Running more than one self-employed business? HMRC will not always treat them as separate. Whether they are taxed as one combined trade or multiple depends on how your activities relate to each other. It is not a matter of choice, it is about how your business is run in practice. Get it right to avoid costly mistakes.

When someone has more than one self-employed income, one of the key issues to consider is whether to combine all profits under a single business activity or treat each separately. This depends on the nature and relationship of the activities. HMRC’s manuals set out three possible scenarios:

1. Separate Trades

If the new activity is run independently, with different staff, stock, or customers, it is treated as a separate trade. This means each business is taxed individually, and the commencement rules apply to the new one. No merging takes place unless operations later combine in substance.

2. A New Single Trade

If the new activity transforms the original business significantly, so much so that the old trade effectively ends, then both are treated as forming a new trade. The cessation rules apply to the original trade, and commencement rules apply to the new, combined business.

3. Continuation of Existing Trade

If the new activity merely expands the existing business without fundamentally changing its nature, it is treated as a continuation. Profits are combined and taxed as one ongoing trade, with no change in basis.

Understanding whether activities form one trade or multiple is crucial for correct tax treatment. It’s not just a matter of choice. It also depends on the facts and how the businesses operate and interact.

We would be happy to help you review the structure of your business to ensure compliance with HMRC guidance and avoid unexpected tax consequences.

From April 2025, Agricultural Property Relief from Inheritance Tax now extends to land under qualifying environmental agreements. This means landowners entering long-term stewardship schemes will not lose IHT relief. From April 2026, a new £1 million limit will apply to combined APR and BPR claims-making timely planning more important than ever.

Agricultural Property Relief (APR) is a relief from Inheritance Tax (IHT) that reduces the taxable value of agricultural land and property when it is passed on, either during a person’s lifetime or after death. It allows up to 100% relief on qualifying agricultural land used for farming.

The scope of APR was extended from 6 April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, devolved governments, public bodies, local authorities, or relevant approved responsible bodies. This expansion of the relief helps to better support environmental land management without penalising landowners for switching from farming to environmental use.

The new rules will benefit individuals, estates, and personal representatives where agricultural land is shifted to long-term environmental use under formal agreements. Previously, land removed from active farming for environmental schemes could have lost eligibility for APR.

From 6 April 2026, broader reforms to Agricultural Property Relief and Business Property Relief are set to take effect. While relief of up to 100% will still be available, it will apply only to the first £1 million of combined agricultural and business property. Beyond that threshold, the relief will be reduced to 50%.

Employees using company fuel for private journeys can sidestep a hefty benefit charge by repaying the full private fuel cost to their employer by 6 July 2025. Miss the deadline, and tax becomes unavoidable.

This repayment process is known as “making good,” and requires the employee to repay the employer for private fuel no later than 6 July following the end of the tax year. For the 2024-25 tax year, the repayment must be completed by 6 July 2025.

If the repayment is not made by the deadline, the employee becomes liable for the car fuel benefit charge. This charge is calculated based on the vehicle’s CO2 emissions and the car fuel benefit multiplier. The charge applies regardless of the actual amount of private fuel used, making it potentially costly for employees who only use a small amount of fuel for private journeys, such as commuting.

To avoid the tax, the employee must fully repay the employer for all private fuel used during the year, including fuel used to travel to and from work. Accurate record-keeping is essential, as HMRC will only accept that no benefit has arisen if the full cost is repaid by the deadline. In many cases, repaying the private fuel cost can be more financially beneficial than paying the fuel benefit charge.

Employers must pay Class 1A NICs for 2024-25 benefits by 19 July (post) or 22 July (electronic). These apply to perks like company cars and private health cover-late payment risks penalties from HMRC.

Class 1A NICs are payable by employers on the value of most taxable benefits offered to employees and directors, including company cars and private medical insurance. They are also due on any portion of termination payments exceeding £30,000, provided that Class 1 NICs have not already been applied.

To ensure the payment is correctly allocated, employers should use their Accounts Office reference number as the payment reference and clearly indicate the relevant tax year and month. It is important to note that Class 1A NICs paid in July always relate to the previous tax year.

There are three key dates employers must remember for the 2024-25 Class 1A NICs. Forms P11D and P11D(b) must be submitted by 6 July 2025. Postal cheque payments must reach HMRC by 19 July 2025, and electronic payments must clear into HMRC’s bank account by 22 July 2025.

These contributions generally apply to benefits provided to company directors, employees, individuals in controlling positions, and their family or household members.

1 June 2025 – Due date for corporation tax due for the year ended 31 August 2024.

19 June 2025 – PAYE and NIC deductions due for month ended 5 June 2025. (If you pay your tax electronically the due date is 22 June 2025).

19 June 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2025.

19 June 2025 – CIS tax deducted for the month ended 5 June 2025 is payable by today.

1 July 2025 – Due date for corporation tax due for the year ended 30 September 2024.

6 July 2025 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2025 – Pay Class 1A NICs (by the 22 July 2025 if paid electronically).

19 July 2025 – PAYE and NIC deductions due for month ended 5 July 2025. (If you pay your tax electronically the due date is 22 July 2025).

19 July 2025 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2025.

19 July 2025 – CIS tax deducted for the month ended 5 July 2025 is payable by today.

31 July 2025 – Pay second self-assessment payment on account for 2024-25.

If you drive a company car and your employer pays for your fuel, including for personal use, you could be facing a sizeable tax charge unless you repay the private fuel element by 6 July 2025. Many company car users are unaware that unless they fully reimburse their employer for private fuel use, they will be taxed on a notional fuel benefit – even if the private mileage is relatively low.

This charge, known as the car fuel benefit charge, is based on a fixed figure set by HMRC for the tax year, multiplied by a percentage that reflects the car’s CO2 emissions. The result is added to your taxable income, which can push you into a higher tax band or increase your overall tax bill significantly.

For example, if your car has a 30% CO2 rating and the multiplier for the year is £27,800, the taxable benefit comes to £8,340. If you are a basic rate taxpayer, this adds around £1,668 to your tax bill. If you are a higher rate taxpayer, the additional tax could be £3,336 or more. This charge is triggered regardless of how little personal fuel was actually used unless full reimbursement is made.

What you need to do

To avoid this charge, you must reimburse the cost of private fuel used during the 2024/25 tax year to your employer by 6 July 2025. To calculate how much to repay, you need to:

1. Keep a mileage log
   The most accurate way to track private fuel use is by recording every journey in a logbook or using a digital mileage tracker. Each journey should note the date, reason, start and end mileage, and whether it was business or personal.
2. Calculate the cost using advisory fuel rates
   HMRC publishes advisory fuel rates each quarter based on fuel type and engine size. Use the correct rate for the relevant period. For example, a petrol car with a 1600cc engine might have a rate of 15p per mile. If you drove 1,000 private miles, you would need to repay £150.
3. Pay the reimbursement by 6 July 2025
   The reimbursement must be made in full and on time. Late or partial repayments will not prevent the benefit charge from applying.

Why this matters

Repaying the private fuel cost is often far more tax-efficient than accepting the benefit. The tax charge is based on a notional benefit that can easily exceed the real-world cost of the fuel actually used. By reimbursing only the cost of the fuel for private use, you avoid this artificial uplift in taxable income and ensure fairness.

Additionally, repaying private fuel helps avoid any scrutiny from HMRC and reduces the risk of disputes about benefit calculations. Employers also appreciate the clarity and reduced administrative burden when employees take responsibility for their own personal mileage.

In summary

If your employer pays for your private fuel, act now:

• Log your private mileage accurately for the 2024-25 tax year
• Use advisory fuel rates to calculate the amount to repay
• Reimburse your employer in full by 6 July 2025

Doing so ensures that you avoid an unnecessary tax charge and remain compliant with benefit-in-kind rules. This is one of the few opportunities when keeping good records and making a small repayment can lead to substantial tax savings.

Every business reaches a point where reducing costs becomes a priority. Whether due to tighter margins, falling demand, or a broader economic slowdown, managing overheads is one of the most immediate ways to improve profitability and preserve cash flow. However, a common concern is that cutting costs too deeply may weaken a business’s ability to respond when conditions improve.

The good news is that not all savings involve drastic action. In many cases, a review of existing expenditure can uncover straightforward and low-risk savings. Here are some practical ideas to help reduce costs without undermining future flexibility or growth potential.

Review software and subscription costs

Businesses often accumulate software tools, apps, and subscription services over time, many of which overlap or are underused. Review all ongoing subscriptions, including project management platforms, CRM systems, antivirus software, marketing tools, and cloud storage. Consider consolidating services, switching to more cost-effective providers, or downgrading to plans that better reflect current usage.

This is one of the least disruptive areas for cost cutting and can often be actioned within a week.

Renegotiate supplier and service contracts

Many suppliers will be open to renegotiation, especially if you are a long-term or reliable customer. Speak to telecom providers, insurers, utility companies, and service contractors such as cleaners, IT support, or maintenance engineers. Even a modest discount or more favourable payment terms can have a cumulative effect.

For office-based businesses, consider whether your current printing and stationery suppliers are offering value for money. Price comparisons are easy to conduct, and switching supplier is rarely difficult.

Make energy efficiency a habit

Reducing energy use remains a simple way to cut overheads. Encourage staff to power down equipment at the end of the day, adjust thermostat settings, and ensure that lighting is switched off when rooms are unoccupied. If you occupy your own premises, upgrading to LED lighting or motion-sensitive controls can lead to long-term savings.

Where energy contracts are up for renewal, it is worth seeking quotes from several providers. Even small businesses can benefit from broker services to find more competitive deals.

Consider flexible or hybrid working arrangements

One of the biggest fixed costs for office-based businesses is premises. With hybrid working now widely accepted, many businesses are reducing desk space without compromising on collaboration or productivity. Moving to smaller premises or adopting a shared workspace model can release significant funds while maintaining operational effectiveness.

Equally, if staff work from home regularly, reducing ancillary office costs such as refreshments, cleaning, and supplies becomes an added bonus.

Revisit staffing arrangements and outsourcing

There is often scope to review how work is allocated and whether it makes sense to bring certain tasks in-house or outsource others. For example, occasional use of freelance support for marketing or bookkeeping can be more cost-effective than retaining part-time staff on payroll.

It is also worth reviewing staffing rotas and shift patterns, particularly in hospitality or retail settings, to ensure they still reflect current demand levels.

Encourage staff involvement

Finally, cost reduction works best when staff are engaged. Encourage employees to share their ideas for saving money. They are often closest to inefficient processes or unnecessary spending. By involving them in decision-making, you are more likely to find practical savings that do not compromise morale or service standards.

In summary, reducing overheads does not need to be painful. There is often low-hanging fruit that can be picked without weakening your business. The key is to be methodical, involve your team, and keep future flexibility in mind. That way, when market conditions improve, your business is leaner, more efficient, and ready to respond.

Today’s (21st May) inflation figures have certainly stirred the economic waters. The Office for National Statistics (ONS) reported that UK inflation surged to 3.5% in April, up from 2.6% in March, marking the highest rate in over a year.

What is driving the rise?

Several factors contributed to this unexpected increase:

Energy and utility costs: Gas and electricity prices rose sharply following adjustments in the Ofgem energy price cap. Although wholesale energy costs have fallen compared to previous years, the regulated cap was increased in April, pushing up household bills.

Water charges: Water and sewerage bills rose by 26.1%, the largest annual increase since the late 1980s. This is part of a wider plan to increase investment in water infrastructure, but in the short term it is placing added pressure on consumers.

Council tax and vehicle excise duty: Local authority tax rises came into effect at the beginning of the new tax year, and vehicle tax bands were also increased, contributing further to the inflationary pressure on households.

Transport costs: Airfares and other travel-related costs increased, in part due to seasonal demand and rising business costs in the transport sector.

Wage pressures: The increase in the National Minimum Wage and rising employer National Insurance bills meant many businesses faced higher staffing costs, which are often passed on to consumers through higher prices.

Economic implications

The unexpected rise in inflation will not go unnoticed by policymakers and financial markets. It has several potential knock-on effects:

Interest rate outlook: Until this report, there had been growing expectations that the Bank of England would continue to lower interest rates from their recent peak of 5.25%. A modest cut to 4.25% earlier this month suggested a softening stance. However, with inflation now running well above the Bank’s 2% target, any further reductions may be put on hold. The Monetary Policy Committee will want more evidence that the current rise is temporary before proceeding with further cuts.

Consumer behaviour: Higher prices for essential services such as utilities, council tax, and transport tend to hit lower- and middle-income households hardest. With household budgets already stretched, consumer spending may slow down, which could affect broader economic growth.

Business confidence: For businesses, particularly those in retail, hospitality, and services, rising costs alongside weakening consumer demand could create a difficult environment. Some may delay expansion or hiring decisions, which could weigh on job creation and economic momentum.

Investment and savings: Persistently higher inflation reduces the real return on savings and fixed income investments. While interest rates remain elevated, they may no longer outpace inflation, particularly if inflation proves sticky over the coming months.

What next?

While some inflationary pressures, such as seasonal energy and transport costs, may ease in the coming months, the broader concern is that inflation could remain above target for longer than anticipated. Much will depend on global energy prices, wage trends, and how quickly businesses can absorb costs rather than passing them on.

For now, households and businesses alike should factor in the likelihood that interest rates may stay higher for longer than previously expected. Anyone planning major financial decisions in the second half of 2025 should keep a close eye on inflation reports and central bank updates.

The roll-out of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA), due from April 2026 for the self-employed and landlords with income over £50,000, has reignited speculation about a fundamental shift in how and when tax is paid. Could this be the beginning of a move towards quarterly tax payments?

At the moment, individuals in Self-Assessment typically pay tax in two instalments (called ‘payments on account’) in January and July, with a final balancing payment the following January. However, the MTD regime will introduce quarterly digital updates, and many believe this could be laying the groundwork for a more frequent payment system.

Why does MTD raise the question of quarterly payments?

MTD for ITSA will require affected taxpayers to submit a summary of income and expenses every three months using compatible software. While these quarterly submissions will not initially generate a tax bill, they will provide HMRC with near real-time financial data. This shift in data collection could make it far easier for HMRC to calculate and request tax payments more regularly.

Although HMRC has stated that quarterly updates are not tax returns and are not currently linked to new payment schedules, the infrastructure being developed does pave the way for possible reform.

The case for quarterly payments

From HMRC’s perspective, collecting tax more frequently would smooth the Treasury’s cash flow and reduce reliance on large lump-sum payments that can be missed or underpaid. For some taxpayers, especially those who struggle to budget for biannual or annual tax bills, smaller quarterly payments might be easier to manage.

In theory, quarterly tax payments could align better with real-time profits, helping avoid situations where tax is paid on earnings that no longer reflect current financial performance. This might particularly benefit businesses with fluctuating income.

What are the concerns?

Many accountants and small business owners are wary. A system of quarterly tax payments would require more frequent cash flow planning and potentially place a heavier burden on those already juggling seasonal income patterns or irregular receipts. There is also concern that if quarterly payments are based on estimated figures, taxpayers could end up overpaying and later needing to claim refunds.

In addition, the administrative burden of submitting quarterly updates, end-of-period statements, and a final declaration already marks a significant compliance leap. If tax payments are added to this schedule, the complexity increases even further.

What happens next?

As things stand, HMRC has not announced any change to the current tax payment timetable. The quarterly updates required under MTD from April 2026 are informational only. However, the topic of payment reform remains on the policy radar, and it would not be surprising to see future consultations addressing more frequent payment models.

One option available to affected tax payers who need to file under the MTD regime from April 2026 is to use the quarterly data submitted to estimate current tax liabilities and make appropriate savings to cover future liabilities.

For now, the key message for the self-employed and landlords is to prepare for digital record keeping and quarterly reporting. Choosing the right software and getting used to more regular financial tracking is essential.

After a period of rising interest rates, there’s a noticeable shift in the UK financial landscape. The Bank of England (BoE) has recently reduced its base rate to 4.25%, marking the fourth cut since August 2024. This move is significant, especially for those involved in mortgages, savings, or business financing.

Why the Shift?

The BoE’s decision is primarily influenced by easing inflationary pressures. Recent data indicates that inflation is gradually declining, providing the central bank with room to lower rates without jeopardising economic stability. However, it’s worth noting that some officials, like Chief Economist Huw Pill, have expressed concerns about potential persistent inflation, suggesting that rates might need to stay elevated longer than anticipated.

Impact on Mortgages and Borrowing

For homeowners and prospective buyers, the rate cut brings a sigh of relief. Mortgage lenders have started to adjust their offerings, with some fixed-rate deals dipping below 4%. This trend benefits those looking to remortgage or enter the housing market, potentially reducing monthly repayments and making homeownership more accessible.

Businesses, particularly SMEs, stand to gain as well. Lower interest rates can translate to more affordable business loans, facilitating expansion and operational investments. However, it’s essential to approach this with caution, considering the broader economic context.

Savings and Investments

While borrowers might celebrate, savers face a different scenario. Reduced interest rates often lead to lower returns on savings accounts. It’s crucial for savers to explore diverse investment avenues, perhaps considering fixed-term deposits or other financial instruments that might offer better yields in this environment.

Economic Outlook

The BoE anticipates that inflation will return to its 2% target by early 2027. However, external factors, such as global trade dynamics and domestic economic policies, could influence this trajectory. For instance, recent trade agreements, like the one between the UK and the US, might bolster economic activity, but their long-term effects remain to be seen.

What Should You Do?

• Homeowners: If you’re on a variable-rate mortgage, consider consulting with your lender about potential savings. Those on fixed rates might explore remortgaging options to capitalise on the current rates. Discuss these options with your mortgage broker before taking any action.
• Prospective Buyers: The current environment could be favourable for entering the property market, but ensure you assess your financial stability and long-term commitments.
• Savers: Review your savings strategy. Diversifying your investments might help mitigate the impact of lower interest rates. Talk to your Independent Financial Advisor.
• Businesses: Evaluate financing options for growth or operational needs. Lower borrowing costs can be advantageous, but it’s essential to ensure that any financial decisions align with your business strategy.

Final Thoughts

The downward trend in UK interest rates presents both opportunities and challenges. While borrowers might benefit from reduced costs, savers need to navigate the landscape carefully. As always, staying informed and seeking professional advice can help you make decisions that align with your financial goals.