Newsletter - August 2025

Posted on 6th August 2025

Welcome to your August update from Bidwell Accountancy.

As summer hits full stride, there’s plenty happening across the financial and tax landscape. This month’s newsletter unpacks key developments in Inheritance Tax, Making Tax Digital, and property ownership schemes—all of which could affect your personal wealth or business planning.

Our team is here to help you navigate these changes with confidence and make the most of the opportunities they bring.

⚖️ Inheritance Tax: Pensions and Death Benefits Now Included

The Finance Bill 2025–26 confirms that, from 6 April 2027, unused pension funds and certain death benefits will fall within the scope of Inheritance Tax (IHT) for the first time. This represents a major shift in how estates will be taxed in the future.

Personal representatives (not pension providers) will now be responsible for reporting and paying IHT.

This could affect estate timelines, privacy, and the complexity of probate.

Planning ahead can ensure you avoid unwanted tax burdens for your loved ones.

✅ How Bidwell Can Help: We’ll review your current estate plan, pension provisions, and identify tax-efficient strategies to protect your legacy.

🌾 Major Reform to Business and Agricultural Property Reliefs

From 6 April 2026, IHT reliefs for business and agricultural property will be capped:

A new £1 million cap will apply to 100% reliefs.

Any value above that threshold will now only qualify for 50% relief—raising the effective tax to 20% on those assets.

AIM-listed company shares will also be affected, with their relief cut to 50% in all cases.

For farming families, business owners and rural estates, this may impact long-held succession and estate plans.

💻 MTD for Income Tax: Get Ready for Digital Reporting

Making Tax Digital (MTD) for Income Tax becomes mandatory from April 2026 for individuals earning over £50,000 and from 2027 for those between £30,000–£50,000.

Key points:

Quarterly submissions to HMRC will be required.

Paper records will no longer be accepted.

Higher penalties are already in place—from 3% after 15–30 days late, up to 10% plus daily interest after 31 days.

🏠 Getting on the Ladder: Shared Ownership Explained

With property prices remaining high, Shared Ownership continues to provide an alternative route into homeownership:

Buy a share of a property (10–75%) and pay rent on the rest.

Smaller deposits and lower mortgage requirements make this more accessible.

You can gradually increase your share through a process called “staircasing.”

📊 HMRC’s tax gap hits £46.8 billion

HMRC estimates it missed out on £46.8 billion of tax revenue in 2023-24 — mostly from small businesses and Corporation Tax.

Mistakes, lack of advice, and uncollected debts make up a large part of this gap. Working with a proactive accountant like Bidwell Accountancy can help you avoid costly errors and take advantage of available reliefs, while ensuring you remain on the right side of the rules.