With the Self-Assessment deadline approaching, we thought now would be a good time to highlight something that could catch many people off guard this year: the return of HMRC’s Direct Recovery of Debt (DRD) powers, a programme that allows them to recover unpaid tax directly from your bank account. What is Direct Recovery of Debt? The Direct Recovery of Debt scheme gives HMRC the power to recover unpaid tax debts of £1,000 or more directly from bank and building society accounts, including cash ISAs. This is not new. The scheme was first introduced in 2015 but paused during the pandemic. It has now been reinstated, with HMRC confirming that debt recovery activity will be stepped up in the months ahead. The aim is to target those who have ignored repeated requests to engage or settle their tax bills. HMRC has stated that DRD will only be used when: The debt is established, and appeal deadlines have passed The taxpayer has ignored multiple attempts by HMRC to make contact There are enough funds to pay the debt and still leave at least £5,000 across all accounts The taxpayer has been visited in person by HMRC before any recovery takes place Although there are safeguards, this remains one of HMRC’s strongest enforcement powers. Its reintroduction signals a clear message that debt collection efforts are intensifying. Why this matters now The 31 January Self-Assessment deadline is approaching. For many business owners, this period often coincides with other financial pressures. But if you have fallen behind on filing or payment, this year it is particularly important to act. Once a debt becomes established, meaning it is due and not under appeal, you could be on HMRC’s radar for DRD. Even if you believe there has been an error, ignoring letters or demands can make things worse. The key message is simple: do not let silence turn a small problem into a serious one. Engage early, clarify your position, and seek help if you need it. What to do if you are struggling to pay If you are facing financial pressure, there are options available. HMRC operates a Time to Pay scheme that allows individuals and businesses to spread tax liabilities over several months in manageable instalments.  The key is communication. If you can show that you are willing to pay and can afford a repayment plan, HMRC is usually open to negotiation. We can also play an important role here. We can: Review your cash flow and assess whether a repayment plan is appropriate Communicate directly with HMRC on your behalf Help you prepare the information HMRC needs to agree realistic terms Keep your records accurate to prevent disputes or delays Acting early gives you more control and avoids the stress of HMRC enforcement. By way of reassurance, HMRC uses Direct Recovery of Debt only as a last resort. It applies to taxpayers who have ignored repeated correspondence and face-to-face visits. If you are proactive, file your returns on time, and stay in touch with your accountant, you are highly unlikely to be affected. The greatest risk lies in doing nothing. How we can help Whether you need help filing your return, setting up a Time to Pay plan, or building a more predictable tax strategy for the year ahead, we can support you every step of the way. To see how we can help you, call our team on 01709 589 439 or book a discovery call with Frances .

The chancellor has delivered the Autumn Budget, outlining tax changes and spending plans that will shape the next few years for business owners. While much of the announcement confirmed earlier leaks and forecasts, there are several measures that directly affect small and medium-sized enterprises (SMEs) and family-run firms. Below is a clear breakdown of the changes most likely to matter to you, along with what they could mean in practice. Wage rises every business needs to prepare for From April 2026 , the legal minimum wage for over-21s will rise to £12.71 per hour , with the 18–20 rate increasing to £10.85 . For many businesses with close-knit teams, wage costs form a significant part of everyday spending. These increases will have a noticeable impact on payroll budgets, especially in sectors such as retail, hospitality, trades, personal services, and care. What to do now: Review staffing levels and rotas Forecast how changes affect your cash flow from April 2026 onwards Consider revisiting pricing, service packages, or operational efficiencies The Budget also confirmed that employer National Insurance thresholds will remain frozen until 2031 , which means employer NI costs will continue to rise as wages increase. Tax rises through frozen thresholds Income tax thresholds and National Insurance thresholds for employees are now frozen until 2031 . As wages rise over time, more individuals will move into higher tax bands. For employers, this means: Higher payroll tax exposure for staff Greater importance on understanding the true cost of salary reviews A stronger need for accurate forecasting For owner-managers drawing a mix of salary and dividends, planning around these freezes will be essential. Dividend, savings, and property income tax increases The Budget confirmed that: Dividend tax rates will rise by 2 percentage points from April 2026 Income tax on rental and savings income will rise by 2 percentage points from April 2027 This matters for: Directors who pay themselves partly through dividends Owners with rental properties tied to their business or family wealth Anyone relying on investment income as part of their household finances These increases make tax-efficient profit extraction more important than ever. Salary sacrifice changes affecting employer benefits From April 2029 , the amount an employee can sacrifice from their salary for pension contributions free of National Insurance will be capped at £2,000 per year . This affects businesses that use salary sacrifice as a benefit for directors or key staff. You may need to revisit your remuneration strategy ahead of 2029. Rising costs for importing supplies The tax exemption for overseas packages under £135 will be scrapped from 2029. Many SMEs rely on lower-value imports for: Packaging Tools and equipment Replacement parts Online-sourced stock Removing the exemption means these items will become more expensive. Reviewing your supply chain and local alternatives may help control costs. Alcohol, tobacco, and sugary drink duty rises From 1 February 2026 , alcohol duty will increase in line with RPI inflation. This will affect businesses selling alcoholic drinks as part of their offer, such as restaurants, bars, cafés, and event venues. From January 2028 , the sugar tax will be extended to pre-packaged milkshakes and lattes . If your business sells bottled or canned sweetened drinks, suppliers are likely to pass on the cost. Fuel duty freeze – a small relief for business travel The current 5p cut in fuel duty has been extended until September 2026 . While modest, this does give some stability for businesses that rely on: Deliveries Site visits Mobile services Tradespeople travelling between jobs However, a new mileage-based tax for electric and plug-in hybrid vehicles will begin in April 2028 . If your business is moving towards an electric fleet, factor this into long-term planning. Support through apprenticeships and training There is positive news for employers developing young talent. Apprenticeship training for under-25s will be free for SMEs , making it more accessible for smaller firms to bring in and train new staff. For businesses aiming to build long-term capability, this could be a valuable opportunity. Changes affecting household budgets and customer spending While many Budget measures target business taxation, everyday households will also feel the impact of: Frozen income tax thresholds to 2031 The minimum wage rise State pension increase of 4.8% Changes to child-related benefits What this Budget means overall The Autumn Budget brings a continued mix of rising wage costs, increasing tax pressure, and a handful of supportive measures for business growth. For you, the most important shifts will likely be: Higher payroll costs from 2026 Higher employer NI costs each year through to 2031 Tax changes affecting directors’ pay and family investment income More expensive low-value imports Duty rises that affect small retailers and hospitality Opportunities through apprenticeship support Now is the right time to review forecasts, revisit your pricing and profit structure, and check you’re making the most of the reliefs and allowances available. How we can help We specialise in supporting family-run and owner-managed businesses. We can help you understand tax changes early and build plans that protect profit and cash flow. To work with us, call our team on 01709 589 439 or book a discovery call with Frances . We'd love to hear from you.