Client news update - August 2025

The Department for Work and Pensions (DWP) has warned that pensioners retiring in 2050 are set to be worse off than those retiring today.

According to the DWP, nearly half of working-age adults in the UK are not saving into a private pension. More than three million self-employed workers do not currently save into a pension, it added.

Just one in four low earners are saving into a private pension, the DWP also found. The DWP warned that action needs to be taken to boost retirement savings.

In order to tackle the issue, the DWP is utilising the Pensions Commission and has initiated the next review of the State Pension age. This is currently 66 years old and will rise to 68 by 2046.

Paul Nowak, General Secretary of the Trades Union Congress (TUC), said:

‘Everyone deserves dignity and security in retirement, but right now many workers – especially those in the private sector – will find themselves without enough to get by on.

‘Far too many people won’t have enough pension for a decent retirement, and too many – especially women, BME, disabled workers and the self-employed – are shut out of the workplace pension system altogether.’

Internet link: GOV.UK

Recruitment at UK firms remained static in the second quarter of 2025 as businesses continued to assess the impact of the rise in employer National Insurance contributions (NICs), says the British Chambers of Commerce (BCC).

The BCC’s latest Quarterly Recruitment Outlook (QRO) showed that 55% of firms attempted to recruit in the last three months, broadly similar to the 54% in the first quarter.

Of those firms trying to hire staff, 73% said they experienced difficulties, a slightly improved picture from the previous quarter.

Labour costs remain the biggest cost pressure for businesses, cited by 73% of respondents, the same as in the first quarter of the year.

Jane Gratton, Deputy Director of Public Policy, at the BCC, said:

‘While it is still early days, firms are beginning to sound the alarm on the impact of NICs and other employment costs. There could be a big shock coming further down the line.

‘Increased labour costs and persistent skills shortages are making recruitment a significant challenge for SMEs.

‘At the same time, growth and productivity is being stymied by persistent skills shortages, particularly in sectors like transport, logistics and construction.

‘We need urgent action by policymakers to tackle the long running skills crisis. That means a more flexible and responsive training system, better support for people facing barriers to work, and a firm commitment to no further tax hikes on business.’

Internet link: BCC website

HMRC has launched a new online PAYE service, which it says will give 35 million workers more control over their tax affairs.

The tax authority says the new service will make it simpler and easier to check and update their income, allowances, reliefs and expenses, and will be available via their Personal Tax Account or through the HMRC app.

This service forms part of HMRC’s Transformation Roadmap that sets out ambitious plans to become a digital first organisation by 2030, with 90% of customer interactions taking place digitally.

HMRC says its plans to modernise the tax and customs system, introduce new AI technologies and work with third parties and intermediaries will make it easier for taxpayers, businesses and intermediaries to interact with it.

The digital first approach will see HMRC automating tax wherever possible and offering new digital self-serve options across a number of tax regimes.

In addition, taxpayers liable for the High Income Child Benefit Charge (HICBC) will no longer have to register for self assessment.

James Murray MP, Exchequer Secretary to the Treasury, said: ‘We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers.

‘By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share.’

Internet link: HMRC press release

Homebuyers are being warned to avoid Stamp Duty Land Tax (SDLT) scams, following a landmark Court of Appeal decision.

HMRC is warning buyers to be vigilant of tax agents offering to secure (SDLT) repayments on their behalf where repairs are needed to a property they have bought.

Some agents have suggested that, for a fee, they can reclaim SDLT the buyer has already paid by saying that the property is non-residential because it’s uninhabitable.

But HMRC says that making claims of this kind often leave the homeowner liable for the full amount of SDLT, plus penalties and interest.

A recent Court of Appeal judgment in the case of Mudan & Anor v HMRC has confirmed that housing in need of repair is chargeable at the residential rates of SDLT, and that repayment claims based solely on a property’s condition are not valid.

HMRC says it is taking decisive action on spurious SDLT repayment claims, using civil and criminal powers.

Anthony Burke, HMRC’s Deputy Director of Compliance Assets, said:

‘The Court of Appeal’s decision is a major win, protecting public funds. Homebuyers should be cautious of allowing someone to make a SDLT repayment claim on their behalf. If the claim is inaccurate, you could end up paying more than the amount you were trying to recover.’

Internet link: HMRC press release

Old Mill have SDLT Specialists that can help with any queries you may have, get in touch…

The government is set to tackle late payments to businesses with significant legislative reforms.

Late payments cost the UK economy £11 billion a year and shut down 38 businesses every day, according to the government.

The new laws are set to give stronger powers to the Small Business Commissioner to empower them to wield fines, worth potentially millions of pounds, against the biggest firms who persistently choose to pay their suppliers late.

Following the legislation, the UK will have the toughest late payments laws in the G7, the government added.

The legislation is part of reforms to back small businesses and unlock growth as part of the Plan for Change.

Business and Trade Secretary Jonathan Reynolds said:

’This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best – growing our local economies.

‘Our Small Business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need.

‘This is our Plan for Change in action, putting more money in people’s pockets, boosting local communities and ensuring Britain is a great place to do business and thrive.’

Read more from our Head of Small Business here.

President Trump’s decision to charge import duties for low value goods entering the US is a major blow to the UK’s SME exporters, says the British Chambers of Commerce (BCC).

Under an Executive Order issued by the President, duties will be payable on goods valued under $800 from 29 August 2025. These will be in line with the rates applied to other goods from each country in accordance with its tariff rates.

For most UK goods export sectors this means the tariff rate they used to have plus the additional 10% reciprocal rate applied to most UK goods since April.

Alternatively, for the first six months only, a specific rate of $80 per item would apply to low value packages from the UK entering the US. After that period, the duties described above will be enforced on all packages of UK origin in scope.

William Bain, Head of Trade Policy, said:

‘This development has been coming for several months but is still a major blow to UK exporters to the US. Smaller firms and sole traders, who have invested strongly in e-commerce sales internationally, will be worst hit.

‘But the UK is in a comparatively advantageous position in terms of these additional duties compared with those faced by other countries.

‘The EU is also likely to scrap its de minimis threshold by 2028, and the UK government is launching a review into removing the threshold here too.’  

Internet link: White House website BCC website

HMRC is encouraging working families to save money by signing up to Tax-Free Childcare and using one of the thousands of facilities accepting it as payment.

Tax-Free Childcare means working families can save up to £2,000 annually for each child up to the age of 11, and £4,000 for a disabled child up to the age of 16, when they’re paying for their childcare.

There are now 75,000 childcare settings accepting Tax-Free Childcare as payment including nurseries, registered childminders, holiday activity clubs. In addition, when school starts back in September it includes before and after school clubs.

Families yet to sign up for Tax-Free Childcare can do it now to pay for their summer activities or start paying into it ready for breakfast and after-school clubs when the new term starts.

Myrtle Lloyd, HMRC’s Chief Customer Officer said:

‘Whether your child is interested in football, climbing, crafting or dance, there’s a huge variety of childcare settings accepting Tax-Free Childcare. Children can learn something new and have fun with their friends while their parents save on their childcare bills. Visit GOV.UK to sign up today.’

Internet link: HMRC press release