When running payroll in the UK, choosing the correct National Insurance (NI) category letter is very important. If the wrong category is used, it can lead to incorrect deductions and problems with HM Revenue and Customs (HMRC). What are NI Category Letters for? NI category letters tell you: 1) How much NI the employee pays 2) How much NI the employer pays The correct category depends on the employee’s age and circumstances. The Most Common NI Categories: Category Empl

Congratulations are in order for Lily, who has successfully completed her AAT qualification! Lily has been so dedicated to her studies since joining Shepherd Partnership in 2023, and we're incredibly proud of her achievements. Here's to the future (and ACCA studies), Lily!

Recent reports suggest some savers are paying more tax than they should because HMRC has used incorrect savings interest figures when calculating tax codes. With interest rates having been much higher over the last few years, more people are exceeding their Personal Savings Allowance and finding HMRC adjusting their PAYE tax codes to collect additional tax. Unfortunately, where HMRC's figures are wrong, the result can be an unexpected and costly overpayment. Problems can aris

Voting for this year's Skipton Business Awards is now open. Cast your vote before July 12th for the business that you think goes above and beyond for the good of our wonderful town. There are 12 different categories to choose from - so take a look and give our local businesses the recognition they deserve. At Shepherd Partnership we're thrilled to be sponsoring this year's Health and Wellbeing Business of the Year award category. Cast your votes here: https://skiptonbid.com/m

After 15 years without a change, the approved mileage rate for cars and vans has been increased from 45p to 55p per mile for the first 10,000 business miles each tax year. These rates apply only for using your own vehicle. Employees using company cars for business travel are subject to HMRC's separate Advisory Fuel Rates. The increase has been backdated to 6 April 2026. What are the New Mileage Rates? Rate Before Now Cars & Vans (first 10,000 miles) 45p 55p Cars & Vans (over

Huge congratulations go to Chloe - from our payroll team - on the arrival of twins! The picture shows them with their doting big sister. Sending huge love to Chloe and family.

During the King’s Speech 2026, new plans have been confirmed to resolve late payment issues affecting many small and medium sized enterprises (SMEs). The proposed reforms are designed to improve payment practices across the UK economy. So, what is changing? The government says the reforms are aimed at improving cash flow for SMEs and, reducing the number of companies struggling when invoices are paid late. Under the new proposals, large businesses could face: A maximum 60-day

Pensions are highly flexible, allowing individuals to access funds in a range of ways, including lump sum withdrawals, drawdown, and consolidation of pension pots. While this flexibility can be useful, it also increases the risk of unintended tax and financial consequences if decisions are not properly thought through. With the changes coming from April 2027 bringing some unused pension funds directly into the Inheritance Tax (IHT) framework, many individuals are now reviewin

A temporary reduction in VAT from 20% to 5% has been announced on certain children’s meals, tickets and family attractions from 25 June to 1 September 2026. The relief is designed to encourage spending within the hospitality and leisure sectors, which will hopefully help some businesses, although the administration could be problematic. Qualifying supplies include: Children’s meals sold from dedicated children’s menus Children’s admission tickets Certain family attractions su

Inheritance tax (IHT) planning can encounter many problems if not handled correctly. This article covers 10 mistakes that are commonly seen within the process. 1. Forgetting the Capital Gains Tax valuation uplift on death One of the biggest inheritance tax planning mistakes is assuming lifetime gifting is always preferable. Assets retained until death generally receive a Capital Gains Tax (CGT) uplift, resetting the base cost to market value at death. By contrast, gifting a

During the 2024 Budget, it was announced that from April 2027 most unused pension death benefits would be subject to inheritance tax (IHT). The legislation remains subject to consultation and further detail may emerge before implementation in April 2027. This article summarises our current understanding of the proposed changes. What is changing? Pension death benefits becoming subject to IHT represents one of the largest changes to IHT planning in a generation and means

A timely reminder for clients with teenagers: Child Benefit does not automatically continue once a child reaches 16. Failing to act can result in payments stopping unnecessarily. What’s changing? Child Benefit will automatically stop on 31 August following a child’s 16th birthday unless HM Revenue & Customs (HMRC) is notified that the young person is continuing in approved education or training started before their 19th birthday. What do I need to do? HMRC typically contacts

Businesses that use contractors, freelancers or casual workers should start preparing for significant changes to UK right to work rules expected to take effect from October 2026 under the Border Security, Asylum and Immigration Act 2025. The legislation will expand existing right to work obligations beyond traditional employees to include many workers in the “gig economy”, such as subcontractors, casual workers, self-employed contractors and individuals engaged through online

The latest 'Welcome to Skipton' newsletter has just gone out to subscribers, and there are some fabulous events going on around Skipton in the coming months... Read the newsletter here. The newsletter is put together by Skipton Bid - who do a fantastic job of supporting the businesses in our lovely town!

Businesses that reclaim VAT on fuel for company cars should ensure they are using the latest HMRC VAT fuel scale charges. The fuel scale charge applies where a business reclaims VAT on fuel that is used for both business and private motoring. Rather than tracking private fuel use in detail, HMRC applies a fixed scale charge based on the vehicle’s CO₂ emissions. Scale charges rates have been updated and should be used in upcoming VAT returns. HMRC has confirmed that the new ra

Running a business can be a serious lesson in resilience... and never more so than in present times as costs continue to increase and customers continue to be cautious. Cash is proving tight for many businesses and credit control is a core discipline for keeping a business afloat in such times... which is why we've put a few pointers together to help you keep on top of your credit control. Effective credit control can help to turn sales into cash in a more predictable way. So

What will change in 2027 New rules, that are expected to come into force from spring 2027, will make it easier for people to avoid costly subscription traps. The rules will mean: Clear, simple information to be provided before any subscription is signed up for. Reminders before free or discounted trials end, or before annual (or longer) contracts automatically renew. Cancellations will be made straightforward, including online exits for online sign-ups. A new 14-day cooling-

For small VAT-registered businesses, the method you use to calculate VAT can influence both your cash position and the amount of time spent on administration. While the standard approach works well for many, the VAT Flat Rate Scheme may offer advantages in certain situations, although it’s not always as beneficial as it first appears. Below are the key points to help you assess whether it’s a good fit for your business: How do the two methods differ? Under the standard VAT sy

When buying property in England, Stamp Duty Land Tax (SDLT) often represents a significant cost. One crucial distinction is whether a property is treated as purely residential or mixed‑use. Mixed‑use property includes both residential and non‑residential elements, such as a house with farmland, commercial buildings, or genuinely non‑residential land, and it is taxed at lower SDLT rates than residential property. This makes mixed‑use classification attractive, but it is also a

Agricultural income rarely follows a steady pattern. Many farmers see profits rise and fall significantly from one year to the next, often due to factors beyond their control. Weather conditions, disease outbreaks, fluctuating market prices for products such as milk, volatile costs for essentials like feed, fuel, and fertiliser, and changes in government policy all contribute to this uncertainty. Because of this instability, farmers’ averaging is a tax relief mechanism design

As outlined in the 2025 Autumn Budget, several changes took place on 6 April that may affect those who use the Construction Industry Scheme. From April 2026, contractors are required by law to either: file a CIS return every month, including nil returns in months where they have not used a subcontractor; or inform HMRC in advance that they will not pay subcontractors that month by submitting an inactivity request. From April 2026, with the nil filing requirement back in place

Please take note of an upcoming change to our office opening hours, which will come into effect on Friday 1st May . New Skipton Office Hours Monday to Thursday: 8:00am – 5:00pm Friday: 8:00am – 1:30pm New Settle Office Hours Tuesday: 9:00am – 4:00pm Thursday: 9:00am – 4:00pm We have carefully considered the impact of these changes on both our team and clients, and believe these new hours will provide an efficient and positive way forward for everyone. If you have any question

From the 2025/26 tax year directors of small companies will need to provide more detailed information about dividend payments on their Self-Assessment tax returns. You must report each company from which you received dividends, along with the company’s registration number. HMRC will require the exact amount of dividends received from each company. You will also need to declare your ownership share in each company. Currently, most directors simply report total dividend income.

The tax position for electric company vans is extremely simple, because there is currently no Benefit in Kind charge at all. Since April 2021, the taxable benefit for a zero-emission van has been set at £0, even where the van is available for private use. This means an employee can use an electric company van for both work and personal journeys without any personal tax charge. In short, electric vans are currently one of the simplest and most tax-efficient company vehicle opt

Electric vehicles (EVs) are rapidly becoming one of the most tax-efficient options for UK businesses in multiple ways. With fuel prices currently remaining high, EVs are increasingly attractive, not just for the cost savings, but also for the generous tax reliefs, VAT advantages, and recruitment benefits they offer. 1. 100% First-Year Allowance (FYA) Claim Businesses can claim 100% of the cost of a new, fully electric vehicle against taxable profits in the first year of pu

We're proud to be supporting Red Nose Day this year! Heather has been treating us to a selection of tasty treats each day this week - all to raise money for a good cause. This is an internal fundraiser - bringing everyone together while supporting something meaningful. We've had cookies, sticky toffee pudding, bacon/sausage butties, scones etc! It's been amazing to see everyone getting involved, donating, and enjoying some tasty treats along the way!

The new tax year brings several updates to payroll and employment costs that employers should be aware of. While many of the changes are relatively small, it’s important to ensure your payroll systems are updated correctly from April 2026. This is a summary of the key updates affecting employers. Statutory Sick Pay (SSP) There are significant changes to Statutory Sick Pay from April 2026 , which are covered in a separate article. Lower Earnings Limit (LEL) The Lower Earnings

From 6 April 2026, new legislation will introduce important changes to Statutory Sick Pay (SSP). Employers will need to ensure payroll systems and processes are updated. What’s Changing? Lower Earnings Limit Removed Currently, only employees earning above a certain threshold qualify for SSP. From April 2026, all employees will be eligible, regardless of income. SSP will be 80% of normal weekly earnings or the weekly flat rate of £123.25, whichever is lower. Waiting Period Rem

It has recently been announced that a number of updates to the UK apprenticeship system are being introduced during 2026, with a stronger focus on supporting younger people into work and helping employers address key skills gaps. Here’s a summary of the main changes and what they could mean for your business: £2,000 Incentive for Hiring Young Apprentices Employers hiring new apprentices aged 16-24 from October 2026 may be eligible for a payment of up to £2,000. This i

A recent tax tribunal decision highlights the importance of keeping proper VAT invoices when reclaiming VAT on business purchases. In the case of Mochars Ltd, the Tribunal considered whether a business could recover input VAT where it was unable to provide the required invoices to support its claim. The Tribunal ultimately dismissed the appeal and confirmed that HMRC was entitled to refuse the VAT repayment. Background to the case The company was VAT registered and submitted

As we approach the end of the 2025/26 tax year, it’s an ideal time for businesses to review employee benefits ahead of the P11D reporting deadline. While these rules apply to all employers, certain sectors, including farming and rural businesses, may face additional considerations, particularly around accommodation and vehicles. Below are the key areas worth reviewing. Accommodation Provided to Employees For businesses that provide living accommodation, job-related accommodat

HM Revenue & Customs (HMRC) has recently highlighted private use adjustments as an area receiving their greater attention during small business compliance checks. HMRC expects these to be carefully reviewed so that only the correct proportion is claimed for tax purposes. What is a Private Use Adjustment? For many small businesses, certain costs naturally have a mixture of personal and business use. A private use adjustment is required so only the portion relating to the busin

A recent tax tribunal case will be of interest to farmers who rear or finish cattle on behalf of other businesses. The case looked at the VAT treatment of arrangements where one farmer houses and feeds cattle owned by another business. The Tribunal decided that the services provided were a single supply that should be charged at the standard rate of VAT. Background to the case A farming partnership entered into an agreement with a company to house and feed cattle. Under the a

From 6 April 2026, the tax cost of leaving a director’s loan account overdrawn is expected to increase. This is because it is linked to the higher rate of dividend tax, which is itself rising. Although final confirmation that this will apply to the Section 455 charge has not yet been issued, it appears likely. The rate is set to increase to 35.75% for loans made on or after that date. The current rate is 33.75% for loans made since 6 April 2022, and 32.5% for loans made befor

After over 20 years with Shepherd Partnership, we said 'farewell' to our Accounts Senior, Michael - who retired at the end of January (thank you, Michael for sticking around till after the tax-return deadline!). Michael began working in accounts and finance straight from college, and joined the Shepherd Partnership team in 2004. He has been a hugely valuable and popular member of the team, and we are sorry to see him go (but happy to see him enjoying a new , relaxed routine)

We closed our office doors for the day last Friday to host a team gathering at Le Bistro in Skipton. After coffee, bacon butties and pastries, we started our day with a team building/information gathering session - which we called a 'team ideas forum'. This was a new idea, and provided an opportunity for everyone to come forward with discussion points/ suggestions for the business going forward/ ways to improve our systems etc... The session was such a success (we would highl

It has been announced that taxpayers who fall into Making Tax Digital for Income Tax (MTD) from 6 April 2026 will face a soft landing for penalty points. Additionally, the government have announced that from 6 April 2027, late submission and late payment penalties for those still in self assessment will mirror the MTD penalty regime. What is the penalty system for MTD? HMRC’s MTD penalty system operates as a point-based system where you will receive separate penalty points fo

From 6 April 2025, if you are a pensioner who received a Winter Fuel Payment, HMRC will recover the amount full if your income was over £35,000. Why will this happen? In July 2024, the government announced that payment of the Winter Fuel Payment was dependent on the individual receiving another means tested benefit. In July 2025, the government expanded the eligibility to include pensioners with total income below or equal to £35,000, in addition to introducing the tax char

As the 2025/2026 tax year draws to a close, it’s an ideal time to review your finances and ensure you’ve taken full advantage of all the allowances and reliefs available to you. Investment Allowances Have you used your £20,000 ISA allowance? Have you used your £3,000 annual exemption for capital gains tax? Have you used your annual £500 dividend allowance? Tax relief on Venture Capital Trusts investments, currently provide 30% tax relief. However, this will be reduced t

Following recent reports from Birmingham Mail, millions of state pensioners are being contacted by HM Revenue & Customs regarding tax on their pension income. Due to frozen income tax thresholds and rising State Pension payments, many retirees who have never previously paid tax may now find themselves liable — sometimes through a “Simple Assessment” letter. If you or a family member has received one of these letters: Don’t ignore it Don’t panic Don’t assume it’s wrong ...But

Following the original announcement in the Spring 2015 Budget, we are now finally 6 weeks away from the introduction of Making Tax Digital for Income Tax (MTD) for sole trader and landlords with combined turnover more than £50,000. Quarterly reporting comes with it! Are you ready? Have you chosen your MTD compatible software? Have you considered the number of licences needed for your individual purposes? Have you signed up for MTD with HMRC? Don’t understand what you nee

In very exciting news from the office, Adam recently became a Grandad for the 1st time! Adam's daughter welcomed her first child - a little boy called Benji! Mother and son are doing well, and are settling into the routine (or perhaps more like thrown into the craziness) of parenthood. Congratulations to the whole family on their adorable new addition. The photos show Adam and his wife, Virginia, enjoying cuddles.

We wondered if The Small Awards might be of interest to some of our clients and contacts... please read on for more info. The Small Awards, delivered by Small Business Britain, are completely free to enter and are an opportunity to get some well-deserved recognition for your small business. With 12 awards up for grabs across a range categories, entries close at midnight on the 28th February and winners will be announced at an exciting awards ceremony. The categories are: Hig

Making Tax Digital for Income Tax comes into force on 6 April 2026, but many sole traders and landlords still don’t know what it means. New research from IPSE, the Association of Independent Professionals and the Self-Employed, shows almost 40% are unaware of the changes. The rules require digital record-keeping and quarterly submissions using HMRC-approved software, with penalties applying for non-compliance. We’re already supporting our clients with MTD setup and ongoing c

On 23 December, the Government confirmed a significant reform to Inheritance Tax (IHT) reliefs for business owners and farmers, increasing the value of assets eligible for full Agricultural Property Relief (APR) and Business Property Relief (BPR) to £2.5 million. The changes will take effect from 6 April 2026. While the increased threshold is welcome, the announcement came too late for some individuals who have already incurred substantial tax planning costs that may now prov

The Department for Environment, Food and Rural Affairs has set out details of the revised Sustainable Farming Incentive (SFI) scheme, which is expected to open in 2026 as part of the next phase of environmental land management support in England. The SFI is a government programme that pays farmers for a range of land management activities designed to support sustainable farming alongside food production. Under the refreshed offer, the scheme will be streamlined with fewer a

The start of the year is a natural time to pause, reflect and reset… and while New Year’s resolutions are often associated with personal goals, they can be just as powerful for businesses of all sizes. At Shepherd Partnership, we encourage our clients to use the new year as an opportunity to review what’s working, what’s not, and where small changes could make a big difference over the next 12 months. Business Resolutions Worth Making Some of the most effective business resol

An increasing number of people are transforming hobbies into small businesses. Earning a living from something you genuinely enjoy is one of the most rewarding career moves you could make. One of the biggest mistakes new entrepreneurs make is waiting too long to seek proper accounting advice. Even a brief conversation with an accountant at the very beginning can prevent confusion, unexpected costs, and unnecessary stress later on. When Does a Hobby Become a Business? If you a

Many employees accumulate air miles, credit-card points or other loyalty rewards when travelling or purchasing goods for business purposes. Understandably, employers often wonder whether these rewards create a tax liability. The good news: in most routine situations, they don’t. When Reward Points Are Not Taxable HMRC generally treats points earned through standard public loyalty schemes as a personal reward for the individual. This applies even where: The purchase was made

With the 31 January tax return deadline just around the corner, HMRC has revealed the ‘Top 10 oddest excuses’ for sending in a late return. And, although we're certain that none of these would ever come from our clients, we thought these excuses might offer a bit of entertainment! My pet goldfish died (self-employed builder) I had a run-in with a cow (Midlands farmer) After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else (London woman) My wife