Author: Glenn

The Welsh Final Budget for 2026-27 was published on 20 January 2026. The Budget sets out the Welsh government’s revenue and capital spending plans, including detailed portfolio spending plans.

Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language confirmed that the Final Budget provides £27.5bn for people, public services and businesses across Wales. This is £1.2bn more than in 2025-26 and £400m more than at the Draft Budget. The additional funding includes resources for local government, the NHS and other Welsh Government priorities.

There have been no changes announced to the Welsh rates of Income Tax (WRIT) which will continue to be set at 10p for 2026-27. This means that the rates of Income Tax paid by Welsh taxpayers will continue to be the same as those paid by English and Northern Irish taxpayers in the new tax year.

The Budget also confirms no changes to the current residential and non-residential rates and thresholds for Land Transaction Tax (LTT) for 2026-27. Some changes to the Multiple Dwelling Relief (MDR) regime for LTT will take effect and a new limited refund provision for the higher residential rates of LTT aimed at supporting more affordable homes.

In addition, Landfill Disposals Tax (LDT) rates will continue to mirror UK landfill tax rates in 2026-27.

From 6 April 2026, significant changes to PAYE rules will affect umbrella companies, recruitment agencies, and end clients, increasing shared responsibility for payroll compliance across labour supply chains.

Umbrella companies are often used by freelancers, contractors, and temporary workers who prefer not to operate as limited companies or set up their own businesses. Essentially, an umbrella company acts as an intermediary between the worker and the end client (or recruitment agency), handling payroll, taxes and other administrative tasks on behalf of the worker. This includes any business supplying labour under a contract of employment.

There are significant changes to the PAYE rules for labour supply chains taking effect from 6 April 2026. Under the new rules, if an umbrella company fails to operate PAYE correctly or underpays tax and NICs, HMRC can recover the amounts due from the recruitment agency that has the contract with the end client, rather than pursuing only the umbrella company. Where there is no recruitment agency involved, the end client becomes responsible. This significantly widens the requirement for all parts of the labour supply chain to ensure that these umbrella companies are fully compliant with all payroll obligations.

Umbrella companies still remain the legal employer of the workers, but recruitment agencies and end clients will now share responsibility for ensuring PAYE is operated correctly from April 2026 onwards.

Not every UK limited company needs a statutory audit. Many smaller companies qualify for audit exemption, but it is important to understand the rules, as an audit may still be required in certain situations.

For financial years starting on or after 6 April 2025, a company is generally audit exempt if it qualifies as a small company and meets at least two of the following conditions:

• Annual turnover of no more than £15 million
• Balance sheet total (gross assets) of no more than £7.5 million
• Average number of employees of no more than 50

If a company exceeds these limits, it will not usually lose audit exemption straight away. In most cases, the company must exceed the thresholds for two consecutive financial years before the exemption is lost.

However, some companies must have an audit regardless of size. This includes public companies and certain regulated businesses, such as banks, insurance companies, and some investment firms.

An audit may also be required if the company’s shareholders request one. Shareholders holding at least 10% of any class of shares, or 10% of voting rights, or 10% in number of members, can demand an audit. This request must be made in writing and received at least one month before the end of the financial year.

Charitable companies are subject to different rules and often face lower thresholds for mandatory audits. For example, a charity may require an audit once its gross income exceeds £1 million, depending on its circumstances.

If you are unsure whether your company needs an audit, or whether an audit could be beneficial for lenders, investors, or business planning, please get in touch and we will be happy to review your position.

With so many online accounts now in daily use, including banking, shopping, email and HMRC services, password security has never been more important. A weak or reused password can lead to fraud, identity theft, or unauthorised access to personal and business information.

A good first step is to use strong, unique passwords for every account. Avoid using the same password across multiple websites, as criminals often reuse stolen login details from one breach to access other accounts. Strong passwords are usually at least 12 characters long and do not rely on obvious words or personal information. Many people find passphrases easier to remember than random characters.

A password manager is one of the easiest ways to improve security. It securely stores passwords in an encrypted vault, generates complex passwords for you, and can warn you if you are using weak or repeated passwords. This means you only need to remember one strong master password.

Where possible, enable two-factor authentication (2FA). This adds a second step when logging in, such as a code from an authentication app or a prompt on your phone. Even if someone obtains your password, they may still be unable to access your account without the second factor.

Be cautious with password reset emails and links. Your email account is often the gateway to all other accounts, so secure it with a strong password and 2FA. Also watch for phishing emails and fake login pages designed to steal your details. If unsure, type the website address directly into your browser rather than clicking a link.

Finally, avoid sharing passwords by email or text message, especially in a business setting. Where possible, use separate logins for each person and restrict access appropriately.

With the balancing payment and first payment on account both due on 31 January 2026, it is worth checking your options early if funds are tight.

The final balancing payment for the 2024–25 tax year is due by 31 January 2026, which is also the deadline for filing your self-assessment tax return. This payment will settle any remaining tax owed for the year after taking account of payments on account already made.

In addition to the balancing payment, many self-assessment taxpayers will also have a first payment on account for the 2025–26 tax year due on the same date, which can make January a particularly challenging month for cash flow.

If you are struggling to meet the tax payments due by 31 January 2026 deadline, it is important to take action early, as there are options available to help manage the payment.

Taxpayers with self-assessment liabilities of up to £30,000 can use HMRC’s online Time to Pay (TTP) service to set up instalment payments. This can be done without speaking directly to an HMRC adviser and is available up to 60 days after the payment deadline.

To use the online Time to Pay service, you must:

• Have no outstanding tax returns
• Have no other unpaid tax debts
• Have no existing HMRC payment plans

If you do not meet these criteria, it may still be possible to agree a bespoke Time to Pay arrangement by contacting HMRC directly. These arrangements are assessed on a case-by-case basis and are usually based on your personal or business financial position.

HMRC will generally agree to extended payment terms where they believe the tax can be paid in full over time. However, if HMRC considers that delaying payment will not resolve the issue, they may seek immediate payment and can take enforcement action if the debt remains unpaid.

If you anticipate difficulty in paying your January 2026 tax bill, please do not ignore the problem. Please let us know and we can help you understand what options are available to you.