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Latest tax gap sets another record

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Latest tax gap sets another record

The tax gap for 2024/25 sets another record at £59.2 billion, with small businesses accounting for some 62% of the taxes not collected.

The tax gap is the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid.

Upward trend

Enterprise management incentives grow in popularity

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Enterprise management incentives grow in popularity

The April 2026 enterprise management incentive (EMI) reforms have pushed this perk towards mainstream acceptance. Higher qualifying limits mean that EMI tax-advantaged share options can now continue to be granted even as a company grows and matures.

Close company directors asked to reveal more

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Close company directors asked to reveal more

Directors of close companies will have to provide more details than previously when completing their self-assessment tax returns for 2025/26. In the longer term, close companies themselves will also be required to provide significantly more detailed information.

The problem of dividend income

Penalties for late VAT payments

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Penalties for late VAT payments

More than 580,000 traders were penalised for late payment of VAT last year, representing a quarter of businesses registered for VAT. A sure sign that the tougher penalty regime introduced in 2023 is hitting cash-strapped businesses.

Penalty regime

Each late payment of VAT is considered separately, with penalties charged as follows:

Soaring tax receipts for CGT and NICs

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Soaring tax receipts for CGT and NICs

The amount of tax collected by HMRC for 2025/26 increased by 9.3% compared to the previous year. The figure is unsurprising given the hike in capital gains tax (CGT) rates, as well as employer national insurance contributions (NICs).

Receipts for CGT

CGT receipts for 2025/26 were an astonishing 62% higher than for 2024/25:

VAT annual adjustments: What it is and when to do it

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VAT annual adjustments: What it is and when to do it

Every year, partially exempt organisations face a vital VAT compliance task: partial exemption VAT annual adjustments. In our latest Insight, our Dains Group colleage Ian Brown outlines why organisations should be preparing now for their annual adjustment and suggests ways to avoid costly errors. 

If your organisation hasn’t completed its annual adjustment yet, now is the time to prepare and reflect on any changes during the year which may need fed into the calculation.

Cycling to work tax savings continue

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Cycling to work tax savings continue

There is no financial limit on the value of cycles that can be provided to employees under the cycle-to-work scheme. It was therefore something of a surprise that the Chancellor did not introduce a cap in the November 2025 Budget, particularly given that some cycles can cost more than £5,000.

The scheme has become increasingly popular, which is unsurprising given the potential tax savings for both employees and employers.

HMRC VAT compliance checks increasing for mid-sized businesses

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HMRC VAT compliance checks increasing for mid-sized businesses

Following on from the issue of HMRC’s guidelines of what it considers as goods practice in relation to VAT acc

A light shone on the limits of the IHT gift rule

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A light shone on the limits of the IHT gift rule

The normal expenditure out of income exemption allows individuals to make gifts during their lifetime that are immediately exempt from inheritance tax (IHT), without the need to survive seven years. A recent case heard by the First-tier Tribunal (FTT) has provided further clarity on what is meant by ‘normal expenditure’.

The exemption

For gifts to qualify for the exemption, they must:

An unwelcome April Fool’s for business tax changes

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An unwelcome April Fool’s for business tax changes

April brings key tax and filing changes for businesses

The start of April has introduced a number of significant changes for businesses. These include reduced capital allowances, increased penalties for late filing of corporation tax returns, and the closure of HMRC’s free corporation tax return filing portal.

Capital allowances

Capital expenditure will often qualify for a 100% deduction. However, where expenditure does not qualify, an annual writing-down allowance (WDA) is applied.

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