when an individual returns to the UK after a period of temporary non-residence, they may be charged to tax on certain income and gains received during that period.

A person can be temporarily non-resident if, among other conditions, they had sole UK residence before departure, were solely UK residents in 4 or more of the 7 tax years before leaving, and their period of non-residence is 5 years or less. HMRC also states that for these special rules not to apply, the period of non-residence must exceed 5 years, in effect at least 5 years and 1 day.

For capital gains in particular, gains arising during a period of temporary non-residence can become chargeable to Capital Gains Tax in the period of return. This is a key trap for expats who sell assets while abroad and then move back sooner than planned.

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Split-year treatment can help, but it is not optional

When someone leaves or arrives in the UK during a tax year, split-year treatment may apply. HMRC explains that a split year divides the year into a UK part and an overseas part. The UK part is taxed broadly as resident, while the overseas part is taxed broadly as non-resident for most purposes.

However, this is not something you simply choose because it suits you. If you meet the conditions for one of the split-year cases, it applies. If you do not, it does not. That makes it essential to review the facts carefully rather than relying on assumptions.

New rules on foreign income and gains

Since 6 April 2025, the old remittance basis has been replaced by the 4-year foreign income and gains regime. If you qualify and claim under this regime, you will not pay tax on eligible foreign income and gains covered by the claim. To qualify, you must be a UK tax resident under the Statutory Residence Test and still be within your first 4 years of UK tax residence after at least a 10-year period of non-UK tax residence.

This matters for expats returning to the UK after a long period abroad. The new regime may offer relief, but it has conditions and limits. GOV.UK also says unused years cannot be rolled forward. So a returning expat should review their position as soon as they become a UK resident again, not years later.

Inheritance Tax can still follow some expats after they leave

Income Tax and Capital Gains Tax are not the only issues. From 6 April 2025, GOV.UK says the old domicile and deemed domicile rules for Inheritance Tax were replaced by long-term UK residence rules. If you are a long-term UK resident, your overseas assets may be subject to Inheritance Tax.

A person is a long-term UK resident if they were a UK tax resident for either the previous 10 consecutive years or for 10 years or more in the previous 20 years. GOV.UK also says you can keep long-term UK residence for up to 10 tax years after leaving the UK, although that tail can be shorter depending on how long you lived here before departure.

That means some expats can leave the UK and still remain exposed to UK Inheritance Tax on overseas assets for years afterward. This is a major point that is often missed in international estate planning.

Key deadlines expats should not miss

Obligation	Main deadline
Tell HMRC you need a return	By 5 October after the relevant tax year
Paper Self Assessment return	By 31 October
Online Self Assessment return	By 31 January
Self Assessment tax payment	By 31 January
UK residential property CGT report	Usually within 60 days of completion

GOV.UK says HMRC must receive your tax return and any money owed by the deadline. Missing these dates can trigger penalties and interest.

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How We Can Help You

At Apex Accountants, we help expats and internationally mobile individuals understand exactly where they stand before problems build up.

Our support includes:

reviewing your UK residence position under the Statutory Residence Test
checking whether split-year treatment may apply
reviewing UK rental income and non-resident landlord obligations
handling UK property disposal reporting
advising returning expats on temporary non-residence risks
assessing whether the 4-year foreign income and gains regime may apply
reviewing longer-term Inheritance Tax exposure for former UK residents

Each case turns on detailed facts. A few extra days in the UK, a family connection, a retained home, or a return to Britain sooner than expected can change the outcome.

Conclusion

Yes, expats can absolutely be dragged into the UK tax system. Sometimes that happens because they become UK residents again. Sometimes it happens because UK income and UK property remain taxable even while they live abroad. In other cases, the issue only becomes clear when they return to the UK, sell property, or begin reviewing their estate planning.

The rules are not impossible, but they are technical. The safest approach is not to assume. It is to review your residence status, income sources, property exposure and future plans early using current HMRC guidance. If you are unsure how these rules apply to you, contact Apex Accountants for professional guidance. Our specialists can review your circumstances and help you manage your UK tax position with confidence.

How to Claim Tax Relief on Donations in the UK

Posted on 31 March 202631 March 2026 by Nida Umair

If by “renew tax relief on donations” you mean keeping your charity tax relief claims correct and up to date, the main UK route is still Gift Aid. There is no annual renewal process for donors. Instead, you claim relief by using the right method, keeping records, and following HMRC’s time limits. Since 6 April 2024, relief on donations to non-UK charities has ended, so eligibility now depends much more clearly on the charity meeting the UK tax definition.

At Apex Accountants, our view is simple. This area is often treated like a small admin point, but it can affect your tax return, your adjusted net income, your Higher Income Child Benefit Charge position, and, in some cases, your Inheritance Tax planning. HMRC’s own guidance shows that the rules are straightforward once you separate them into the correct relief route.

Claiming Tax Relief on Donations in UK

For most individuals, tax relief on donations is claimed through one of these routes:

Donation route	How relief works	Who benefits first
Gift Aid	Charity reclaims 25p for every £1 donated	Charity first; the donor may claim extra if there is a higher or additional rate.
Payroll Giving	Donation comes out of pay or pension before Income Tax	Donor gets relief at the source.
Shares, land or buildings	Donor can deduct the value from taxable income and may also avoid Capital Gains Tax on qualifying gifts	Donor
Gifts in a will	Gift is taken off the estate before Inheritance Tax is calculated, and 10% or more to charity can reduce the IHT rate on some assets to 36%	Estate

What Gift Aid actually does

Gift Aid lets a charity or Community Amateur Sports Club reclaim 25p for every £1 you donate. So a £100 donation is treated as £125 gross for tax purposes. It does not cost the donor anything extra at the point of giving.

To use Gift Aid, you must give the charity a Gift Aid declaration. That declaration can cover:

current donations
future donations
donations made in the last 4 years

That point matters. Many people think they need to “renew” Gift Aid every year. Usually, they do not. What matters is that the declaration remains valid and that you still pay enough qualifying UK tax.

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Tax Rules for Donors

The tax condition many donors miss

You must have paid enough Income Tax or Capital Gains Tax in the tax year to cover the amount the charity reclaims. HMRC says your Gift Aid donations must not be more than 4 times the tax you paid in that year. If the charity reclaims more than you paid, HMRC may ask you to pay the difference.

This is one of the most important compliance points. A donor can complete a declaration in good faith, then later stop paying enough tax. HMRC says you must tell the charities you support if that happens.

Can higher-rate and additional-rate taxpayers claim more?

Yes. If you pay tax at 40% or 45%, you may claim the difference between the basic-rate relief already given to the charity and your higher rate of tax. HMRC explains that this relief is given by increasing your basic rate band and higher rate band by the grossed-up amount of your gifts.

The following example shows the mechanics clearly:

donate £200
charity treats it as £250 gross
a 40% taxpayer can claim £50
a 45% taxpayer can claim £62.50

How to claim the extra relief

If you complete a Self Assessment return, enter your qualifying charitable giving on the return using HMRC’s charitable giving guidance and helpsheet HS342. If you do not normally file a return, you can contact them and ask for your tax code to be adjusted.

If you are claiming tax relief on donations of £10,000 or more without sending a tax return, HMRC says you need to tell them the following:

the date of the donation
who you donated to

Can you claim for past donations?

Yes, but the route depends on timing.

1. Past donations under a Gift Aid declaration

A declaration can cover donations made in the last 4 years. That helps the charity reclaim Gift Aid on qualifying donations if the declaration is valid.

2. Carrying back a donation to the previous tax year

HMRC allows certain Gift Aid donations made after the tax year ends to be treated as if they were made in the previous tax year, but only if you make that claim on the original return and submit it by the filing deadline. HMRC is clear that it cannot accept a first claim or a higher claim in an amended return for that carry-back treatment.

3. Correcting an overpayment through HMRC

If the issue is not carry-back but overpaid tax more generally, HMRC’s overpayment relief rules may be relevant. That is a separate claims process and not a way to reopen the specific carry-back rule after the deadline.

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What changed from April 2024?

This is the key policy change.

From April 2024, non-UK charities and CASCs are no longer eligible for UK charitable tax reliefs. GOV.UK states that only charities falling within the relevant UK court jurisdictions now qualify under the UK tax definition. HMRC also states in HS342 that you no longer get relief on gifts to non-UK charities after 5 April 2024.

So if you previously gave to an EU or EEA body and expected UK tax relief, you now need to re-check eligibility carefully. That is one of the main reasons people feel their donation relief needs to be “renewed” or revisited.

Other donation tax relief routes people often overlook

Payroll Giving

Payroll Giving works differently from Gift Aid. The donation is taken from wages or pension before Income Tax is deducted. HMRC says that to donate £1, a basic-rate taxpayer pays 80p, a higher-rate taxpayer 60p, and an additional-rate taxpayer 55p.

This donation tax relief route can be simpler for regular donors because the relief is built in through payroll. You do not then claim the same higher-rate difference separately in the way you do with Gift Aid.

Gifts of shares, land or buildings

HMRC says you can claim relief by deducting the value of the gift from your total taxable income for the tax year in which you made the gift or sale to charity. For qualifying shares and securities, HMRC also states that the relief is in addition to the Capital Gains Tax exemption on such gifts.

If the charity asks you to sell the asset on its behalf, you can still claim relief, but HMRC says you must keep the records of the gift and the charity’s request. Without them, you might have to pay Capital Gains Tax.

Gifts in your will

A gift to charity in your will is deducted from your estate before Inheritance Tax is worked out. If you leave 10% or more of the net value of the estate to charity, HMRC says the Inheritance Tax rate on some assets may reduce to 36%.

Does Gift Aid affect adjusted net income?

Yes. When working out adjusted net income, you deduct the grossed-up value of Gift Aid donations. For every £1 donated under Gift Aid, you take off £1.25 from net income.

That can matter where income-linked thresholds apply. Adjusted net income is used for rules such as the Personal Allowance taper and the High Income Child Benefit Charge.

Record-keeping rules

Good records are essential. You need to keep records of donations if you want to take them off your taxable income. For land, buildings and shares, you should keep the legal transfer papers and any document showing the charity asked you to sell on its behalf. Individual taxpayers normally need to keep records for at least 22 months from the end of the tax year.

For charities, Gift Aid declarations must be kept for 6 years after the most recent donation is claimed.

Common mistakes to avoid

Assuming Gift Aid must be renewed every tax year
Claiming relief for donations to a non-UK charity after 5 April 2024
Signing a Gift Aid declaration without paying enough Income Tax or Capital Gains Tax
Missing the filing deadline for a carry-back claim
Forgetting that Payroll Giving and Gift Aid work differently
Failing to keep donation evidence and supporting records

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How We Help Claim Tax Relief on Donations in UK

At Apex Accountants, we help clients review charitable giving from a tax and compliance angle, not just a paperwork angle. That includes:

checking whether Gift Aid declarations still work for your current tax position
reviewing higher-rate and additional-rate relief claims
checking whether adjusted net income has been calculated correctly
helping with Self Assessment reporting of charitable donations
reviewing whether a current-year donation can still be carried back
advising on gifts of shares, land or buildings
Reviewing Inheritance Tax planning where charitable legacies are involved
helping directors and owner-managed businesses separate personal giving from company giving rules

We also help clients avoid simple errors that can create HMRC problems later, especially where there are large donations, changing income levels, overseas charities, or missed filing deadlines.

Conclusion

The main point is this: tax relief on donations in the UK does not usually need “renewing”, but it does need checking. The right claim depends on the donation method, the tax year, the charity’s eligibility, and your own tax position. Since the April 2024 restriction to UK charities, it is even more important to confirm that a donation still qualifies before you rely on relief.

If you are unsure how your charitable donations affect your tax position, contact Apex Accountants today. Our team can review your donations, confirm eligibility under HMRC rules, and help you claim the correct tax relief on your Self Assessment return.

FAQs About Tax Relief on Donations

Do I need to renew Gift Aid every year?

No. In most cases, a valid Gift Aid declaration can cover current donations, future donations, and donations made in the last 4 years. What you must keep under review is whether you still pay enough qualifying tax.

Can I claim tax relief on donations without Self Assessment?

Yes. Higher-rate taxpayers who do not complete a return can contact HMRC and ask for a tax code adjustment instead.

Can I amend an old return to carry back a Gift Aid donation?

Not for a first or higher carry-back claim once the deadline has passed. Carry-back must be claimed in the original return for that year.

Do donations to overseas charities still qualify?

Usually no, for UK charitable tax relief purposes after 5 April 2024. GOV.UK states that non-UK charities and CASCs are no longer eligible after that point.

Can Gift Aid help if my income is over £100,000?

It can. Gift Aid donations reduce adjusted net income using the grossed-up amount. That can affect income-linked tax positions such as the Personal Allowance taper.

Is Payroll Giving the same as Gift Aid?

No. Payroll Giving gives tax relief through your pay before Income Tax is deducted. Gift Aid lets the charity reclaim basic-rate tax, and higher-rate donors may then claim extra relief separately.

VAT For Barbers: UK Guide for 2026

Posted on 19 March 202619 March 2026 by Farazia Gillani

VAT For Barbers is a critical area of understanding for every barber and salon owner in the UK. Whether you’re self‑employed, running a barbershop, or managing a team, VAT can impact pricing, cash flow, and overall financial planning. This comprehensive guide will explore VAT registration, key tax implications, and how employment status affects VAT obligations for barbers. By the end of this guide, you’ll have a deeper understanding of your VAT obligations, making sure you’re fully compliant and optimising your business structure.

When Do Barbers Have to Charge VAT?

The answer depends on your VAT registration status. VAT is an indirect tax applied to most services and goods in the UK, including barbering. If your business turnover exceeds the VAT threshold (currently £90,000 in any rolling 12-month period), you must register for VAT and charge it on services like haircuts, shaves, and product sales.

If you’re below the VAT threshold, you’re not required to register, but you can choose to do so voluntarily. Voluntary registration allows you to reclaim VAT on purchases like clippers, shampoos, and salon equipment, which may be beneficial in some cases.

When you’re VAT registered:

You must add 20% VAT to taxable services and product sales.
VAT must be paid to HMRC, and VAT returns are filed quarterly.
VAT is charged on all taxable services – including cuts, styling, and any products you sell.

VAT Threshold for Barbers in the UK

Understanding VAT Registration Requirements For Barbershops

In UK VAT threshold for barbers is £90,000 in taxable turnover. Once your turnover reaches this amount, you must register for VAT within 30 days

Here’s how VAT registration for barbershops work:

Monitor your taxable turnover. All sales (services like haircuts and products) contribute to the VAT threshold.
If you exceed £90,000 in sales during a 12-month period, you must register and begin charging VAT on all taxable supplies.
You must also register if you expect to exceed the threshold in the next 30 days.
Once registered, you must submit VAT returns to HMRC quarterly.

However, if your business’s turnover falls below £88,000 in a 12-month period, you can choose to deregister from VAT (if you no longer want to reclaim VAT or charge VAT on sales).

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VAT Considerations for Barbers

There are a few key points that every barber needs to understand when it comes to VAT:

Standard VAT vs Flat Rate Scheme

Once your barber business is VAT registered, you have two main options for VAT accounting:

Standard VAT Scheme: You charge 20% VAT on services, reclaim VAT on purchases, and pay the difference to HMRC. (gov.uk)
Flat Rate Scheme: A simplified system where you pay a set percentage (around 13% for barbers) of your turnover as VAT. This option is available if your annual turnover is below £150,000 and it reduces the admin burden of calculating VAT separately on each transaction.

Which scheme should barbers choose?

The standard VAT scheme is typically better if your business makes significant purchases (e.g., equipment, products). However, the flat-rate scheme may be beneficial for small barbershops with lower expenses, as it simplifies VAT calculations.

VAT Implications for Self‑Employed vs Employed Staff

The employment status of your staff can affect VAT charges and reporting. Let’s explore how:

If Stylists Are Employed

VAT is charged on services provided by the barbershop.
You must account for VAT on all taxable services your salon provides (cuts, styling, etc.).
Stylists do not charge VAT on their individual earnings since they are employees of the salon.

If Stylists Are Self‑Employed

In a self‑employed chair rental arrangement, VAT treatment depends on the contractual relationship.

If the stylist contracts directly with customers, they are responsible for their own VAT registration if their turnover exceeds the threshold.
If the barbershop rents out chairs, VAT may apply to rental income.

HMRC uses various operational tests to decide whether VAT applies to services provided by self‑employed contractors in barbershops. This could include the stylist’s business structure and whether they have direct customer contracts.

List of Barbershop Purchases Eligible for VAT Refunds

Once you’re VAT registered, your business can reclaim VAT on eligible purchases that are used for business activities. Here’s a list of common items that barbershops can reclaim VAT on:

Item Type	Can You Reclaim VAT?
Clippers, scissors, razors	Yes
Shampoos & styling products	Yes
Commercial rent & utilities	Yes
Cleaning supplies	Yes
Staff uniforms (protective)	Yes
Accounting & professional services	Yes

Restrictions:

You cannot reclaim VAT on non‑business items or personal expenses.
VAT cannot be reclaimed on motor vehicles used for business unless certain conditions are met. (gov.uk)

Reclaiming VAT helps reduce your operating costs and can significantly improve cash flow, but remember, you must keep detailed records of all VAT transactions.

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Tax-Saving Strategies for Barbers:

As a VAT-registered business, barbers can take several steps to optimise their tax position:

Utilise VAT Reclaims: Reclaim VAT on business-related purchases, such as equipment, cleaning supplies, and professional services, to reduce overall costs.
Choose the Flat Rate Scheme: If your business has low overheads, the Flat Rate Scheme could be a more efficient option, simplifying VAT reporting and potentially saving on tax.
Maximise Allowable Expenses: Ensure you’re claiming all allowable expenses, such as utilities, business insurance, and office supplies, to reduce taxable profits.

How We Help Barbers

At Apex Accountants, we specialise in helping barbershops and salon owners navigate VAT complexities. Our services include:

VAT Registration and Compliance: We guide you through the registration process and ensure you’re compliant.
Taxation Advice: We provide clear advice on how VAT impacts your business model, whether you’re self‑employed, employing others, or operating as a limited company.
Reclaiming VAT: Our team assists with reclaiming VAT on business purchases to improve your cash flow.
VAT Schemes Advice: We help you select the right VAT scheme for your business.
Quarterly VAT Returns: We manage your VAT submissions to HMRC, ensuring deadlines are met and returns are accurate.

If you need assistance with VAT or other accounting services for your barbershop, contact us today.

Conclusion

VAT is an essential aspect of your business’s financial structure. Whether you’re approaching the VAT threshold, considering registration, or managing VAT obligations for self-employed and employed staff, understanding your responsibilities is key to staying compliant and efficient.

By staying on top of your VAT registration, knowing the key factors that affect your business, and reclaiming VAT on eligible purchases, you can optimise your operations and minimise tax risks.

Let Apex Accountants help simplify your VAT process, allowing you to focus on providing excellent service to your clients.

Understanding HMRC-Approved Tax-Free Mileage Rates: A Potential Lifesaver for UK Drivers

Posted on 19 March 202619 March 2026 by Nida Umair

For many UK workers, driving their own vehicles for business purposes can be a costly endeavour. Fortunately, there is a tax-free benefit available that can provide significant financial relief: the HMRC-approved tax-free mileage rates. These rates allow employees to claim tax-free reimbursement for using their own vehicles for business travel. However, with the rising cost of motoring, there’s growing pressure to increase these rates to reflect the actual expenses workers incur.

This article dives into the current rates, the proposed changes, and what it means for both employees and the self-employed.

What Are HMRC-Approved Tax-Free Mileage Rates?

The HMRC-approved tax-free mileage rates are the maximum amounts that can be reimbursed by an employer without the employee being taxed on the reimbursement. These rates are designed to cover all aspects of motoring costs, including fuel, vehicle wear and tear, insurance, and other associated costs of using a personal vehicle for business purposes.

Currently, the rates are:

Vehicle Type	First 10,000 Business Miles	Above 10,000 Miles
Cars & Vans	45p per mile	25p per mile
Motorcycles	24p per mile	24p per mile
Bicycles	20p per mile	20p per mile

Employees can also claim an extra 5p per mile per passenger carried on a business trip.

These rates have remained unchanged since 2011, and there are growing calls to increase them due to rising motoring costs.

What Are Mileage Allowance Payments (MAPs)?

Mileage Allowance Payments (MAPs) are amounts paid by an employer to an employee for using their own vehicle for business travel. These payments are intended to cover travel costs such as fuel, vehicle wear and tear, insurance and other running costs. MAPs are defined in HMRC’s tax rules for business travel reimbursements.

Under HMRC rules, employers are permitted to pay employees a set amount for business mileage without reporting it to HMRC — as long as the total does not exceed the approved amount defined by HMRC.

MAPs can be paid:

Per mile based on distance driven
As a lump sum that covers business use of a vehicle
Or as a reimbursement that reflects actual business mileage costs

These payments can apply whether the vehicle used is a car, van, motorcycle or bicycle.

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What Is Mileage Allowance Relief (MAR)?

Mileage Allowance Relief (MAR) is the tax relief you can claim if:

You are paid less than the HMRC‑approved tax‑free mileage rates, or
You are not paid any mileage allowance by your employer for business travel.

MAR lets you claim tax relief on the difference between what you were paid and the HMRC‑approved rate. In other words, it protects employees who aren’t fully reimbursed for their work‑related mileage.

To be eligible:

You must have used your own vehicle (car, van, motorcycle, or cycle) for business travel.
You must have received less than the HMRC AMAP rate for that mileage.

How MAR works: If your employer only pays 30p per mile but the approved amount is 45p per mile, you may claim relief on the difference (15p per mile) through your tax return or other claim method.

Also Read:

April 2026 Car Tax Changes: What UK Drivers Need to Know About UK Vehicle Excise Duty

How Much Tax‑Free Mileage Can You Claim?

The simple answer:

You can claim up to 45p per mile tax‑free for the first 10,000 business miles in a year.
If you go above 10,000 business miles, you can claim 25p per mile tax‑free for additional miles.

This means if you drive 8,000 business miles in a tax year and are fully reimbursed at 45p, you could receive £3,600 tax‑free.

However, if your employer pays a lower rate, you may be able to claim tax relief on the difference between what you’re paid and the HMRC rate.

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How Many Kilometres Can You Claim Tax‑Free?

UK mileage rules use miles, but to translate to kilometres:

45p per mile ≈ 28p per kilometre
25p per mile ≈ 16p per kilometre

These aren’t official HMRC figures but a simple conversion for context.

What Is the 45p Mileage Allowance?

The 45p mileage allowance applies to the first 10,000 business miles you drive in a tax year using your own car or van.

This rate was last updated back in 2011 — meaning it hasn’t changed in well over a decade despite significant rises in motoring costs.

Many workers, particularly those who drive long distances for work (e.g., social workers, field engineers), argue this rate is no longer sufficient to cover real running costs.

The 45p Mileage Allowance Update: Why It Has Become a Point of Controversy

The 45p-per-mile rate, while once adequate, has been widely viewed as outdated. The real cost of running a car is now significantly higher, with figures suggesting it costs around 67p per mile to own and operate a car. When considering the overall increase in fuel prices, insurance, and maintenance costs over the past decade, the 45p rate no longer adequately reflects the true costs faced by drivers.

Is Mileage Exempt from Tax?

Yes, but only if the reimbursement stays within the HMRC‑approved amount.

Payments up to the approved AMAP rates are exempt from tax and National Insurance.
Anything above this must be reported and will be taxed as employment income.

Crucially, if you receive less than the HMRC rate, you can usually apply to HMRC for Mileage Allowance Relief — a tax refund on the amount you weren’t reimbursed.

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What Would an AMAP Rate Increase Mean for Drivers?

An increase in the Approved Mileage Allowance Payment (AMAP) rate would allow employees to claim higher amounts for using their own vehicles for work without triggering tax liabilities. Currently, if an employee is reimbursed at a rate above the HMRC-approved amount, the excess is considered taxable income. On the other hand, if the rate is below the approved amount, employees can claim Mileage Allowance Relief on the shortfall.

For instance, if an employer reimburses a worker at 30p per mile instead of 45p, the difference (15p per mile) can be claimed as tax relief. However, if the reimbursement rate is increased to reflect actual motoring costs—say, to 67p per mile—employees could significantly benefit from higher tax-free reimbursements.

Is a Change to the Mileage Rates Coming?

Recent comments by Chancellor Rachel Reeves indicate the government is reviewing the mileage allowance, acknowledging that costs have risen and the current rate hasn’t been updated in years.

According to reporting from last week, Reeves said the government is “looking at the issue” and will consider changes as part of a future fiscal update.

An increase to align AMAPs more closely with actual motoring costs — which some estimates put nearer to 60p+ per mile — could significantly benefit those who drive frequently for work. While no official new rate has been announced yet, pressure is rising for a formal AMAP rate increase.

Who Benefits Most from Higher Mileage Rates?

Increased HMRC mileage rates would help:

Field‑based employees (sales reps, engineers, consultants)
Healthcare and social care workers with long travel distances
Self‑employed drivers, including tradespeople who use a personal vehicle for work
Those whose employers reimburse less than the HMRC‑approved amounts

For example, healthcare workers like social workers and NHS staff, who drive long distances to visit patients, would benefit greatly from a higher AMAP rate. If the rate were increased to 67p per mile, an employee driving 200 miles a week for work could potentially claim an additional £44 per week tax-free—a significant relief considering the rising costs of fuel and car maintenance.

For the self‑employed, using the tax‑free mileage rates can reduce taxable profits when they choose to use this instead of actual vehicle costs in their accounts.

You might also want to read about VAT regulations for car rentals:

VAT on Car Hire in the UK – What Businesses Need to Know

Self-Employed Drivers Tax-Free Mileage

The self-employed also stand to benefit from a rise in the HMRC-approved tax-free mileage rates. Many self-employed individuals, such as tradespeople, are entitled to claim mileage as an allowable expense when filing their taxes. However, this can only be claimed if they have not already deducted actual running costs or capital allowances for their vehicles.

The increase in the mileage rate could help self-employed individuals reduce their tax bills more effectively, as they would be able to claim a higher tax-free reimbursement for the business miles they drive.

How Apex Accountants & Tax Advisors Can Help

At Apex Accountants, we offer expert advice and support for both employees and self-employed individuals looking to maximise their mileage claims. Our services include:

Mileage policy and payroll treatment reviews
Calculations for Mileage Allowance Relief (including back-claims for up to 4 prior tax years)
Sole trader advice on simplified expenses versus actual vehicle running costs

If the AMAP rate increase goes ahead, now is the perfect time to ensure that your mileage claims are compliant and optimised for maximum savings.

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Conclusion

The HMRC-approved tax-free mileage rates are an essential tool for employees and self-employed individuals alike, providing a tax-free way to reimburse driving costs for business travel. However, the current rates, which have remained unchanged for over a decade, are no longer sufficient to cover the increasing costs of motoring. An increase in these rates, as discussed by Chancellor Rachel Reeves, could provide much-needed financial relief to millions of workers across the UK.

With the government considering changes to these rates, it’s crucial to stay informed about the latest developments and ensure that you are claiming the full benefits available to you. At Apex Accountants, we’re here to help you navigate these changes and ensure that your claims are accurate, compliant, and maximised to reduce your tax liabilities.

Could Returning to the UK Trigger a Returning Expatriates UK Tax Bill? What You Need to Know

Posted on 19 March 202619 March 2026 by Sidra

Returning from the Middle East during wartime is an emotional decision, but for many British expatriates, it also brings a potential returning expatriates UK tax bill.The UK tax system doesn’t simply ‘start fresh’ the day you land at Heathrow; under HM Revenue & Customs’ statutory rules the moment you cease to be a non‑resident, your worldwide income and gains may fall into the UK tax net. Understanding the statutory residence test (SRT), the temporary non‑residence rules and recent changes to the non‑dom regime can make the difference between an orderly transition and an unexpected six‑figure tax bill.

How the Statutory Residence Test for Returning Expatriates Captures Tax Residency

The SRT determines whether you are a UK tax resident in any tax year. It begins with simple day-count rules. Spending 183 days or more in the UK during a tax year automatically makes you a UK resident. Conversely, if you were a UK resident in at least one of the three preceding tax years and spend fewer than 16 days in the UK, you are automatically a non‑resident; that threshold rises to 46 days if you were not a resident in the prior three years. A third automatic overseas test allows non‑residence if you work full‑time abroad, spend fewer than 91 days in the UK, and do not exceed 30 UK workdays.

For those who do not meet an automatic test, HMRC applies the ‘sufficient ties’ test, a crucial aspect of the tax residency rules for returning expatriates. The more connections (family, accommodation, work, and 90-day ties) you have to the UK, the fewer days you can spend here before becoming a resident.

Individuals who were UK residents in one or more of the preceding three years can become residents with as few as 16 days in the UK if they have four UK ties, 46 days with three ties or 91 days with two ties, illustrating how strict the tax residency rules for returning expatriates can be. Those with no recent UK residence need more days to trigger residency, but the principle is the same: the greater your social and economic ties, the sooner HMRC will treat you as back in the UK tax net.

Exceptional circumstances offer only limited respite. HMRC allows up to 60 days of UK presence to be disregarded where events beyond your control keep you here, but the bar is high. The internal manual explains that the concession usually applies only when the Foreign Office advises against all travel to your host country, such as during civil unrest or natural disasters. Even then, the maximum 60 days is a limit; any additional days count towards residence. HMRC emphasises that exceptional circumstances generally do not apply merely because a crisis prompted you to return to the UK.

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The Five‑Year Trap: Temporary Non‑Residence Rules

Simply being a non-resident doesn’t automatically exempt you from UK tax on gains. Under the temporary non-residence rules UK, gains and income can still be taxed when you return within five years. HMRC’s temporary non‑residence rules catch individuals who were UK residents in four out of the seven tax years before departure and return within five years. In that case, capital gains and some distributions realized during the period of non‑residence are treated as arising in the tax year of return.

The 2025 version of the HMRC helpsheet notes that a gain made while abroad can be taxed when UK residence is resumed. Crucially, the five‑year clock counts full tax years; someone who left in April 2021 and returns before April 2026 will fall within the rules even if they lived abroad for almost five calendar years.

The implications for Gulf‑based executives are stark. Many earn tax‑free salaries and realize gains on shares or businesses while abroad. If they return within five tax years, those historic gains can be taxed at UK rates of up to 20 percent for capital gains and 39.35 percent for dividends. The rules also apply to certain income, such as close company distributions and some partnership profits. Assets acquired during the overseas period are normally exempt, but exceptions apply where relief was rolled over from a UK asset.

A New Non‑Dom Regime: Who Qualifies?

HM Treasury announced in 2024 that the long‑standing domicile‑based tax regime would end from 6 April 2025. Domicile will no longer determine access to the remittance basis; instead the government is introducing a residence‑based foreign income and gains (FIG) regime.

The policy paper states that the new rules will provide 100 per cent relief on foreign income and gains for newcomers during their first four tax years of UK residence, provided they have not been UK tax resident in any of the ten preceding years.

Protection for income and gains in trusts will end for non‑doms who do not qualify. This relief is aimed at attracting internationally mobile talent, not at returning expatriates; most Gulf returnees will have been UK tax resident within the last decade and therefore will not qualify. In addition, any foreign income or gains that arose before 6 April 2025 under the old remittance basis will still be taxed when remitted to the UK.

Practical Considerations and Risks for a Returning Expatriates UK Tax Bill

Day Counts and Tax Residency:
- Vigilance over day counts is crucial. An unplanned overnight stay or UK business trip could result in triggering tax residency.
- 183 days automatically makes you a tax resident in the UK, but fewer days can still suffice, particularly if family or accommodation ties are considered.
- Meticulous record-keeping of your arrivals and departures is essential to avoid being caught out.
- If travel to the Gulf is unsafe, consider spending time in a third country to manage your days of residency.
Split-Year Treatment:
- For permanent returns, explore whether split-year treatment can reduce UK tax exposure.
- HMRC’s Statutory Residence Test (SRT) allows a tax year to be split into UK and overseas parts.
- Only income arising in the UK part of the year will be taxed.
Temporary Non-Residence Rules:
- If you’ve sold a business or other assets while abroad, ensure you review whether the temporary non-residence rules apply.
- Gains on assets acquired after leaving the UK are generally excluded from UK tax.
- However, exceptions apply to assets linked to earlier UK holdings.
- To avoid unexpected tax liabilities, consider timing disposals to ensure the five-year period elapses before your return, as required under the temporary non-residence rules UK, or arrange to defer your return until after the tax year ends.
National Insurance Contributions (NICs):
- When returning to work in the UK, your National Insurance contributions will likely resume.
- You must notify HMRC and file a Self Assessment tax return by 5 October following the tax year if you have untaxed income to report.

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How Apex Accountants & Tax Advisors Can Help

Apex Accountants & Tax Advisors has extensive experience supporting globally mobile clients. We help expatriates calculate their UK day counts, interpret the SRT and assess whether exceptional circumstances can be claimed. Our advisers can model the impact of temporary non‑residence rules on historic gains, evaluate eligibility for the new FIG regime and structure asset disposals to mitigate UK tax. If you are considering returning from the Middle East, we can assist with split‑year claims, Self Assessment registration and National Insurance planning, and liaise with HMRC on your behalf.

Contact us for a confidential consultation before you book your flight home; proactive planning is essential when days in the UK are limited.

FAQs

1. How many days can I spend in the UK without becoming tax resident?

If you spend 183 days or more in the UK in a tax year, you are automatically a resident. However, you may become a resident with far fewer days once your UK ties are taken into account.

2. Do exceptional circumstances excuse additional UK days?

HMRC may disregard up to 60 days if you are forced to stay in the UK due to events beyond your control, but only where the Foreign Office advises against all travel to your country.

3. What is the temporary non‑residence rule?

It applies if you were UK resident for at least four of the seven tax years before departure and you return within five tax years. Gains and certain income arising during that overseas period are taxed in the year of return.

4. Can I avoid tax on assets sold while abroad?

Gains on assets acquired after you left the UK are usually excluded, but gains on assets owned before departure or linked through rollover relief can be charged under the temporary non‑residence rules.

5. Who qualifies for the new foreign income and gains (FIG) regime?

From 6 April 2025 new arrivals can claim 100 per cent relief on foreign income and gains for four years if they have not been UK tax resident in the previous ten years. Returning expats who were recently UK resident are unlikely to qualify.

6. Do I need to register for Self Assessment when I return?

You must tell HMRC by 5 October following the tax year if you have foreign income or gains to report. Employees without other untaxed income may not need to register.

Why You’re Losing Your £12,570 Personal Allowance

Posted on 18 March 202618 March 2026 by Nida Umair

In the UK tax system, most workers benefit from the £12,570 Personal Allowance – the amount of income you can receive each tax year without paying income tax. For the current and 2026/27 tax years, this allowance is set at £12,570, meaning you don’t pay income tax on the first £12,570 you earn.

However, for those earning above £100,000, a less‑well‑understood rule gradually reduces this allowance. Many high earners see the tax‑free benefit shrink and ultimately disappear completely before they even enter the highest tax band. This hidden effect increases the marginal tax they pay and can make additional income significantly less rewarding.

Below, we break this down and explain what it really means for your take‑home pay, who gets affected, why it exists and how some people manage or mitigate it.

How the Personal Allowance Taper Works

What the Rules Say

Personal Allowance for 2025/26 and 2026/27: £12,570.
Once your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 earned above this threshold.
If your income reaches £125,140 or more, you lose the Personal Allowance completely.

This taper reduces your tax‑free income gradually, rather than all at once.

What “Adjusted Net Income” Means

Adjusted net income includes most taxable income, such as:

Salary or wages
Bonuses
Benefits from employment
Rental income
Some pension and savings income

Certain reliefs – like pension contributions or Gift Aid – can reduce your adjusted net income, which may affect how much allowance you lose.

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Why This Creates a Hidden 60% Tax Rate

When your Personal Allowance is tapered away, it effectively increases the tax you pay on extra income before you reach the additional rate.

Here’s how:

Between £100,000 and £125,140, any extra £1 of income is taxed at the higher rate of 40%.
At the same time, you lose £0.50 of Personal Allowance for every extra £1 earned above £100,000.
That lost £0.50 would otherwise be tax‑free, so it now becomes taxable at 40%.

Putting that together:

Component	Amount
Tax charged on extra £1 of income	40p
Value of allowance lost (£0.50 taxed at 40%)	20p
Total effective tax rate	60p per £1

Put another way: every extra £100 you earn above £100,000 can leave you with just £40 in extra take‑home pay.

If you also pay National Insurance contributions at 2%, the effective marginal rate can reach 62% on that slice of income.

This has become known in financial planning circles as the “£100,000 tax trap”.

Practical Example

Imagine you earn £100,000 and receive a £10,000 pay rise:

Income rise	Tax rate	Tax payable
Extra income taxed at 40%	40%	£4,000
50% allowance lost (£5,000) taxed at 40%	40%	£2,000
Total tax on £10,000 raise	–	£6,000
Take‑home from £10,000 increase	–	£4,000 (40%)

In this range, the effective marginal tax rate is 60%.

Impact of Frozen Thresholds

The most important contextual factor is that these thresholds have not increased with inflation for many years. The Personal Allowance and the £100,000 threshold have been frozen since the early 2020s and are set to remain unchanged until April 2031.

The result is fiscal drag:

More people get pulled into higher tax bands as wages rise with inflation.
Increasing numbers of professionals — including clinicians, teachers, engineers and managers — encounter this high marginal rate even if their real purchasing power hasn’t changed.

Estimates suggest over 2 million taxpayers will be affected by this trap in the current tax year.

Who Is Affected Most

This tapered Personal Allowance rule mainly affects:

Individuals with adjusted net income between £100,000 and £125,140
People receiving bonuses or irregular earnings within this range
Professionals combining salary with rental or investment income
Those whose income is creeping up due to inflation but have not moved into much higher tax bands

It’s not limited to employees — contractors, business owners and sole traders can be caught too.

How to Reduce the Impact

While you can’t avoid the rule entirely, several legal strategies can help reduce exposure to the 60% effective rate:

Common Options

Increase pension contributions – These reduce your adjusted net income.
Use salary sacrifice schemes – Items like additional pension contributions, childcare vouchers or approved benefits can lower taxable income.
Charitable donations under Gift Aid – These extend your basic rate band and can reduce net income.
Make use of other tax reliefs – Such as trading losses or investment allowances

Each option has its own rules and implications, so professional advice is often valuable.

Also Read:

How to Increase Your Tax-Free Personal Allowance to £20,070 Through HMRC Rent-a-Room Scheme

Summary

The UK tax system’s Personal Allowance taper is straightforward in concept but can hit high earners unexpectedly hard. As income climbs past £100,000:

You gradually lose your £12,570 tax‑free allowance.
This generates an effective 60% marginal tax rate between £100,000 and £125,140.
Frozen thresholds mean more taxpayers are affected over time.

Understanding these rules helps you with £12,570 personal allowance planning more effectively and avoid surprises at tax time.

How We Can Help With £12,570 Personal Allowance Planning

At Apex Accountants, we provide tailored tax planning for high earners, professionals and businesses. Our expert services include:

Income tax planning and optimisation
Personal Allowance and marginal rate strategies
Pension and retirement tax planning
Tax‑efficient remuneration structuring
Year‑end planning and projections
Support with HMRC filings and compliance

We help you navigate complex tax rules, reduce liabilities within the law and maximise your take‑home income. Contact us today to build a smart, personalised plan for your finances.

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FAQs: Personal Allowance in the UK

1. What happens if you lose your Personal Allowance?

If you lose your Personal Allowance, your income becomes taxable from the first pound, making your effective tax rate higher. This typically happens if your income exceeds £100,000.

2. Is Personal Allowance still £12,570?

Yes, the standard Personal Allowance is £12,570 for the 2025/26 and 2026/27 tax years. However, it’s gradually reduced if your income exceeds £100,000.

3. Why has my Personal Tax Allowance dropped?

Your Personal Allowance may drop if your income exceeds £100,000. For every £2 earned above this threshold, £1 of your Personal Allowance is lost, reducing your tax-free income.

4. How to regain Personal Allowance?

You can regain your Personal Allowance by reducing your adjusted net income. Options include contributing to pensions, making charitable donations through Gift Aid, or using salary sacrifice schemes.

5. Why has my Personal Allowance been tapered?

Your Personal Allowance is tapered if your adjusted net income exceeds £100,000. The taper reduces your tax-free allowance by £1 for every £2 earned above this threshold, resulting in a higher effective tax rate.

6. Has Personal Allowance changed from 2025-26?

The Personal Allowance for the 2025-26 tax year is set to remain at £12,570. There have been no increases due to frozen thresholds, and the rate will stay the same until 2031.

7. Is the HMRC considering raising Personal Tax Allowance from £12,570 to £20,000?

Currently, there are no official plans to raise the Personal Tax Allowance to £20,000. The government has frozen the allowance at £12,570 until 2031.

8. How much is the tapered annual allowance?

The tapered annual allowance is the amount by which your Personal Allowance is reduced once your income exceeds £100,000. For every £2 earned over this threshold, £1 of your allowance is lost.

UK VAT On Prize Draws Faces Scrutiny As HMRC Clarifies Tax Position

Posted on 16 March 202618 March 2026 by Farazia Gillani

The UK government has confirmed that paid entries to online VAT on prize draws offering both a free and paid route will be subject to value added tax (VAT) at the standard rate, challenging the widespread assumption that such draws fall within the betting and gaming exemption. Responding to a House of Commons question tabled on 9 February, Treasury minister Dan Tomlinson stated on 17 February that HM Revenue & Customs (HMRC) “confirm that prize draws offering both paid and free entry routes are not eligible for VAT exemption and paid entries will be subject to VAT at the standard rate of 20%”. The clarification comes as the Department for Culture, Media & Sport (DCMS) prepares to implement a voluntary code of practice for prize draw operators and as the sector attracts increased regulatory and fiscal scrutiny.

Why VAT on online prize draws matters

Prize draws have become a lucrative segment of the UK online promotions market, and VAT on online prize draws is increasingly under scrutiny. Independent research commissioned by DCMS estimated that around 7.4 million adults took part in prize draws and competitions (known collectively as PDCs) in the 12 months to November 2023, spending around £1.3 billion—with a market size range of £700 million to £2.1 billion. The sector is dominated by around 400 operators and is growing rapidly, prompting concerns about consumer protection, gambling harm and tax compliance. The Treasury’s recent statement, coupled with the forthcoming voluntary code, means operators must reassess whether their ticket sales attract VAT and consider potential historic exposures.

Key points

HMRC confirmation: The government has confirmed that prize draws with both paid and free entry routes are not covered by the VAT exemption for betting, gaming, and lotteries; VAT for online prize draw operators will apply at 20% for paid entries.
Policy trigger: The clarification followed a parliamentary question about the tax treatment of such draws, asked amid the roll‑out of the voluntary code of practice.
Growing market: Research shows 7.4 million participants and annual spending around £1.3 billion, with at least 401 operators, each of whom must understand VAT for online prize draw operators to avoid penalties.
Exemption complexities: VAT legislation exempts facilities for betting or playing games of chance, but the supply of games of skill is standard‑rated. The classification of prize draws sits in this grey area.
Voluntary code: Operators signing the code must implement its player‑protection measures within six months and no later than 20 May 2026.
Uncertain tax treatment: Larger businesses taking a tax position inconsistent with HMRC’s “known position” must notify HMRC under the uncertain tax treatment regime.

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What Has Happened with VAT on Prize Draws

A written question from Maureen Burke, Labour MP for Glasgow North East, asked the Chancellor to clarify the VAT treatment of ticket sales for online prize draws that offer both a paid and a free entry route. In the response on 17 February 2026, Treasury minister Dan Tomlinson confirmed that HMRC regards paid entries as standard‑rated supplies, meaning VAT must be charged at 20 %. The minister’s statement effectively rejects the view that such draws are exempt under Group 4 of Schedule 9 to the Value Added Tax Act 1994, which exempts facilities for betting, gaming and lotteries.

The parliamentary question reflects growing uncertainty in the sector. Many operators have treated their prize draws as VAT‑exempt on the basis that they provide a game of chance similar to a lottery. HMRC’s position draws a distinction between games of chance, which are exempt, and games of skill or commercial competitions, which are standard‑rated. The government’s clarification suggests that a dual‑entry prize draw—where free postal entries coexist with paid online tickets—does not fit neatly within the gambling exemption.

Background and context

Under existing HMRC guidance, supplying facilities for betting or playing games of chance is normally exempt from VAT. A game of chance involves an outcome determined wholly or partly by chance, whereas games of skill, such as certain competitions are subject to VAT. HMRC’s VAT notice cites “spot the ball” competitions as examples; these were deemed games of chance and thus exempt after a Court of Appeal ruling in 2016. The line between skill and chance, however, is nuanced. In prize draws offering both free and paid entry, HMRC appears to consider the paid ticket sale as a taxable supply rather than a stake in a game of chance.

The value of the exemption may be substantial. Participation in games of equal chance became VAT‑exempt from 29 April 2009, and the exemption covers stakes or takings less any winnings. Operators who have not accounted for VAT on ticket sales may face assessments, penalties and interest. Moreover, under the uncertain tax treatment (UTT) regime, large businesses must notify HMRC when they take a tax position that is uncertain and exceeds a £5 million tax advantage. Treating prize draw entries as exempt despite HMRC’s stated position would therefore trigger a disclosure obligation.

Key details or changes

The voluntary code of good practice for prize draw operators, published by DCMS and updated in February 2026, contains detailed measures on player protection, transparency and accountability. Signatories must fully implement the code within six months of publication and no later than 20 May 2026, sharing best practices and supporting non‑signatories. The code prohibits operators from accepting credit card payments above £250 per month per player, requires age verification and clear complaints processes, and encourages spend limits and self‑exclusion options. While the code does not address VAT directly, it signals heightened regulatory interest in the sector.

The research commissioned by DCMS highlights the scale of the market and its proximity to gambling. An estimated 88 % of prize draw participants also engage in commercial gambling activities, compared with 60 % of adults in the general population. This connection has raised concerns that prize draws may serve as a gateway to gambling, prompting calls for tighter oversight and clearer taxation rules.

Who is affected

Online prize draw operators offering paid and free entry routes are directly affected. Those who have treated entry fees as exempt may face liabilities for under‑declared VAT and should review historic transactions.
Businesses using prize draws for promotions, such as retailers and charities, need to consider whether entry fees constitute taxable supplies. Promotional competitions based solely on skill may remain subject to VAT; free-entry draws with no paid option are outside the scope.
Large corporations are subject to the uncertain tax treatment rules. If their interpretation diverges from HMRC’s position, they must disclose the uncertainty.
Players and consumers are unlikely to see direct tax impacts, but operators may adjust ticket prices or limit paid entries to account for VAT.

Expert Analysis

From a tax and accounting perspective, HMRC’s confirmation narrows the scope of the betting and gaming exemption. The key determinant is whether the consideration paid by participants is a stake in a game of chance (exempt) or payment for a right to enter a competition or prize promotion (taxable). Operators offering both free and paid entry routes effectively sell a participation right. HMRC’s position aligns with the principle that a competition with a free route is not a “bet” and therefore falls outside the Group 4 exemption.

Businesses that have relied on the exemption should assess their exposure. This includes analysing whether entry fees were treated as exempt and whether input VAT recovery on related expenses (such as prizes or marketing) was restricted. Where VAT was not charged, operators may need to correct past VAT returns and negotiate time‑to‑pay arrangements with HMRC. The UTT regime adds a further layer: taking a position contrary to HMRC’s known stance—such as claiming exemption after February 2026—must be disclosed if the potential tax difference exceeds £5 million.

Why this matters for UK businesses

For operators, the immediate impact of VAT treatment for promotional competitions is financial. Charging 20 % VAT on ticket sales could significantly reduce margins and may require price adjustments or reductions in charitable donations. Businesses that fail to account for VAT risk assessments, penalties and reputational damage. Those using prize draws as marketing tools must also be aware that VAT applies where participants pay to enter; free draws with no purchase requirement remain outside the scope. Compliance obligations extend beyond VAT; operators must implement the voluntary code’s player‑protection measures by May 2026.

The clarification also underscores the need for robust tax governance. Uncertain tax positions should be documented, and businesses should engage early with HMRC to seek confirmation or apply for rulings. Transparent communication reduces the likelihood of costly disputes. In the longer term, litigation may test whether the dual-entry draw model genuinely falls outside the betting exemption, echoing the successful “spot the ball” challenge. Until courts provide further guidance, conservative treatment and disclosure will be prudent.

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VAT Treatment for Promotional Competitions: What Businesses Should Do

Review current and historic prize draw models to determine whether entry fees have been correctly treated for VAT purposes and identify any under‑declared VAT.
Distinguish between games of chance and games of skill. Where an element of skill predominates, treat the supply as taxable; where it is pure chance with a stake, exemption may apply.
Implement the DCMS voluntary code by 20 May 2026, including spend limits, age verification and restrictions on credit card payments.
Assess uncertain tax treatments and notify HMRC if the tax advantage exceeds the £5 million threshold, particularly if adopting a position contrary to HMRC’s statement.
Seek professional advice before launching prize promotions to ensure VAT compliance and mitigate potential liabilities.

How Apex Accountants Can Support Your Business with VAT on Prize Draws and Competitions

At Apex Accountants & Tax Advisors, we offer expert guidance on VAT and indirect taxes related to prize draws and promotional competitions. Our services include:

VAT Reviews: Assessing your prize draw and competition models to ensure they align with the latest VAT regulations.
Exemption Analysis: Determining whether VAT exemptions apply and evaluating any potential historic VAT exposure.
VAT Registration & Return Adjustments: Supporting VAT registration, filing adjustments, and handling negotiations with HMRC.
Voluntary Code Compliance: Assisting with the implementation of the voluntary code, including age verification and spend limits compliance.
Uncertain Tax Treatment Notifications: Offering expert advice on uncertain tax treatment and helping you prepare necessary documentation.

Conclusion

The UK government’s confirmation that paid entries to prize draws are subject to standard‑rated VAT signals a shift in the treatment of a rapidly growing sector. With millions of participants and significant sums at stake, prize draw operators must reassess their tax positions and prepare for increased compliance obligations. The forthcoming voluntary code aims to improve consumer protections, and the uncertain tax treatment regime encourages transparency. Businesses that take proactive steps to review their prize promotions, implement the code and engage with HMRC will be better positioned to manage risks and avoid costly disputes.

Frequently asked questions

Are online prize draws subject to VAT?

Yes. HMRC has confirmed that prize draws offering both paid and free entry routes are not eligible for the betting and gaming exemption; paid entries must be charged VAT at 20 %.

What about free‑entry routes?

Where entry is genuinely free and no payment is required, there is no taxable supply and VAT does not arise. The tax liability applies to the paid entry, not the free option.

Why are games of chance usually VAT‑exempt?

Group 4 of Schedule 9 to the Value Added Tax Act 1994 exempts the provision of facilities for betting or playing games of chance. A game of chance is defined as one where chance or chance and skill combined determine the outcome. However, competitions based principally on skill are standard‑rated.

When does the voluntary code come into force?

Signatories must fully implement the code within six months of its publication and no later than 20 May 2026. The code is not legally binding but demonstrates good practice and may influence regulatory expectations.

What is the uncertain tax treatment regime?

Since 1 April 2022, large businesses with turnover above £200 million or assets exceeding £2 billion must notify HMRC when they adopt a tax position that is uncertain and exceeds a £5 million tax advantage. Adopting a position contrary to HMRC’s confirmed view on prize draws could trigger this notification.

Do prizes attract VAT?

For exempt betting and gaming supplies, the stake money is outside the scope of VAT and prizes are not taxable; only the net takings are exempt. Where a prize draw is taxable, any input VAT on goods given as prizes may be recoverable, subject to normal rules.

Could future litigation change HMRC’s position?

Possibly. The 2016 “spot the ball” case demonstrated that courts may classify certain competitions as games of chance. If a court were to decide that dual‑entry prize draws are bets or lotteries, they could become exempt. Until then, HMRC’s stated position applies and businesses should account for VAT accordingly.

UK Tax Allowances: Ways to Make the Most of 2025/26 Before 5 April

Posted on 16 March 202618 March 2026 by Maliha Javaid

As the end of the UK tax year approaches, it’s crucial to make the most of available tax allowances before the 5th of April. With inflation impacting your finances, the freezing of income tax thresholds until at least 2031, and rising living costs, optimising your UK tax allowances has never been more important. This guide will explore key allowances available for the 2025/26 tax year and how you can strategically plan your finances for the future.

UK Tax Allowances You Should Use Before the End of the Tax Year

Whether you’re looking to save for the future, reduce your taxable income, or pass on assets to loved ones, knowing which allowances to use before the end of the tax year is essential. Here are the primary allowances you can take advantage of:

1. Personal Allowance and Marriage Allowance

Personal Allowance: For the 2025/26 tax year, you can earn up to £12,570 tax-free. However, once your income exceeds £100,000, this allowance begins to taper off and is entirely phased out by an income of £125,140. Planning for this can help mitigate higher tax liabilities.
Marriage Allowance: If one spouse or civil partner earns below the personal allowance threshold, they can transfer up to 10% of their allowance to the other partner, reducing the higher earner’s tax bill. This could save up to £250 per year for eligible couples.

2. Savings Allowances

Personal Savings Allowance: If you’re a basic-rate taxpayer, you can earn up to £1,000 in savings interest tax-free. For higher-rate taxpayers, the allowance drops to £500, and additional-rate taxpayers are not eligible for this relief.
Starting Rate for Savings: If your non-savings income is below £12,570, you could be eligible to earn up to an extra £5,000 of interest taxed at 0%. This starts to taper off as your other income rises.

3. Capital Gains Tax (CGT) Annual Exempt Amount

CGT Exempt Amount: For individuals in the 2025/26 tax year, the annual exempt amount stands at £3,000. If you’re married or in a civil partnership, both you and your partner can combine your allowances, creating a £6,000 buffer for jointly held assets. This allowance can be particularly useful when selling assets like shares, second properties, or collectibles.

4. Dividend Allowance

Tax-Free Dividends: If you own shares, you can earn up to £500 in dividends tax-free in 2025/26. This allowance will gradually decrease over time, so if you have investments, using this allowance now could help reduce your tax burden.

5. Inheritance Tax (IHT) Allowances

Annual Gifting Exemption: Every individual has a £3,000 annual exemption for IHT, which can be carried forward for one year if unused. You can also gift up to £250 to as many people as you like without it counting towards your £3,000 exemption.
Marriage and Civil Partnership Gifts: In addition to the £3,000 annual exemption, you can gift £5,000 to a child, £2,500 to a grandchild, or £1,000 to anyone else as part of a wedding gift.

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Strategic Planning for UK Tax Year-End Planning 2025/26

The end of the tax year (5 April) is the deadline for using your tax-free allowances. Here’s how to plan your UK tax year-end planning 2025/26 strategy:

Use Your ISA Allowance

ISAs offer a valuable opportunity to save or invest without paying tax on the returns. You can contribute up to £20,000 into an ISA in 2025/26. Contributions can be spread between Cash ISAs, Stocks & Shares ISAs, and Innovative Finance ISAs. Since this allowance cannot be carried forward, you must use it before the end of the tax year.

Cash ISAs: These are best for short-term savings, as they offer competitive interest rates with tax-free earnings.
Stocks and Shares ISAs: These offer the potential for higher long-term returns, although with some market volatility. They’re best used for medium- to long-term goals, such as retirement planning.

Maximise Pension Contributions to Take Full Advantage of Tax Year End Allowances 2025/26

Pensions are one of the most tax-efficient ways to save for retirement. The personal contributions you make to a pension qualify for tax relief, which can significantly reduce your taxable income.

The annual allowance for pension contributions is £60,000 for most people, but this may taper down for those with income over £200,000. Even if you don’t contribute the full £60,000, making regular contributions can help maximise your savings while reducing your current tax liability.

Consider Capital Gains Tax Planning

Capital gains tax applies when you sell assets such as stocks, bonds, property (excluding your primary home), or other investments. To make the most of your £3,000 annual exemption, consider spreading the sale of assets over multiple years or using your spouse’s exemption as well. Be aware of the tax rates on gains, which are 18% for basic-rate taxpayers and 24% for higher-rate taxpayers.

Understanding the Impact of Inflation and Income Thresholds

With the UK facing rising inflation, the value of your personal savings and investments is at risk. This makes using tax allowances to reduce your taxable income and maximise growth even more crucial.

The freeze on income tax thresholds until 2031 means that more individuals are being pushed into higher tax bands due to wage inflation. It’s essential to consider tax-efficient strategies to offset this, including contributions to pensions, ISAs, and gifts to reduce your taxable estate.

The Importance of UK Tax Year-End Planning 2025/2026

The tax year-end planning process is crucial for securing long-term financial health. By proactively managing your allowances and tax-free contributions, you can reduce your taxable income and optimise your savings. Every year offers an opportunity to re-evaluate your financial position and ensure that you are making the most of the tax benefits available.

At Apex Accountants, we can help you navigate the complexities of the UK tax system. Our expert advice ensures that you stay on track with tax-efficient savings and investments.

How We Can Help You Take Full Advantage of UK Tax Allowances

At Apex Accountants, we offer tailored tax planning and accounting services to ensure your financial strategy is in the best possible shape. Whether you’re looking to make the most of your tax year-end allowances 2025/26 or need assistance with long-term wealth planning, we provide expert advice and solutions.

Tax Advice and Planning

Our tax advisors can help you optimise your use of tax allowances, reduce your taxable income, and ensure compliance with the latest HMRC regulations.

Pensions and Retirement Planning

We offer guidance on pension contributions, tax relief, and other retirement planning strategies, helping you make the most of your pension pot.

Capital Gains Tax and Inheritance Tax Planning

Our experts can help you manage capital gains and inheritance tax efficiently, ensuring that you maximise exemptions and avoid unnecessary tax liabilities.

By making strategic use of these tax year end allowances 2025/26, you can ensure that your finances are in the best possible position as we head into the next tax year. Remember, the key is to plan and make the most of every tax-saving opportunity before the 5th of April deadline.

For more advice on UK tax year-end planning 2025/2026, or if you need assistance with any tax-related matters, feel free to reach out to us. We’re here to help guide you through the process and ensure you take full advantage of the tax allowances available.

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FAQs on Tax Year-end Allowances 2025/26

1. Is the personal tax allowance going up in 2025–26?

No, the personal tax allowance remains at £12,570 for the 2025/26 tax year. There are no confirmed plans for an increase in the personal allowance for this period.

2. What are the tax allowances for 2025–26?

For 2025/26, key allowances include the personal allowance (£12,570), savings allowance (£1,000), dividend allowance (£500), capital gains tax exemption (£3,000), and various gifting and inheritance tax exemptions.

3. Is HMRC considering raising the personal tax allowance from £12,570 to £20,000?

No, HMRC has not announced any plans to raise the personal tax allowance to £20,000. It remains at £12,570 for the 2025/26 tax year without major changes anticipated.

4. What are the tax thresholds for 2025?

The income tax thresholds for 2025 include the personal allowance of £12,570, the basic rate at £12,571–£50,270, and the higher rate between £50,271–£150,000, with the additional rate above £150,000.

5. What is the dividend allowance for 2025–26?

For 2025/26, the dividend allowance is £500. Tax on dividends above this allowance is charged at 8.75% for basic rate, 33.75% for higher rate, and 39.35% for additional rate taxpayers.

6. Is the UK tax allowance changing in 2025?

The UK tax allowance will remain the same for 2025, with the personal allowance staying at £12,570. However, it is important to note that the allowance will gradually be phased out for individuals with income above £100,000, and it will be lost entirely for those earning over £125,140.

7. What is the tax exemption limit for assessment year 2025/26?

The tax exemption limit for the 2025/26 assessment year will depend on the specific type of tax relief or exemption. For example, the personal allowance remains £12,570, and the inheritance tax annual exemption is £3,000. Other allowances, like the capital gains exemption, may also apply to certain assets.

8. How much tax will I pay in 2025/26 UK?

The amount of tax you will pay in the 2025/26 tax year depends on your income level and type. The personal tax allowance is £12,570, and income above this will be taxed at varying rates. For example, income between £12,570 and £50,270 will be taxed at the basic rate of 20%, while income over £50,270 is taxed at 40% and above £150,000 at 45%. Calculating your exact tax depends on your earnings, tax code, and deductions.