Navigating Tax in 2025/2026
I know from experience that there is never a quiet time of the tax year! Over two months have passed since the 2023/2024 tax return submission deadline, but since then there have been plenty of interesting tax issues to deal with for clients.
Now that we are into the new 2025/2026 tax year, work can start on 2024/2025 tax returns. For many, the tax return process will be familiar with the key dates being 31 July and 31 January for making tax payments, and 31 October and 31 January for submitting paper and online tax returns.
There are also other important self-assessment deadlines to be aware of in the months ahead.
1 May: £10 daily late filing penalties commence for 2023/2024 tax returns (for a maximum of 90 days).
31 Jul: Further late filing penalty for 2023/2024 tax returns (equal to the higher of £300 and 5% of the outstanding tax). Late payment penalty equal to 5% of the outstanding 2023/2024 tax.
5 Oct: Deadline for notifying HMRC that there has been a change in circumstances and that a self-assessment tax return for 2024/2025 should be issued.
30 Dec: Deadline for submitting a 2024/2025 tax return online if the tax due is to be collected through the tax code from April 2026.
The advice every year is to deal with the self-assessment tax return as soon as possible, and to then have the funds available to make the necessary tax payments by the due dates.
What other time sensitive matters should you be aware of in the year ahead?
2025/2026 Tax Codes
Make sure that the 2025/2026 tax code is correct. If net income for April is different to previous months, this is a sign that the 2025/2026 tax code may be wrong. HMRC should be notified as soon as possible to avoid a large tax under or overpayment building up in the months ahead.
Furnished Holiday Letting Changes
The tax changes to FHL businesses that came into effect from 6 April 2025 were mentioned in a previous blog. One of these changes impacts businesses operated by a married couple where the beneficial ownership of the FHL property is unequal.
A Form 17 may be required and if it is, the deadline for submission to HMRC is 5 June 2025.
Higher Income Child Benefit Charge
For many, the sole reason for completing a self-assessment tax return is to report the high income child benefit charge. This is about to change, and in the summer HMRC will provide details of a new digital service. This service will allow child benefit payments to be reported direct to HMRC without the need to complete a self-assessment tax return. Amounts payable can then be settled through PAYE.
Property Capital Gains Tax Returns
When property is sold and a CGT liability arises, the disposal generally needs to be reported, and the CGT paid within 60 days. The disposal also needs to be declared on the self-assessment tax return for the year of disposal.
However, if a self-assessment tax return can be submitted within 60 days of completion, no separate property CGT return is required. This also means that CGT is payable on 31 January following the end of the tax year rather than within 60 days.
Where a property disposal took place in February/March 2025 and the disposal is still to be reported to HMRC, there could be an incentive to prepare and submit the self-assessment tax return now.
Please get in touch if you require further information about tax deadlines. One final comment is that Making Tax Digital will become a reality for many from April 2026.
Some planning will be required for this in the year ahead and I will comment further in future blogs.
