In this edition’s eNews, HMRC warns homebuyers over bogus SDLT claims, news on the government’s crackdown on late payments, the latest economic confidence, charges exporters to the US will face later this month, Tax-Free Childcare, the latest data from a weakening jobs market, and HMRC’s campaign on personal expenditure on self assessment tax returns. There is also news on the tax authority’s changes to late and penalty interest rates and the deadline for extending Child Benefit claims for 16-19 year olds to update you on.
- Homebuyers get bogus SDLT claims warning
- Crackdown on late payments launched in plan to back small businesses
- Economic confidence plummets to all-time low
- SME exporters hit by new US customs charges
- HMRC urges families to save money with Tax-Free Childcare
- UK labour market continues to weaken
- HMRC targets personal expenditure on self assessment
- HMRC cuts late payment interest rate to 8%
- Deadline approaching to extend teen Child Benefit claims
Homebuyers get bogus SDLT claims warning
Homebuyers are being warned to avoid Stamp Duty Land Tax (SDLT) scams, following a landmark Court of Appeal decision.
HMRC is warning buyers to be vigilant of tax agents offering to secure (SDLT) repayments on their behalf where repairs are needed to a property they have bought.
Some agents have suggested that, for a fee, they can reclaim SDLT the buyer has already paid by saying that the property is non-residential because it’s uninhabitable.
But HMRC says that making claims of this kind often leave the homeowner liable for the full amount of SDLT, plus penalties and interest.
A recent Court of Appeal judgment in the case of Mudan & Anor v HMRC has confirmed that housing in need of repair is chargeable at the residential rates of SDLT, and that repayment claims based solely on a property’s condition are not valid.
HMRC says it is taking decisive action on spurious SDLT repayment claims, using civil and criminal powers.
Anthony Burke, HMRCs Deputy Director of Compliance Assets, said:
‘The Court of Appeal’s decision is a major win, protecting public funds. Homebuyers should be cautious of allowing someone to make a SDLT repayment claim on their behalf. If the claim is inaccurate, you could end up paying more than the amount you were trying to recover.’
Internet link: HMRC press release
Crackdown on late payments launched in plan to back small businesses
The government is set to tackle late payments to businesses with significant legislative reforms.
Late payments cost the UK economy £11 billion a year and shut down 38 businesses every day, according to the government.
The new laws are set to give stronger powers to the Small Business Commissioner to empower them to wield fines, worth potentially millions of pounds, against the biggest firms who persistently choose to pay their suppliers late.
Following the legislation, the UK will have the toughest late payments laws in the G7, the government added.
The legislation is part of reforms to back small businesses and unlock growth as part of the Plan for Change.
Business and Trade Secretary Jonathan Reynolds said:
’This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best – growing our local economies.
‘Our Small Business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need.
‘This is our Plan for Change in action, putting more money in people’s pockets, boosting local communities and ensuring Britain is a great place to do business and thrive.’
Internet link: GOV.UK
Economic confidence plummets to all-time low
Economic confidence amongst the UK’s business leaders has dropped to an all-time low, according to data from the Institute of Directors (IoD).
The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, fell to -72 in July 2025 from -53 in June.
This exceeds the previous record low of -69 in April 2020 and marks the lowest reading of the Index since its introduction in July 2016.
Business leader confidence in their own organisations also fell to -9 in July 2025, from +3 in June. This is the second lowest reading of this indicator since its introduction in July 2016.
Anna Leach, Chief Economist at the IoD, said:
‘UK business leaders have entered the summer with the lowest confidence levels we’ve seen since our records began in 2016.
‘Companies continue to battle cost increases – particularly arising from the national minimum wage and National Insurance changes – and many are frustrated that while the government has been quick to raise costs for business, it has been much slower to deliver improvements to the wider business environment.
‘Last year, damaging speculation around tax rises in the lead-up to the 2024 Budget caused many firms to pause investment and hiring decisions – contributing to six months of near-zero economic growth. We’re now living with the economic consequences of those tax hikes, even as uncertainty around future costs once again builds.’
Internet link: IoD website
SME exporters hit by new US customs charges
President Trump’s decision to charge import duties for low value goods entering the US is a major blow to the UK’s SME exporters, says the British Chambers of Commerce (BCC).
Under an Executive Order issued by the President, duties will be payable on goods valued under $800 from 29 August 2025. These will be in line with the rates applied to other goods from each country in accordance with its tariff rates.
For most UK goods export sectors this means the tariff rate they used to have plus the additional 10% reciprocal rate applied to most UK goods since April.
Alternatively, for the first six months only, a specific rate of $80 per item would apply to low value packages from the UK entering the US. After that period, the duties described above will be enforced on all packages of UK origin in scope.
William Bain, Head of Trade Policy, said:
‘This development has been coming for several months but is still a major blow to UK exporters to the US. Smaller firms and sole traders, who have invested strongly in e-commerce sales internationally, will be worst hit.
‘But the UK is in a comparatively advantageous position in terms of these additional duties compared with those faced by other countries.
‘The EU is also likely to scrap its de minimis threshold by 2028, and the UK government is launching a review into removing the threshold here too.’
Internet link: White House website BCC website
HMRC urges families to save money with Tax-Free Childcare
HMRC is encouraging working families to save money by signing up to Tax-Free Childcare and using one of the thousands of facilities accepting it as payment.
Tax-Free Childcare means working families can save up to £2,000 annually for each child up to the age of 11, and £4,000 for a disabled child up to the age of 16, when they’re paying for their childcare.
There are now 75,000 childcare settings accepting Tax-Free Childcare as payment including nurseries, registered childminders, holiday activity clubs. In addition, when school starts back in September it includes before and after school clubs.
Families yet to sign up for Tax-Free Childcare can do it now to pay for their summer activities or start paying into it ready for breakfast and after-school clubs when the new term starts.
Myrtle Lloyd, HMRC’s Chief Customer Officer said:
‘Whether your child is interested in football, climbing, crafting or dance, there’s a huge variety of childcare settings accepting Tax-Free Childcare. Children can learn something new and have fun with their friends while their parents save on their childcare bills. Visit GOV.UK to sign up today.’
Internet link: HMRC press release
UK labour market continues to weaken
The UK labour market continues to weaken, shedding 149,000 jobs over the past 12 months, according to the latest data from the Office for National Statistics (ONS).
The number of vacancies, which has now been falling steadily since early 2022, fell to 718,000 in June, which is a fall of 44,000 for the quarter.
Payrolled jobs are still falling fastest in the low paying hospitality sector, suggesting that the mini shock of the employer National Insurance contributions (NICs) and National Living Wage rise combination in April is still feeding through.
Pay growth continues to weaken too, but at a slower pace than the jobs market. Annual private sector wages grew by 4.8% in the year to June – down from 5.3% the year before.
Hannah Slaughter, Senior Economist at the Resolution Foundation, said:
‘The UK’s post-pandemic labour market was red hot. But that period is officially over – the labour market is loose and getting looser, having shed 165,000 payrolled jobs over the past eight months.
‘These jobs falls continue to be concentrated in low paying sectors like retail and hospitality. This reinforces the government’s decision to take a cautious approach to the minimum wage next year as the economic fallout from the recent employer NICs rise continues.’
Internet link: ONS website Resolution Foundation website
HMRC targets personal expenditure on self assessment
HMRC will run a digital campaign to ensure that self assessment taxpayers do not claim tax relief for personal expenditure on 2025/25 tax returns, according to the Institute of Chartered Accountants in England and Wales (ICAEW).
HMRC has told the ICAEW that the digital campaign follows a trial in 2024.
This trial generated over £27 million in tax revenue and ‘highlighted reporting of disallowable private use in business expenditure’.
HMRC says that it will be opening more enquiries to check that sole traders, partners and landlords only claim deductions for business-related expenses. This includes ensuring that mixed use expenses are apportioned correctly between business and personal use, which considers the circumstance of the particular tax year.
The legislation states that in order for an expense to be deductible, it must be ‘incurred wholly and exclusively for the purposes of the trade’.
Where an identifiable part of an expense is incurred for trade purposes, that part of the expense is an allowable deduction. It is important that the method of apportionment used is:
- supported by records (eg, mileage records); and
- applied consistently from one tax year to the next.
It must also be the case that the expense is not capital in nature. Capital allowances are available for qualifying expenditure on plant and machinery.
Taxpayers have the option to use flat rate ‘simplified expenses’ to work out allowable expenses on motor costs, use of home and private use of business premises.
Internet link: ICAEW website
HMRC cuts late payment interest rate to 8%
HMRC will reduce late payment and repayment interest rates from 27 August following the 0.25% cut in the base rate earlier in the month.
The Bank of England cut the base rate to 4% on 7 August, triggering a 0.25% cut in HMRC interest rates which are pegged to the base rate.
From 27 August, the late payment interest rate will be cut to 8.0% from 8.25%.
The repayment interest rate will be cut to 3% from 3.25% from 27 August.
HMRC late payment interest is set at base rate plus 4%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.
Following the cut to the base rate, Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), said:
‘The small business community will now look to lenders to reflect this rapidly across their offering, cutting the cost of finance. They will also want to see the Bank of England set out a clear path for the rest of the year, with a further easing in the base rate badly needed to reduce the financial strain they are under.
‘There will be no growth in the economy overall unless small firms are able to expand and fulfil their potential, but their confidence is still firmly in negative territory, according to our research.
‘Lower borrowing costs will encourage small businesses to invest, giving the wider economy a much-needed fillip.’
Internet link: GOV.UK FSB website
Deadline approaching to extend teen Child Benefit claims
Parents have less than two weeks to tell HMRC their 16-19-year-old is continuing education or training, or their Child Benefit payments will stop.
Hundreds of thousands of teenagers will decide on their future after they receive their GCSE results on 21 August 2025.
For parents of 16-19-year-olds who haven’t yet extended their claim, Child Benefit payments will stop after 31 August. If their child is going to continue in approved education or training, parents can continue receiving Child Benefit and HMRC is urging them to extend their claim now.
Parents can quickly and easily extend their Child Benefit claim online on or via the HMRC app.
According to HMRC, more than 509,000 parents have extended their claim digitally so far, with the changes applied to their record without the need to wait on the phone.
Child Benefit is worth up to £1,354.60 a year for the first or only child and up to £897 a year for every additional child.
Myrtle Lloyd, Chief Customer Officer at HMRC, said:
‘Teenagers can be expensive and Child Benefit is an important source of income for your household. As soon as you know what your teen is doing in September, don’t miss out. You can extend your claim in minutes through the HMRC app or online to ensure your payments continue.’
Internet link: HMRC press releasee
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.