What's in the news this month - January 2026

The removal of full tax-free salary sacrifice on pensions with a new £2,000 limit will hit over three million employees at 290,000 companies, according to government figures.

The change to pension salary sacrifice is due to come into effect from 6 April 2029 and will see a new £2,000 limit on the amount of contributions employees can make into a salary sacrifice scheme free of tax and National Insurance contributions (NICs), hitting schemes run by UK employers.

Almost eight million employees currently use salary sacrifice to make pension contributions. Of these, over three million sacrifice more than £2,000 of salary or bonuses.

However, just over half of employees will fall below the threshold based on current HMRC estimates, meaning over four million pension savers will not be affected.

The government said:

‘The government supports and incentivises pension saving and has retained Income Tax and NICs reliefs on pension contributions that are worth over £70 billion per year.

‘Most other salary sacrifice opportunities were closed in 2017. Salary sacrifice for pension contributions remains, and its cost as a relief has increased markedly from £2.8 billion in forgone NICs in the tax year 2016 to 2017, rising to £5.8 billion in the tax year 2023 to 2024. If no changes are made, it is expected that this would nearly triple to £8 billion by the tax year 2030 to 2031.’

Internet link: GOV.UK

HMRC is sending Self Assessment taxpayers a reminder that help is available to manage their tax bill.

The deadline to file and pay any tax owed is 31 January 2026, but people who are unable to pay in full by then may be able to set up a Time to Pay arrangement online and spread the cost over monthly instalments.

For those with bills of up to £30,000, such an arrangement can be set up without even needing to contact HMRC directly.

According to HMRC, since 6 April 2025, nearly 18,000 payment plans have been set up using the service, helping customers avoid late payment penalties by arranging regular payments that suit their own circumstances.

A Time to Pay arrangement cannot be set up until a Self Assessment return has been filed. If the tax owed is more than £30,000, or a longer repayment period is needed, people can still apply but will need to contact HMRC directly.

Myrtle Lloyd, HMRC’s Chief Customer Officer, said:

‘We’re here to help customers get their tax right. If you are worried about paying your Self Assessment bill, assistance is available. Our online payment plans offer financial flexibility and can be tailored to individual circumstances. We want to support all our customers in meeting their tax obligations with confidence.’

Internet link: HMRC press release

The UK will bring cryptocurrencies, including Bitcoin, into a regulatory framework with legislation due by 2027.

The government says that firm and proportionate rules will give legal clarity over the sector’s regulatory position.

It says they will also boost consumer confidence by ensuring consumers are robustly protected.

The changes mean that firms will need to be regulated by the Financial Conduct Authority in the same way as other providers of financial products – including being subject to established transparency standards.

Through this new regime, the UK is helping to shape global standards for cryptoassets regulation.

The regime is designed to support responsible innovation, ensure open and competitive markets, and promote the UK as a destination of choice for digital asset businesses.

Read more in Tax Adviser, Chris Watt‘s article: Big Changes are coming for crytop and tax.

HMRC has published the latest issue of the Employer Bulletin. The December issue has information on various topics, including:

• Changes take effect 6 April 2026 — prepare for new PAYE responsibilities in labour supply chains.
• Clarifying the Optional Remuneration Arrangement rules at section 228A ITEPA.
• Important update regarding tax refunds.
• Payrolling of benefits in kind.
• Employment Rights Bill autumn consultations.
• Tell ABAB survey report — now live.

Internet link: GOV.UK

The level of the Agricultural Property Relief (APR) and Business Property Relief (BPR) thresholds will be increased from £1 million to £2.5 million, the government has announced.

The change will allow spouses or civil partners to pass on up to £5 million in qualifying agricultural or business assets between them before paying Inheritance Tax (IHT), on top of existing allowances.

The government says the changes come after it listened to the concerns of the farming community and businesses about the reforms.

It says it will protect more farms and businesses, while maintaining the core principle that the most valuable agricultural and business assets should not receive unlimited relief.

The change will be introduced to the Finance Bill in January and will apply from 6 April.

Environment Secretary Emma Reynolds said:

‘Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for British farming.

‘We have listened closely to farmers across the country, and we are making changes today to protect more ordinary family farms. We are increasing the individual threshold from £1million to £2.5 million, which means couples with estates of up to £5 million will now pay no Inheritance Tax on their estates.

‘It’s only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain’s rural communities.’

Internet link: GOV.UK

The Spring Statement has been scheduled for 3 March 2026 by the Chancellor of the Exchequer, Rachel Reeves.

Ms Reeves has asked the Office for Budget Responsibility to prepare an economic and fiscal forecast for publication on that date.

The government said:

‘As set out at the Budget, the Spring forecast will not make an assessment of the government’s performance against the fiscal mandate and will instead provide an interim update on the economy and public finances.

‘The government will respond to the March forecast through a statement to Parliament, in line with the government’s commitment to deliver one major fiscal event a year at the Budget.

‘This approach gives families and businesses the stability and certainty they need and supports the government’s growth mission.’

Internet link: GOV.UK

More than 4,800 Self Assessment scams have been reported since February 2025, according to data released by HMRC.

The tax authority says scammers are using persuasive and threatening tactics to target people when they are more likely to receive correspondence from HMRC. The scammers send fake tax demands or attempt to pressurise people to hand over personal information.

In the last 10 months, taxpayers have reported more than 135,500 HMRC-related scams, including 29,000 scams referring to fake tax refund claims.

HMRC is reminding customers to be vigilant as the Self Assessment deadline nears and check whether the email, SMS message or phone call claiming to be from HMRC is genuine on GOV.UK.

The Self Assessment deadline to file returns and pay any tax owed for the 2024/25 tax year is 31 January 2026.

Lucy Pike, HMRC’s Chief Security Officer, said:

‘Millions of people file a tax return each year, and scammers mimic HMRC to try and catch unsuspecting victims out.

‘I’m urging people to stay vigilant and if any emails, text messages or phone calls appear suspicious – don’t be lured into clicking on links or sharing your personal information – report it directly to HMRC. Just search ‘report an HMRC scam’ on GOV.UK to find out more.’

Internet link: HMRC press release

A third of UK firms are worried about their business rates, according to data from the British Chambers of Commerce (BCC).

Concern is at its highest since the BCC began keeping track. It is most acute in the hospitality sector, with manufacturing and logistics close behind.

Companies cite cost pressure from business rates as a key reason for increasing prices and delaying expansion of their premises.

The BCC is calling on the Treasury to rethink its plans for business rates as anxiety about changes to the system in April reaches record levels.

While the government has indicated it is considering a rethink on business rates for pubs, BCC research shows the disquiet being felt goes much wider.

Kate Shoesmith, Director of Policy and Insights at the BCC, said:

‘The Chancellor recognised in the Autumn Budget that the current system for business rates is broken and holding back growth.

‘But it is becoming increasingly clear that the changes she set out are not balanced and leave some sectors over-exposed.

‘While news of a carve-out for pubs is welcome, there are many other smaller hospitality companies facing an existential threat. Meanwhile, at the other end of the scale, airports and hotel chains are expected to pay millions more.’

Internet link: BCC website

Use of the HMRC app surged last year as millions of users downloaded it for the first time, according to the tax authority’s figures.

HMRC says the app was downloaded 4.2 million times last year and people logged in to the app 136 million times, a 20% increase on 2024, reflecting growing confidence in managing tax digitally.

Total annual app users have now surpassed 7.18 million, up from 5.09 million the previous calendar year.

There has also been significant growth from older and retired users, especially checking State Pension forecasts.

Other areas that saw growth were Child Benefit and National Insurance (NI).

Almost 960,000 people used the Child Benefit area of the app in 2025 – 160,000 more than in 2024.

In addition, 383,000 people stored their NI number on the app during 2025, 70,000 more than the previous year.

HMRC says the rise in app use this year reflects its ambition to make it easier for customers to self‑serve on straightforward tasks.

Myrtle Lloyd, HMRC’s Chief Customer Officer, said:

‘The HMRC app has become one of the quickest and easiest ways to check your tax affairs and we’ve seen even more customers embrace it this year. If you choose to use the app you can access the information you need straight through your phone.’

Internet link: HMRC press release

Thinking of buying a gift for a member of staff? Unbeknownst to many, there are government rules in place for this process, which, if not followed, could result in potential unexpected costs. However, they can also be used to your advantage.  Read our full article here: