It is important to know if HMRC is holding money that belongs to you. For example, if you have paid too much tax to HMRC, you may be able to claim a tax refund (also known as a tax rebate). Overpayments can happen for a number of reasons, including changes in your employment, paying tax using the wrong startegy or not claiming eligible expenses.

The process for claiming a refund depends on your circumstances, including whether you complete a self-assessment tax return and the type of income or expense involved. HMRC provides an online service to help you find out what you need to do if you have overpaid tax.

You may be able to claim a refund if you have paid too much tax on income from a job, job-related expenses such as working from home, fuel, work clothing or tools, a pension, overpayments revealed by a  self-assessment tax return or a redundancy payment. Refunds may also be available for UK income taxed while living abroad, interest from savings or payment protection insurance (PPI), income from a life or pension annuity, foreign income, or UK income earned before leaving the UK.

HMRC offers an online service at www.gov.uk/claim-tax-refund/y that allows you to check whether you are eligible and, in many cases, submit a claim.

If you have already claimed a tax refund, you can use HMRC’s guidance to check when you should expect a response.

Most people are aware that cash donations to a charity can qualify for tax relief. However, it is less well known that gifts of land, property and qualifying shares can also provide valuable tax advantages.

If you donate land, property or shares to a UK charity, or sell them to a charity for less than their market value, you may be entitled to both Income Tax and Capital Gains Tax (CGT) relief. However, Income Tax relief is not available for gifts to Community Amateur Sports Clubs (CASCs).

Income Tax relief is claimed by deducting the value of the qualifying donation from your total taxable income for the tax year in which the gift or sale is made. If you complete a self-assessment tax return, the claim is made in the ‘Charitable giving’ section. Those who do not file a tax return can contact HMRC directly to claim the relief, either as a repayment or through an adjustment to their tax code.

There is also no CGT to pay on qualifying gifts of land, property or shares made to charity. Where an asset is sold to a charity for less than its market value, any gain is calculated using the actual amount paid by the charity rather than the asset’s market value.

To support any claim, it is important to retain records showing that the gift or sale was made and accepted by the charity. If the charity asks you to sell the asset on its behalf before donating the proceeds, keep evidence of both the gift and the charity’s request, as this will help preserve your entitlement to tax relief and avoid any unnecessary tax liability.

If you are selling shares or other investments, you may incur Capital Gains Tax (CGT) on any profit, or ‘gain’, you make. You will need to work out your gain to determine if you need to pay tax, which depends on whether your total gains exceed your CGT allowance for the tax year. 

You usually pay CGT on total gains above your annual tax-free allowance, which is currently £3,000. If your gains exceed the allowance, you must report and pay CGT. This is usually done through self-assessment, with different reporting deadlines depending on the type of asset disposed of. The rate of tax depends on your income. Basic rate taxpayers pay 18% CGT on gains within the basic rate band and 24% on amounts above it. Higher and additional rate taxpayers generally pay 24% CGT on all gains.

You do not usually pay CGT when you give shares as a gift to your husband, wife, civil partner, or a charity. Additionally, shares including those held within an ISA, those in employer Share Incentive Plans (SIPs) and UK government gilts are exempt. Your gain is typically the difference between what you paid for your shares and the sales proceeds. 

You can deduct costs like stockbrokers’ fees and Stamp Duty Reserve Tax (SDRT) from your gain. Various tax reliefs may also reduce or delay your CGT liability, including Business Asset Disposal Relief, Gift Hold-Over Relief, Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), and Rollover relief. Special rules apply for working out the cost of shares bought at different times in the same company, or if sold through an investment club.

It is important to calculate your gain, consider any applicable reliefs, and report to HMRC if your total gains exceed the annual allowance.

Many UK businesses now borrow money from overseas lenders or form part of international business groups. Where interest is paid outside the UK, the tax rules can become surprisingly complicated. HMRC has now launched a consultation that could make one aspect of those rules much simpler.

Why are the rules so complicated?

In some circumstances, UK businesses paying interest to an overseas lender must deduct UK Income Tax before making the payment. This is known as withholding tax.

However, many countries have Double Taxation Agreements with the UK that reduce or remove this requirement. The difficulty is that businesses often need to complete a formal clearance process before they can apply the reduced rate, adding time, paperwork and uncertainty to international transactions.

What is HMRC proposing?

The Government is consulting on ways to simplify the system so that businesses can claim treaty relief more easily. Although no final decisions have yet been made, the aim is to reduce unnecessary administration while maintaining appropriate safeguards against abuse.

If implemented, the proposals could make it quicker and easier for businesses to apply the correct withholding tax treatment when making overseas interest payments.

Who could be affected?

The consultation will be of most interest to:

• Companies with overseas parent companies.
• Businesses borrowing from overseas lenders.
• Groups financing their operations internationally.
• Businesses expanding into overseas markets.

Many smaller businesses may assume these rules do not apply to them, but international borrowing arrangements are becoming increasingly common.

What should businesses do now?

There is no immediate change to the law. Existing withholding tax obligations continue to apply until any new legislation is introduced.

However, businesses involved in international financing should ensure they understand their current obligations and keep appropriate documentation supporting any claims under Double Taxation Agreements.

Professional advice can often prevent costly errors, particularly where cross-border tax rules are involved.

How we can help

International tax rules are rarely straightforward, but getting them right can avoid unnecessary tax costs, penalties and delays.

If your business pays interest overseas, is considering overseas borrowing or has questions about withholding tax, we can review your arrangements and ensure you are applying the rules correctly while keeping you informed of any future changes resulting from the consultation.

Research and Development (R&D) tax relief has helped thousands of innovative UK businesses recover some of the costs of developing new products, improving processes and overcoming technical challenges. However, recent reports suggest that many genuine businesses are no longer making claims because they fear becoming caught up in HMRC’s crackdown on abuse of the scheme.

There is no doubt that HMRC was right to tackle fraudulent and exaggerated claims. The tax authority has introduced tougher compliance procedures and new requirements to ensure that relief is available only for genuine innovation. These measures have significantly reduced error and fraud within the system.

The difficulty is that some legitimate businesses have also become reluctant to claim. Recent research indicates that many companies have delayed innovation projects, reduced investment or simply decided not to submit claims because they are concerned about the complexity of the process or the possibility of an HMRC enquiry.

If your business is developing new technology, improving manufacturing processes, creating specialist software or solving difficult engineering or scientific problems, it may still qualify for valuable tax relief. Many business owners mistakenly believe that R&D only applies to laboratories or major scientific breakthroughs. In reality, a wide range of commercial activities can qualify where a project seeks to overcome genuine scientific or technological uncertainty.

The key is ensuring that any claim is well prepared and supported by appropriate evidence. HMRC expects businesses to demonstrate why the work involved technological or scientific uncertainty, how those challenges were addressed and what costs were incurred. Good project records, technical documentation and accurate financial information are now more important than ever.

To help businesses gain greater certainty, HMRC has also launched a targeted Advance Assurance pilot. This enables eligible SMEs to obtain an indication on certain aspects of a proposed claim before it is submitted, reducing uncertainty in more complex cases.

The message for innovative businesses is simple. Do not allow concerns about increased scrutiny to prevent you from claiming relief to which you are entitled. Equally, avoid firms that promise large tax repayments without first carrying out a detailed technical review of your activities.

If you think your business may have undertaken qualifying R&D, or if you have dismissed the possibility in the past, now is an excellent time to review your position. A properly prepared claim, supported by robust evidence and professional advice, can still provide valuable tax savings while meeting HMRC’s increasingly rigorous standards.

If you would like to discuss whether your business could qualify for R&D tax relief, please contact us. We will be pleased to review your projects and advise whether a claim is likely to succeed.

What it could mean for households and small businesses

The Government has announced that VAT on domestic electricity bills will be reduced from 5% to 0% from 1 October 2026 as part of its latest package of cost of living measures. The change is intended to reduce household energy costs ahead of the winter months and help ease pressure on family finances. The measure was one of the first announcements made by the new administration and will be introduced through legislation when Parliament returns after the summer recess.

For the average household, the Government estimates that the change could reduce annual electricity costs by around £45, although the actual saving will depend on electricity consumption. Energy suppliers are expected to pass the VAT reduction on to customers, including those on fixed tariffs.

Although the announcement is aimed primarily at households, there are wider implications worth noting.

Some small businesses that qualify for domestic energy VAT relief and are not VAT registered, together with eligible charities and residential care homes, are also expected to benefit from the reduced rate. Businesses that are fully VAT registered and recover their input VAT are unlikely to see any significant financial advantage because the VAT they pay is normally reclaimed through their VAT returns.

It is also important to keep the announcement in perspective. The reduction applies only to the VAT element of electricity bills. Wholesale energy prices, standing charges and future changes to the Ofgem price cap will continue to have a much greater influence on the total amount consumers pay. If energy prices rise significantly during the winter, some or all of the VAT saving could be offset by higher underlying costs.

As with many tax announcements, the detail matters. The legislation has yet to be published and further guidance is expected on the precise operation of the new zero rate, particularly for qualifying organisations and customers in Northern Ireland, where different VAT arrangements currently apply.

If you are unsure whether your household, charity or business will benefit from the change or would like advice on reducing your overall energy costs and improving tax efficiency, please contact us. We will be pleased to explain how the new rules apply to your circumstances and help you identify any other opportunities to reduce your tax burden.

Artificial intelligence is rapidly becoming part of everyday business. From drafting emails and analysing data to producing marketing content and improving customer service, AI offers exciting opportunities for businesses of every size.

However, as recent guidance from the accountancy profession makes clear, adopting AI successfully requires more than simply choosing the latest software. Businesses also need to think carefully about governance, security and responsible use.

One of the greatest benefits of AI is its ability to automate routine administrative tasks. This allows staff to spend more time on work that adds value, such as serving customers, developing new products or improving business performance. For many smaller businesses, AI can deliver significant productivity gains without requiring major investment.

Despite these advantages, AI should not be viewed as a replacement for human judgement. Information generated by AI can occasionally be inaccurate, incomplete or out of date. Important business decisions, financial reports and customer communications should always be reviewed by someone with the appropriate knowledge and experience.

Businesses should also consider how confidential information is handled. Before uploading documents or customer data into any AI platform, it is important to understand how that information will be stored, processed and protected. Staff should receive clear guidance on what information may and may not be entered into AI systems.

Developing a simple AI policy can help reduce risk. The policy should explain which AI tools have been approved for business use, identify situations where human approval is required and remind employees of their responsibilities regarding confidentiality and data protection.

Training is equally important. Employees should understand both the capabilities and the limitations of AI. Used appropriately, AI can become a valuable assistant. Used carelessly, it can create compliance, legal and reputational risks.

As AI technology continues to develop, businesses that embrace it sensibly are likely to gain a competitive advantage. The key is to combine the efficiency of technology with the experience and judgement that only people can provide.

If your business is considering introducing AI into its operations, now is an ideal time to review your existing processes, data security arrangements and internal controls. With the right planning, AI can become a powerful tool that supports growth while helping your business remain secure and compliant.

If you complete a Self-Assessment tax return, or expect to do so in the coming months, it is worth taking a few minutes to check that the information HMRC holds about your State Pension is correct.

HMRC has recently identified an issue affecting some taxpayers where the amount of State Pension included in tax calculations may not have been accurate. Although the problem does not affect everyone, it serves as a timely reminder that the figures pre-populated by HMRC should never be accepted without review.

The State Pension is taxable income, even though tax is not usually deducted before it is paid. This means it must be included correctly on your Self-Assessment tax return where one is required. An incorrect figure could result in too much or too little tax being calculated.

The issue is particularly relevant for people who started receiving their State Pension during the tax year, experienced a change in their entitlement, or rely on information automatically provided by HMRC when preparing their return.

It is always sensible to compare the amount shown on your tax return with your own records. This may include annual State Pension statements, bank statements showing pension payments, or correspondence received from the Department for Work and Pensions.

Checking the figures before submitting your return is much easier than correcting mistakes afterwards. If an error is discovered after filing, it may be necessary to amend the return and, depending on the circumstances, pay additional tax or claim a repayment.

The incident also highlights a wider point. While HMRC increasingly uses digital systems to populate tax returns with information it already holds, those systems are fallible. The legal responsibility for ensuring that a tax return is complete and accurate always rests with the taxpayer.

Preparing your tax return early provides time to identify missing information, resolve discrepancies and avoid the pressure of the January filing deadline. It can also provide earlier certainty over any tax payable, making it easier to budget for future payments.

If you are unsure whether your State Pension has been reported correctly or would like your 2025-26 tax return reviewed before submission, we will be pleased to help. A simple review today could prevent unnecessary correspondence with HMRC and ensure you pay no more tax than you should.

Companies House continues to introduce significant reforms that will change the way companies are administered in the UK. The changes are being implemented in stages following the Economic Crime and Corporate Transparency Act and are intended to improve the accuracy of the Companies House register, reduce opportunities for fraud and strengthen confidence in UK businesses.

For many years Companies House acted largely as a repository for information submitted by companies. The new legislation gives it much stronger powers to question, reject or remove information that appears to be inaccurate, misleading or inconsistent. The overall objective is to ensure that the public register becomes a more reliable source of information for businesses, lenders, investors and the wider public.

One of the most significant changes is the introduction of identity verification. Directors, people with significant control and others involved in filing company information will increasingly need to verify their identity before carrying out certain activities. This is intended to reduce the misuse of false identities and make it more difficult for criminals to establish or control companies for fraudulent purposes.

Companies House is also taking a more active role in monitoring information filed on the register. Details such as directors, registered office addresses, persons with significant control and confirmation statements are expected to receive greater scrutiny than in the past. Companies that fail to keep their records up to date or submit inaccurate information may find that filings are challenged or rejected.

For the vast majority of well-managed businesses, these changes should not create significant difficulties. Companies that already maintain accurate statutory records, file documents on time and ensure that changes are reported promptly are likely to adapt with relatively little disruption.

However, businesses that have neglected company administration may need to review their procedures. This includes checking that statutory registers are complete, ensuring confirmation statements are submitted on time and confirming that company officers understand their ongoing legal responsibilities.

These changes should not simply be viewed as additional compliance obligations. Accurate and reliable company information helps strengthen confidence in UK businesses, supports lenders and suppliers when making commercial decisions and contributes to a more transparent business environment.

Directors should regard this as an opportunity to undertake a general review of their company’s statutory records and filing procedures. Identifying and correcting issues now is likely to be much easier than dealing with queries after new powers have been exercised by Companies House.

The reforms represent one of the biggest changes to company administration for many years. Businesses that prepare early, maintain accurate records and seek professional advice where necessary will be well placed to meet the new requirements with confidence.

If you would like us to review your company’s statutory records or discuss how these reforms may affect your business, please contact us. We will be pleased to help.

HMRC continues to modernise the UK’s tax system, with a range of new digital services and improvements planned over the coming months. While Making Tax Digital has attracted considerable attention in recent years, it is only one part of a much broader programme of change. HMRC’s long-term objective is to create a tax system that is easier to use, more efficient and less prone to error.

The latest developments indicate that taxpayers can expect an increasing number of services to be delivered online. These improvements are designed to reduce paperwork, simplify routine administration and make it easier for individuals and businesses to access information about their tax affairs whenever they need it.

Among the planned enhancements are improvements to the Personal Tax Account, enabling taxpayers to view more information in one place and manage their tax affairs more effectively. HMRC also intends to increase the amount of information that is automatically included in Self-Assessment tax returns. Where HMRC already holds data from employers, pension providers or financial institutions, taxpayers should increasingly find that less manual entry is required. This has the potential to reduce mistakes and make completing a tax return a quicker and less stressful process.

Further developments include improved digital services for claiming allowable expenses and tax reliefs, clearer explanations of PAYE tax codes and deductions, and more online facilities for dealing with National Insurance matters. The overall aim is to make routine interactions with HMRC simpler, faster and more transparent.

For businesses, these developments reinforce the importance of maintaining accurate digital records. Good bookkeeping has always been essential, but digital record keeping is becoming a fundamental part of managing tax compliance. Businesses that continue to rely on incomplete records or manual processes may find it more difficult to take advantage of HMRC’s evolving online services.

The changes also present opportunities. Better digital information can help business owners monitor cash flow, keep track of tax liabilities throughout the year and reduce the risk of unexpected tax bills. Accurate records also enable accountants to provide more timely advice rather than simply preparing year end accounts and tax returns.

Professional advisers remain central to the process. Although HMRC is improving its digital services, technology cannot replace professional judgement. Accountants continue to help clients interpret complex tax rules, identify planning opportunities and ensure that tax returns are accurate and complete. Digital systems work best when they are supported by sound professional advice.

Businesses should not wait until new services become mandatory before reviewing their own systems. Now is an excellent time to assess bookkeeping procedures, ensure accounting software is being used effectively and encourage staff responsible for financial records to follow consistent processes.

The direction of travel is unmistakable. HMRC is steadily building a more digital tax system in which information is shared more efficiently, and routine tasks can increasingly be

completed online. Businesses that prepare early are likely to benefit from improved efficiency, fewer administrative problems and greater confidence that their tax affairs remain in good order.

If you would like advice on how these developments could affect your business or would like help reviewing your accounting systems and record keeping procedures, please contact us. We will be pleased to help.