In this edition of eNews, we look at the Chancellor’s confirmation that the ISA allowance won’t be reduced, recommendations for reforming the Household Support Fund, rising borrowing figures potentially leading to tax, and action taken against employers who fail to comply with the National Living Wage (NLW). There is also news on measures to make small firms more energy efficient and advisory fuel rates for company cars to update you on.
- Chancellor confirms ISA allowance won’t be cut
- Household Support Fund ‘needs reforming’
- Higher borrowing figures ‘increase prospect of tax rises’
- HMRC names and shames over 500 employers for failing to pay NLW
- HMRC Small firms held back from energy efficiency by upfront costs
- Advisory fuel rates for company cars
Chancellor confirms ISA allowance won’t be cut
Chancellor Rachel Reeves has confirmed that the annual tax-free ISA allowance won’t be reduced from £20,000.
Ms Reeves stated that she ‘absolutely wants to preserve’ the £20,000 tax-free investment people can make every year.
The Chancellor is set to launch a consultation into how the UK ISA market could be overhauled, and did not rule out changes to cash ISAs.
The overall annual savings limit remains at £20,000 for 2024/25 and 2025/26. Investors are allowed to invest in a cash ISA, an investment ISA, an Innovative Finance ISA or a combination of the three, subject to not exceeding the overall annual investment limit.
Investors are able to transfer their investments from a stocks and shares ISA to a cash ISA (or vice versa).
The Chancellor said:
‘I do want people to get better returns on their savings whether that is a pension or their everyday savings. At the moment a lot of money is put into cash or bonds when it could be invested in equities or stock markets and earn a better return from it.’
Internet link: CityAM article
Household Support Fund ‘needs reforming’
Think tank the Resolution Foundation has stated that the Household Support Fund needs renewing and reforming to ensure it continues to help families through the cost-of-living squeeze.
The Fund has helped millions of families in England with their food, energy and water bills since it was introduced in 2021. However, the Foundation stated that its effectiveness has been ‘hampered’ by ‘chaotic and declining funding’.
It says that funding needs to be put on a ‘firmer footing’, and urged the government to use the upcoming Spending Review to ensure the long-term future of the Household Support Fund.
Alex Clegg, Economist at the Resolution Foundation, commented:
‘The Household Support Fund has been a vitally important scheme, helping millions of families with unexpected costs and rising bills through the pandemic and cost of living crisis.
‘But its success has been hampered by chaotic and declining funding, and a lack of public awareness. This risks households in need of urgent help being left unaware and unable to access support.’
Internet link: Resolution Foundation website
Higher borrowing figures ‘increase prospect of tax rises’
Experts have warned that recent higher than anticipated government borrowing figures have increased the prospect of Chancellor Rachel Reeves raising taxes at the next Budget.
Official data showed that government borrowing was £20.2 billion in April, which was an increase of £1 billion from the same month in 2024.
Experts have warned that weaker economic growth anticipated over the coming months could affect tax receipts, which would pile pressure on government finances.
The Chancellor aims to bring stability to the UK economy by paying for day-to-day government costs through tax income rather than borrowing and getting debt falling as a share of national income by the end of the current parliament.
Ruth Gregory, Deputy Chief Economist at Capital Economics, said:
‘With the Prime Minister announcing a partial U-turn on the cut to winter fuel payments, the dilemma faced by the Chancellor over how to deal with increased spending pressures in environment of low economic growth and high interest rates hasn’t gone away.’
Internet link: BBC article
HMRC names and shames over 500 employers for failing to pay NLW
HMRC has named and shamed over 500 UK employers for failing to pay the National Living Wage (NLW) or the National Minimum Wage (NMW).
The employers will now be forced to repay over £7.4 million to nearly 60,000 workers who had been left out of pocket.
Employers who left nearly 60,000 workers over £7.4 million out of pocket must now repay their employees.
The rates for NLW increased to £12.21 an hour on 1 April and the government says this put £1,400 into the pockets of full-time workers on NLW.
Justin Madders, Minister for Employment Rights, said:
‘There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don’t pay their employees what they are owed.
‘Ensuring workers have the support they need and making sure they receive a fair day’s pay for a fair day’s work is a key commitment in our Plan for Change. This will put more money in working people’s pockets, helping to boost productivity and ending low pay.’
Internet link: GOV.UK
HMRC Small firms held back from energy efficiency by upfront costs
Small firms are keen to become more energy efficient, but they are being held back by the high upfront cost of green investment, according to the Federation of Small Businesses (FSB).
The FSB has outlined a path to help cut carbon emissions and costs for small firms in a report.
The FSB’s report found that small businesses are keen to make investments in sustainability and to become more energy efficient through reducing their carbon footprints.
The business group says small firms across the country should be given access to the Business Energy Advice Service, which offers tailored support including free energy assessments and match-funded grants for improvements.
It also says that future solar panel grant support offered by the government should be available to commercial properties as well as domestic properties.
The current VAT zero rate for installing energy-saving materials should include commercial premises, the FSB adds.
Tina McKenzie, Policy Chair at the FSB, said:
‘The incredible inventiveness and entrepreneurialism among the small business community will be a powerful tool when it comes to cutting carbon, growing the green economy, and hitting the country’s net zero targets – if small businesses are given the tools and support they need to thrive.
‘The sustainable economy has absolutely enormous potential for growth in coming years. This is growth that we as a country need, and small firms must be given the chance to benefit from the opportunities on offer.’
Internet link: FSB website
Advisory fuel rates for company cars
New company car advisory fuel rates have been published and took effect from 1 June 2025.
The guidance states: ‘you can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 June 2025 are:
| Engine size | Petrol |
| 1400cc or less | 12p |
| 1401cc – 2000cc | 14p |
| Over 2000cc | 22p |
| Engine size | Diesel |
| 1600cc or less | 11p |
| 1601cc – 2000cc | 13p |
| Over 2000cc | 17p |
| Engine size | LPG |
| 1400cc or less | 11p |
| 1401cc – 2000cc | 13p |
| Over 2000cc | 21p |
HMRC guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars
- require employees to repay the cost of fuel used for private travel.
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is 7p per mile.
If you would like to discuss your company car policy, please contact us.
Internet link: GOV.UK AFR
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.