Well, what a summer it’s been! We hope you’ve enjoyed the sunshine (and now the rain, if only for the sake of the gardens and wildlife). With the summer holidays almost over, many of us are getting back into our usual routines and settling into a bit of normality again.
There’s plenty happening in the world of business and tax and we’ll be keeping a close eye on the latest announcements from the new Prime Minister, as well as looking ahead to the Autumn Budget at the end of next month.
As always, we’ve put together a selection of updates and useful snippets in this month’s newsletter, covering some of the things we think you’ll want to know about.
If anything catches your eye, leaves you scratching your head, or makes you wonder whether it might affect you, just give us a shout. Whether you have a question about payroll, need a hand with tax planning or keeping on top of your accounts and compliance, or simply want to talk through an idea, the Clear Vision team is always here for you.
HMRC Warning – Beware of “Tax Credit” Payroll
HMRC has issued a warning to employers and employment agencies about fraudulent payroll arrangements that promise to reduce employment costs through the use of third-party tax credits.
Businesses operating in the temporary worker, recruitment and employment agency sectors are being specifically targeted by organised fraud groups promoting schemes that appear to offer significant savings on PAYE and National Insurance.
How Do These Schemes Work?
Businesses may be approached by organisations presenting themselves as payroll providers, umbrella companies, intermediaries or back-office service providers.
They may claim that they have acquired another business with unused tax credits recorded with HMRC and that these credits can then be used to offset the PAYE and National Insurance liabilities of your workforce.
The result is often marketed as a “cheaper” payroll solution, with the provider claiming that less tax needs to be paid to HMRC.
However, these arrangements are fraudulent. In some cases, the taxes are simply not paid to HMRC, while false returns or documentation may be produced to make it appear that the correct amounts have been reported and paid.
Why Should Employers Be Concerned?
Entering into one of these arrangements can expose your business to substantial financial and reputational risk.
Even if a third party operates the payroll on your behalf, HMRC may still pursue the employer for unpaid PAYE, National Insurance, interest and penalties. Businesses could therefore face a significant unexpected liability long after the arrangement has been put in place.
What Should You Do?
If a payroll provider or intermediary offers unusually large reductions in PAYE or National Insurance, particularly where the explanation involves tax credits belonging to another company, you should treat the proposal with extreme caution.
Before entering into any arrangement:
- Check exactly how the claimed tax saving is being achieved
- Ask who is legally responsible for calculating and paying PAYE and National Insurance
- Be wary of claims that another company’s tax credits can simply be transferred or used against your employment tax liabilities
- Obtain independent professional advice before signing up to an unfamiliar payroll model
- Keep appropriate records of payroll calculations, PAYE submissions and payments to HMRC
Already Using a Scheme?
If you believe your business may already be involved in an arrangement of this type, do not ignore it. HMRC provides routes for businesses to make a disclosure and report suspected tax fraud or avoidance arrangements.
Our Advice
If you have been approached with a payroll arrangement promising to reduce your PAYE or National Insurance bill through the use of third-party tax credits, speak to us before proceeding. Our payroll team can help you understand the proposed arrangement and identify potential risks.
MTD for Income Tax – Another Deadline Coming Up
If you’re already signed up for Making Tax Digital (MTD) for Income Tax, there’s another quarterly update to put in the diary.
The next deadline is 7 November 2026, covering your income and expenses from 6 July to 5 October 2026.
By now, the process should hopefully be starting to feel a bit more routine. If the first submission highlighted any problems with your software or record-keeping, now is a good time to sort them out, rather than leaving it until the last minute.
Just to be clear, the quarterly update isn’t a tax bill. It’s simply a summary of your business income and expenses sent to HMRC using compatible software. Your actual tax liability is worked out later when you submit your Final Declaration after the end of the tax year.
And there’s more change ahead. The MTD income threshold will drop to £30,000 from April 2027 and then to £20,000 from April 2028.
If you think you could be affected by either threshold, it’s worth getting your records and software ready, well before you need to. If you’re unsure what this means for you, please speak with us – we’re happy to help clarify what you need to do.
Good News for Hospitality and Leisure Businesses
There’s some welcome news if you run a pub, social club, music venue, or independent hospitality, retail or leisure business.
From April 2027, business rates bills are set to be 20% lower for qualifying businesses in these sectors. This follows the 15% relief already available for 2026/27.
So, if you’re planning ahead for next year, this is a saving worth keeping in mind when looking at your numbers and budgets.
We’re expecting the full details, including exactly who qualifies and how the relief will work, to be confirmed in the Autumn Budget on 28 October. We’ll keep an eye on the announcements and update you once we know more.
In the Spotlight
This month, we’re putting the spotlight on Joe, our brilliant Accounts Manager – the person who keeps the numbers in check and makes sure everything is ticking along nicely.
When he’s not busy making sense of numbers and helping clients navigate the world of accounts, Joe swaps his calculator for a paintbrush. He’s a seriously talented artist and has even had his work commissioned — although he’s much too modest to tell you that himself, so we’re happy to do it for him!
Outside work, Joe keeps himself pretty busy too. You’ll often find him cheering on his local ice hockey team, taking on the competition at his local pub quiz, getting stuck into padel or heading out for a run. Basically, Joe appears to have mastered the art of fitting about 47 hours into a 24-hour day.
He’s also one of those people who brings a great energy to the office — always happy to help, always up for a chat and rarely far away when someone needs a hand.
We’re lucky to have him on the team. Now, if only we could persuade him to turn his artistic talents towards producing a very flattering office portrait…
How We Can Help
If you have any questions about the topics covered in this month’s newsletter and how they might affect you or your business, please don’t hesitate to reach out.
We are committed to keeping our clients ahead of regulatory changes, so you can focus on running your business with confidence.
At Clear Vision, we’re more than a team of professionals; we’re a group of people who genuinely enjoy supporting our clients. We’re always here to help.
However you need us to support you through your journey as a business owner, we’re here for you!
This month’s Clear Vision positive thought:
“Some people want it to happen, some wish it would happen, others make it happen.”
Michael Jordan