Spring has (almost) sprung
The last year has seen so many changes, both in tax and in company regulation. The next financial year will see further changes from Companies House and HMRC.
Making Tax Digital starts from April 2026, requiring quarterly returns from Self Assessment Sole Traders and/or Landlords whose turnover, be it single or combined is over £50k.
We are still dealing with the fallout from Companies House ID Verification as we discover that the information held on the public record for some directors and PSCs is not correct and causing failures in verification.
There isn’t long left until the end of the current, 2025-2026, Tax Year on 5th April 2026. Take a look down our to-do list and see if there are any last minute changes you can make to help save you tax in the coming year.
Read on for more information on these and other tax topics……
Don’t miss the 5th April 2026 Pension Contribution Deadline
As the end of the UK tax year approaches, now is an important time to review your pension contributions. The deadline of 5th April 2026 marks the final opportunity to make contributions that count towards the 2025/26 tax year and to ensure you are making full use of the valuable tax reliefs available.
Use Your Annual Allowance
Most individuals can contribute up to £60,000 per tax year into pensions while still benefiting from tax relief, subject to having sufficient relevant earnings. This limit is known as the annual allowance and includes both personal and employer contributions.
If your income is very high, the tapered annual allowance may apply, potentially reducing the amount you can contribute tax-efficiently.
Carry Forward Unused Allowances
If you haven’t fully used your pension annual allowance in previous years, you may be able to carry forward unused allowances from the three previous tax years. This means that before the 5 April deadline, it may be possible to make a significantly larger contribution than the standard annual limit.
For the current tax year, you can potentially use unused allowances from:
- 2022/23
- 2023/24
- 2024/25
Check for other unused allowances
Annual Tax on Enveloped Dwellings (ATED)
HMRC Annual Tax on Enveloped Dwellings (ATED)
What is it? ATED is an annual tax payable, mainly by companies who own UK residential property** valued at more than £500,000 (for any single property).
If you are a limited company or a partnership who own a UK residential property** (or a trust who jointly own a UK residential property** with a company), and the value of any property is more than £500,000 you will need to complete an ATED return annually even if there is no tax to pay.
Returns for the 2026-27 tax year must be submitted on or after 1 April 2026 and any tax due must be declared and paid by the 30 April 2026.
Can I claim any relief? There are reliefs and exemptions which may mean you do not have any tax to pay. You will still however, need to submit an ATED return.
There are reliefs available if the property is:
- ** let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner.
Note: In this instance “commercial” means you are charging and receiving a market rent for your let property. So, for a large number of companies who own BTL properties there will be no tax to pay.
- open to the public for at least 28 days a year.
- being developed for resale by a property developer.
- owned by a property trader as the stock of the business for the sole purpose of resale.
- repossessed by a financial institution as a result of its business of lending money
acquired under a regulated home reversion plan. - being used by a trading business to provide living accommodation to certain qualifying employees.
- a farmhouse occupied by a farm worker or a former long-serving farm worker
owned by a registered provider of social housing or a qualifying housing co-operative.
Is any property exempt? HMRC use the term “dwelling” when referring to the tax. Your property is considered a dwelling if all or part of it is currently used, or could be used, as a residence. Some properties, for example, hotels, guest houses, boarding school accommodation, hospitals, student halls of residence, military accommodation, care homes and prisons are not classed as dwellings.
Revaluation
You must revalue your property every 5 years in line with Annual Tax on Enveloped Dwellings (ATED) legislation. For the 5 chargeable periods from 2023, the revaluation date is 1 April 2022.
- You must revalue the properties you owned on or before 1 April 2022 using that date. If you acquire property after 1 April 2022, use the acquisition date.
Contact your client manager if have any questions or you need assistance with your return.
Business Property Incorporation
Are you considering incorporating your personally owned rental properties into a limited company?
If structured correctly, incorporation can significantly reduce your tax bill — but many landlords don’t realise they may also qualify for Incorporation Relief, potentially deferring capital gains tax when transferring their portfolio.
Done properly and in line with HM Revenue & Customs rules, incorporation could help you:
• Pay corporation tax instead of higher personal tax rates
• Fully deduct mortgage interest as a business expense
• Reinvest profits more efficiently
• Build a more scalable, professional structure
• Potentially defer capital gains tax using Incorporation Relief
It’s not a simple switch and not all landlords will meet HMRCs strict rules. We offer a free, no-obligation call to review your situation and confirm whether you’re eligible — and how much you could save.
Book your free call today: https://meetings-eu1.hubspot.com/calculated-jl/calculatedbpi-discovery
Making Tax Digital (MTD)
When Does MTD come into effect?
MTD comes into effect on 6th April 2026 or 1st April 2026 (if you choose calendar month ends instead of tax year month ends).
The requirement under MTD is to keep digital records and submit quarterly returns.
Who is affected by MTD?
Making Tax Digital (MTD) requirements are based on your 2024–25 tax return. If you received property income and/or self-employment income. with a combined turnover of £50,000 or more (either combined or from a single source), you will be required to register with HM Revenue and Customs. The threshold is based on turnover and not profit.
What are the thresholds for future years?
The thresholds are based on your qualifying income in a previous tax year (before expenses):
• £50,000 – Must register for MTD if your 2024–25 gross income from self–employment and/or property exceeds this.
→ You will need to use MTD from 6 April 2026.
• £30,000 – If your 2025–26 gross income from self–employment and/or property is over this amount, you’ll need to join MTD from 6 April 2027.
• £20,000 – If your 2026–27 gross income from these sources exceeds this, you’ll be required to comply from 6 April 2028
How to register and deadlines for registering
If we complete your Self Assessment Tax Return, we will have already contacted you and signed you up for MTD.
You can also register yourself via the gov.uk website.
The deadline for registering is 1st April 2026 if you choose calendar month ends or 6th April if you choose tax month ends.
What are the filing requirements and deadlines for filing?
You must send income and expense summaries every quarter to HMRC using approved software:
• 7 August – for the period 6 April–5 July
• 7 November – for 6 July–5 October
• 7 February – for 6 October–5 January
• 7 May – for 6 January–5 April
After the tax year ends, you must also submit:
• End of Period Statement (EOPS) – confirms final business/property figures
• Final Declaration (replaces the Self Assessment tax return)
Both are due by 31st January following the end of the tax year.
Will my Tax payment dates change?
Tax payments will not change, which means any balancing payment will still be payable 31st January and if you make payments on account, they will remain at 31st January and 31st July each year.
What are the penalties for late filing?
The penalties are based on a points system.
• 1 penalty point is given for each missed deadline.
• For quarterly filers (MTD), reaching 4 penalty points typically triggers a financial penalty.
• Once you reach the threshold, a £200 financial penalty is charged, and further late submissions can attract additional £200 penalties while the points remain at the threshold.
• Points stay on your record and can be reset only by complying with all submission deadlines for an extended period (usually 12–24 months).
What if my income ceases?
If a taxpayer in MTD ceases their only source of qualifying income (winds up a sole trade or stops letting property completely), they will be able to leave MTD. Once they’ve submitted the quarterly update covering the period to cessation of their trade or property business, they will need to notify HMRC before the next quarterly update is due, stating the cessation date of their business. It is not yet known how that notification will be made.
Taxpayers with more than one source of qualifying income (say a sole trade and a rental property) who cease one source will need to remain in MTD for the remaining source unless or until the gross income from that source falls below the MTD threshold for three consecutive years. If the income from the remaining source is sufficiently low, an application for exemption from MTD may be possible before the three year period ends – see “What if a taxpayer in MTD reduces their qualifying income below the MTD threshold” below.
What if my income falls below the Threshold?
Once an individual is mandated into MTD, they will normally only become exempt from MTD after three consecutive years in MTD when their qualifying income was below the MTD income threshold.
Partnerships
Partnerships are not yet required to comply with MTD for Income Tax. General partnerships, limited liability partnerships (LLPs) and other partnership types are currently out of scope, and no mandatory start date has been confirmed.
What about jointly owned property?
The turnover thresholds are per individual not the total turnover.
If you own a rental property jointly, only your personal share of the rental income counts towards your MTD qualifying income — not the total income for the whole property.
For example, if two people own a property 50:50 that generates £100,000 gross rent, each owner’s qualifying income is £50,000.
Limited Company / Self Assessment – What’s the difference?
Many of our seasoned clients are familiar with the cut-offs and crossovers between a limited company and its tax structure, and their self assessment tax return but the two sometimes blur and can affect each other, especially if you have dividend income from your limited company or perhaps a company car.
It is essential to understand that both are separate and distinct entities when it comes to tax and come with their own deadlines and regulations.
A limited company is a distinct legal business entity separate from its owners (shareholders) and directors, meaning the business holds its own assets, liabilities, and legal responsibilities. A limited company must be registered with Companies House in the UK.
Directors must keep records, file annual accounts, and submit corporation tax returns. The financial year for a limited company will vary, usually depending on the month it was incorporated.
Self Assessment applies to income for an individual.
You must send a tax return if, in the last tax year (6 April to 5 April), any of the following applied:
- you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- you were a partner in a business partnership (this is not a limited company)
- you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
- you had to pay the High Income Child Benefit Charge and do not pay it through PAYE
You may also need to send a tax return if you have any untaxed income, such as:
- money from renting out a personally owned property
- tips and commission
- income from savings, investments and dividends (including dividend income from a limited company you own or part own)
- foreign income
Companies House ID Verification
ID Verification became a legal requirement on 18th November 2025 for Directors and PSCs of a limited company.
The change was implemented to support the Economic Crime and Corporate Transparency Act and in essence, the use of a single personal authentication code which has been produced following successful biometric and cryptographic verification checks for an individual, is the first time Companies House have ever been able (or will be able) to link an individual to ALL of the companies for whom they are Directors or PSCs.
Please complete your ID Verification ASAP.
If you have not already done so and you are any or all of the following:
- A director of a limited company
- A Personal of Significant Control (PSC) for a limited company
A PSC is usually anyone who:
- has more than 25% shares or voting rights in your company
- can appoint or remove a majority of directors
- can influence or control your company or trust
From 18 November 2025, identity verification became a legal requirement.
This date is not a deadline. It marks the start of a 12-month transition period, giving your company time to make sure all directors and people with significant control (PSCs) have verified their identity by their due dates.
Once we’ve received it, we will enter your personal authentication code with Companies House when it becomes necessary. That depends on your relationship and the date of your Annual Confirmation Statement:
Directors
You will need to provide your Companies House personal code as part of your company’s next confirmation statement.
If you are a director of more than one company, you will need to do this for each company.
If you’re registering a new company, you’ll be asked to provide the Companies House personal code for each director as part of the registration filing.
If you’re an overseas company, you must confirm that all directors have verified their identity by the anniversary of your UK establishment’s registration.
PSCs
If you are both director and PSC for the same company, you’ll need to provide your personal code separately for each role.
As a PSC, you must provide it within a 14 day period, starting from the day after the company’s confirmation statement date.
If the company files its confirmation statement early, the dates of your 14 day period will not change.
If you’re a PSC but not a director of the same company, you must provide your personal code within the first 14 days of your birth month. For example, if your date of birth is 22 January, your 14 day period will begin on 1 January.
If you became a PSC after 18 November 2025, you can provide your personal code when you’re first added to the Companies House register, or within 14 days of being added.
