HMRC cuts late payment interest rates from 27 Aug

HMRC has resumed its programme allowing direct recovery of money from debtors’ bank accounts. The Direct Recovery of Debts (DRD) policy, which was paused during the Covid-19 pandemic, has restarted in a ‘test and learn’ phase’, the tax authority has confirmed. DRD targets individuals and businesses who can afford to pay their debts but deliberately choose not to, HMRC said. This power enables HMRC to compel banks and building societies to transfer funds directly from a debtor’s account. It applies to debts of £1,000 or more, with safeguards against undue hardship and for vulnerable customers. Before debts are considered for recovery through DRD, every debtor will receive a face-to-face visit from HMRC agents to personally identify the taxpayer to confirm it is their debt and to discuss options to resolve the debt. Safeguards include only taking action against those who have established debts, have passed the timetable for appeals, and have repeatedly ignored HMRC’s attempts to make contact. The safeguards also include leaving a minimum of £5,000 in the debtor’s accounts to ensure that sufficient money is available to pay wages, mortgages or essential business or household expenses. HMRC said, "The vast majority of taxpayers pay their taxes in full and on time, but a minority choose not to pay, even though they have the means to do so." #accountant #HMRC

💷 Thinking of taking a loan from your company? On the surface, it can look like a smart move – quick access to funds with no bank forms, no refusals, and no interest charged. But HMRC’s rules make things much more complicated. 👉 Fail to repay within nine months and one day, and your company could face a 33.75% tax charge. 👉 Repay and borrow again? The 30-day ‘bed and breakfast’ rule could stop it counting. 👉 And even small loans have conditions and hidden traps. We’ve explained the rules, the risks, and the exemptions in our latest blog – so you can borrow with confidence and avoid an HMRC headache. 🔗 https://lnkd.in/en8_6ijK

⛔Late payment crackdown: ⌛The late payment of invoices has been a longstanding bugbear for the UK’s SME businesses as well as the self-employed. Late payments are significant barrier to growth while many owners and managers are forced to spend disproportionate time chasing payments. This results in cashflow problems causing many to struggle. 👀Now, the government is taking tougher measures to tackle the issue of late payments in its Small Business Plan. Here, we take a look at the problem of late payments and assess the government’s response. 📘Read more Mitchells Grievson Chartered Accountants : https://lnkd.in/g6DJTfd

💷 HMRC TO RESUME TAKING TAX OWED BY DEBTORS DIRECTLY FROM BANK ACCOUNTS 💷 HMRC has resumed its programme allowing direct recovery of money from debtors' bank accounts. The Direct Recovery of Debts (DRD) policy, which was paused during the Covid-19 pandemic, has restarted in a 'test and learn' phase', the tax authority has confirmed. DRD targets individuals and businesses who can afford to pay their debts but deliberately choose not to, HMRC said. This power enables HMRC to compel banks and building societies to transfer funds directly from a debtor's account. It applies to debts of £1,000 or more, with safeguards against undue hardship and for vulnerable customers. Before debts are considered for recovery through DRD, every debtor will receive a face-to-face visit from HMRC agents to personally identify the taxpayer to confirm it is their debt and to discuss options to resolve the debt. Safeguards include only taking action against those who have established debts, have passed the timetable for appeals and have repeatedly ignored HMRC's attempts to make contact. The safeguards also include leaving a minimum of £5,000 in the debtor's accounts to ensure that sufficient money is available to pay wages, mortgages or essential business or household expenses. HMRC said: 'The vast majority of taxpayers pay their taxes in full and on time, but a minority choose not to pay, even though they have the means to do so.' #TaxNews #HMRC #accountants #SMEAccountingExperts #SupportingSmallBusinessesUK #GrantJones

💷 HMRC TO RESUME TAKING TAX OWED BY DEBTORS DIRECTLY FROM BANK ACCOUNTS 💷 HMRC has resumed its programme allowing direct recovery of money from debtors' bank accounts. The Direct Recovery of Debts (DRD) policy, which was paused during the Covid-19 pandemic, has restarted in a 'test and learn' phase', the tax authority has confirmed. DRD targets individuals and businesses who can afford to pay their debts but deliberately choose not to, HMRC said. This power enables HMRC to compel banks and building societies to transfer funds directly from a debtor's account. It applies to debts of £1,000 or more, with safeguards against undue hardship and for vulnerable customers. Before debts are considered for recovery through DRD, every debtor will receive a face-to-face visit from HMRC agents to personally identify the taxpayer to confirm it is their debt and to discuss options to resolve the debt. Safeguards include only taking action against those who have established debts, have passed the timetable for appeals and have repeatedly ignored HMRC's attempts to make contact. The safeguards also include leaving a minimum of £5,000 in the debtor's accounts to ensure that sufficient money is available to pay wages, mortgages or essential business or household expenses. HMRC said: 'The vast majority of taxpayers pay their taxes in full and on time, but a minority choose not to pay, even though they have the means to do so.' #TaxNews #HMRC #accountants #SMEAccountingExperts #SupportingSmallBusinessesUK #GrantJones

HMRC has announced changes to interest rates for late and repayment of Income Tax and National Insurance contributions: Late payment interest rate: 8.00% Repayment interest rate: 3.00% How are the rates calculated? Late payment interest = Bank of England base rate + 4% (from 6 April 2025; previously +2.5%). Repayment interest = Bank of England base rate – 1%, with a minimum floor of 0.5%. HMRC explains the difference: “The rates align with international tax practice and reflect typical commercial interest on loans and deposits.” Key takeaway for businesses & taxpayers: Late payments are now significantly more costly. Make sure your tax deadlines are met to avoid unnecessary interest charges. More than accountants – your growth partner. 📍 353 High Street North, London, E12 6PQ 📧 info@taxca.co.uk 🌐 www.taxca.co.uk 📞 020 3369 7867 #TAXCA #HMRC #TaxUpdate #BusinessTips #UKTax

𝗟𝗮𝘁𝗲 𝗰𝗹𝗶𝗲𝗻𝘁 𝗽𝗮𝘆𝗺𝗲𝗻𝘁𝘀. 𝗠𝗶𝘀𝘀𝗲𝗱 𝗕𝗔𝗦. 𝗟𝗼𝘀𝘁 𝗿𝗲𝗰𝗲𝗶𝗽𝘁𝘀... 𝗙𝗼𝗿 𝗺𝗮𝗻𝘆 𝘁𝗿𝗮𝗱𝗶𝗲𝘀, 𝗺𝗼𝗻𝗲𝘆 𝘀𝗹𝗶𝗽𝘀 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗰𝗿𝗮𝗰𝗸𝘀 𝗲𝘃𝗲𝗿𝘆 𝘀𝗶𝗻𝗴𝗹𝗲 𝗺𝗼𝗻𝘁𝗵. Without the right financial systems, even the best tradies can: ❗️Miss tax deductions they’re entitled to ❗️Fall behind on BAS, GST, or PAYG ❗️Struggle with cash flow when clients pay late ❗️Risk ATO penalties from simple mistakes The construction industry makes up 27% of Australian insolvencies — the highest of any sector. Don’t let your business become part of that statistic. 👉 This carousel shows the most common money mistakes tradies make (and how the right support fixes them). Need more detail? Check out our latest blog: "𝘞𝘩𝘺 𝘛𝘳𝘢𝘥𝘪𝘦𝘴 𝘕𝘦𝘦𝘥 𝘢𝘯 𝘈𝘤𝘤𝘰𝘶𝘯𝘵𝘢𝘯𝘵 𝘞𝘩𝘰 𝘜𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥𝘴 𝘛𝘩𝘦𝘪𝘳 𝘉𝘶𝘴𝘪𝘯𝘦𝘴𝘴" (read on our website). #Tradies #TaxHelpForTradies #CashFlow #TradieAccountants #BHTPartners #ElthamAccountants

HMRC’s latest data shows the banking sector paid £35.2bn in 2024/25 across PAYE, Corporation Tax, the Bank Levy and the Surcharge, a 5% decline on last year, but still a major contribution to the UK tax take A few points that can get lost in the headlines: ✔️ The reduction largely reflects changes to National Insurance rates and a reduction inprofits. ✔️ The figures exclude irrecoverable VAT, estimated at a further £4.6bn borne by banks. ✔️ The sector continues to carry a diverse tax burden that goes well beyond the Corporation Tax headline. In a climate where banks are sometimes perceived as under-taxed, being clear about the total tax contribution, both direct and indirect, has never been more important. https://lnkd.in/eadPSqit #banking #tax #financialservices #HMRC #totaltaxcontribution

𝙊𝙡𝙙 𝙫𝙨. 𝙉𝙚𝙬 𝘽𝙖𝙙 𝘿𝙚𝙗𝙩 𝙍𝙪𝙡𝙚𝙨: 𝙒𝙝𝙖𝙩'𝙨 𝘾𝙝𝙖𝙣𝙜𝙞𝙣𝙜? Another update from the New Tax Act 2025! If you're a business owner, you need to know about the changes to bad debt rules. Here's a comparison between the old and new provisions: 👡 Old Provision: - Businesses had more flexibility in claiming tax deductions for bad debts. - Documentation requirements were not as strict. - This led to some inconsistencies and potential abuse. 👡 New Provision: - Businesses now need to provide more proof to claim tax deductions for bad debts. For instance: 1. Invoice or contract 2. Proof of delivery 3. Bill or statement 4. Letters or emails sent 5. Efforts to collect debt 6. Write-off record 7. Proof customer can't pay (if the customer is bankrupt) - Debts will be classified into different stages based on how long they've been outstanding. - The tax rules for bad debts are becoming clearer. 👠 Why is the new provision better? - Increased transparency: Clearer guidelines will help businesses understand what they can claim. - Improved accountability: Stricter documentation requirements will reduce potential abuse. - Better risk management: Businesses will be more proactive in managing their finances. 🩴What should businesses do? - Make sure you're following the new rules to avoid any issues. - Keep good records of your debts and payments. - Stay on top of your finances to avoid bad debts. Share this information with others! #tamunonemitekenah Business and Corporate lawyer

Maximise tax relief for bad debts Struggling with unpaid invoices or money you know will never come back? The good news is that businesses can often claim tax relief on irrecoverable debts. To qualify, you’ll need to show that the debt is genuinely unlikely to be recovered. For example, this could be a loan to a friend who has gone bankrupt or trade debts that remain unpaid despite repeated attempts to collect. HMRC will only allow relief if the debt has already been included in your taxable income, and you’ve made genuine efforts to pursue repayment. Good record keeping is essential here – without it, claims may be challenged. Handled correctly, claiming relief can ease the financial impact of bad debts and keep your business on track. At Ward Goodman, we help businesses make sure their tax position is fully protected. #BusinessTax #HMRC #TaxRelief #WardGoodman