Change is the only constant in tax, and the months ahead prove the point. With the 2025 Autumn Budget date now locked in, new measures are on the horizon while previous announcements continue to take effect. From further changes to Capital Gains and Inheritance Tax to HMRC’s growing focus on umbrella companies and VAT errors, the coming months will bring both challenges and opportunities for businesses and individuals alike.

In this update, we outline what’s already in motion, what could change when the Chancellor speaks on 26 November, and the key compliance points you’ll want on your radar.

Budget 2025 Date—26 November

Go ahead and block out your calendar: the Chancellor will be stepping up to the dispatch box on 26 November 2025 with the Autumn Budget. This one’s expected to be weighty—after all, the public finance deficit isn’t exactly shrinking itself. Translation? Tax rises could well be on the cards.

But before we get carried away with what might happen, let’s not forget that we’re still digesting last year’s Autumn Budget. Some of its changes haven’t even landed yet.

• Capital Gains Tax (CGT): Not content with the hikes that hit on 30 October 2024 and 6 April 2025, the rate where Business Asset Disposal Relief (BADR) applies will climb again—from 14% to 18%—on 6 April 2026.
• Inheritance Tax (IHT): Already lined up are two big shifts: restrictions on 100% relief for business and agricultural property from April 2026, and the inclusion of unused pension funds in estates from April 2027.

What’s Unlikely to Budge

Despite all the noise, some things look pretty nailed down. Labour’s 2024 manifesto promised no hikes to National Insurance, the main rates of Income Tax, or VAT. Corporate tax policy also looks steady: the 25% main rate is here to stay, along with the small profits rate, marginal relief, permanent full expensing, and that handy £1m annual investment allowance.

And those frozen Income Tax thresholds? The government swore they wouldn’t keep them locked forever because of the squeeze on working people… but let’s be honest, they’re now frozen solid until April 2030—right in step with IHT thresholds.

What Could Change

Here’s where things get interesting (or worrying, depending on your point of view):

• National Insurance Contributions could be widened to cover landlords.
• Pension tax relief, currently linked to your tax band (20%, 40%, 45%), might get capped at a flat rate—say, 30%.
• Salary sacrifice for extra employer pension contributions could lose its exemption, dragging NICs and Income Tax into play.
• CGT rates (currently 18% / 24%) could be aligned with Income Tax—cue potential 45% CGT.
• More restrictions on IHT reliefs might land, such as limits on lifetime gifting.
• The VAT registration threshold (£90,000) could be trimmed down—or scrapped altogether.
• Domestic fuel VAT (currently 5%) might even be cut to 0% to help with living costs.

Crystal balls are in short supply, but safe to say, 26 November could bring some major shifts in how and where tax bites.

Spotlight on Umbrella Companies

Umbrella companies aren’t a type of rainy-day gear, but rather a setup where an intermediary employs temporary workers who bounce between agencies and clients. They’ve been around for a while, but HMRC has been taking a closer look.

Here’s the gist:

• Agency workers are generally subject to PAYE and NICs.
• Since 2014, if a worker is under supervision, direction, or control, they’re treated as an employee—no loopholes.
• Agencies that supply self-employed workers have to file regular reports, and late penalties apply.

Fast forward to June 2025, and HMRC released Spotlight 71, warning agency workers and contractors about being shuffled between umbrella companies in ways that may signal tax avoidance. In short—if you’re in that world, keep your eyes peeled.

VAT Error Correction

RIP, Form VAT652—withdrawn on 8 September 2025. This was the go-to for reporting errors that couldn’t be fixed in your next return. Now, the process looks like this:

• Small errors (under £10,000, or up to £50,000 if less than 1% of your Box 6 figure) can be corrected in your next return.
• Bigger ones? You’ll need to use HMRC’s new online service (Government Gateway login required).

And just a heads up: if the mistake was down to “careless behaviour,” HMRC can still dish out penalties, even if you’ve corrected it later. Adjusting on the return alone doesn’t count as a full disclosure—so don’t skip the extra step.

Sideways Loss Relief Disallowed

In a recent First Tier Tribunal case (Charlotte MacDonald v HMRC), sideways loss relief was denied on losses from organising an annual woodland shoot.

Why? Because although it was run on a commercial basis, it had racked up losses nearly every year for 15 years. With barely a whiff of profit, the Tribunal decided there was no genuine expectation of future gains—so no relief. Moral of the story: if your “business” looks more like an expensive hobby, sideways loss relief probably won’t fly.

Advisory Fuel Rates for Company Cars

From 1 September 2025, the new reimbursement rates are:

(Previous rates in brackets.)

• Hybrids follow petrol/diesel rules.
• Electric cars now have a split: 8p/mile if charged at home, 14p/mile if charged publicly—the first time location has mattered.
• Employees using their own cars still get 45p/mile (plus 5p per passenger) for the first 10,000 business miles, then 25p thereafter.

Employers can reclaim VAT on the fuel element if supported by a VAT receipt—e.g., for a 1300cc petrol car, that’s 2p per mile.

Diary of Main Tax Events: Oct / Nov 2025

Here are the key dates you don’t want to miss:

• 1 October: Corporation Tax due for year ending 31/12/2024 (unless quarterly instalments).
• 5 October: Deadline to notify HMRC of chargeability if not already in Self-Assessment (2024/25).
• 19 October: PAYE & NIC deductions, CIS return and tax, for month to 05/10/2025 (due 22/10 if paying electronically).
• 1 November: Corporation Tax due for year ending 31/01/2025.
• 19 November: PAYE & NIC deductions, CIS return and tax, for month to 05/11/2025 (due 22/11 if paying electronically).

Categories: Positive Accountant