Taxes Archives

British Retailers Call for Action on Small-Parcel Import Tax Loophole

Posted on 3 July 20263 July 2026 by Farazia Gillani

British retailers are calling on the government to accelerate plans to close the loophole for small parcel import taxes, which allows overseas sellers to ship low‑value parcels into the UK without paying customs duty. Their appeal comes after the 2025 Autumn Budget confirmed that the longstanding low-value import (LVI) relief will be abolished by March 2029 at the latest. For companies competing with online marketplaces that ship millions of parcels valued at £135 or less, the wait for reform feels too long. Accelerating the closure of the loophole for small parcel import taxes would align the UK with reforms in the United States and European Union, helping restore a level playing field for domestic retailers.

A loophole that has grown too large to ignore

Under current rules, individual consignments valued at £135 or less can enter the UK duty‑free. The relief was originally designed for infrequent and low‑value transactions, but it has become a fundamental part of cross‑border e‑commerce. Parcel operators and customs intermediaries submit simplified declarations using a Bulk Import Reduced Data Set (BIRDS), which allows them to clear multiple consignments at once. This simplification has helped overseas sellers to flood the UK market with very cheap goods.

HMRC estimates that the number of consignments imported using BIRDS more than tripled between 2021 and 2024, reaching around 600 million parcels a year. During the same period, the value of low-value imports recorded in BIRDS rose from £3.8 billion to £5.9 billion.

Removing customs duty from these parcels made sense when cross-border parcel volumes were low, but the low-value import relief the UK now offers distorts competition. UK‑based retailers import goods in bulk and pay duties at standard tariff rates, while overseas sellers shipping individual parcels valued under £135 effectively avoid customs duty. The government acknowledges that this situation undermines fair competition and has committed to reforms that will require all sellers, regardless of their location, to pay duties on goods sold to UK consumers.

What the government proposes and why it matters

The 2025 Autumn Budget signposted an end to low-value import relief in the UK, describing it as an “unfair customs arrangement” that allows some online retailers to import goods duty-free. HM Treasury and HM Revenue & Customs have since published a detailed consultation outlining UK customs duty changes for parcels and the broader low-value import regime. The document proposes that the new arrangements take effect by March 2029. For UK high street chains, that timetable feels far away, particularly now that the US has removed its $800 de minimis threshold, and the EU plans to eliminate duty relief on consignments under €150 by 2028.

The government’s consultation suggests three key changes:

Duty liability shifts to sellers and online marketplaces

Under the proposed LVI customs arrangements, sellers and the operators of online marketplaces will be responsible for paying customs duty on consignments of £135 or less. This mirrors the existing VAT model, where marketplaces must charge and remit UK VAT on low‑value sales. By consolidating liability, duty could be collected through quarterly payments away from the border. That would reduce disruption at ports and ensure duty is visible at the point of sale, improving price transparency.

Potential introduction of an administrative fee

The government is considering a flat fee on low‑value imports to fund the extra customs and border costs associated with processing millions of parcels. This fee would be limited to the cost of services rendered and would be paid by sellers or the platforms facilitating sales. Similar fees have been proposed or introduced in other jurisdictions.

A simplified tariff schedule

To help sellers and marketplaces apply the correct duty without having to assign full commodity codes to every item, officials are exploring a “tariff bucket” system – effectively grouping products into bands with set duty rates. Simplifying classification could make compliance more manageable for overseas sellers unfamiliar with the UK Global Tariff schedule.

The consultation also proposes that overseas sellers without a UK presence appoint a fiscal representative in the UK who would be jointly liable for customs debts. The government intends to maintain the existing relief on gifts valued at £39 or less sent between individuals.

Why retailers want reform sooner

Retailers pressing for change argue that waiting until 2029 will allow overseas platforms to cement an even larger presence in the UK. The consultation notes that low‑value import volumes are already substantial, with an estimated 1.6 million parcels arriving every day. Since the United States abolished duty relief for imports under $800 in 2025 and the EU is moving to scrap its €150 exemption, the UK has become an outlier. Industry groups worry that global sellers will increasingly divert their parcels to UK consumers to exploit the remaining duty relief, further eroding domestic market share. They also highlight product safety concerns; when goods circumvent import duties, they often bypass quality checks.

From a revenue perspective, the low‑value import relief is becoming expensive. Once goods are subject to duty, receipts could help fund public services. Introducing an administrative fee of around £2.60 per parcel, as suggested by some retailers, could raise over £1 billion annually. However, designing and implementing new systems will take time, and businesses need certainty. HM Treasury has therefore signalled that reforms must balance fairness with the practicalities of collecting duty and data at scale.

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Practical steps for businesses

Although the new regime and UK customs duty changes for parcels may be several years away, businesses should not wait to prepare. Overseas sellers and marketplace operators should review their supply chains, ensure that systems can capture and report product data, and prepare for quarterly customs duty payments.

Those not established in the UK may need to appoint a fiscal representative and budget for administrative fees. UK retailers should assess how the changes could affect pricing and inventory strategies; some imports currently shipped under the £135 threshold may become subject to duty and higher costs.

All stakeholders can respond to the government consultation, which runs until March 2026, and help shape the final design of the new customs arrangements.

The abolition of LVI relief also interacts with VAT. Since January 2021, the UK has abolished the VAT exemption for goods under £15 and requires sellers dispatching goods valued at £135 or less to register for UK VAT and charge it at the point of sale. Businesses must continue to account for VAT correctly while preparing for future customs duties.

How Apex Accountants & Tax Advisors can help

Navigating cross‑border trade rules is complex. Apex Accountants & Tax Advisors works with retailers, online marketplace operators and logistics firms to interpret the evolving customs and VAT landscape. Our team can help you:

Analyse how the removal of the LVI relief and the potential small parcel import tax loophole closure will affect your cost base and pricing.
Register for UK VAT and design systems to collect customs duty and VAT on low‑value consignments.
Prepare for quarterly duty payments and develop processes for appointing fiscal representatives if you do not have a UK establishment.
Model the financial impact of possible administrative fees and simplified tariff schedules.

We collaborate closely with clients to ensure compliance with HMRC guidance, integrate duty calculations into accounting systems and plan for changes well ahead of the March 2029 target. Contact Apex Accountants today to discuss tailored strategies for your supply chain and e‑commerce operations.

Frequently asked questions

What is the low-value import relief, and why is it being removed?

The LVI relief allows consignments of goods valued at £135 or less to enter the UK without paying customs duty. The government plans to abolish it by March 2029 because the relief has been exploited by overseas sellers, distorting competition and undermining tax fairness.

When will the new customs arrangements come into force?

HM Treasury intends the new LVI customs arrangements to take effect by March 2029, but British retailers are urging the government to implement changes sooner.

Who will pay customs duty under the new regime?

The consultation proposes making sellers and online marketplace operators responsible for paying duty on low‑value consignments, aligning with existing VAT rules.

Will there be any exemptions?

The government plans to retain the relief for non‑commercial gifts valued at £39 or less sent between private individuals. All other consignments will be subject to customs duty and potentially an administrative fee.

What is the proposed administrative fee and why?

Officials are considering a flat fee on low‑value imports to cover the cost of processing millions of parcels. Retailers have suggested a fee of about £2.60 per parcel, but the government is still gathering views through its consultation.

How should businesses prepare?

Companies should ensure they are compliant with VAT rules, plan for quarterly customs duty payments and monitor the consultation. Overseas sellers without a UK presence may need to appoint a fiscal representative. Engaging with advisers, such as Apex Accountants, can help businesses adapt their systems and minimise disruption.

HMRC v M R Currell Ltd [2026] – Genuine Loan via EBT Not Taxable as Salary

Posted on 26 May 202626 May 2026 by Farazia Gillani

In HMRC v M R Currell Ltd [2026] EWCA Civ 445, the Court of Appeal held that an £800,000 payment routed through an Employee Benefit Trust (EBT) was a genuine loan, not taxable employment income, because it carried a real obligation to repay. In April 2026, the court confirmed that Mr Currell received a loan, not extra pay, so he did not gain taxable earnings from the transaction. This clarifies that simply using a trust to channel funds does not automatically turn money into a salary – the substance of the transaction matters.

Disguised remuneration (DR) rules have long targeted schemes that shift pay into loans or benefits via third parties. In 2011 the government enacted Part 7A of ITEPA 2003 to catch such schemes involving intermediaries. Later, the controversial Loan Charge (2019) aimed to tax old loan arrangements. However, under general law, a payment is only taxed as earnings if it arises “from the employment”. As HMRC’s own manuals note, a profit or payment “arose from something else” than employment if it did not truly come as a reward for services. In Currell’s case, the money was a loan – a debt Mr Currell had to pay back – not an additional salary.

Background: Disguised Remuneration & EBT Loans

Disguised Remuneration Rules (Part 7A ITEPA 2003):

Introduced in 2011 to target third-party schemes avoiding income tax. They tax “relevant steps” (like making a loan through a trust) as if they were paid.

Loan Charge (2019):

Further rules will tax old disguised remuneration loans. Importantly, changes after a 2025 review limit the charge to loans made on/after 9 Dec 2010.

General Tax Law:

Under s.62 ITEPA (formerly s.19 ICTA), only payments “from the employment” are earnings. Courts ask, ‘Did the benefit come in return for work or from some other source?’

Example: HMRC’s own guidance says that a gift (e.g., a wedding present) from an employer is not taxed because it’s not “from the employment” but from a personal occasion. By analogy, a genuine loan made to an employee – especially through a trust – may not be “from” the job and thus not automatically considered earnings.

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Facts of the Currell Case

Date	Event
Nov 2010	Company Contribution: M R Currell Ltd (a small painting business) pays £800,000 into a newly created EBT.
Nov 2010 (same day)	Loan to Director: The EBT trustees immediately lend £800,000 to Mr M. Currell (a director) at 0% interest for 5 years, secured on the company shares he buys.
2010 (shortly after)	Share Purchase: Mr Currell uses the loan to buy shares (A shares) from his wife. Mrs Currell then loans the money back to the Company.
2011 onwards	Tax Challenge: HMRC investigates and assesses the £800k as if it were Mr Currell’s earnings, seeking income tax and NICs.

The key points of the arrangement were that the loan was fully documented, secured by Mr Currell’s shareholding, and he clearly intended (and was able) to repay it. The First-tier Tribunal (FTT) initially treated the payment to the trust as taxable pay, essentially calling it a reward for Mr Currell’s services. On appeal, the Upper Tribunal (UT) found the opposite: the contribution to the EBT was made solely to enable the loan, and since the loan had a real repayment obligation, the payment was not considered earnings.

FTT (201X):

Viewed the £800k contribution (the “Payment”) as remuneration for Mr Currell’s work, relying on previous cases like RFC 2012 Plc v Advocate General for Scotland (“Rangers”) that held payments to a trust could be earnings when they were agreed upon as part of salary.

UT (2024):

Ruled that the FTT made an error. It held that the loan itself was genuine and repayable, so the contribution was not Mr Currell’s pay. The UT “remade” the decision in HMRC’s favour (legally speaking) and concluded that the £800k was not taxable as earnings because of the loan’s bona fide nature.

Court of Appeal Decision

The Court of Appeal (CA) upheld the Upper Tribunal. It firmly agreed that the loan was genuine and properly characterised. Key principles from the judgement include the following:

Characterisation Over Purpose:

The court stressed that the character of a payment must be determined before applying tax law. Money spent on employee benefits does not automatically become “earnings” simply because of the purpose. In Currell’s case, the money went into the trust and then became a loan. The CA emphasised that one must look at what the transaction actually was, not just at why it happened.

Genuine Loan ≠ Earnings:

A loan with a real promise to repay is not earnings. The court noted that an employee receiving a genuine loan with repayment terms is not getting a benefit worth money in the sense of pay. Instead, any fiscal “benefit” (like zero interest) is taxed under the special loan/beneficial loan charge rules, not as salary. As the CA aptly put it, “In truth, what Mr Currell got was the loan. This was not a case of diverting remuneration to the EBT.”

Read: Everything You Need to Know About Director’s Loan Write-Off and the Douglas Boulton Case

Distinguishing Rangers:

In Rangers (the 2017 Supreme Court case), it was already common ground that the monies were remuneration; the only question was whether a trust could receive them. Here, by contrast, the very nature of the payment was in dispute. The CA highlighted a “fundamental distinction”: unlike Rangers, in Currell it was not agreed the money was due as salary in the first place. Because the loan was secured and had to be repaid, the Court found it was incorrect to equate it with Mr Currell’s pay.

Limited Circumstances for Taxing Loans:

The Court noted that only in limited cases – for example, a sham loan or arrangement – could a loan be treated as earnings. On Currell’s facts, there was no sham. The suggestion that a borrower’s control over a lender (e.g., via share ownership) could turn the loan into pay was dismissed; no legal authority supported that idea.

Caution Against Overreach:

In its concluding remarks, the CA warned that HMRC’s broad approach could have unintended consequences. It gave examples: if every loan through a third party were taxed as pay, ordinary loans (like directors withdrawing loan account balances or loan season-ticket schemes via payroll) might wrongly be caught. This “close inspection of the trees” could miss the bigger picture. The court thus signalled that normal commercial loans should not be swept up as disguised salaries.

In summary, the Court of Appeal agreed that the Upper Tribunal’s conclusion “was the only one that could have been reached” and expressly adopted its view that the £800k was not part of Mr Currell’s earnings.

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Practical Implications for Businesses and Advisers

The Currell ruling offers important guidance for businesses, directors and accountants dealing with trust-based benefits.

Genuine loans must be clear:

Any loan from a company (even via a trust) should be well-documented, with a realistic repayment schedule and security. The court noted Mr Currell’s loan was properly secured on his shares and he had independent means to repay them. Companies should “confirm loans from EBTs/trusts are properly documented, secured, and carry a realistic repayment obligation”.

Characterise the transaction:

Focus on the substance over the formal route. If an employee receives money that they must repay, it is more logically a loan than extra salary. As HMRC’s rules (and this case) emphasise, one must decide if the benefit came “from the employment”. In practice, explain in writing that the payment is a loan for a commercial purpose (e.g., a share purchase), not a payment for work.

Trustees’ independence:

Ensure that trustees genuinely make trust decisions, rather than merely rubber-stamping them as the company or director would. The CA pointed to the importance of true trustee control. If trustees simply do what the employer directs, HMRC may argue the trust is a sham conduit.

Use Currell in disputes:

If HMRC challenges a loan from EBT as disguised remuneration, this case is strong authority (for pre-2011 schemes) to insist the loan is taxed as such, not as salary. Advisers should request that HMRC confirm the character of the payment (loan vs remuneration) and cite Currell’s reasoning on s.62 analysis.

Beware modern DR rules:

Currell was a pre-2011 loan (Part 7A came into force in Oct 2011) and a pre-loan charge. After 2011, the law expanded to treat many third-party loans as income immediately. The Court acknowledged that Parliament later closed this gap. So do not assume that post-2011 or Loan Charge-era loans can avoid tax; new anti-avoidance rules will often apply. In short, Currell vindicates older arrangements, but “for post-2011 structures, Currell does not provide a free pass.”

Review legacy schemes:

This decision is an opportunity to re-check any old EBT or loan arrangements. Where a loan was truly made and intended to be repaid (even if it was tax-advantaged), Currell suggests it was not income at the time. Conversely, any sham or purely circular schemes should be unwound or settled.

Seek expert advice:

The line between a legitimate loan and a disguised salary can be fine. Specialist tax advice (or even HMRC clearance) is prudent for complex arrangements. The Currell judgement itself recommends getting professional opinions and structuring “defensively” under Part 7A rules.

How We Help

As chartered accountants and tax specialists, Apex Accountants can help you navigate EBT schemes and employee tax:

Tax planning & compliance: We advise on structuring loans, share purchases or benefits so they meet legal requirements and minimise tax risk.
Disguised remuneration & EBT advice: Our team stays up to date on cases like Currell. We can review any trust-based arrangements and ensure they pass the correct legal tests.
HMRC dispute support: If you face an enquiry or need to appeal an HMRC decision, we can help develop your case (for example, using Currell to argue your loan was not taxable earnings).
Loan Charge guidance: We assist clients with historic loan schemes to check if and how the Loan Charge or new rules apply.
Tailored accounting services: From company accounts to payroll taxes and beyond, we provide practical support to UK businesses of all sizes.

With our expertise, you’ll get clear, practical advice grounded in the latest laws and court decisions. We aim to protect your interests and help you stay compliant without paying more tax than necessary.

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Conclusion

The HMRC v M R Currell Ltd [2026] case is a reminder to look at the true nature of payments. A bona fide loan – even one routed through an EBT – should be treated as a loan for tax purposes, not as hidden earnings. This means thorough documentation and honest substance are vital. While later legislation (Part 7A, Loan Charge) has tightened the rules, Currell restores balance for older arrangements. It shows that legitimate trust arrangements with real loans won’t automatically trigger income tax just because a trust is involved. For specific situations, always seek tailored advice.

Contact Apex Accountants for expert support on employment taxes, EBT schemes and any HMRC issues. We’ll help you understand how cases like HMRC v Currell Ltd may affect your affairs and ensure you comply with tax law.

FAQs About HMRC v M R Currell Ltd [2026]

What was the main point of the Currell judgement?

The Court of Appeal confirmed that when a company’s contribution to a trust is used to fund a loan to an employee, this loan – if genuine and repayable – is not automatically taxable as earnings. In Currell’s case, the £800k he received was treated as a loan (with a real obligation to repay), not as salary.

How is this different from the Rangers’ case?

Rangers (2017) held that if an employee contracts to have part of their salary paid to a trust, it is taxable when it enters the trust. In Currell, by contrast, the court found that the parties disputed whether any salary was ever deferred; here, the arrangement was purely a loan. The Court emphasized that, unlike Rangers, it did not agree that Mr Currell had earned this money as pay.

Does this mean EBT loans are tax-free?

Not always. Currell specifically involved a loan made in 2010, before new anti-avoidance rules (Part 7A ITEPA, Loan Charge) took effect. The Court’s logic focused on that time. Today, many loans via trusts fall under strict DR legislation. However, Currell shows that if a loan was genuinely commercial and was entered into before 2011, it may not have been considered “earnings,” even if it was routed through a trust.

What should employers do now?

Companies should ensure any employee loans (direct or through trusts) are bona fide: documented, secured, and repaid. If using an EBT or similar vehicle, trustees must act independently. In case of HMRC enquiries, use the Currell case to argue that the loan should be taxed under the loan rules, not as salary, by highlighting the legal distinction. Always keep clear records of the purpose (e.g., a share purchase) to show the commercial rationale.

Will this case affect employees and tax appeals?

Yes. Individuals or employers who took loans from trusts (especially before 2011) can reference this ruling. It may overturn earlier assumptions that “trust = tax avoidance”. For appeals, lawyers and accountants will likely cite Currell when challenging HMRC assessments on genuine loans.

VAT Evasion Penalties in the UK: Cunningsburgh Man Who Evaded £166,000 in Tax Ordered to Pay Just £1

Posted on 27 April 202626 May 2026 by Farazia Gillani

A recent case in Shetland has put the spotlight on VAT fraud and confiscation orders in the UK. A businessman from Cunningsburgh, who fraudulently claimed £166,000 in VAT refunds, was sentenced to 18 months in prison, highlighting the severe VAT evasion penalties in the UK, and ordered to pay only £1 under the Proceeds of Crime Act. The man, a company director in his forties, exploited the VAT system by inflating invoices, claiming input tax on personal purchases, and submitting falsified bank statements to HM Revenue & Customs (HMRC). Despite the significant financial wrongdoing, the court was only able to enforce a token confiscation order due to the man’s lack of assets to seize.

This case highlights the risks of VAT fraud and raises concerns for UK businesses about the consequences of such offences. With the tax authorities pursuing strict punishments for fraudsters, this case serves as a reminder to businesses about the importance of VAT compliance and the consequences of evading tax responsibilities.

How the fraud was carried out

Evidence presented in court suggested that the Cunningsburgh director used a mix of fraudulent techniques:

Falsified paperwork – he created or edited invoices and bank statements to inflate the value of purchases or to show that personal expenses were legitimate business costs. Under the VAT system, businesses can reclaim the tax paid on goods and services used in their trade; by doctoring documents, he increased his input tax claims.
Misuse of personal purchases – personal items such as vehicles and household goods were bought at the normal VAT-inclusive price and then claimed as business expenses. HMRC considers such behaviour fraudulent VAT evasion because the input tax is not attributable to taxable supplies.
Sustained deception – local reports indicate that the fraud continued for almost two years before HMRC identified irregularities. The sentencing judge at Lerwick Sheriff’s Court described the behaviour as “devious” and “calculated.”

The fraudulent scheme was uncovered after VAT compliance services for businesses flagged inconsistencies between VAT returns and underlying records. This case further highlights the importance of UK VAT fraud risk management to help businesses avoid such risks and ensure proper VAT compliance. During the sentencing hearing, the judge mentioned the need for a deterrent sentence and stressed that VAT fraud harms the public purse. The 18‑month custodial term is consistent with the Sentencing Council’s guidelines, which state that fraudulent evasion of VAT under section 72 of the Value Added Tax Act 1994 can result in custodial sentences of up to 14 years and that offence ranges span from a band C fine to 13 years’ custody.

VAT fraud in the UK: Legal framework and penalties

Fraudulent evasion of VAT is a criminal offence under section 72 of the Value Added Tax Act 1994. The legislation provides for serious penalties. Where a person is knowingly involved in the fraudulent evasion of VAT, they are liable:

On summary conviction – to a penalty up to the statutory maximum of £20,000, or three times the amount of VAT evaded, whichever is greater, and up to six months’ imprisonment.
On conviction on indictment – to an unlimited fine or imprisonment for up to 14 years, or both. The Sentencing Council notes that the maximum sentence for offences committed on or after February 22, 2024, is increased from seven to fourteen years.

HMRC also has civil penalties for participating in transactions connected with VAT fraud. Company officers may be jointly liable if their actions facilitated the fraud. HMRC’s compliance‑checks factsheet states that when HMRC denies input tax under the ‘knowledge principle’ (where a trader knew or should have known the transaction was fraudulent), the penalty is fixed at 30% of the VAT denied, emphasising the importance of UK VAT fraud risk management.

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Confiscation orders and the £1 payment

After criminal convictions, courts can make confiscation orders under the Proceeds of Crime Act 2002. These orders require offenders to repay the benefit from their crime. Where no recoverable assets are available, the court may impose a nominal order, often £1. The token order does not wipe out the debt – if assets are discovered later, the full sum can be recovered, and failure to pay can lead to further imprisonment. The Cunningsburgh case thus illustrates a paradox: although the offender stole more than £166,000, he currently has no assets, so he is only ordered to repay a pound. The debt remains enforceable for life and will be revisited if he acquires assets in future.

Implications for UK businesses

This case underscores several broader themes for businesses:

VAT is a trust-based tax – HMRC relies on businesses to submit accurate returns, and VAT compliance services for businesses can help ensure compliance and avoid costly mistakes. Fraudulent claims directly deprive the Treasury of revenue, and HMRC invests significant resources in compliance checks and data analytics. Finding irregularities can lead to civil penalties, public naming, and criminal prosecution.
Directors can be personally liable – under HMRC’s guidance, company officers may be liable for penalties when they knew or should have known that transactions were connected with VAT fraud. Directors should ensure robust controls over invoicing, record‑keeping and VAT calculations.
Fines and prison terms are severe – VAT fraud is not a minor offence. The Value Added Tax Act allows fines up to three times the tax evaded and imprisonment for up to 14 years. Sentences vary according to culpability and harm, but courts take sustained deception seriously, as shown by the 18‑month term in this case.
Confiscation orders persist – nominal orders do not absolve the offender. Businesses and individuals tempted to hide assets should note that the Proceeds of Crime Act enables recovery years after conviction.

Practical steps to prevent VAT fraud

Businesses can mitigate risk and avoid unintentional involvement in VAT fraud by adopting good practices:

Strengthen internal controls: implement checks on invoicing and purchasing processes to improve HMRC VAT audit support and help prevent VAT fraud for companies. ensure that all expenses claimed for VAT recovery are wholly and exclusively for business purposes.
Keep accurate records: maintain digital and physical records that support VAT claims. HMRC’s Making Tax Digital rules mandate the electronic storage of VAT records.
Conduct due diligence on suppliers: if you buy from missing traders or carousel fraudsters, HMRC can deny your input tax claim and charge a 30 % penalty. Verify that suppliers are genuine and VAT‑registered.
Seek professional advice early: consult tax advisers before embarking on complex transactions; disclosure of errors to HMRC can reduce penalties.
Train staff: ensure finance and procurement teams understand the VAT rules and the difference between business and personal expenditure.

How Apex Accountants & Tax Advisors can help

Apex Accountants & Tax Advisors offers specialist support to prevent VAT abuses like those seen in the case of the Cunningsburgh man who evaded £166,000 in VAT. Our chartered tax advisers assist clients with:

Compliance reviews – assessing whether your VAT returns and systems meet HMRC standards.
VAT planning: structuring transactions to maximise legitimate relief while avoiding the pitfalls of fraudulent schemes.
Representation in HMRC investigations – if HMRC opens a compliance check, we provide expert advocacy and negotiate on your behalf.
Training and governance – designing internal controls and staff training to minimise the risk of errors or fraud and enhance HMRC VAT audit support for businesses.

With the tax authority increasingly using sophisticated analytics and the courts imposing severe penalties, expert advice has never been more important. Contact Apex Accountants today to arrange a confidential consultation and ensure your business stays on the right side of the law.

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Frequently asked questions

What constitutes VAT fraud?

VAT fraud involves deliberately misstating or concealing information to reduce VAT liabilities. Examples include failing to register for VAT when required, submitting false invoices, claiming input tax on personal expenses, and participating in missing trader carousel schemes. Section 72 of the Value Added Tax Act 1994 criminalises fraudulent VAT evasion.

What penalties can HMRC impose without a criminal prosecution?

HMRC can deny input tax and levy civil penalties. Under the knowledge principle, the penalty is 30 % of the VAT denied. HMRC may also publish the names of businesses and directors involved in serious VAT fraud.

When must a business register for VAT?

A UK business must register if its taxable turnover exceeds the registration threshold (currently £90,000 per annum). Deliberate failure to register when required is treated as tax evasion and can lead to penalties or criminal charges.

Can directors be personally liable for VAT fraud committed by their company?

Yes. HMRC guidance states that company officers who knew or should have known about fraudulent transactions can be liable for all or part of the penalty. Criminal prosecution is also possible under section 72 of the VAT Act.

What happens if someone cannot pay a confiscation order?

The court may impose a nominal order, often £1, if there are no recoverable assets. However, the full amount remains due, and authorities can recover assets later. Failure to pay confiscation orders can result in additional prison sentences.

How Company Car Tax Bands Work and What You Will Pay

Posted on 17 April 202617 April 2026 by Rida Ahmed

In the UK, most company cars (and vans) used for private purposes fall under benefit-in-kind taxation. The value is calculated using the vehicle’s list price, while the applicable percentage is determined through tax bands for company cars, which are based on CO₂ emissions and the type of fuel used.

In practice, HMRC publishes percentage bands for each tax year – you multiply the car’s list price by the relevant percentage to get the taxable benefit. Low-emission vehicles attract much lower percentages, while high-emission cars top out at 37%. The taxable value is further reduced if the employee pays anything towards the cost, uses the car only part-time, or has a car has low CO₂ emissions.

How Compay Car Tax Bands Are Calculated

Benefit calculation

The BIK rate is a percentage of the car’s original list price (including VAT and options). HMRC sets the percentage in the CO₂ band. For example, a petrol/diesel car emitting 145 g/km might be taxed at 35% of its list price, whereas a new electric car is taxed at only a few percent.

Emission bands:

Cars are grouped by CO₂ emissions (g/km) and, for hybrids/plug-ins, by their electric-only range. Each band has a set percentage. Lower bands (cleaner cars) pay less tax. The table below summarises the 2025/26 and 2026/27 company car tax rates. (From April 6, 2026 new rates apply.)

CO₂ emissions (g/km) & electric range	2025/26 rate (%)	2026/27 rate (%)
Zero emission (fully electric)	3 %	4 %
1–50 (≥130 mile EV range)	3 %	4 %
1–50 (70–129 mile range)	6 %	7 %
1–50 (40–69 mile range)	9 %	10 %
1–50 (30–39 mile range)	13 %	14 %
1–50 (<30 mile range)	15 %	16 %
51–54	16 %	17 %
55–59	17 %	18 %
60–64	18 %	19 %
65–69	19 %	20 %
70–74	20 %	21 %
≥75 (all higher bands)	21 %–37 %	21 %–37 %

Table: Company car BIK rates for tax years 2025/26 and 2026/27 by CO₂ emissions and electric range.

Why Electric Cars Have the Lowest Tax Rates

Fully electric cars sit at the lowest end of the tax scale.

For the 2025/26 tax year, the rate is 3%. This increases slightly to 4% in 2026/27.

Plug-in hybrids with a long electric range (130+ miles) follow the same pattern. This makes them a strong option for reducing overall tax liability.

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

How Plug-in Hybrids and Mid-Range Cars Are Changing

Other plug-in hybrids are also seeing small increases. Each band rises by 1 percentage point depending on electric range.

For example:

70–129 miles range → slight increase
40–69 miles range → slight increase
Below 30 miles range → higher tax compared to longer-range models

Cars with moderate emissions (51–74 g/km) also move up by 1%.

A car emitting 65–69 g/km increases from 19% to 20%

Higher emissions continue to push vehicles into more expensive brackets.

When These Changes Came Into Effect

The updated rates apply from:

April 2025 (2025/26 tax year)
April 2026 (2026/27 tax year)

These changes form part of a gradual shift rather than a sudden increase.

What to Expect in the Coming Years

Tax rates for electric vehicles will rise slowly over time.

Planned increases include:

6% in 2027/28
8% in 2028/29
9% in 2029/30

Even with these changes, electric cars will remain the most tax-efficient option.

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The Highest Tax Rates for Petrol and Diesel Cars

Petrol and diesel vehicles continue to sit at the top end of the tax scale.

The maximum rate remains at 37%
This applies once emissions go above 160 g/km

In simple terms, the higher the emissions, the higher the tax.

How it works

The employee’s taxable benefit is calculated by:

This is the car’s list price, which includes any accessories and VAT.
Applying the appropriate percentage from the table above.
Multiplying by the employee’s income tax rate (e.g., 20% or 40%) to find the tax due.

Example: A £30,000 car with 0 g/km CO₂ (electric) has a 3% BIK in 2025/26. The taxable benefit is 3% of £30,000 = £900. A 20% taxpayer would pay £180 in tax (20% of £900).

Special cases:

If you pay something towards the car’s cost (e.g., contribute to the lease or petrol), such payment reduces the taxable value.
Part-time availability (less than 15 hours/week) also reduces the taxable benefit.
Employer-provided fuel for private use is a separate charge: free petrol/diesel triggers a fuel benefit (using a fixed multiplier × BIK%). For 2026/27 the fuel multiplier is £29,200 (up from £28,200). Electric charging at home is treated differently and generally has no fuel benefit charge if no fuel is given.

Staying up to date:

HMRC guidance is updated each year. For example, HMRC’s table (Appendix 2) was updated in April 2026 to include the new 4% EV rate. Always check the latest GOV.UK guidance or use HMRC’s online calculator to estimate your specific tax.

Read: 5 VAT Strategies For Car Garages To Use In 2026

Key Points on Low-Emission Vehicles

Electric cars (0 g/km) enjoy very low tax. From April 2026, their BIK rate is 4%, up from 3% previously. The charge is based on list price, not fuel costs.
Plug-in hybrids are taxed by their declared CO₂ and electric range. A PHEV with a 100 miles range might pay 10–14%, whereas the same model with only 30 miles would pay 14–16%. The ranges and rates are in the table above.
Future changes: The government has signalled that EVBIK will rise by 2% each year until 2029. This was confirmed in the 2024 Autumn Budget. Consequently, the BIK rates for even very clean cars will gradually increase – though they will remain much lower than for fossil-fuel cars.

How We Help Businesses Manage Tax on Company Cars

At Apex Accountants, we help businesses and employees navigate company car taxation and other benefits. Our services include:

Tax planning for company cars: Advice on choosing cars, salary sacrifice schemes, and calculating company car BIK to minimise tax costs.
Payroll and Benefits administration: Managing P11D returns, payroll adjustments and ensuring the correct reporting of car benefits.
Company tax and VAT advice: Ensuring employer expenses and deductions (leasing, maintenance) are handled correctly.
Employee benefits consulting: Structuring car and fuel benefits packages that meet business needs and compliance requirements.

Whether you’re an employer arranging a fleet or an employee reviewing your company car deal, our experts can clarify the rules and optimise your tax position.

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FAQs About Tax on Company Cars

When do car tax rates change?

Company car BIK rates update every tax year (6 April). Recent uprating occurred in April 2025 and April 2026. The rates are normally set in Budget or tax announcements and then published by HMRC.

How do I know which CO₂ figure to use for my car?

HMRC gives tables in terms of grams per km under the WLTP (new) or NEDC (old) test cycles. Use the official CO₂ figure from the manufacturer’s spec. (When in doubt, HMRC’s calculator or your payroll department will use the correct value.)

What about tax on fuel costs?

If your employer pays for your private fuel, a separate fuel benefit charge applies. The car fuel multiplier is £29,200 for 2026/27. Electric charge at home generally isn’t taxed as fuel.

Can I reduce my car tax?

Yes. Paying a contribution toward the car’s value or insurance reduces the taxable benefit. Taking a cheaper car or an older car (with a lower list price) also lowers the overall tax.

Where can I find official information about tax on cars and other vehicles?

All rates and rules are published on GOV.UK. See HMRC’s Company car Benefit— appropriate percentage tables for each year and HMRC guides on company car tax.

What Businesses Need to Know About Tax Changes in UK

Posted on 17 April 202617 April 2026 by Nida Umair

In the United Kingdom, “new financial year” can mean two things. The government’s financial year typically runs from 1 April, while the personal tax year runs from 6 April to 5 April. For 2026/27, the tax year started on 6 April 2026. This matters because a lot of the practical tax changes in UK (PAYE, National Insurance, dividend tax rates, capital gains tax relief rates, and the rollout of Making Tax Digital for Income Tax) start from 6 April.

Key dates at the start of the year

Date	What it means in practice
1 April 2026	Start of the Corporation Tax “year” (financial year) for rates that apply to companies’ profits (depending on accounting period start dates).
6 April 2026	Start of the 2026/27 tax year (Income Tax and National Insurance settings apply from this date, and several targeted changes take effect).
5 April 2026	Cut-off to register for voluntary payrolling of benefits in kind for the 2026/27 tax year (if you want to payroll benefits instead of using P11Ds).

Personal tax changes for 2026/27

Most headline Income Tax rates are unchanged, but allowances and thresholds still drive what you actually pay.

Income Tax bands and thresholds

For most people in England, Wales and Northern Ireland, the standard Personal Allowance remains £12,570, and the basic/higher/additional rate structure is unchanged.

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

If your adjusted net income is over £100,000, your personal allowance is tapered away at £1 for every £2 over £100,000, reaching zero at £125,140.

Area	Band (2026/27)	Taxable income	Rate
England, Wales, Northern Ireland	Personal Allowance	Up to £12,570	0%
	Basic rate	£12,571 to £50,270	20%
	Higher rate	£50,271 to £125,140	40%
	Additional rate	Over £125,140	45%

These bands are set out in government guidance for the 2026/27 tax year.

Tax changes for Scottish taxpayers

If you live in Scotland, you pay Scottish income tax rates on wages, pensions and most other non-savings, non-dividend taxable income. Dividends and savings interest remain taxed at UK-wide rates.

Area	Band (2026/27)	Taxable income	Rate
Scotland	Personal Allowance	Up to £12,570	0%
	Starter rate	£12,571 to £16,537	19%
	Basic rate	£16,538 to £29,526	20%
	Intermediate rate	£29,527 to £43,662	21%
	Higher rate	£43,663 to £75,000	42%
	Advanced rate	£75,001 to £125,140	45%
	Top rate	Over £125,140	48%

The tax changes for Scotland taxpayers in the 2026/27 financial year include updated income tax bands and rates, reflecting changes that affect both higher and lower earners across Scotland.

Dividend tax rises from 6 April 2026

A clear “start of tax year” change for investors and owner-managed businesses is dividend taxation. From 6 April 2026:

the dividend ordinary rate rises to 10.75%
the dividend upper rate rises to 35.75%
the dividend additional rate stays at 39.35%

The dividend allowance remains £500 for 2026/27 (so you only pay dividend tax on dividends above this allowance, after considering how the allowance interacts with your wider Income Tax position).

For close companies, it is also worth noting that the “loans to participators” charge is linked to the dividend upper rate and therefore moves in line with that increase.

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Capital Gains Tax and relief rates

The Capital Gains Tax Annual Exempt Amount for individuals remains £3,000 for 2026/27 (with a lower allowance of £1,500 for most trustees).

For many disposals in 2026/27, government guidance shows CGT rates at 18% and 24% for individuals (depending on whether you are a basic rate or higher/additional rate Income Tax payer), with trustees and personal representatives generally at 24% (subject to the detailed rules).

Business Asset Disposal Relief goes to 18%

If you are selling a business (or qualifying shares), the rate under Business Asset Disposal Relief increases again.

Business Asset Disposal Relief means you pay:

18% on qualifying gains for disposals on or after 6 April 2026
14% for disposals between 6 April 2025 and 5 April 2026 (and 10% for earlier disposals)

This change is also reflected in wider official CGT policy material.

Investors’ Relief similarly moves to 18% for disposals on or after 6 April 2026.

Inheritance Tax changes affecting farms and family businesses from 6 April 2026

Another major change that takes effect from 6 April 2026 is a reform to 100% Agricultural Property Relief and 100% Business Property Relief.

Official guidance confirms that, for deaths on or after 6 April 2026, the combined value of qualifying agricultural or business property that can receive 100% relief is capped at £2.5 million.

Where qualifying value exceeds £2.5 million, relief at the lower rate (50%) applies to the excess.

The allowance can also be transferable between spouses and civil partners if a claim is made, and rules also apply for trusts.

Business and employer changes for 2026/27

For employers, the start of the tax year is primarily a payroll event. Rates, thresholds, and employer reliefs need to be correct from the first pay run after 6 April.

National Insurance rates and thresholds

For 2026/27, published National Insurance contribution rates show:

employees in the main category (A) pay 8% on earnings above the Primary Threshold up to the Upper Earnings Limit, and 2% above that
employers pay 15% on earnings above the Secondary Threshold (with modified treatment for specific categories such as under-21s and apprentices)
Class 1A and Class 1B National Insurance on expenses and benefits is 15% for 2026/27

The key thresholds that align strongly with payroll for 2026/27 include:

Primary Threshold: £242 per week (£12,570 per year)
Secondary Threshold: £96 per week (£5,000 per year)
Upper Earnings Limit: £967 per week (£50,270 per year)

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Employment Allowance remains a key employer offset

The employment allowance can reduce eligible employers’ annual employer (secondary) Class 1 National Insurance liability by up to £10,500.

HMRC guidance also confirms that the previous restriction linked to having more than £100,000 of secondary Class 1 NIC liability (in the prior year) ceased from 6 April 2025 onwards.

Corporation Tax for financial years starting 1 April

Corporation Tax rates depend on profits, and the published table for Corporation Tax years starting 1 April shows:

19% small profits rate for companies with profits under £50,000
25% main rate for companies with profits over £250,000
marginal relief applies between those limits (with published limits and fraction).

VAT thresholds and registration

The VAT registration threshold is more than £90,000 of taxable turnover (rolling 12-month test). The voluntary deregistration threshold is £88,000.

If you exceed the threshold, government guidance explains that you must register within 30 days of the end of the month when you went over the threshold. It also sets out the “effective date of registration” as the first day of the second month after you go over.

Making Tax Digital for Income Tax begins for many from April 2026

For sole traders and landlords, the biggest operational change at the start of 2026/27 is the move into Making Tax Digital for Income Tax.

Who must comply from 6 April 2026

Government guidance confirms Making Tax Digital for Income Tax becomes mandatory from 6 April 2026 for individuals with qualifying income over £50,000 from self-employment and property.

It is being phased in, with published thresholds showing:

qualifying income over £50,000 → mandatory from 6 April 2026
qualifying income over £30,000 → mandatory from 6 April 2027
qualifying income over £20,000 → mandatory from 6 April 2028

What it changes day-to-day

HMRC guidance states that you (or your agent) will need compatible software to keep digital records and send quarterly updates, and then submit your tax return and pay tax due by 31 January after the end of the tax year.

There is also a published first-year “soft landing” on quarterly update penalties: where you are required to use MTD from 6 April 2026, HMRC will not apply penalty points for late quarterly updates in the first year (2026/27), though penalties still apply for late tax returns and late payment.

Start-of-year checklist

A clean start in April saves time (and usually stress) later in the year.

Individuals and families:

Check your tax bands and Personal Allowance position, especially if your income is around £100,000 (Personal Allowance taper) or close to £125,140.
If you receive dividends outside ISAs and pensions, update your 2026/27 dividend tax estimates for the rate rise.
If you are planning a business sale or exit, factor in the Business Asset Disposal Relief rate now being 18% for disposals on or after 6 April 2026.
If you have significant farm or business assets, review Inheritance Tax exposure under the new £2.5 million cap on 100% relief for deaths on or after 6 April 2026.

Employers:

Confirm payroll software has the correct 2026/27 PAYE and National Insurance settings.
Check Employment Allowance eligibility and ensure it is being claimed correctly (up to £10,500).
If you want to payroll benefits in kind for 2026/27, registration needed to be completed by 5 April 2026.

Sole traders and landlords:

Use HMRC’s eligibility guidance to confirm if you must join Making Tax Digital from 6 April 2026 and choose compatible software early.

How We Help You Deal With the Recent UK Tax Updates

At Apex Accountants, we help you translate the rules into practical decisions.

We support clients with:

personal tax planning (income tax bands, dividends, CGT planning, and reliefs)
director remuneration reviews in light of the 2026/27 dividend tax rates
payroll compliance, including correct NIC settings and Employment Allowance claims
VAT registration planning and ongoing VAT returns
Making Tax Digital for Income Tax readiness: eligibility checks, software setup, and quarterly update workflows
exit planning (including Business Asset Disposal Relief considerations) and succession planning where Inheritance Tax relief rules have changed from 6 April 2026

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Conclusion

The new 2026/27 tax year brings fewer “headline” rate changes, but several impactful shifts are now live: higher dividend tax rates, an 18% rate under Business Asset Disposal Relief, new Inheritance Tax limits on 100% relief for qualifying farm and business assets, and the first mandatory phase of Making Tax Digital for Income Tax.

FAQs About 2026 Tax Changes in UK

When does the UK tax year run?

The 2026/27 tax year runs from 6 April 2026 to 5 April 2027.

What are the recent tax changes in the UK?

Recent tax changes include the Corporation Tax main rate remaining at 25% (unchanged since 2023), with dividend tax rates increasing to 10.75%/35.75% and Business Asset Disposal Relief rising to 18% from April 2026.

Are taxes going up in 2026 in the UK?

Corporation Tax remains at 25% for profits over £250,000 (unchanged since 2023). However, dividend tax rates will rise significantly from 6 April 2026, impacting many taxpayers.

Have Income Tax rates changed for 2026/27?

The main Income Tax rates remain 20%, 40% and 45% for England, Wales and Northern Ireland, with published bands as per government guidance.
If you live in Scotland, the Scottish Income Tax bands and rates apply to most non-savings, non-dividend income and differ from the rest of the UK.

What are the dividend tax rates for 2026/27?

From 6 April 2026, the dividend ordinary rate is 10.75% and the dividend upper rate is 35.75% (additional rate remains 39.35%), with a £500 dividend allowance.

What is Business Asset Disposal Relief in 2026/27?

Business Asset Disposal Relief applies a reduced CGT rate to qualifying disposals, and the rate is 18% for disposals on or after 6 April 2026 (compared with 14% in 2025/26).

What is the VAT threshold in April 2026?

The VAT registration threshold is more than £90,000 of taxable turnover, with an optional deregistration threshold of £88,000.

Do I need to use Making Tax Digital from April 2026?

Making Tax Digital for Income Tax becomes mandatory from 6 April 2026 if your qualifying income from self-employment and property is over £50,000, with phased expansion in later years.

Can I just gift 100k to my son?

You can gift £100,000 to your son, but it may be subject to inheritance tax if you pass away within seven years, following the Potentially Exempt Transfer (PET) rule and taper relief.

Who pays 40% tax in the UK?

The 40% higher rate applies to taxable income between £50,271 and £125,140 after the £12,570 Personal Allowance. The Personal Allowance tapers from £100,000, reducing by £1 for every £2 earned over that threshold.

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.”

Everything About UK Non‑Dom Tax Changes in April 2026

Posted on 6 April 20266 April 2026 by Farazia Gillani

What changed in non-dom tax from April 2025

From 6 April 2025, the long‑running remittance basis ended. In practical terms, the UK no longer taxes most “non‑dom” individuals on foreign income and gains only when money is brought into the UK. Instead, UK tax residence is now the main driver, with a new relief aimed at genuinely new arrivals.

What that means day‑to‑day: from 6 April 2025, UK residents are generally taxed on worldwide income and gains as they arise, unless they qualify for and claim the new Foreign Income and Gains regime for new/returning residents.

Topic	Up to 5 April 2025 (remittance basis era)	From 6 April 2025 (current rules)
Main “gateway”	Domicile + a remittance basis claim (and related rules)	Residence‑led: worldwide taxation on the arising basis, unless it is in the new regime
Foreign income & gains (newly arising)	Often taxed only if remitted (subject to conditions)	Taxed as they arise for most UK residents; relief available for qualifying new residents
Bringing foreign funds to the UK	Could trigger UK tax if the funds were untaxed FIG	For eligible FIG under the new regime, remitting does not create a UK charge; for historic FIG, old remittance concepts still matter

The Foreign Income and Gains regime for new residents

The cornerstone of the reform is a four‑tax‑year “Foreign Income and Gains” relief for people who are genuinely new (or returning) to the UK tax net.

Who can claim foreign income and gains relief

You can claim foreign income tax and gains relief if you are a UK tax resident under the Statutory Residence Test and are still within your first four tax years of UK residence after at least ten consecutive tax years of non-UK residence.

A key point many people miss is that if your UK residence started before 6 April 2025, you may still be able to use the regime from 2025/26 onwards for whatever part of your four‑year window remains (there is no “reset” unless you have a further ten‑year non‑resident period).

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What relief you get

If you make a valid claim, you do not pay UK tax on eligible foreign income and foreign gains for the sources you claim, and remitting those relieved amounts to the UK does not create a tax charge.

Eligible foreign income includes, for example, overseas trade profits, overseas property business profits, non‑UK dividends and foreign interest.

The trade-offs: what you give up

Claiming comes with a cost. If you claim under the regime, you lose key UK allowances for that tax year, including income tax and capital gains tax allowances and certain marriage‑related allowances.

Also, even where relief applies, foreign income and gains typically still need to be reported (the old “leave it offshore and don’t report it” mindset is no longer a safe default).

Transitional rules for former remittance basis users

The reform did not wipe the slate clean for earlier years. Historic offshore funds still need careful handling, and this is where many accidental tax bills arise.

Historic foreign income and gains are still “historic”:

Where someone used the remittance basis before 2025/26, the remittance basis can still apply to income and gains that arose in those earlier tax years. In simple terms, those historic amounts can still become taxable if and when they are remitted, unless you use a specific transitional facility.

The Temporary Repatriation Facility:

The main transition tool is the Temporary Repatriation Facility. It runs for a fixed three‑tax‑year period and is designed to let former remittance basis users bring pre‑6 April 2025 offshore income and gains to the UK at a flat, reduced charge by designating amounts and paying the TRF charge.

TRF designation year	Flat TRF charge on designated “qualifying overseas capital”
2025/26 or 2026/27	12%
2027/28	15%

Two practical points matter in real life:

You do not have to remit the designated amount during the TRF window to benefit from the reduced rate; designation can be done and funds brought over later without further UK tax on that designated amount.
If you remit an amount in a tax year but fail to designate it in that same year’s return, you can be exposed to the normal remittance taxation (designating later will not “fix” a prior remittance).

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CGT rebasing for certain foreign assets:

A separate transitional relief allows some former remittance basis users to rebase certain personally held foreign assets to their market value at 5 April 2017, so that only post‑rebasing growth is taken into account for UK capital gains tax on a later disposal. The government’s published design includes conditions such as holding the asset at 5 April 2017 and disposing of it on or after 6 April 2025.

Payroll support for mobile employees:

For globally mobile employees, employers can notify HM Revenue & Customs that they will operate PAYE on only the proportion of earnings related to UK duties (the mechanism previously associated with “section 690”). The current guidance also covers split‑year cases and employees eligible for Overseas Workday Relief.

Inheritance tax becomes residence-based

Inheritance tax is now aligned with residence history, not domicile labels.

From 6 April 2025, the domicile and deemed‑domicile framework for bringing non‑UK assets into inheritance tax was replaced by a long‑term UK resident test. If you are long‑term resident, your overseas assets can fall within UK inheritance tax on death or on certain lifetime transfers.

Who is a “long-term resident”

You are generally a long‑term resident if you have been UK tax resident for at least ten out of the prior twenty tax years. There is also a rule set that can treat you as long‑term resident after ten consecutive years.

The “tail” after leaving the UK

Leaving the UK does not necessarily end exposure immediately. The inheritance tax manual sets out a tail that can run from three up to ten tax years, depending on how many years of UK residence you have in the look‑back period.

Trusts are directly in scope

The long‑term residence framework also affects trusts. The official guidance states that inheritance tax can be charged on overseas assets in a trust you set up or added to, with specific conditions and exceptions depending on when assets were settled and their location at key dates.

How We Help Clients Navigate UK Non-Dom Tax Changes

At Apex Accountants, we focus on the practical work clients need to stay compliant and avoid avoidable tax costs under the post‑April 2025 rules.

We typically help with:

Residence and eligibility reviews to confirm whether the Foreign Income and Gains regime is available and which claims are worth making.
TRF planning and designation support, including fund tracing, mixed-fund cleanup strategy, and ensuring designations align with remittance timelines.
CGT modelling and rebasing support, including “before and after” disposal scenarios and valuation requirements.
Inheritance tax exposure mapping, particularly around long‑term resident status, tail periods, and trust interaction.
Employer and payroll guidance for globally mobile employees, including PAYE proportion notifications and split‑year considerations.

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Conclusion

The abolition of the remittance basis from 6 April 2025 has shifted the UK to a residence‑led approach: worldwide taxation is now the default for UK residents, with a tightly defined new‑arrival relief, specific transitional tools for historic offshore funds, and a major reset for inheritance tax based on long‑term residence.

FAQs

1. Can I still use the remittance basis?

Not for new income and gains from 6 April 2025. However, the remittance concept remains relevant for pre‑6 April 2025 foreign income and gains that arose while you were on the remittance basis.

2. Do I get four years completely tax‑free in the UK?

You can receive 100% UK relief on eligible foreign income and gains during your qualifying period, but only if you qualify and make a claim. You may also lose UK allowances in the year(s) you claim.

3. If I claim the new regime, do I still have to report foreign income and gains?

In most cases, yes. The reporting position has tightened, and many more UK residents now need to report foreign income and gains even when relief applies.

4. Can I bring historic offshore income to the UK tax‑free during the transition window?

No “amnesty” applies. The transition tool is the TRF, which offers a reduced flat charge (not a zero rate) if you designate correctly.

5. What happens after the qualifying period ends?

Once your qualifying period ends, your default position is the normal UK arising‑basis taxation on worldwide income and gains.

6. When does inheritance tax start applying to overseas assets?

From 6 April 2025, overseas assets can be within UK inheritance tax if you meet the long‑term resident test, with a tail that can continue after departure.

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.