Tax Takes a Back Seat… For Now
In the first six months of the new government, tax reform was front and centre—with speculation, protests, and bold headlines dominating the financial news cycle. But recently? Tax has taken a back seat to trade deals and tariff negotiations. Don’t be fooled, though—this quiet spell won’t last.
🗞️ From NICs to IHT: A Look Back
Early headlines speculated about major tax changes, including rumours of National Insurance Contributions (NICs) being applied to occupational pension contributions. Those didn’t materialise, but the government did increase employers’ NICs, and stirred debate with a proposal to include farmers’ businesses within the scope of Inheritance Tax (IHT)—a first in over a generation.
And while those rumours have cooled, the tax landscape is far from settled.
📈 Trade Deals Now, Tax Later
Right now, headlines are dominated by trade and tariffs. But these aren’t isolated issues—they feed directly into the UK’s GDP and fiscal policy. Lower GDP means less tax revenue, and that could push tax back onto the government’s priority list by this autumn.
Expect a shift. Tax is likely to reclaim the spotlight in the next Budget cycle.
📋 IHT and Business Succession Planning
In February, a consultation was launched to restrict IHT relief for farming businesses. But this isn’t just about agriculture—it affects all types of trading businesses, from sole traders to limited companies. If your business falls into this category, it’s time to review your succession strategy. Even though nothing is final yet, early planning could make a significant difference.
⚖️ Landmark Tax Cases You Should Know
Two recent tax tribunal cases are worth keeping an eye on:
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Tax Residence Case – One taxpayer saved £3.1 million by being classified as non-resident. However, the ruling may still be overturned in the Supreme Court.
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Dividend Payments and Anti-Avoidance – This case centred around dividends paid from a private company and could have implications for those involved in family-run businesses.
🔍 Old Advice, Outdated Articles
Be cautious when looking for tax guidance online. Much of what’s out there is outdated, especially with recent rule changes. Our advice? Get professional, up-to-date advice before making any decisions.
One example: HMRC has recently highlighted yet another ineffective tax avoidance scheme. As a rule of thumb, if a strategy is too complex to explain simply, it’s probably too risky to get involved without advice.
💻 MTD for Income Tax: It’s Coming
Starting 6 April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory for individuals with annual turnover over £50,000—including sole traders and landlords.
This is a major change in how your business interacts with HMRC. If you haven’t begun preparing, now is the time to act. This shift will require new systems, processes, and potentially support from your accountant.
🧾 Final Thoughts: Let’s Get Ahead of the Changes
At Merranti, we specialise in helping you stay ahead of tax changes, avoid penalties, and ensure you’re always in the best position. Whether it’s planning for IHT changes, preparing for MTD, or reviewing your dividend strategy, we’re here to help.
If you have any concerns about what’s on the horizon, or want to review your tax planning, just get in touch with your usual Merranti contact.
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