ENTERPRISE BUSINESS & COMMERCIAL NEWSLETTER
WELCOME
Welcome to our Autumn edition of Enterprise. As we move on from the summer holidays, I hope you have been able to enjoy a well-deserved break in what was the hottest summer on record.
Here at Albert Goodman, we celebrated our first year as head sponsor for the AG Bristol International Balloon Fiesta. Our staff were able to enjoy an away day to make the most of the event, it was a huge success and we look forward to seeing even more clients there next year! We have included an article in the newsletter to highlight the success of the event.
In this edition of Enterprise, we will also be looking ahead to some of the changes being introduced for the new tax year from 6 April 2026. If you have concerns you may be affected by any of these changes, please contact us at AG, we are here to help.
The Autumn Budget 2025 was announced to take place on 26 November. The team and I will endeavour to keep you abreast of the announced changes through future newsletters and our social media content.
I hope you enjoy the latest edition of Enterprise.
Mike Cahill Partner
UPCOMING TAX DEADLINES
November 2025
1st Payment of corporation tax liabilities for periods ending 31 January 2025 for small and medium sized companies not liable to pay in instalments.
7th VAT return and payment for September quarter (online).
19th PAYE/CIS liabilities for month ended 5th November 2025 if paying by cheque. File monthly CIS return.
22nd PAYE/CIS liabilities for month ended 5th November 2025 if paying electronically.
December 2025
1st Payment of corporation tax liabilities for periods ending 28 February 2025 for small and medium sized companies not liable to pay in instalments.
7th VAT return and payment for October quarter (online).
19th PAYE/CIS liabilities for month ended 5th December 2025 if paying by cheque. File monthly CIS return.
22nd PAYE/CIS liabilities for month ended 5th December 2025 if paying electronically.
January 2026
1st Payment of corporation tax liabilities for periods ending 31 March 2025 for small and medium sized companies not liable to pay in instalments.
7th VAT return and payment for November quarter (online).
19th PAYE/CIS liabilities for month ended 5th January 2026 if paying by cheque. File monthly CIS return.
22nd PAYE/CIS liabilities for month ended 5th January 2026 if paying electronically.
31st Self Assessment deadline for filing 2024/25 tax returns; self-assessment balancing payment due for 2024/25 tax year and 1st payment on account due for the 2025/26 tax year.
CHANGES TO BUSINESS PROPERTY RELIEF (BPR) ANNOUNCED IN THE BUDGET ON 30 OCTOBER 2024
In Labour’s first budget last year it was announced a reform to the exemptions for inheritance tax (IHT) on assets qualifying for Business Property Relief (BPR) and Agricultural Property Relief (APR). A £1million exemption limit was placed on all qualifying BPR and APR assets with any amounts above this limit receiving 50% exemption.
What is Business Property Relief (BPR)
Any ownership of a business, or shares in a business, is included in someone’s estate for Inheritance Tax purposes.
BPR reduced the value of a trading business or its assets when working out how much IHT has to be paid by someone’s estate or on lifetime gifts. If a business asset qualifies, it will either attract 50% or 100% relief from IHT.
The following assets receive 100% BPR
A business or interest in an unincorporated business
Shares in an unlisted trading company
The following assets receive 50% BPR
Shares which control more than 50% in a listed company
Land, Building or Machinery owned by the individual and used in a business they were either a partner or controlled.
Land, Building or Machinery used in the business and held in a trust that it has the right to benefit from.
BPR is not available in respect of a business or shares in a company that is not trading. This would include any business that is ‘wholly or mainly’ dealing in holding investments, including dealing in securities, stock and shares and holding land or buildings not used in a trade.
Agricultural Property Relief (APR) also takes precedence, so if a business or asset also qualifies for APR, BPR could not be claimed.
Level of relief before 30 October 2024
Before the budget announcement, if a business or asset qualified for BPR, there was no cap to the value of exemption for the relevant assets.
Changes Announced on 30 October 2024
The Government announced that any estate from 6 April 2026, in addition to existing nil rate bands and exemptions, relief of up to 100% is available on qualifying Business and Agricultural assets for the first £1million of combined assets. Any qualifying Business or Agricultural assets in excess of £1m will get 50% relief thereafter.
Practically this means any Business or Agricultural assets in excess of £1m will be taxed at 20%, rather than the usual IHT rate of 40%.
These rules apply from 30 October 2024 and therefore apply to any ‘failed’ lifetime gifts or transfers after this date for anyone that dies after 6 April 2026 and within 7 years of the gift or transfer.
The Government also announced a reduction in relief for shares designated as ‘not listed’ on the markets of recognised stock exchanges, such as AIM shares from 100% to 50%.
To provide an illustration for the effects of these changes, please see the following examples
EXAMPLE 1 – A single estate with qualifying BPR assets before the budget changes
Pre budget IHT on a single estate
(1) The family home was passed to a direct descendant but due to the size of the estate, the residence nil rate band was tapered to nil.
This is a pre-budget estate where no assets or nil rate bands have been passed on from a previous spouse or civil partner’s death. You will note the full £4.5m value of the trading company shares can be passed on tax free as they qualify for 100% BPR. The deceased standard nil rate band of £325,000 is offset against the remaining estate value. The remaining taxable estate of £905,000 is taxed at the standard IHT rate of 40% giving rise to IHT tax of £362,000, all of which is due immediately.
EXAMPLE 2- An estate with qualifying BPR assets after the budget changes
Post budget IHT on a single estate Assets at the time of death (after 6 April 2026)
Residence Nil Rate Band
(1)
As mentioned previously, the £1 million exemption is spread across both BPR and APR qualifying assets, not £1m per classification.
When someone’s estate includes both BPR and APR assets, the £1million exemption is apportioned based in the value of each category of qualifying assets. For example, if BPR assets are valued at £3.5m and APR assets are valued at £1.5m in someone’s estate, the exemption will be split £700,000 against BPR assets and £300,000 against APR assets.
The apportionment may not affect the overall exposure to IHT, if for example all assets in both categories currently qualify for 100% relief.
It may affect the overall liability if some of the assets in either relief category only currently qualifies for 50% relief so this needs to be considered if you have both BPR and APR qualifying assets.
What to do now
If you feel that you may be affected by the proposed changes coming on 6 April 2026 it is important you consider the following
Establish your IHT Exposure
(2)
(1) The family home was passed to a direct descendant but due to the size of the estate, the residence nil rate band was tapered to nil.
(2) Payable in installments over 10 years £700,000
This is the same scenario as example 1, but the death occurs after 6 April 2026 when the changes announced in the budget take full effect.
The main difference here when compared to example 1 is that only £1m of the qualifying business asset (trading shares) is exempt from IHT. The remaining £3.5m is now taxable at 50%, so taxed at 20% instead of the usual 40% IHT rate.
The changes announced will give rise to an increase in IHT payable on this estate of £700,000 (being £3.5m at 20%).
The additional tax due on the qualifying business assets of £700,000 can be paid in instalments over a 10 year period, although interest may be charged.
The remaining amount of £362,000 due on the rest of the estate is still due immediately.
Interaction between Business Property Relief(BPR) and Agricultural Property Relief (APR)
By determining what your potential IHT liability is and how you may be affected by the changes, you will be better placed to make informed decisions with the knowledge of the potential liability that could be due. By determining these amounts we will also be better placed to provide the potential tax planning advice needed.
Once you know your potential IHT liability being faced, you can consider how any potential tax can be paid. Once all tax planning has been considered, review the liquidity of your asset and consider how easy they can be converted to pay potential tax due.
Lifetime gifts can mitigate future IHT liability and with the potential of holdover relief you may be able to avoid creating an immediate Capital Gains Tax charge on lifetime gifts. The full implications of gifting assets need to be considered before any decisions are made.
Every estate is different. The makeup of assets and personal wishes for what happens to these assets differs for everyone, tailored advice is so important.
Review your Will
In the next article, my colleague Paul Collings has provided guidance on why it is important to review your Will, particularly if it was prepared before these changes were announced.
If you feel these changes may have an impact on you, please discuss this with your usual contact at AG.
Mark Thompson Director
WHERE THERE IS A WILL THERE IS A WAY
The October 2024 Budget saw a fundamental change to Inheritance Tax (IHT). Prior to the Budget, owners of trading business operated on the understanding that unlimited amounts of Business Property Relief (BPR) were available, irrespective of the size or value of the trading business. However, on 30 October Rachel Reeves announced that with effect from April 2026, taxpayers’ ability to claim BPR will be limited. Taxpayers will now only be able to claim BPR at 100% of the first £1 million of qualifying assets. Above this value only 50% BPR will be available.
As a consequence of this, owners of trading businesses are going to be faced with much larger IHT bills than previously has been the case. The increase will be more pronounced the greater the size of the trading business. An example of the impact is given in the scenario below.
What is also important to note is that this £1 million allowance is not transferrable between spouses. As such, for married couples (or individuals in a civil partnership) it is important that wills are prepared that are “tax efficient”. This will then ensure that each party to a marriage (or civil partnership) uses their £1 million allowance rather than it being wasted. An inefficient will (or simple mirror will) is now unlikely to be as tax efficient as it once was.
As a result of the above, clients are well advised to review their wills to ensure that they make best use of their £1 million allowance. A tax efficient will may well save the client £200,000 of tax in certain circumstances.
Moving forward with “IHT on the rise” then there is, by definition, going to be less assets available to distribute between beneficiaries. Individuals need to consider which family members are going to “suffer” this IHT increase. This is of utmost importance where an estate might be divided between family members, some of whom inherit the “trading business”, and some of whom inherit “other assets” and who is receiving the residuary of the estate. Again, it is really important that business owners carefully consider the structure of their will to ensure that disasters are avoided.
Of course, a will is something that does need to be reviewed periodically. Clients often think “it’s OK, I have a will” but forget that life-changing effects such as marriage or divorce can have a real impact on any previous wills. As such, there is a real need to take professional advice.
Albert and Kate own a house worth £650,000. They also both own shares in their trading business worth £4,000,000 which qualify for BPR. They currently have simple mirror wills which leave their entire estate to each other on first death. On the second death the IHT position is as shown in the table below.
If you would like to discuss how the above could impact your IHT exposure, then please do not hesitate to get in touch with your usual point of contact.
Paul Collings Tax Director paul.collings@albertgoodman.co.uk
MAKING TAX DIGITAL FOR INCOME TAX –WHAT SHOULD I DO NOW TO PREPARE?
The Making Tax Digital for Income Tax (MTD IT) regime is one of the biggest changes to the tax system in many years and fundamentally changes how taxpayers interact with HMRC.
As HMRC have started writing to taxpayers about the Making Tax Digital for Income Tax rollout, we wanted to have a brief refresher on what it is, when is starts and who it affects before covering what practical steps you should be taking now to prepare!
So, what is MTD IT?
The MTD for IT regime is the new way that taxpayers will need to keep and submit their records to HMRC. It is a requirement to keep, maintain and submit digital records to HMRC. Paper records will no longer suffice.
Affected taxpayers will also change from submitting 1 annual self-assessment tax return to submitting 4 quarterly updates to HMRC as well as one annual final declaration.
When does it start and who does it affect?
The regime will be mandated from 06 April 2026 and rolled out in 3 tranches:
From 6 April 2026 - sole trade businesses and landlords with qualifying income over £50,000 are required to register and comply.
From 6 April 2027 - sole trade businesses and landlords with qualifying income over £30,000 are required to register and comply.
From 6 April 2028 - sole trade businesses and landlords with qualifying income over £20,000 are required to register and comply.
It is important to note that qualifying income is based on the combined income (not profits) from sole trades and property only. Other income sources such as Employment, Pensions, Interest on savings or anything else for that matter will not count as qualifying income.
How are HMRC judging who will be affected?
HMRC will be using the taxpayers submitted tax returns for the tax year ending 5 April 2025 when assessing whether an individual is mandated to use the MTD IT regime.
The deadline for filing these tax returns is 31 January 2026, leaving very little time for the next steps should you chose to file your tax return near the deadline. The next steps are:
Sign up to MTD for IT with HMRC
Provide authority to your agent (e.g. Albert Goodman)
Transfer your records onto MTD compatible software
Link this software to your agent’s platform
Start keeping your records digitally on the new software Practical Steps – What should I do now?
1. Talk to an advisor that understands the MTD for IT regime – at Albert Goodman we are working with HMRC & leading software providers and are at the forefront of this change, so please get in touch if you need any help.
2. Prepare and submit your tax return for the year ending 5 April 2025 as soon as possible – Don’t wait until the end of the tax year to do this!
Preparing your tax return now will help you to understand your qualifying income for the year of assessment. In turn, this will enable you or your agent to carry out many of the preparatory steps in advance.
Also, contrary to many opinions, you don’t have to pay your liability as soon as its filed. You are well within your rights to submit now and pay just before the deadline.
3. Ensure you have a dedicated business bank account for each type of business – Doing this will dramatically reduce admin time when it comes to keeping digital records. It will also allow you to receive the admin benefits that automation provides.
As an example, an individual with a sole trade business and a rental property will ideally have a dedicated business bank account for each business.
4. Get into the habit of completing your bookkeeping on a regular basis – MTD IT will require quarterly submissions and the time between the quarter ending and the submission deadline can be as small as 1 month and 2 days! Therefore, regular record keeping will maximise this filing window and make the process much less daunting.
5. Consider being part of the Beta Testing Phase – at Albert Goodman we are part of the MTD IT beta testing phase. This allows us to work with HMRC to test and have a say in how the regime will work. Being part of the testing phase will help you understand exactly how this will work and set you up nicely and ahead of the game!
Please reach out to your regular contact at AG should you wish to be part of this.
Katie Hodge
Tax
Senior Manager
katie.hodge@albertgoodman.co.uk
MAKING TAX DIGITAL FOR CORPORATION TAX SCRAPPED
The HM Revenue & Customs Transformation Roadmap was released on 21 July and it was announced that they do not intend to introduce Making Tax Digital for Corporation Tax.
Instead HMRC will develop an approach to the future administration of Corporation Tax that is suited to the varying needs of the diverse Corporation Tax population. HMRC say they recognise the wide range of entities, from small owner managed businesses to large multinational enterprises.
HMRC have said they will work closely with stakeholders and government to identify changes that will provide the best outcome for taxpayers and the government. They are committed to consulting and providing early clarity and assurance on both the design and timing of any changes.
While confirmation Making Tax Digital for Corporation Tax will not be introduced is welcomed, we await to see the changes mentioned and what they will mean for you and the day to day running of your business.
There are some changes proposed which will change interaction with HMRC that are either confirmed or being consulted on.
MANDATORY PAYROLLING OF STAFF BENEFITS
From 6 April 2027 most benefit in kind and expenses, along with associated income tax and National Insurance Contributions, will need to be reported through real time Information (RTI) on the company payroll.
For a temporary period, employment related loans and accommodation benefit reporting will not be mandatory and can still be reported on a P11d at the end of the tax year. A timeline for mandatory payrolling these benefits will be set out in due course.
This will lead to the eventual end of the annual P11d benefit in kind forms.
E-INVOICING
In the Budget last October, it was confirmed there would be a consultation on E-Invoicing. The consultation closed on 7 May 2025 and we await the outcome. We may hear more information at the next budget in the autumn.
E-Invoicing is the digital exchange of invoice information directly between buyers’ and suppliers’ financial systems, even if these systems are different. The outcome is an invoice which is automatically written into the buyer’s financial system without manual processing.
The consultation provided several approaches. Currently E-Invoicing is not mandatory in the UK, with the exception of services provided to the NHS. Other countries have made E-Invoicing mandatory in varying degrees.
Any outcome is likely to affect anyone who is currently manually generating invoices and anyone either emailing or posting invoice to customers.
CONCLUSION
We will await any further announcements on further changes to how we all interact with HMRC and we will keep you updated when these announcements are made. We are likely to get further updates in the Autumn Budget in November.
If you have any questions, please get in touch with your usual contact here at Albert Goodman.
John Coupe Business Services Director john.coupe@albertgoodman.co.uk
REQUIREMENT TO PROVIDE PERSONAL INFORMATION TO CRYPTOASSET PROVIDERS
From 1 January 2026, anyone who invests in crypto assets will need to provide certain personal identifying details to the service provider used to buy, sell, transfer or exchange Cryptoassets.
The information will be used by HM Revenue & Customs in order to link cryptoasset activity to an individual tax record. This will make it easier for HM Revenue & Customs to find out what tax needs to be paid.
Failure to provide the information under the new regulations or providing inaccurate information could lead to a penalty of up to £300 from HM Revenue & Customs.
What is classed as a Cryptoasst Service Provider
Cryptoasset Service providers are any business that allows you to buy, sell, transfer or exchange Cryptoassets, including any that do these activities for you.
HM Revenue & Customs advise examples of Cryptoasset services include
A wallet app you use to exchange bitcoin
An online marketplace where you buy and sell nonfungible tokens (known as NFTs)
A service you pay to manage your Cryptoasset portfolio
HM Revenue & Customs examples of Cryptoassets are as follows
Exchange tokens, like Bitcoin
NFTs (non-fungible token)
Utility tokens
Stablecoins
Security tokens
Personal Information Required
If the investment is made in personal name, the following details must be provided
Full name
Date of birth
Usual home address
Tax identification number, for UK residents this could be your National Insurance number or your Unique Tax Reference (UTR) if you complete a UK tax return.
If the investment is held in another entity, like a limited
company, partnership, trust or charity, the following information must be provided
Legal business name
Main business address
Company registration number (for UK companies)
Tax identification number (and country of issue for non UK companies)
In certain circumstances, some entities may also need to provide personal details of the controlling individual.
This information must be provided to Cryptoassets service providers you use, including any that are not based in the UK.
In addition to this, the 2024/25 self-assessment tax return requires full disclosure of gains or income in a new dedicated section of the Capital Gains pages.
From 1 January 2026, the Cyptoassets service providers will need to share information with HM Revenue & Customs, including full details of taxable income or gains.
The regulations being introduced here in the UK are part of the OECD Cryptoasset Reporting Framework (CARF) which requires the Crypto platforms to share detailed information to tax authorities in countries adopting CARF. So far the CARF is being adopted by 52 counties with the UK being one of the first countries to adopt the new rules.
The Treasury estimates the measure will raise up to £315m in unpaid tax by April 2030 and HMRC have said the measures will provide them with the information to help people get their tax affairs right.
If you are worried previous gains have not been reported correctly, HM Revenue & Customs have a Cryptoasset Disclosure Service for voluntary disclosure. If you feel a voluntary disclosure may be required, please contact us here at Albert Goodman and we can help ensure the correct disclosure is made.
If you have any questions regarding the new regulations, please contact me or your usual Albert Goodman contact.
Sharron Quick Business Services Senior Manager sharron.quick@albertgoodman.co.uk
SMALL BUSINESS FUNDING: WHAT ARE YOUR OPTIONS?
Running a business often means finding the right balance between ambition and resources. While many small businesses start with personal savings or help from family, at some point most will consider outside funding. Whether it’s a loan, equity investment, or grant, the right funding can unlock opportunities that wouldn’t otherwise be affordable.
WHY MIGHT YOU NEED FUNDING?
Funding is usually sought to give your business a boost that can’t be managed through day-to-day cash flow. Some examples of where funding may be used are:
Expanding into new locations
Acquiring another business
Developing a new product or service
Hiring staff or building your team
Purchasing equipment or other assets
Smoothing out cash flow gaps
THE THREE MAIN TYPES OF FUNDING
1. Debt Funding
Borrowing money to repay over time.
Pros: You keep full ownership.
Cons: Regular repayments and often security required. Make sure you fully consider any personal guarantees.
Examples of debt funding:
Term loans – a lump sum repaid with interest
Invoice finance – borrow against unpaid invoices
Asset finance – fund equipment or vehicles
Merchant cash advance – borrow against and repay through future card sales
Property finance – commercial mortgages, development, or bridging loans
Government-backed loans – e.g. Start Up Loans (£25k + mentoring) or Recovery Loan Scheme
Peer-to-peer lending – more of a last resort as usually more expensive
2. Equity Investment
Selling a share of your business in exchange for investment.
Pros: No loan repayments; investors can bring their expertise, mentoring and networks to help you succeed.
Cons: You give up part of your ownership.
Sources of equity funding include:
Angel investors (early-stage backers)
Venture capital funds (for scaling businesses)
Equity crowdfunding (raising smaller amounts from many investors)
Private equity (for more mature businesses)
Tax incentives:
SEIS – 50% income tax relief for investors (for businesses trading <2 years)
EIS – 30% relief (for more established businesses, usually trading <7–10 years)
These schemes can make your business more attractive to potential investors but are subject to further criteria needing to be met.
3. Grants and Subsidies
Free or subsidised funding for specific purposes.
Pros: No repayment, no equity.
Cons: Often competitive and restricted in use.
Where to look:
Innovate UK – national innovation grants
Heart of the South West Growth Hub – regional schemes and signposting
South West Investment Fund – subsidised equity and debt
Quick Examples
Using debt to scale: Imagine you have £250k to invest, but a business you want to acquire costs £1m. By raising £750k in debt, you can complete the deal — and once the debt is repaid, you own the full £1m+ business.
Using equity to grow: If you give away 10% of your company to fund a growth plan that doubles its value, your remaining 90% ends up being worth more than your original 100%.
FINAL THOUGHTS
Funding isn’t right for everyone, but when used wisely it can be transformational. Whatever the route, having accurate and up-to-date financial information and forecasts will make your business more attractive to lenders and investors.
If you’d like to explore which funding options could be right for your business, we’d be happy to meet and discuss this with you.
Matthew Chandler Partner matthew.chandler@albertgoodman.co.uk
PENSIONS? ARE THEY STILL WORTH IT?
In recent times there have been a number of tax increases that impact on owners of trading businesses. The change that has obtained the most attention has been the increase in the rates of Employers National Insurance. But at and around the same time we have also seen the reduction in the level of Business Property Relief (BPR) available on qualifying assets (with effect from April 2026) which is important for IHT purposes. In addition it has also been announced that private pension pots have been brought within the charge to Inheritance Tax (with effect from April 2027). If this isn’t bad enough for business owners who have simply “had enough” they will now face higher amounts of Capital Gains Tax as and when they come to sell their business.
As a consequence of these changes it is important that the “strategies” that tax payers have used for any number of years should be revisited
PENSIONS – MONIES OF LAST RESORT
Ever since the rules “Pension Freedoms” were introduced in 2015 wealthy individuals have been encouraged to consider their pensions as “monies of last resort”. Tax Payers have been encouraged to perhaps spend other wealth (which is subject to IHT). As a consequence, with pensions being proposed to be within the remit of IHT from 2027 this strategy needs to be revisited.
Tax payers are now going to have to consider whether alternative strategies should be considered. Such strategies might include:-
A. Taking the Pension Commencement Lump Sum (more commonly known as “tax free cash”) and simply “gifting it away” sooner rather than later;
B. Withdrawing the tax free cash and using it to buy assets qualifying for BPR so as to utilise the £1m BPR allowance if it is not otherwise utilised;
C. Withdrawing the taxable element of the pension so as to reduce the level of the pension in the longer term; and
D. Choosing an annuity over “drawdown”.
What is clear is that these rules are a game changer for how pensions should be dealt with. Clearly it is going to be necessary for an individual’s overall “strategy” to be revisited.
STRUCTURE – BUSINESS PREMISES IN PENSIONS
Historically many businesses have purchased their premises in their pensions. Often a Self-Invested Pension Plan is used in these kind of situations. The pension would then receive rent from the limited company as a form of “investment return”. What should be noted is that:-
A. As a result of the 2027 changes the Pension (including any value associated with the business premises) are going to be within the scope of IHT; and
B. The Pension Scheme will not be able to claim any Business Property Relief (BPR) in respect of the bricks and mortar that might be contained within the pension “environment”.
Individuals who have this kind of arrangement should therefore be considering whether such a “structure” remains “fit for purpose”. There will be some taxpayers where it might be preferable for the business to effectively “buy back” the Business Premises from the pension so as to increase the amount of BPR available looking at the wider position. Of course, as is always the case with situations such as this, there are other tax considerations that will need to be considered. These will include, but will not be limited to Stamp Duty Land Tax, VAT, capital allowances etc.
Again the message to tax payers is clear - the “rules have changed” and therefore it might be the case that structures might need to be changed as a consequence.
PENSIONS – ARE THEY STILL WORTHWHILE?
Since Pension Freedoms were introduced in 2015 the making of pension contributions has been the “go to advice” when deciding how to extract wealth from owner managed businesses. Pension contributions have been attractive as they have provided corporation tax relief, they have been free of National Insurance Contributions and they have been paid to an environment (the pension) which has itself been free of Inheritance Tax.
However with effect from April 2027 Pensions are going to be within the remit of IHT. As such shareholders in Owner Managed Businesses might think that pension contributions are “no longer worthwhile”; instead business owners might decide to let the cash build up in the company and to simply extract any cash available on a disposal claiming Business Asset Disposal Relief along the way. Of course, in recent times the Chancellor has also increased the rate of Capital Gains Tax by reducing the level of Business Asset Disposal Relief available. Rates of BADR that now apply are:-
14% on the first £1million of gains up to 5 April 2026 18% on the first £1million of gains thereafter.
For tax payers who are looking to “fund their retirement” there is a need to consider the “tax cost” of making pension contributions (and withdrawing funds at a later date) versus the tax cost of extracting sums on a sale.
EXAMPLE:
Let us consider A Limited. A limited has had a good trading year and has made profits in excess of budget of £60,000. The owner of A Limited (Mr A) is 62 years old. He has only modest pensions and is conscious that at some point in the not too distant future he will look to sell his business. He has been advised that if structured correctly any cash in the company might become available to him on a future sale. Mr A is considering what approach he should take with respect to the £60,000 of profits that have been made in recent times.
A. Tax Position of a Pension Contribution
If the Company makes a pension contribution Mr A’s pension will be “boosted” by £60,000. At some point in the future he will be able to take 25% of the sum involved (£15,000) tax free as part of his tax free lump sum. He will be able to withdraw the remaining £45,000 as he wishes. He has
other income but any withdrawals from his pension should remain with the basic rate band if those withdrawals are “managed” correctly. As such he will suffer (£9,000 i.e. 20% of £45,000) on these withdrawals.
Of the original £60,000 Mr A receives £51,000 being the £15,000 “tax free cash” together with the net amount of £36,000 of taxable withdrawals.
B. Tax Position of extracting on Sale
If the monies are left in the company then the company will not be able to claim corporation tax relief. As such the sum available will be reduced by corporation tax. The amount “in the company” will be reduced by between 19% and 25% depending on the overall level of profit in point. However if we assume that the rate that applies is 20% (i.e. towards the lower end of the spectrum) then the cash held in the company will be £48,000.
If this sum is extracted on a sale then, if the company is sold subsequent to 5 April 2026, then a CGT rate of 18% will arise. As such the £48,000 amount will be reduced to £39,360. Clearly this is somewhat less than the £51,000 available to Mr A were he to make a pension contribution. The tax saving of making the pension contribution would be higher still if the company paid corporation tax at the highest rate of 25%.
Once again however the above is very much a “simplification” of the points that need to be considered. However what is clear is that notwithstanding the removal of the IHT advantages associated with a pension they should remain at the forefront of an individuals mind when considering how they should they should extract monies from their business.
CONCLUSIONS
Clearly with such dramatic change to the rules it is clear that up to date professional advice from tax advisors, independent financial advisors and private client lawyers is required more than ever before.
Paul Collings Tax Director paul.collings@albertgoodman.co.uk
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Is it time to pay your fees? Why not
An easier way to pay your fees
We are pleased to offer you the opportunity to spread your fees over monthly repayments via a facility called FeePlan provided by Premium Credit Limited.
With FeePlan, instead of having to pay your fees in a single, one off payment, you can benefit from a facility that enables you to smooth the settlement of the invoice over a number of monthly repayments.
Our years of experience tell us that it’s not a question of whether you can afford to pay in full. It’s about whether you would prefer to choose a number of payment options - just like you do with many other regular bills at work and at home.
Benefits of using FeePlan
Boost Cash Flow
• Keep your cash available for use in your business as additional working capital.
Additional Line of Credit
• A new totally unsecured credit line and one that doesn’t involve complex application forms or supporting projections.
Minimal Cost
• A transaction fee will be added to your invoice amount, this will be advised by the practice and is subject to a minimum fee. A £5 facility fee will be added to your first instalment.
How do you apply?
• It’s really easy - just tell your practice you want to take advantage of the FeePlan facility and they will advise you of the options available.
• Your practice will then contact Premium Credit on your behalf and on approval, Premium Credit will electronically (or by post if no email details are given), send you a Credit Agreement to e-sign or return.
• You will also receive confirmation of the exact repayment amounts and due dates.
About Premium Credit
As well as providing funding for fees, Premium Credit also provides finance and collection services for:
• Golf Club Memberships
• Independent School fees
• Insurance Premiums
• Tax Funding
• Leisure Club Memberships
• Mooring/Berthing fees
• Holiday Home Pitch fees and many other annually renewable fees.
Premium Credit has almost 3 million customers and achieves over £5 billion in net advances, processing over 30 million Direct Debits annually.
For further information speak with your contact at the practice or visit www.premiumcredit.co.uk
Credit is subject to status. Terms and conditions apply, over 18s only.
Your credit agreement may be cancelled if you do not keep up repayments.
BRISTOL INTERNATIONAL BALLOON FIESTA
The iconic Bristol International Balloon Fiesta is a free to attend, three-day event that celebrates the city and its heritage links to the remarkable world of hot air ballooning.
The rolling hills of Ashton Court on the outskirts of the city of Bristol are home to a temporary playground of entertainment, and a stage set ready and waiting for over 100 hot air balloons to take flight.
Albert Goodman has been operating in communities throughout the South West for over 150 years, and as a proudly independent business, we feel real connection to the pioneering spirit embedded in the Fiesta.
This is a meaningful investment for us, not just financially, but as a commitment to the city and its cultural fabric. It means a great deal to us (and to our clients) that we can help the fiesta remain free for the city, help to support the regional economy in which we live, work and do business and celebrate the city while sharing the magic of hot air ballooning with all.
As a firm with deep roots in the South West, community is at the heart of everything we do, and the Fiesta perfectly reflects that sense of pride and shared experience. We love that we’re playing a part in helping to deliver such a memorable event that everyone can enjoy.
With Bristol being a pivotal part of our ongoing strategy and the Fiesta being a cornerstone of the city’s event calendar, it is one we felt we felt perfectly aligned with who we are and our vision for the future.
We are proud of the connections we are continuing to make in the city and beyond – through sponsorship and partnership like Bristol Sport and the Grand Appeal and our support for the Fiesta is a key milestone in this journey.
The Bristol International Balloon Fiesta has now been going for almost half a century and we are excited to be supporting the region’s most iconic and loved event.
As the headline sponsor of the Bristol International Balloon Fiesta, our brand gains prominent visibility and association
with a high-profile event. The Fiesta attracts over 300,000 visitors annually, offering a unique platform to engage with a diverse audience.
The event also carries the title “Bristol International Balloon Fiesta in partnership with Albert Goodman”, which prominently featured across all channels — including news coverage, social media, Tannoy announcements, and on-site signage. Our iconic pink branding was everywhere.
We also had our own large activation stand where we got to engage and interact with visitors across the weekend.
It’s important to us that we actively involve and bring our people along with us on what is our biggest sponsorship to date. After an internal launch event, we took our 350 people to the Fiesta for our annual whole firm away day to celebrate and experience the event firsthand.
By partnering with such an iconic and loved event, we aim to celebrate the South West, strengthen relationships with the local community, and showcase Albert Goodman as a forward-thinking firm whilst growing our presence in Bristol.
In the short term: Key indicators will include website traffic and enquiries generated during and immediately following the event, together with levels of social media engagement, media coverage, and overall PR exposure.
In the medium to long term:
Monitoring will focus on the volume and the enquiries originating from Bristol and the surrounding area during this period and in subsequent years.
Stacey Jabbitt Marketing Manager
stacey.jabbitt@albertgoodman.co.uk