Month: June 2026

Tax on rental income

If you receive income from renting out property, it is important to understand your tax obligations and the reliefs that may be available. Rental income is generally taxable, although landlords can deduct certain allowable expenses before calculating the amount of tax due.

For individuals, who personally own rental property, the first £1,000 of rental income each tax year may be covered by the property allowance. Where rental income exceeds this amount, landlords may need to contact HMRC to complete a self-assessment tax return, depending on the level of income and profit generated.

Tax is normally charged on the profit from renting out residential property rather than the gross rent received. Landlords can reduce their taxable profit by claiming allowable expenses such as letting agent fees, insurance, repairs and maintenance, utility bills, service charges, accountancy fees and advertising costs. However, costs that improve or significantly enhance a property are generally treated as capital expenditure and cannot be deducted as day-to-day expenses.

Landlords may also be able to claim Replacement of Domestic Items Relief when replacing items such as beds, carpets, curtains, sofas and white goods provided for tenants.

National Insurance may also be relevant. Landlords whose property activities amount to a business may be eligible to pay voluntary Class 2 National Insurance contributions, while others may be able to make voluntary Class 3 contributions to help maintain their entitlement to the State Pension and certain benefits.

Where multiple properties are owned, rental income and expenses are usually combined to calculate an overall profit or loss. Any losses can usually be carried forward and offset against future profits from the same property business.

Source:HM Revenue & Customs | 01-06-2026

A reminder of the tax rules for online sellers

A reminder that the tax rules for how online platforms report seller information to HMRC changed on 1 January 2024. Digital platforms such as eBay, Vinted and Airbnb are required to collect and verify certain details about users who sell goods or provide services through their sites. This data is shared with HMRC.

In general, platforms will only report information where sellers have either sold around 30 or more items or earned approximately £1,725 (around €2,000) in a calendar year. If you meet these thresholds, your platform provider will usually notify you that your data has been shared.

Importantly, this reporting requirement does not automatically mean tax is due or that you need to file a tax return. Many people who simply sell personal belongings occasionally will have no tax to pay.

However, you may need to register for self-assessment and pay tax if you are trading rather than casually selling. This includes situations where you buy goods to resell, make items to sell for profit, or regularly provide services through online platforms. A key threshold to be aware of applied if you generate a total income from trading or providing services online of more than £1,000 before deducting expenses in any tax year.

As has always been the case, genuine hobby sellers are not affected, but those running a business through online platforms should ensure they understand their tax obligations and keep accurate records. HMRC also provides guidance and tools to help individuals check whether their income is taxable.

Source:HM Revenue & Customs | 01-06-2026

Allowable expenses for the self-employed

If you are self-employed, claiming all of your allowable business expenses can significantly reduce your tax bill. For example, if your business turnover is £40,000 and you have £10,000 of allowable expenses, you will only pay tax on your taxable profit of £30,000. However, personal spending and money withdrawn from the business for private use cannot be claimed.

A wide range of business costs may qualify as allowable expenses. These include office expenses such as stationery, phone bills and software subscriptions, as well as the costs of running business premises, including rent, utilities, business rates and insurance. Travel expenses, including fuel, parking charges and public transport costs incurred for business journeys, can also be claimed.

Other common deductible costs include staff wages, subcontractor fees, uniforms and protective clothing, advertising and marketing expenses, website costs, professional subscriptions and certain training courses that help maintain or update existing business skills. Businesses that buy goods for resale can also claim the cost of stock and raw materials.

Those who work from home may be able to claim a proportion of household costs, including heating, electricity, internet charges and rent or mortgage interest. Alternatively, many self-employed individuals can use HMRC's simplified expenses system, which uses flat-rate allowances for working from home, use of vehicles and living at business premises.
 

Source:HM Revenue & Customs | 01-06-2026

Are you affected by the High Income Child Benefit Charge?

Families claiming Child Benefit should be aware of the High Income Child Benefit Charge (HICBC), which can apply when one member of the household has a higher income.

The charge applies where an individual has adjusted net income of more than £60,000 in a tax year and either they or their partner receives a Child Benefit payment. The amount payable increases gradually as income rises, with the charge set at 1% of the Child Benefit received for every £200 of income above £60,000.

As a result, the impact of the charge is phased in rather than applying all at once. However, once income reaches £80,000, the charge effectively claws back all of the Child Benefit received, removing the direct financial benefit of the payments.

Eligible taxpayers can elect to have the charge collected through their PAYE tax code rather than completing a self-assessment tax return. This measure is intended to reduce the administrative burden for employees whose only reason for filing a self-assessment tax return is to declare the HICBC.

Although some families choose to stop receiving Child Benefit to avoid the charge, it is often worthwhile to continue making a claim. Registering for Child Benefit can help protect entitlement to National Insurance credits for parents or carers and ensures children are automatically issued with a National Insurance number shortly before their 16th birthday.

Taxpayers with income approaching or exceeding £60,000 should review their position regularly to ensure they are complying with the rules and making the most appropriate choice for their circumstances.

Source:HM Revenue & Customs | 01-06-2026

Pension tax relief and allowances

Pensions remain one of the most tax-efficient ways to save for retirement, due to a range of tax reliefs and allowances that can help boost retirement savings.

One of the key advantages of private pension contributions is the availability of tax relief on pension contributions. Individuals can usually receive tax relief on pension contributions worth up to 100% of their annual earnings subject to an annual allowance. The tax relief effectively reduces the cost of saving into a pension. Basic rate taxpayers benefit from 20% tax relief, while higher rate taxpayers can claim 40% relief and additional rate taxpayers can receive 45% relief on their contributions.

The annual allowance is the maximum amount that can be contributed to pension schemes each tax year before an additional tax charge may arise. The standard annual allowance is currently £60,000 and applies across all of an individual's pension arrangements. In some circumstances it may be possible to contribute more by using the carry forward rules. This allows unused pension allowances from the previous three tax years to be carried forward, provided they made pension contributions during those years.

Pension savers can also benefit from tax-free withdrawals in retirement. Most people can usually take up to 25% of their pension savings as a tax-free lump sum, subject to a maximum lump sum allowance of £268,275. In certain circumstances, including certain death benefits and serious ill-health payments, a higher lump sum and death benefit allowance may apply.

Ensuring that you use all the tax benefits available to you can make a significant difference to the value of retirement savings over the long term.

Source:HM Revenue & Customs | 01-06-2026

A reminder to consider the Marriage Allowance

Many married couples and civil partners could be missing out on valuable tax savings available by claiming the Marriage Allowance. If your circumstances are suitable, this is a reminder to consider the Marriage Allowance, as a simple claim could reduce your tax bill by up to £252 during the 2026-27 tax year.

The Marriage Allowance allows a spouse or civil partner with income below their Personal Allowance to transfer £1,260 of that allowance to their partner. The standard Personal Allowance is £12,570 for the 2026-27 tax year. To qualify, the person receiving the transfer must normally be a basic-rate taxpayer and the higher-earning partner must also be a basic rate taxpayer. This generally means they have income between £12,571 and £50,270 during 2026-27. Different limits apply for Scottish taxpayers because of Scotland's separate Income Tax bands.

Although the transfer reduces the lower earner's Personal Allowance, the overall effect is usually beneficial for the couple as a whole. For many households, it provides an easy way to reduce the amount of Income Tax paid without making any changes to their working arrangements or income levels.

It is also worth remembering that claims can be backdated where eligibility existed in earlier years. Eligible couples can currently backdate a claim to 6 April 2022, which could result in a useful lump-sum repayment from HMRC.

Once a successful claim has been made, the allowance will usually continue automatically in future tax years unless it is cancelled or a change in circumstances affects eligibility. Couples whose income levels have changed recently may therefore wish to review whether they qualify and ensure they are not overlooking this tax-saving opportunity.

Source:HM Revenue & Customs | 01-06-2026

Where a formal job offer effectively creates a binding contract

In the world of HR, the ubiquitous disclaimer "subject to references" is often viewed by employers as an escape clause, one which allows them to withdraw an offer at any time before “Day One”. However, a recent ruling has clarified that a conditional offer can become a binding legal contract long before an employee even steps into the role.

Mr. Swamy applied for the post of project manager and was formally offered the role "subject to receipt of satisfactory references, a right-to-work (RTW) check, and a successful six-month probation period". Mr. Swamy formally accepted the offer via email, provided the contact details of his references, and submitted his RTW documents. Loesche Energy Systems Ltd. (Loesche) then advised Mr. Swamy to seek a 12-month rental, as he was initially to be based in the UK. However, only weeks before he was due to start, Loesche informed him that their own client contract had been delayed and that they were "no longer able to offer" the position as specified. Mr. Swamy brought a claim for breach of contract, arguing that a binding agreement had existed, one which entitled him to notice pay.

The Appeal Tribunal sided with Mr. Swamy, finding that the offer letter had contained all the essential terms in terms of salary, hours, start date, and probation period. Crucially, as a probation period can only be initiated after employment begins, it was logical to view the entire package as a concluded contract, and thus Loesche did not have the unrestricted right to withdraw. By failing to provide sufficient notice, they had effectively breached the contract.

As the written contract was silent as to how much notice was required, the Tribunal had to infer a term of "reasonable notice". Despite Loesche’s attempt to argue for a "zero-day" notice period (or a statutory minimum of a week), the Tribunal determined that three months was the only reasonable term given the request that Mr. Swamy secure a 12-month rental property.

This ruling carries significant weight for anyone involved in recruitment, given that employees are now protected from “Day One” after they accept a clear offer, even if "onboarding" checks are in progress. If an employer withdraws an offer for reasons unrelated to background checks, such as a change in business fortunes, then significant damages can be awarded based on an implied notice period. Thus, employers should rigorously review offer letters and pre-employment correspondence and cannot rely on "standard terms" that the candidate has not seen. To avoid any unexpected liability, employers must be explicit about notice periods during the pre-start phase and understand that, once an offer is accepted, a legal "point of no return" has been crossed.

Source:Tribunal | 02-06-2026

Government reviews access to face-to-face banking services

The government has announced a review into access to face-to-face banking services as concerns continue to grow over the impact of bank branch closures on local communities, older customers and small businesses.

Over recent years, many high street bank branches have closed as more customers move towards online and mobile banking. While digital banking has become increasingly popular, there remains significant concern that some individuals and businesses still rely heavily on in-person banking facilities for cash handling, account support and day-to-day financial transactions.

The review will examine whether existing arrangements continue to provide adequate access to banking services across the UK, particularly in rural areas and smaller towns where branch closures can leave customers with limited alternatives. It will also consider how shared banking hubs and other community banking solutions are performing and whether additional measures may be needed.

Small businesses are likely to take a close interest in the review, especially firms that regularly deal with cash or require local banking support. For many business owners, the loss of nearby branches can increase administration time and create additional security and travel concerns when paying in cash or obtaining change.

Consumer groups have also highlighted the challenges faced by elderly and vulnerable customers who may be less comfortable using digital banking services or who value personal contact when dealing with financial matters.

The government has stated that maintaining appropriate access to banking services remains important for consumers, businesses and local economies, and the findings of the review may help shape future banking access policies across the UK.

Source:Other | 31-05-2026

Companies House publishes its business plan

Companies House has published its business plan for 2026-27, setting out its priorities for the coming year as it continues to implement major reforms aimed at improving the quality of information held on the UK companies register and tackling economic crime.

A key objective is to improve the accuracy, reliability and usability of company data. Companies House plans to increase the use of automated checks, remove inaccurate information and strengthen data governance procedures. The organisation believes that more reliable company information will help support business confidence and economic growth.

The business plan also highlights continued efforts to prevent and detect economic crime. Companies House will expand data sharing with partner organisations and take more targeted enforcement action where there is evidence of abuse of the company registration system. It will work closely with law enforcement agencies to disrupt fraudulent activity and improve the integrity of the register.

Another major priority is the ongoing rollout of identity verification requirements for company directors and people with significant control. Companies House aims to ensure that all companies either comply with the new verification requirements or are progressing through an appropriate compliance or enforcement process by the end of the financial year.

The organisation has also committed to maintaining high levels of customer service, including keeping digital services available for at least 99.5% of the time and reducing waiting times for telephone enquiries.

For business owners and advisers, the plan provides a clear indication that Companies House reforms will continue to gather pace during 2026-27, with greater scrutiny of company information, stronger identity checks and increased action against those seeking to misuse the corporate framework.

Source:Other | 31-05-2026