
Why regular financial forecasting is so important
If you want to secure the long-term success of your business, we highly recommend doing some financial forecasting.

How to expand your business without financial strain
Expanding a business is something many entrepreneurs dream of, but it is much easier said than done.

MTD for ITSA – When will you have to report and what you need to know
You may already be familiar with Making Tax Digital (MTD), but the extension to Income Tax Self Assessment (ITSA) is something many self-employed individuals and landlords need to start preparing for.

The impact of extending the Income Tax threshold freeze
A recent report from the Financial Times has indicated that Chancellor Rachel Reeves may extend the freeze on Income Tax thresholds.

What impact will the Budget have on inflation?
As we approach the Budget, due to be announced on 30 October, one of the key concerns is the potential impact on inflation.

What happens if tax reliefs for SMEs and farms are cut in the impending Budget?
It is the world’s worst-kept secret at this point, but if you have not already heard, the Budget is approaching and is likely to be “painful”.

Could the Budget affect dividend tax? A closer look at potential impacts
Dividends have long been an important income stream for investors, business owners, and retirees alike.

Six months left – Are you missing out on increasing your state pension?
The deadline for voluntary National Insurance (NI) contributions is fast approaching, leaving you with little time to fill gaps in your NI record to maximise your state pension.

How to avoid Lifetime ISA withdrawal penalties from HMRC
Lifetime ISAs (LISAs) have become a popular way to save for a first home or retirement, offering a 25 per cent Government bonus on contributions.
However, if you withdraw money for anything other than these specific purposes, you could face penalties from HM Revenue & Customs (HMRC).
A freedom of information (FOI) request has revealed that in the 2022-23 tax year, the average penalty for the top 25 unauthorised withdrawals was £11,000.
Over 15,000 savers had to hand back £1,000 or more in penalties, while more than 6,000 paid over £2,000 and 851 paid over £5,000.
With the total value of LISA penalties reaching over £75 million in 2023-24, up 40 per cent from the previous year, it is clear that many savers are feeling the sting of these charges.
So, how can you avoid becoming part of these statistics?
What are the LISA rules?
The 25 per cent withdrawal penalty is in place to ensure that LISAs are used for their intended purposes: buying a first home (worth £450,000 or less) or saving for retirement, which you can access tax-free from age 60.
Any other withdrawals, unless due to terminal illness, will incur the charge.
The penalty removes some of your own savings, making it more imposing than it first appears.
Plan your savings carefully
If you are considering using a LISA to buy a first home, it is vital to be aware of the £450,000 property price cap.
House prices have risen considerably, particularly in the south of England, where many properties exceed this threshold.
In London, for example, average house prices in areas like Barnet (£592,597), Camden (£858,303), and Hackney (£563,111) are far beyond the cap.
Even outside the capital, areas such as Cambridge (£487,493), Oxford (£475,247), and Guildford (£516,489) have average property prices above the LISA limit, meaning you could be forced to either buy below the cap or face the penalty if you exceed it.
Build an emergency fund
One of the key reasons savers tap into their LISA early is due to unexpected financial pressures, whether that is an emergency or a change in circumstances.
To avoid being tempted to withdraw from your LISA and incur a penalty, an emergency savings fund should be created that you can access when needed.
This way, your LISA can remain untouched until it is time to use it for its intended purpose.
Think long-term with your retirement savings
If your goal is to use your LISA for retirement savings, make sure it forms part of a broader retirement strategy.
Since you won’t be able to access the funds without penalty until age 60, other accessible savings or pension schemes should be available to you that allow for flexibility.
That way, you can keep your LISA intact for the long haul without risking penalties.
Keep track of your contributions
You can contribute up to £4,000 per year to a LISA, with a maximum Government bonus of £1,000 annually.
Staying on top of these limits can help you optimise your savings while making sure you are not relying too heavily on them, which could lead to early withdrawals and penalties.
Stay informed
Keep yourself up to date with any changes to LISA rules or allowances.
The ever-changing property market can affect your plans for using your LISA, so staying informed will help you in the long run and give you a better chance of avoiding penalties.
If you are looking for advice on how to manage your LISA and avoid penalties, contact our team today for expert guidance.

What pension tax reforms could we see in the October Budget?
For months, there was speculation that the upcoming Budget could bring major changes to pension tax relief, specifically a move towards a flat rate of tax relief for pension contributions.
While nothing has yet been confirmed, reports in The Guardian suggest that these plans have now been dropped, leaving many wondering what this means for the future of pension policy.
Why would pension tax reforms be abandoned?
If the flat-rate tax relief proposal is indeed scrapped as suggested by reports in The Guardian, it could be due to the impact it would have had on public sector workers, many of whom benefit from generous defined benefit (DB) pension schemes.
These schemes, which are largely unavailable in the private sector, offer guaranteed retirement income.
A change to the tax relief system would result in higher tax bills for many workers.
What does this mean for taxpayers?
While the flat rate of tax relief looks to have been shelved, it does not mean pensions are completely off the table.
The Government may still look for other ways to reform the system or raise revenue from pensions.
For now, however, higher earners will continue to enjoy tax relief at 40 or 45 per cent, and those in defined benefit schemes look likely to be safe from additional tax charges to their contributions.
The Chancellor might still consider smaller changes that affect the way pensions are taxed or the contribution limits.
For example, the annual allowance, which is currently set at £60,000, could be reduced, especially for higher earners.
This is the maximum amount an individual can contribute to their pension with tax relief each year.
Reducing this limit would raise revenue for the Treasury and might still be seen as a way to target wealthier individuals without causing widespread disruption.
Another possible area for reform could be the 25 per cent tax-free lump sum, which allows retirees to withdraw a portion of their pension pot without paying any tax.
Reducing or capping this benefit could be an alternative way to generate tax revenue without directly increasing income tax or National Insurance.
What about employer contributions?
There have also been discussions about increasing mandatory employer pension contributions.
Currently, employers are required to contribute at least three per cent to their employees’ pensions.
If the Government follows Australia’s example, where employers contribute as much as 12 per cent, businesses could face significant cost increases.
While this policy is not expected in this Budget, it remains a possibility for future reform.
A move towards UK investment?
Labour has expressed interest in encouraging pension funds to invest more in the UK economy.
While there’s no specific policy announcement yet, there has been talk of requiring a portion of pension funds to be invested in UK assets.
This could be part of a broader effort to boost domestic investment and stimulate economic growth, but it raises questions about whether such a mandate would be in the best interests of pension savers.
Pension fund managers will need to weigh the potential risks and rewards of being required to invest in specific UK assets, particularly if they involve higher-risk investments.
What to watch for next
Chancellor Rachel Reeves has until 25 October to submit her final resolution on changing the Government’s fiscal rules ahead of the Budget, so we will likely know more about her final plans for pensions by then.
Even though it looks probable that major pension tax reforms have been shelved for now, the Government’s need to raise revenue remains.
Pensions are an attractive target for future changes, and individuals and businesses need to stay informed about any potential reforms.
If you are a higher earner or a business owner concerned about how future changes could impact your pension contributions, now is a good time to review your pension strategy.
Speak with our team to ensure you are prepared for any potential changes in pension policy.
Social

Recent Posts
- How do Companies House address suppression changes impact company directors?
- VAT fraud – Avoid getting caught out by phishing attacks
- Why an apprenticeship in accountancy could be your best career move
- Are you missing out? The deadline to boost your State Pension is approaching
- Millions miss Self-Assessment deadline – A reminder to prepare for 2026
Archives
- February 2025
- January 2025
- December 2024
- November 2024
- October 2024
- September 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
Categories
- Accountancy
- Accounting
- Agriculture
- Apprentices
- Asset and Wealth Management
- Ben Allen
- Blog
- Blogs
- Bookkeeping
- Brexit
- Budget
- Business
- Business Advice
- Business Advice News
- Business Blog
- Business News
- Business Start-ups
- Capital Allowances
- Cash Flow
- Cash flow management
- Charities
- Corporate Tax
- Corporation Tax
- Covid-19 Home working and expenses
- Economy
- Employees
- Employment
- Employment and payroll
- Family Businesses
- Finance
- Financial News
- Financial Planning
- Fraud
- Funding
- Government Funding
- Grants
- Guide
- HMRC
- Home working and expenses
- Income Tax
- Inflation
- Inflation / Interest Rates
- Inheritance
- Insurance
- Investment
- Latest Business News
- Latest News
- Legal
- leisure and hospitality
- Loans
- Making Tax Digital
- Money
- MTD
- News
- PAYE
- Payroll
- Pension
- Pensions
- Personal Tax
- Personal taxes and finances
- Property
- Property News
- R&D
- Redundancy
- Scam
- Self Assessment
- Self Employed
- SME
- SMEs
- SMEs / Business
- Start ups
- Tax
- Tax Blog
- Tax News
- Tax Planning
- Tourism
- Uncategorized
- VAT
- VAT and MTD
- VAT deferral
- Wages
- Wealth Management