“Pre” budget newsletter

LEAD UP TO THE BUDGET

As we look ahead to the 26 November budget, few are expecting much in the way of good news. At this stage it is just a matter of which tax rate increases, discussed for weeks now in the media, will be implemented. While we wait for clarity, we’ve rounded up a few other updates and insights in this edition.

MAKE TAX DIGITAL FOR SOLETRADERS AND LANDLORDS

The march of the digital world continues. From April 2026 soletraders and anyone with a letting business with income greater than £50,000 in 24/25 will be required to submit quarterly reports via MTD to HMRC. This threshold decreases to £30,000 in the year after and to £20,000 after that.

It will not change when tax is due or impact payments on account. The key will be to maintain bookkeeping throughout the year and not just at the tax year end. We will be in touch if this applies to you.

SUMMARY OF CHANGES IMPACTING FINANCIAL STATEMENTS

There are a series of changes impacting financial statements which are coming or to be confirmed:

• For accounting periods starting after 6 April 2025 – company size thresholds have increased significantly enabling more companies to file as small or micro entities

• For accounting periods starting after 1 January 2026 - revised FRS102 is effective bringing in changes to revenue recognition, lease accounting and more

• Likely for accounting periods after 1 April 2027 (yet to be finalised in legislation) – small companies will have to file a profit and loss account

HMRC APP

Inevitably HMRC is encouraging everyone to download and use the app. Ultimately this is how they wish to communicate with individuals. Why bother? It will enable us more easily to direct people to look into unexpected tax code changes and make appropriate adjustments.