Hello,
News this week includes a proposed reporting easement for ‘side-hustlers’ and a new service for tax agents to escalate and resolve self-assessment and PAYE queries with HMRC. We also continue to look forward to the new tax year, with a range of new and updated guides and resources.
The ICAEW and CIOT hosted an event this week marking the 20th anniversary of HMRC. At this event, Exchequer Secretary to the Treasury, James Murray, made a number of announcements including the launch, on 31 March 2025, of a new service for tax agents to help escalate and resolve outstanding PAYE and self-assessment queries. This is something which we expect will be welcomed by many.
Our editorial team are currently busy updating our core ‘annuals’ for the new tax year. This week, in Editor’s Choice, we feature our 2025-26 Tax Data Card: a key reference point when planning, as well as our comparison of operating as a sole trader, versus a limited company, in 2025-26.
In last month’s Agent Update, HMRC highlighted that from April 2025 they would be writing to taxpayers whose 2023-24 tax returns suggested they may be mandated into Making Tax Digital (MTD) for Income Tax, from 6 April 2026.
In response, we have created a template letter to assist in communicating the upcoming changes with clients, before HMRC’s letters start hitting doormats. We have also made a downloadable MTD Roadmap Infographic, which sets out the new rules in a visual form. These are designed to allow you to add your own branding.
More news, cases and updates below.
Nichola and the team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Side-hustle reporting threshold to treble
The minister responsible for HMRC, James Murray, has announced that those with side-hustles will be able to earn up to £3,000 before they have to file a tax return, although tax will still be due on earnings over £1,000. A new service will also be launched on 31 March, for agents to escalate and resolve self-assessment and PAYE queries.
Tracker of HMRC's one-to-many letters
HMRC's latest one-to-many nudge letter focuses on taxpayers where HMRC hold information showing that tax is owed on undeclared sales, due to the misuse of a till system (electronic sales suppression).
Tax Cases
UK deemed domiciled subject to ToAA rules
In Valesca Valentina Yvette Louwman v HMRC [2025] TC09445, the First Tier Tribunal (FTT) reluctantly ruled that the Transfer of Assets Abroad (ToAA) rules applied to Offshore Income Gains (OIGs) and Accrued Income Profits (AIPs) deemed to arise to a UK deemed domiciled taxpayer from non-resident trusts settled before the taxpayer became UK domiciled. The OIGs and AIPs were chargeable to Income Tax as they arose.
Editor's Choice
Tax Data Card 2025-26
NEW: A summary of key tax rates and allowances for 2025-26 and 2024-25.
Sole trader v. limited company: Tax differences & savings (2025/26)
NEW: Is it better from both a tax and legal point of view to run your business as a sole trader or as a company? Are there tax advantages in running a business as a company? What legal protections apply?
Do I pay a salary or dividend? 2025/26
NEW: This guide explores the tax-planning points and pitfalls of creating a tax-efficient pay package. Should 'excess profits' or one-off amounts of income be paid out of a company as a salary or dividend?
We're hiring: you looking? Tax Adviser/Consultant
We are recruiting for a Tax Adviser to come and join our friendly team at 20:20 Innovation and work in the Virtual Tax Partner (VtaxP) advisory service and on rossmartin.co.uk.
Guides & Updates
Making Tax Digital
Making Tax Digital: Client letter
NEW: A template letter for accountants to use to communicate with clients about the introduction of Making Tax Digital for Income Tax from 6 April 2026.
Making Tax Digital: MTD Roadmap Infographic
NEW: A downloadable Making Tax Digital for Income Tax Roadmap Infographic which sets out the new rules in a graphical format, ideal for ‘visual learners’ and those who don’t like reading! This infographic is designed to allow you to add your firm’s branding.
Self-employed
Losses, trade losses and sideways relief
How can trade losses be utilised? What are the restrictions?
Carried interest
UPDATE: In February 2025 HMRC issued guidance on the additional information fund managers can consider providing to HMRC. Whilst there is no statutory obligation to provide such additional information, doing so reduces the chances of compliance checks being opened to verify figures or understand adjustments.
Incorporation
Incorporation: Businesses & Trades
How to transfer an existing sole trader's business by incorporation into a company.
Directors & Companies
Directors' loan accounts: Toolkit (subscribers)
What is the tax treatment for an overdrawn director's loan account? What are the consequences of an outstanding loan to a participatory?
Employers
Official rate of interest
UPDATE: The official rate of interest will increase to 3.75% from 6 April 2025.
Employer's What's On: 2024/25
This employer update is for advisers and their clients for 2024-25 and covers measures from the 2024 Finance Acts and the October 2024 Budget. It also considers other topical issues for employers and employees.
Land & Property
National Insurance for landlords
When are National Insurance Contributions (NICs) payable by landlords? Can landlords pay Class 2 NICs voluntarily?
Annual Tax on Enveloped Dwellings (ATED)
What is the Annual Tax on Enveloped Dwellings (ATED)? Who does ATED apply to? What relief is available and how is it claimed? What are the ATED return filing dates?
Overseas & Residence
Transfer of Assets Abroad (ToAA)
What are the ToAA rules? When do they apply? How is the tax charge calculated? Is there any defence against the rules?
Private Client & Estate Planning
Pensions: Tax rules and planning
What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?
CGT: Rollover Relief
What is Rollover Relief? When a capital gain is made on the disposal of a business asset, it is possible to defer the gain by rolling it over against the cost of acquiring a replacement business asset. What are the conditions for the relief? What is a business asset?
Investigations & Enquiries
Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC publishes a list of named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.
HMRC Tax Settlement Facilities 2024-25
HMRC provides special tax settlement facilities and opportunities to allow taxpayers to notify undeclared income or gains over a range of different taxes. Facilities are provided via special links to enable taxpayers to settle unpaid taxes.
VAT News & Cases
Is voluntary VAT registration worthwhile?
When can a business voluntarily register for VAT? When would it be beneficial to register voluntarily?
Mixed supplies: Single or Multiple supply?
Is a mixed supply a single or multiple supply for VAT purposes? What tests and case law apply?
Tax Tools & Calculators
Tax tools & calculators
We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax-significant events.
CPD
CPD for lunch: Byte-sized chunks of lunchtime CPD (free for our Subscribers)
- How to run the most tax-efficient business 2024/25.
- Purchase of Own Shares: all the details.
- Anti-money Laundering Update and Firm-Wide Risk Assessment ...More...
Tax Queries?
UK Agent for registration of Overseas Entities
Do you require assistance in the registration and verification of an overseas entity that owns UK land or property?
Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.
Missed the Last Tax Update?
Ross Martin Tax: SME Tax News 6 March 2025
- Online filing service for companies to close
- Consultation on APR and BPR reforms for trusts
- Umbrella company non-compliance consultation outcome
- Consultation outcomes on Make Work Pay policy
- No Multiple Dwellings Relief (MDR) for annexe
- Tax Planning for the 2024/25 year-end: Private Clients NEW
- Tax Planning for the 2024/25 year-end: Business Owners NEW
- Salary 2025/26 (interaction with NICs) NEW
- MTD: Toolkit for accountants UPDATE
- R&D Zone: State Aid and subsidised expenditure UPDATE ...More
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