Welcome to our latest monthly tax newswire. We hope you enjoy reading this newsletter and find it useful. Contact us if you wish to discuss any issues further.

Tax-Year-End Tax Planning

It’s not too late to undertake some end-of-year tax planning. If you have some spare cash, an obvious tax planning point would be to maximise your ISA allowances for the 2023/24 tax year (currently £20,000 each). You might also want to consider increasing your pension savings before 5 April 2024.

Use A Lifetime Isa (LISA) To Save For Your First Home

Those aged between 18 and 40 can set up a Lifetime ISA (Individual Savings Account) to buy their first home or save for later life. You can put in up to £4,000 annually until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.  Note that the Lifetime ISA limit of £4,000 counts towards your £20,000 annual ISA limit.

You can withdraw money from your ISA if you’re:

• buying your first home,
• aged 60 or over, or
• terminally ill, with less than 12 months to live.

However, you’ll pay a withdrawal charge of 25% if you withdraw cash or assets for any other reason (an unauthorised withdrawal). This recovers the government bonus you received on your original savings.

Pension Planning

Under the current rules, the government adds to your pension contributions at the 20% basic rate. For instance, if you save £4,000 in a personal pension, the government tops this up to £5,000. If you are a higher-rate taxpayer, there is a further £1,000 tax relief when your tax liability is calculated, reducing the net cost to £3,000.

Additional pension contributions can be even more effective if your income is between £100,000 and £125,140, as the gross pension contribution reduces net income for the purposes of the reduction in the personal allowance. Note that for every £2 of income in excess of £100,000, the £12,570 personal allowance is reduced by £1, with reduction to nil where net income is £125,140 or more. This is effectively a 60% tax saving.

Capital Gains Tax Planning

You might wish to consider bringing forward capital gains to before 6 April 2024, where you haven’t used your £6,000 CGT annual exemption. This exempt amount reduces to just £3,000 for gains made in 2024/25.

Business Capital Expenditure Planning

Unless the business year end is 31 March or 5 April, the end of the tax year is not a significant date regarding capital allowances. In order for new equipment to attract capital allowances, the expenditure must be incurred on or before the end of the accounting period. Limited companies buying new (not second-hand) equipment are entitled to fully expense the cost of most acquisitions against business profits. There is no financial limit on expenditure qualifying for this “full expensing” relief.

Unincorporated businesses are entitled to a 100% write-off for the first £1 million spent on new and used equipment in 12 months. This “annual investment allowance” (AIA) is also available to limited companies buying second-hand equipment. The AIA does not apply to motor cars, but there is a special 100% tax relief if you buy a new zero-emission motor car.

Where equipment is bought under a hire purchase contract, the capital allowances outlined above are available on the full cost of the asset, provided it has been brought into use by the end of the accounting period. This is despite the fact that the payments may be spread over a number of months.

Get Ready For More R&D Changes

On top of the major changes to research and development (R&D) tax relief that took effect from 1 April 2023, there are yet more changes that take effect from 1 April 2024.

The main change from 1 April 2024 is that most companies carrying out qualifying R&D will be entitled to a 20% expenditure credit. The 20% is calculated on the amount of qualifying expenditure. Qualifying expenditure is extended to include subsidised expenditure from 1 April 2024, although R&D carried out overseas will no longer qualify unless the work cannot be undertaken in the UK.

“R&D intensive” companies that make trading losses will continue to be entitled to a tax refund instead of the expenditure credit. The definition of “R&D intensive” is reduced from 40% to 30% from 1 April 2024, which means a company that spends at least 30% of total expenditure on qualifying R&D.

R&D tax relief continues to be a complex area, and we can work with you to help you prepare a valid claim.

Advisory Fuel Rate For Company Cars

The table below shows the HMRC advisory fuel rates from 1 March 2024. These are the suggested reimbursement rates for employees’ private mileage using their company car.

Where the employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.

The previous rate is shown in brackets where there has been a change.

You can also continue to use the previous rates for up to 1 month from the date the new rates apply.

Note that for hybrid cars you must use the petrol or diesel rate.

For fully electric vehicles, the rate is 9p per mile.

Don’t Be Late In Paying Your Self-Assessment Tax Bill

2022/23 income tax, CGT, class 2 and 4 NIC liabilities should have been paid by 31 January 2024 unless you have agreed a payment plan with HMRC. Note that if the balance is still unpaid at the end of February 2024, a 5% surcharge penalty is added to the normal interest charge unless a payment plan has been agreed upon.

Diary Of Main Tax Events

February/March 2024

Alzheimer’s Society

Partner Graham Loosley runs the Manchester Marathon on 14th April to raise funds for The Alzheimer’s Society. You can follow his training on his sponsorship page. If you are able to, please consider supporting this worthwhile cause.

Website News Articles

Here are some of the news articles we added to our website since the January newsletter:

• 
  April 2026 NewsletterMarch 24, 2026
  As the 2026/27 tax year begins, April is one of the busiest and most important months in the tax calendar. This year, the timing feels even more pronounced because Easter falls right at the start of the new tax year, with Good Friday on 3 April and Easter Monday on 6 April in England and…
• 
  March 2026 NewsletterMarch 13, 2026
  As we approach the end of the 2025/26 tax year and prepare for the start of 2026/27 on 6 April, March is a critical planning month for business owners, landlords and individuals. Alongside the Spring statement delivered on 3 March, several structural changes to tax administration and employment costs are coming into effect. Digital reporting,…
• 
  Are You Ready for Making Tax Digital (MTD)?March 2, 2026
  Making Tax Digital (MTD) is the most significant change to the Self Assessment regime since the introduction of electronic filing in 2000. It represents a fundamental shift from annual reporting to digital, quarterly submissions. As Accounts Partner at Mercian Accountants, Jake Holdroyd is already working with clients to prepare for these changes. Below, he outlines…
• 
  February 2026 NewsletterJanuary 28, 2026
  As February gets underway, attention naturally turns to the end of the tax year and the planning opportunities still available before April. With the whole of February and March ahead of us, there is time to take stock, review your position and, where appropriate, put sensible steps in place to reduce tax and prepare for…
• 
  January 2026 NewsletterJanuary 6, 2026
  We are pleased to welcome you to the January 2026 edition of the Mercian Accountants Newsletter. As the new year begins, attention quickly turns to key deadlines and changes that will shape the months ahead, particularly the upcoming Self Assessment filing deadline and a range of significant developments affecting businesses, employers and individuals. January is…
• 
  A guide to the Autumn Budget 2025November 27, 2025
  Introduction The Chancellor delivered her long-awaited, very late Budget, highlighting intentions to review public spending, freeze thresholds, remove and reform specific allowances, and announce future tax increases. It was a Budget that added more complexity to an already complex tax system. As with previous Budgets, this complexity may increase as we will see several consultations…
• 
  What the Budget Could Mean for Your Money: Six Big Tax and Finance Changes to WatchNovember 12, 2025
  Income tax, pensions, property, ISAs and more – here’s what to expect from the Budget and how you can prepare. Chancellor Rachel Reeves has set the stage for significant tax and spending changes in her autumn Budget on 26 November 2025. Millions of homeowners, savers, and pensioners could be affected. With two weeks to go…
• 
  November 2025 NewsletterOctober 30, 2025
  We’re pleased to share the November 2025 edition of the Mercian Accountants Newsletter. With the Autumn Budget set for 26 November, attention is turning to how the Chancellor will balance the public finances while maintaining her pledge not to raise Income Tax, VAT, or National Insurance. As we mark Remembrance Sunday, we also take a…
• 
  October 2025 NewsletterSeptember 30, 2025
  Welcome to the October 2025 edition of the Mercian Accountants Newsletter. With the Autumn Budget 2025 confirmed for 26 November, attention is fixed on how the Chancellor might tackle the public finance deficit and what that could mean for taxpayers and businesses. Before then, measures from the Autumn Budget 2024 are expected to come into…
• 
  Angela Rayner’s £40,000 SDLT Error – and How You Can Avoid ItSeptember 10, 2025
  The recent headlines about Angela Rayner’s property purchase may have caught your attention. While the political story has dominated coverage, the more important takeaway for most people is that Stamp Duty Land Tax (SDLT) is rarely straightforward. Where trusts or complex family arrangements are involved, the rules can be particularly difficult to navigate. What appears…
• 
  September 2025 NewsletterAugust 26, 2025
  As we settle into autumn, it’s a good time to review recent developments in tax and payroll that may affect your business or personal finances. In this September edition of the Mercian Accountants newsletter, we highlight HMRC’s renewed focus on private use adjustments for business expenses, upcoming changes to Statutory Sick Pay from April 2026,…
• 
  August 2025 NewsletterJuly 30, 2025
  As summer moves into its final stretch, now is an opportune moment to take stock of the latest tax developments and legislative updates. In the August edition of the Mercian Accountants newsletter, we unpack the key announcements from Legislation Day 2025, including measures aimed at closing the tax gap, proposed changes to inheritance tax reliefs,…
• 
  July 2025 NewsletterJune 26, 2025
  As we move into July and the height of summer, it’s a good time to review your tax planning and stay ahead of key deadlines. This month’s Mercian Accountants newsletter covers efficient profit extraction for owner-managed companies, tax-free childcare accounts for summer costs, pension salary sacrifice schemes, and MTD reporting for jointly held property. We…
• 
  June 2025 NewsletterMay 30, 2025
  As we move into June and the early days of summer, it’s an ideal time to take stock of the latest tax developments and deadlines. With longer days and a new quarter approaching, now is the moment for businesses and individuals alike to stay ahead of upcoming obligations and opportunities. In the June 2025 edition…
• 
  May 2025 NewsletterApril 28, 2025
  As we step into May and welcome the brighter days of spring, it’s the perfect time for a fresh look at the latest tax developments. Just as the season brings renewal and growth, significant changes are on the horizon for both taxpayers and businesses. In the May 2025 edition of the Mercian Accountants newsletter, we…
• 
  New Companies House Requirement: Identity Verification Coming SoonApril 25, 2025
  As part of the evolving changes under the Economic Crime and Corporate Transparency Act (ECCT), identity verification will soon become a mandatory requirement for Companies House filings. These reforms aim to enhance the accuracy and security of the UK’s corporate register and prevent misuse of UK companies for fraudulent activity. Key Dates to Know Dates…
• 
  April 2025 NewsletterMarch 31, 2025
  As spring blossoms and Easter approaches, we welcome you to the April 2025 edition of the Mercian Accountants newsletter. As this season brings renewal, the new tax year offers fresh opportunities to get your finances in order. With key updates from the Spring Statement, now is the time to review your tax position – whether…
• 
  Spring Statement 2025March 27, 2025
  As the days grow longer and the weather (hopefully) starts to improve, the Chancellor Rachel Reeves took to the dispatch box on 26 March 2025 to deliver her first Spring Statement. While many of us are busy thinking about Easter plans or tackling the garden, the Treasury has been hard at work pruning the public…
• 
  March 2025 NewsletterFebruary 28, 2025
  The sun is shining, which means it’s time for the March 2025 edition of the Mercian Accountants newsletter! As spring starts to peek around the corner, it’s a perfect time to get a jump on your tax planning. With deadlines looming and new rules on the horizon, now’s the moment to ensure you’re fully prepared…
• 
  February 2025 NewsletterJanuary 30, 2025
  Welcome to the February 2025 edition of the Mercian Accountants newsletter. February might be the shortest month, but there’s still plenty to think about when it comes to tax planning. As the tax year-end creeps closer, now’s the time to ensure you’re not leaving money on the table – or worse, accidentally donating it to…
• 
  January 2025 NewsletterDecember 30, 2024
  Happy New Year from Mercian Accountants, and welcome to the January 2025 edition of our Newsletter. We hope your New Year resolutions are still intact (or at least as sturdy as your festive leftovers). As always, this newsletter is brimming with essential updates, key deadlines, and timely reminders to keep you and your business in…
• 
  December 2024 NewsletterNovember 28, 2024
  Ho, ho, hold on to your calculators—it’s December, and we’ve got a cracker of a newsletter for you! 🎄 Whether you’re planning a Christmas party that won’t land your staff with a surprise tax bill or strategising for the big changes to agricultural property relief, we’re here to keep your financial affairs on the “nice”…
• 
  The Autumn Budget – 30 October 2024October 31, 2024
  On 30 October 2024, Chancellor Rachel Reeves presented her first budget to parliament. This was a budget intended to restore stability to our economy and to begin a decade of national renewal. Investment will be funded by revised debt rules to facilitate additional borrowing and a hefty £40 billion of tax rises. Headlines included: Below,…
• 
  October 2024 NewsletterSeptember 25, 2024
  Welcome to our October 2024 newsletter. As we approach the Autumn Budget, speculation is rife about potential changes to Capital Gains Tax (CGT) and other financial policies. In this edition, we will explore some of the key rumours surrounding CGT reforms, including possible rate adjustments, the future of Business Asset Disposal Relief (BADR), and the…

Related posts:

October 2023 Tax Newsletter November 2023 Tax Newsletter December 2023 Tax Newsletter January 2024 Tax Newsletter