Author: Glenn

HMRC missed out on £46.8bn in tax last year. Small businesses and Corporation Tax make up the biggest share of the shortfall.

The tax gap for the 2023-24 tax year has been published and is estimated to be 5.3% of total theoretical tax liabilities.

The tax gap is basically the difference between the amount of tax that should have been paid to HMRC and the amount of tax collected by the Exchequer. The gap includes tax that has been avoided in the UK’s black economy, by criminal activities, through tax avoidance and evasion. However, it also includes simple errors made by taxpayers in calculating the tax they owe as well as outstanding tax due from businesses that have become insolvent. 

In monetary terms, the tax gap is equivalent to lost tax of £46.8 billion. This means that HMRC collected £829.2 billion or 94.7% of all tax due.

The government has announced plans to raise a further £7.5 billion through its measures to close the tax gap.

Some of the key findings from this year’s calculations show:

• Small businesses represent the largest proportion of the tax gap (60%).
• Corporation Tax accounts for 40% of the total tax gap.
• Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

As announced at Spending Review 2025, £1.7 billion will be provided to HMRC over four years to fund an additional 5,500 compliance and 2,400 debt management staff in order to try and ensure that more of the tax due is paid, to fund public services. 

Buying tools or clothing for your job? You could claim tax relief. Check if you qualify and how to get your money back. If you have spent your own money on items essential for your work, such as tools or specialist clothing, HMRC may allow you to claim tax relief, even up to four years after you paid. There are two ways to make a claim, and it might be simpler than you think.

You may be able to claim tax relief on:

• Cleaning, repairing, or replacing specialist clothing (e.g. uniforms, safety boots).
• Repairing or replacing small tools needed for your job (e.g. scissors, screwdrivers).

However, you cannot claim for the initial cost of purchasing uniforms, tools or specialist work clothing.

There are two options for making a claim:

1. Claim the actual amount
   • You’ll need to provide receipts or proof of purchase.
   • Submit your claim under ‘Other expenses’ online at https://www.tax.service.gov.uk/claim-tax-relief-expenses/what-claiming-for.
2. Claim a Flat Rate expense / deduction
   • Use this if your job qualifies for a standard fixed amount.
   • There is no need to provide receipts.
   • Claim under ‘Uniform, work clothing and tools’ in the same online portal mentioned above.

If you complete a self-assessment return, you must claim through your tax return instead.

You cannot claim tax relief on PPE (e.g., gloves, hard hats, goggles). If your job requires PPE, your employer must provide it for free or reimburse you for any purchase.

This tax relief is designed to support employees with essential job-related costs and so it’s worth checking if you are eligible to claim.

From April 2024, the cash basis is the default method for sole traders and most partnerships when preparing Self-Assessment returns. Designed to simplify tax reporting, the cash basis lets businesses record income and expenses when money actually moves, easing the admin burden for many. Those who prefer or need traditional accruals accounting must actively opt out when submitting their tax return.

Businesses that prefer traditional accruals accounting or who are ineligible for the cash basis, must opt out of the cash basis when submitting their self-assessment return.

A number of other changes to the cash basis took effect from April 2024. This included the following:

• The removal of the turnover thresholds for businesses to use the cash basis.
• The removal of the restrictions on using relief for losses made in the cash basis, aligning the rules with accruals.
• Interest restrictions have been removed so both cash basis and accruals accounting are subject to the same tax rules.
• People with more than one business are able to choose whether they use the cash basis or accruals accounting for each business they have, rather than having to pick one method for all their businesses.

The cash basis is not available to limited companies and limited liability partnerships.

Get a clear view of your future pension. Use the enhanced online service to check, boost, or track your State Pension entitlement.

The enhanced Check Your State Pension forecast service is available online, offering a faster and more complete way to understand your State Pension entitlement. This joint service from HMRC and the Department for Work and Pensions (DWP) lets most people under State Pension age see:

• How much State Pension they could get.
• When they can get it.
• If and how they can increase their State Pension, for example, by paying voluntary National Insurance contributions to fill contribution gaps.

The forecast service also highlights any shortfalls in your National Insurance Contributions (NICs) record, allowing you to take action now to boost your future pension income.

You can access the service via www.gov.uk/check-state-pension, where you’ll need to sign in securely using your Government Gateway credentials. If you don’t have them yet, you can create an account. You may need photo ID i.e., a passport or driving licence in order to verify your identity.

You can also view your pension forecast through the HMRC app, giving you secure, on-the-go access.

If you're already receiving or have deferred your State Pension, you’ll need to contact The Pension Service (UK) or the International Pension Centre (abroad) instead.

It is recommended that you regularly check your State Pension position to help optimise your entitlement. You should also consider what other savings or pensions might be required for a long and comfortable retirement.

A recent tribunal clarified the procedural powers of the Certification Officer (CO), ruling that applications from trade union members cannot be refused simply because they are deemed "unarguable". After becoming Chair of a prestigious university, the appellant faced three internal complaints from other members/staff of the UCU involving bullying; a complaint regarding his decision not to permit a motion for an AGM at an EGM; and a data protection breach complaint from three managers after he included information about them.

All three complaints were investigated and upheld by an NEC panel of the UCU on 13 December 2021. The UCU rules, specifically 6.1 and 13.1, outline obligations for members to abide by the rules, refrain from detrimental conduct, and provide for disciplinary procedures, including censure, barring from office, suspension, or expulsion for breaches of rules or detriment to the UCU's interests.

On the 6th September 2022, the appellant submitted nine applications to the CO, alleging that the disciplinary procedure applied in his case had been unlawful, although the CO refused to accept these on the grounds that they were "not arguable" and a tribunal appeal followed. The tribunal ruled that the applications should be remitted to the CO due to the fact that the case did not meet the criteria for striking out under Section 256ZA, ruling that the CO erred in law. The CO's power to "refuse to accept" an application under Section 108B of the Trade Union and Labour Relations (Consolidation) Act (TULRCA) 1992 is narrowly confined to those instances where the CO is unsatisfied that the applicant has exhausted internal union complaints procedures. The phrase "unless he is satisfied" in Section 108B(1) means that if the CO is satisfied that internal procedures have been exhausted, he or she cannot refuse to accept the application on that ground. The primary mechanism for striking out applications on substantive grounds is Section 256ZA(1). Crucially, this section requires a "show cause" notice under Section 256ZA(4) – giving the applicant an opportunity to explain why their application should not be struck out.

This judgement reaffirms the procedural powers of the CO when handling applications against trade unions, strongly reinforcing the requirement for due process, specifically the "opportunity to be heard" before an application can be dismissed. This important case clarifies that, once internal union procedures are exhausted, the CO must accept any application and commence inquiries, even if those inquiries might later lead to a formal strike-out process with proper safeguards.