Author: Glenn

Many people rely on state benefits, but it is not always obvious which payments are taxable and which are tax-free.

HMRC’s guidance outlines the following list of the most common state benefits on which Income Tax is payable, subject to the usual limits:

• Bereavement Allowance (previously Widow’s Pension)
• Carer’s Allowance or (in Scotland only) Carer Support Payment
• Contribution-Based Employment and Support Allowance (ESA)
• Incapacity Benefit (from the 29th week you receive it)
• Jobseeker’s Allowance (JSA)
• Pensions Paid by the Industrial Death Benefit Scheme
• The State Pension
• Widowed Parent’s Allowance

The most common state benefits that are not subject to Income Tax include:

• Attendance Allowance
• Bereavement Support Payment
• Child Benefit (income-based – use the Child Benefit tax calculator to see if you’ll have to pay tax)
• Disability Living Allowance (DLA)
• Free TV Licence for Over-75s
• Guardian’s Allowance
• Housing Benefit
• Income Support – though you may have to pay tax on Income Support if you’re involved in a strike
• Income-Related Employment and Support Allowance (ESA)
• Industrial Injuries Benefit
• Lump-Sum Bereavement Payments
• Maternity Allowance
• Pension Credit
• Personal Independence Payment (PIP)
• Severe Disablement Allowance
• Universal Credit
• War Widow’s Pension
• Winter Fuel Payments and Christmas Bonus

Your State Pension forecast shows how much you could receive, when you can claim it, and how to boost it by filling National Insurance gaps.

The Check Your State Pension forecast service provides a way to understand your State Pension entitlement. This is a joint service organised by HMRC and the Department for Work and Pensions (DWP) and is available to most individuals under State Pension age.

The forecast allows users to see:

• The amount of State Pension they could receive.
• The age at which they can start receiving it.
• Options for increasing their State Pension, such as by paying voluntary National Insurance contributions to cover any gaps.

The service also helps identify any shortfalls in National Insurance Contributions (NICs), enabling users to take action now to enhance future pension benefits.

To access the service, go to www.gov.uk/check-state-pension and sign in securely using your Government Gateway credentials. If you don’t have an account, you can easily create one. You may need to verify your identity using a photo ID, such as a passport or driving licence.

For added convenience, you can also check your pension forecast via the HMRC app, providing secure access on the go.

If you are already receiving or have deferred your State Pension, you’ll need to reach out to The Pension Service (UK) or the International Pension Centre (abroad). Regularly checking your State Pension status is important to help maximise your entitlement and to help assess any additional savings or pensions you may need for a comfortable retirement.

As of April 2025, directors of close companies and self-employed taxpayers face new mandatory reporting requirements on their Self-Assessment returns.

Up to 900,000 company directors and 1.2 million taxpayers carrying on a trade will be impacted by new rules that require them to provide more information when filing their 2025-26 self-assessment returns.

Legislation has been enacted that introduces mandatory reporting obligations for certain taxpayers, including those who begin or cease trading and directors of close companies. These measures came into effect on 5 April 2025 and apply for the current 2025-26 tax year and later tax years.

Company directors of close companies will face new reporting requirements. Most small private companies will meet the definition of a close company and there are some specific tax rules that apply to these companies. From 5 April 2025, taxpayers impacted by the change must confirm whether they are directors of a close company and provide further details, including the company’s name and registered number, the value of dividends received and their percentage shareholding in the company. If shareholding changes during the year, the highest percentage held must be reported. Answering these questions will be mandatory when submitting 2025-26 tax returns and beyond.

The new rules also introduce a mandatory requirement to report the start or cessation of a trade that was previously a voluntary requirement. Taxpayers are now required to include the date of commencement or cessation of their business in their tax return, whether for personal tax, partnerships or trustees. This change applies to tax returns for 2025-26 and beyond.

Non-UK resident companies that buy, develop, or sell UK land must register for Corporation Tax within three months of a disposal.

Those non-UK resident companies that deal in or develop UK land must register for Corporation Tax if their activities involve acquiring or developing property with the intention to profit from its disposal. This requirement applies when the land is held as trading stock, or when a main purpose of acquiring or developing land is to sell it for profit. This is different from acquiring property for investment purposes, such as rental income.

Companies are required to register within three months of making a disposal of UK land. The registration process involves providing essential details, including the company name, country of incorporation, registration number, addresses (both the registered office and the UK business address) and the date the company became liable to Corporation Tax. If the company is part of a group, details of the parent company must also be provided.

Registration can be completed online, after which companies must print and submit the form to HMRC. Alternatively, if online registration is not possible, companies can send a letter with the required information, including a 10-digit dummy Unique Taxpayer Reference (UTR). Once HMRC processes the registration, the company will receive its Corporation Tax UTR.

The UK’s financial regulator has proposed an increase to the level of savings protection available under the Financial Services Compensation Scheme (FSCS). If approved, the changes would take effect from 1 December 2025 and will be welcome news for individuals and businesses holding larger balances in UK banks and building societies.

Currently, the FSCS protects deposits of up to £85,000 per person, per institution. For joint accounts, that protection doubles to £170,000. There is also extra cover of up to £1 million for “Temporary High Balances” linked to certain life events, such as receiving proceeds from a house sale, inheritance, or insurance payout. This temporary cover applies for six months.

Under the proposals:

• The standard protection limit would rise from £85,000 to £110,000.
• The Temporary High Balance cover would rise from £1 million to £1.4 million.

The reason for the increase is straightforward: inflation has eroded the real value of the £85,000 cap, which was last set in 2017. Updating the limit to £110,000 would restore much of that lost protection and provide savers with greater confidence that their money is safe, even if their bank were to fail.

For most savers, the current £85,000 ceiling is already sufficient. However, those holding larger deposits, particularly following a major transaction, will welcome the higher limits. The proposal also means businesses holding funds in deposit accounts could benefit from increased protection.

A final decision is expected in November 2025, once the consultation has concluded. If confirmed, financial institutions will update their customer information to reflect the new limits by mid-2026.