As part of the Budget measures, the government confirmed plans to make some changes to the Construction Industry Scheme (CIS).

From 6 April 2026, HMRC will be able to take immediate action where a business makes or receives a payment that it knew, or should have known, was connected to fraud. In these circumstances, HMRC will have the power to remove Gross Payment Status (GPS) with immediate effect, assess the business for the associated tax loss, and impose a penalty of up to 30%. This penalty may be applied to the business itself or to its officers. Where GPS is withdrawn due to fraud or serious non-compliance, the business will also be barred from reapplying for GPS for a period of five years (an increase from the current one-year limit).

Alongside these measures, the government also plans to simplify the CIS by exempting payments to local authorities and certain public bodies. As part of this change the requirement for construction contractors to submit nil returns will be required. These changes are due to take effect from 6 April 2026 and will first be subject to technical consultation.

The CIS is a set of special tax and National Insurance rules for businesses operating in the construction industry. Under the scheme, businesses are classed as either contractors or subcontractors, and both must understand their tax obligations.

Qualifying contractors are required to deduct tax from payments made to subcontractors and pass these deductions to HMRC. The amounts deducted count as advance payments towards the subcontractor’s tax and National Insurance liabilities.

Subcontractors are not required to register for the CIS, but where they are not registered, contractors must deduct tax at a higher rate of 30%. Registered subcontractors are subject to a 20% deduction unless they qualify for GPS. Where GPS applies, no deductions are made by the contractor, and the subcontractor is responsible for paying all tax and National Insurance at the end of the tax year.

To qualify for GPS, a subcontractor must meet specific criteria, including a strong compliance history of paying tax and National Insurance on time, and carrying on a business that undertakes construction work or supplies construction labour in the UK.

If you live abroad and sell your UK home, you may have to pay Capital Gains Tax (CGT) on any gain made since 5 April 2015. Only the portion of the gain made after 5 April 2015 is liable for tax. One of the most commonly used and valuable exemptions from CGT is Private Residence Relief (PRR), which applies when a property has been used as your main family home. Investment properties that have never been your main residence do not qualify for any CGT relief.

For non-UK residents, PRR can still apply, but there are additional conditions. You may not have to pay CGT for any tax year in which you, your spouse, or civil partner spent at least 90 days in the UK home, provided you meet the necessary conditions and nominate it as your only or main home when reporting the sale to HMRC.

Certain parts of the property, such as areas let out, used exclusively for business, or grounds larger than 5,000 square metres, may reduce the relief. You also automatically receive relief for the last nine months of ownership (or 36 months if you are disabled or in long-term care). 

Regardless of whether any tax is due, you must submit a Non-Resident CGT (NRCGT) return and pay any CGT within 60 days of the sale. Penalties apply if the return is late or tax is unpaid by the deadline. Even if there is no CGT to pay the return must still be submitted by the deadline.

The new rules will allow companies to raise more capital under the following schemes although investors will need to factor in reduced VCT Income Tax relief when assessing opportunities.

The Venture Capital Trusts (VCT) and Enterprise Investment Scheme (EIS) are designed to encourage private investment into trading companies. Both schemes help support business growth while at the same time encouraging individuals to fund these companies.

A number of changes to the schemes were announced at Budget 2025 and will apply from 6 April 2026.

The main changes are as follows:

• Gross assets limits: Companies’ gross assets will increase for EIS and VCT eligibility to £30 million immediately before the share issue (from £15 million) and £35 million immediately after the issue (from £16 million).
• Annual investment limits: Companies will be able to raise up to £10 million annually (from £5 million) and £20 million for knowledge-intensive companies (from £10 million).
• Lifetime investment limits: Companies’ lifetime limit will increase to £24 million (from £12 million), and £40 million for knowledge-intensive companies (from £20 million).
• VCT Income Tax relief: The rate of Income Tax relief for individuals investing in VCTs will reduce from 30% to 20%.

These increases in annual, lifetime and gross assets apply only to qualifying companies that are not registered in Northern Ireland and are not engaged in trading goods, or in the generation, transmission, distribution, supply, wholesale trade, or cross-border exchange of electricity.

These companies remain eligible under the current scheme limits.

These changes are designed to encourage larger investments into qualifying companies. 

Investors should be aware of the reduced VCT Income Tax relief available and ensure that investments still remain worthwhile.

There is now less than 1 months to the self-assessment filing deadline for submissions of the 2024-25 tax returns. We urge our readers who have not yet completed and filed their 2024-25 tax return to file as soon as possible to avoid the stress of last-minute preparations as the 31 January 2026 deadline fast approaches.

You should also be aware that payment of any tax due should also be made by this date. This includes the remaining self-assessment balance for the 2024-25 tax year, and the first payment on account for the 2025-26 tax year.

Earlier this year, more than 11.5 million people submitted their 2023-24 self-assessment tax returns by the 31 January deadline. This included 732,498 taxpayers who left their filing until the final day and almost 31,442 that filed in the last hour (between 23:00 and 23:59) before the deadline!

There is a new digital PAYE service for the High Income Child Benefit Charge (HICBC). This allows Child Benefit claimants who previously used self-assessment solely to pay the charge to opt out and instead pay it through their tax code.

If you are filing online for the first time you should ensure that you register to use HMRC’s self-assessment online service as soon as possible. Once registered an activation code will be sent by mail. This process can take up to 10 working days. 

If you miss the filing deadline you will be charged a £100 fixed penalty (unless you have a reasonable excuse) which applies even if there is no tax to pay, or if the tax due is paid on time. 

There are further penalties for late tax returns still outstanding 3 months, 6 months and 12 months after the deadline. There are additional penalties for late payment of tax amounting to 5% of the tax unpaid at 30 days, 6 months and 12 months.

1 January 2026 – Due date for Corporation Tax due for the year ended 31 March 2025

19 January 2026 – PAYE and NIC deductions due for month ended 5 January 2026. (If you pay your tax electronically the due date is 22 January 2026).

19 January 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2026. 

19 January 2026 – CIS tax deducted for the month ended 5 January 2026 is payable by today.

31 January 2026 – Last day to file 2024-25 self-assessment tax returns online.

31 January 2026 – Balance of self-assessment tax owing for 2024-25 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2025-26.

1 February 2026 – Due date for Corporation Tax payable for the year ended 30 April 2025.

19 February 2026 – PAYE and NIC deductions due for month ended 5 February 2026. (If you pay your tax electronically the due date is 22 February 2026)

19 February 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2026. 

19 February 2026 – CIS tax deducted for the month ended 5 February 2026 is payable by today.

In late 2025 the government confirmed a significant change of direction on inheritance tax reliefs for farmers and family owned businesses. Following sustained criticism of earlier proposals, ministers announced an increase in the threshold at which full inheritance tax relief applies to qualifying agricultural and business assets. The move has been widely described as an about face, reflecting the strength of opposition from the farming and rural business community.

What has changed From 6 April 2026, the threshold for full Agricultural Property Relief and Business Property Relief will rise from £1 million to £2.5 million per estate. Where spouses or civil partners jointly hold assets, this effectively allows up to £5 million of qualifying property to be passed on free of inheritance tax.

Relief will still be available above this level, but at a reduced rate. The revised structure is intended to protect the majority of working farms and trading businesses, while limiting unlimited relief for the largest estates.

Why the government reversed its position The original proposals, announced as part of earlier Budget measures, triggered strong reactions across the agricultural sector. Many farmers argued that a £1 million cap bore little resemblance to modern land and business values, particularly in areas where farmland prices have risen sharply over the past decade.

There was widespread concern that families could be forced to sell land or business assets simply to fund inheritance tax liabilities, undermining long term succession planning and the viability of family farms. Protests, lobbying by representative bodies, and sustained media attention kept the issue firmly in the public eye.

In responding to these concerns, the government acknowledged that it had listened to feedback and accepted that the earlier threshold risked unintended consequences for ordinary family enterprises.

Government rationale Ministers have framed the revised threshold as a balanced solution. The stated aim is to protect productive farms and genuine trading businesses, while still ensuring that inheritance tax applies more effectively to large estates.

The government has also emphasised the economic and social importance of family farms and small to medium sized businesses, particularly in rural communities. By raising the threshold, it expects to significantly reduce the number of estates affected by the reforms compared with the original proposals.

Reaction from the sector Farming organisations and business groups have broadly welcomed the announcement, describing it as a sensible and pragmatic adjustment. For many families, the increased

threshold removes immediate pressure and provides greater certainty when planning for succession.

That said, some commentators have noted that the revised rules do not eliminate inheritance tax exposure altogether. Larger estates and asset rich businesses will still need to consider how reduced relief above the threshold may affect long term planning.

Planning implications For farmers and business owners, the change offers welcome breathing space, but it does not remove the need for careful inheritance tax planning. Asset values, ownership structures, partnership arrangements, and the interaction with other reliefs remain critical factors.

Early planning remains essential, particularly for estates approaching or exceeding the new thresholds. Professional advice can help families understand how the revised rules apply to their circumstances and avoid unexpected liabilities.

Conclusion The increase in inheritance tax relief thresholds represents a clear shift in government policy. It highlights how sustained sector engagement can influence tax decisions, and it provides greater reassurance for family farms and businesses heading into the 2026 tax year. However, with reliefs still capped and reduced above certain levels, inheritance tax planning remains firmly on the agenda.