The government’s Making Tax Digital (MTD) initiative is reshaping how the UK’s self-employed and landlords report income. The system aims to make tax administration more accurate, more efficient, and easier for everyone to manage. From April 2026, the first group of taxpayers will be required to keep digital records and send quarterly submissions through compatible software instead of a single annual return. By September 2025, this shift is no longer on the horizon as it is close enough to plan for. HMRC continues to expand the pilot programme, allowing early joiners to test submissions before full rollout. Many small businesses and landlords are using this time to review bookkeeping processes, select software, and begin digitising their financial records. Making Tax Digital (MTD) The MTD for Income Tax Self Assessment (ITSA) rules apply to individuals with total business and property income above £50,000 from April 2026. A second phase, covering those earning between £30,000 and £50,000, will follow in April 2027. Under this new system, taxpayers must maintain digital records of their income and expenses. They must also submit quarterly updates to HMRC using MTD-compatible software. These submissions will replace the annual Self Assessment return for those within scope. According to HMRC’s guidance updated in September 2025, the pilot programme remains open to eligible participants. Volunteers who sign up early can test digital submissions and ensure their systems meet the technical requirements. HMRC lists approved software providers that integrate directly with its systems, including options for both individuals and agents. The aim of MTD is to improve accuracy and reduce errors in reporting. By collecting data throughout the year, taxpayers will have a clearer picture of their liabilities and fewer surprises at year-end. This steady flow of information also allows HMRC to identify discrepancies earlier, making the entire system more transparent. How it impacts you The impact of Making Tax Digital will depend on how you currently manage your records. For those already using cloud-based accounting software, the transition may feel natural. Your existing system might already meet MTD standards or only need minor adjustments. For others still relying on spreadsheets or manual methods, this is the time to upgrade. Quarterly reporting will bring a new rhythm to financial management. Instead of gathering documents once a year, businesses will maintain regular digital updates. This encourages more consistent oversight of income, expenses, and tax estimates. For many clients, that means better budgeting and fewer unexpected tax bills. Landlords with multiple properties may benefit most from the digital approach. Tracking rental income, repair costs, and mortgage interest through one platform reduces errors and simplifies year-end reconciliation. For sole traders and contractors, submitting quarterly figures also means easier cashflow forecasting and more accurate profit tracking throughout the year. MTD for ITSA will not change how much tax is owed, but it will change how information is delivered. Those who prepare early will find the process less disruptive and will benefit from stronger record-keeping in the long term. What you can do Start by checking whether your total business or property income exceeds £50,000. If it does, you will be required to join MTD from April 2026. Even if you fall below this level, it is worth preparing now, as the scope will widen in 2027. Next, review your bookkeeping setup. If you currently use spreadsheets, consider switching to MTD-compatible software. HMRC maintains a list of approved providers that connect directly to its systems. Cloud-based solutions such as Xero, QuickBooks, and FreeAgent allow you to record transactions, store receipts, and generate reports automatically. If you are eligible, consider joining the MTD pilot scheme before the end of the year. Doing so gives you time to learn the process, test submissions, and resolve any technical issues before the system becomes mandatory. Early participation also helps identify any workflow changes needed within your business. Keep in mind that digital compliance requires consistent habits. Upload receipts regularly, reconcile bank transactions monthly, and review your accounts quarterly. This level of organisation not only ensures compliance but also provides more accurate insight into your financial position. At Ledgr Accountants, we help clients set up MTD-compatible systems, train teams to use them effectively, and monitor submissions throughout the year. Preparing now means you can move into the new system confidently, with reliable data and complete peace of mind. Ish Mukit Senior Accountant References https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax https://www.gov.uk/guidance/sign-up-your-business-for-making-tax-digital-for-income-tax

By September 2025, the UK’s Public Finances remain under close scrutiny. The latest data from the Office for National Statistics (ONS) show that government borrowing has eased slightly compared with the same period last year, but the overall picture is still tight. Public sector net borrowing for August 2025 was around £12 billion, down from the previous year’s £13.5 billion. Total public debt remains above 95 percent of GDP, showing how little room there is for large spending increases or tax cuts ahead of the Autumn Statement. Debt interest costs have also stayed elevated due to the higher base rate and inflation-linked bond payments. This continues to limit how much flexibility the Treasury has when planning its budgets. As the government approaches its mid-year review, the balance between keeping borrowing under control and supporting the economy remains delicate. Public Finances The Public Finances update from the ONS confirms that the government has borrowed less than forecast for the first five months of the 2025–26 financial year. The improvement is largely due to higher tax receipts and moderate spending restraint. Income tax and corporation tax receipts have risen as wages and profits hold steady, but spending on welfare and debt servicing remains heavy. The Office for Budget Responsibility (OBR) has noted in its September commentary that the outlook for the remainder of the year remains challenging. Even though borrowing is lower than last year, it is still above pre-pandemic levels. The OBR’s latest projections suggest that the Chancellor has only limited fiscal headroom ahead of the Autumn Statement, meaning that significant tax cuts are unlikely. Debt interest costs alone are now absorbing more than eight percent of total government revenues which is a record in modern times. Meanwhile, the HM Treasury public finances bulletin reiterates that departmental budgets are feeling the squeeze from inflation. Although price pressures have eased from their 2023 highs, the cost of delivering public services has risen faster than planned. The Treasury has urged departments to prioritise productivity and savings to help meet spending targets. Investment continues to focus on infrastructure, green energy, and digital transformation projects that are expected to support longer-term growth. Taken together, these sources show a mixed fiscal landscape. Borrowing is improving, but debt is high, interest payments are heavy, and economic growth remains subdued. The government’s challenge over the next six months will be maintaining fiscal discipline while finding space for measures that encourage business confidence and investment. How it impacts you For households and business owners, the government’s approach to its Public Finances has direct consequences. A cautious stance on borrowing means there is less scope for sweeping tax reliefs or new support schemes in the short term. For individuals, that likely means steady personal tax thresholds and continued pressure on disposable income as inflation and interest rates remain elevated. For small businesses, tighter public spending can lead to slower payment cycles on government contracts and fewer new projects commissioned through local authorities. However, it also brings a measure of economic stability. Controlling debt helps to prevent sudden policy changes or emergency cuts, allowing firms to plan with more confidence. Contractors, landlords, and self-employed individuals will also watch the fiscal situation closely. The Chancellor’s decision on whether to prioritise growth incentives or deficit reduction in the Autumn Statement will influence tax planning, investment appetite, and consumer demand for the remainder of the year. What you can do Understanding the broader fiscal picture is useful for both short-term decisions and long-term planning. For businesses, now is the right time to review budgets, cashflow forecasts, and investment plans ahead of the Autumn Statement. If borrowing remains restrained, government policy is unlikely to deliver major tax changes before the end of the tax year, which makes this a good moment to strengthen balance sheets and reduce unnecessary costs. Individuals should continue planning around existing allowances and thresholds. Reviewing pension contributions, ISA savings, and dividend strategies before April 2026 ensures that you are using the current system to its full advantage. For landlords and contractors, it is sensible to keep digital records up to date, as HMRC’s focus on real-time data and compliance continues to grow. At Ledgr Accountants, we help clients interpret these macroeconomic signals and apply them practically. Whether you are forecasting for your business or managing personal finances, staying informed about the state of the UK’s Public Finances provides the context for smarter, more proactive decisions. Thowsif Mukit Commercial Manager References   https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/august2025 https://assets.publishing.service.gov.uk/media/6874fa6f92691289bdb7d393/Public_Expenditure_Statistical_Analyses_2025.pdf https://obr.uk/docs/dlm_uploads/August-PSF-commentary.pdf

The summer of 2025 has brought a quieter rhythm to consumer lending across the UK. After two years of steady borrowing growth, the latest Bank of England figures reveal that households are becoming more cautious. The number of new credit card and loan applications fell again in July, marking the fourth consecutive monthly decline. This shift reflects not only tighter lending conditions but also the lingering impact of higher living costs. For small businesses and individuals alike, borrowing decisions now require more consideration than ever. Many households are focusing on repaying existing debt rather than taking on new credit. Meanwhile, higher interest rates continue to limit affordability, affecting both personal and business finance. Consumer Borrowing Trends The Consumer Borrowing Trends taking shape this summer tell a clear story of caution and restraint. Households are borrowing less, saving what they can, and focusing on paying down existing debt as the cost of credit remains high. The Bank of England’s Money and Credit report for July 2025, published in early August, shows that annual growth in consumer credit has slowed further to just over five percent. This marks one of the weakest readings since 2022. Lenders are reporting fewer applications for personal loans and new credit cards. Higher interest rates continue to discourage borrowing, with average rates for personal loans still around nine percent and credit card rates above twenty-three percent. Many households are also finding it harder to qualify for new credit, as banks apply tighter affordability checks to reflect the ongoing economic uncertainty. The ONS Quarterly National Accounts for April to June 2025 reveal that household savings have fallen slightly as living costs remain stubbornly high. The average saving ratio now sits just above six percent, down from the first quarter of the year. This suggests that families are relying more heavily on disposable income to cover essential spending and have less capacity to build financial buffers. Meanwhile, the HM Treasury Forecasts for the UK Economy, August 2025, highlight how this tightening in credit conditions is expected to slow consumer spending through the rest of the year. Although inflation has eased from its previous peaks, the lagging effects of higher rates are now visible in softer retail activity and lower household confidence. Together, these indicators point to a cautious period ahead, where consumers continue to prioritise stability over new borrowing. How it impacts you The current borrowing climate has a direct effect on everyday life. For individuals, the cost of credit has made large purchases less affordable. Buying a car, renovating a property or funding home improvements now requires higher monthly repayments, which can stretch household budgets. Even small borrowing decisions such as using a credit card to cover short-term gaps feel riskier in an environment where rates and charges are high. For business owners and contractors, personal borrowing often overlaps with business cashflow. Many use personal credit or savings to fund short-term expenses or investment. With borrowing costs rising, this approach has become less sustainable. It also highlights the importance of separating business and personal finances, ensuring each side is supported by clear records and proper planning. The cautious mood also affects demand for goods and services. As consumers reduce discretionary spending, smaller firms in retail, hospitality and trades may notice slower sales or delayed payments from customers. Recognising these trends early helps business owners adapt pricing, manage credit terms and plan for potential slowdowns in the months ahead. What you can do The best response to the current borrowing climate is to take stock. Review all existing credit agreements, from mortgages and personal loans to credit cards and overdrafts. Check whether your interest rates are fixed or variable, and understand when any promotional or discounted periods expire. Knowing these details helps you avoid surprises later. For households, aim to prioritise repayment of the most expensive debt first. High-rate credit cards and overdrafts erode disposable income quickly, and clearing them delivers immediate benefits. Even small overpayments can shorten repayment terms and reduce total interest paid. For business owners, reassessing financing structures is essential. Explore whether short-term borrowing can be refinanced into longer-term arrangements at more manageable rates. Maintaining accurate cashflow forecasts helps identify pressure points early. If customers are taking longer to pay, plan accordingly and review payment terms to protect liquidity. Finally, don’t face financial uncertainty alone. At Ledgr Accountants, we work with clients to build tailored cashflow and debt management plans. Understanding how broader borrowing trends affect your circumstances allows for better decision-making, whether you’re saving for growth or simply keeping things steady through the rest of 2025. Thowsif Mukit Commercial Manager References   https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/quarterlynationalaccounts/apriltojune2025 https://www.bankofengland.co.uk/statistics/money-and-credit/2025/july-2025 https://www.gov.uk/government/statistics/forecasts-for-the-uk-economy-august-2025

As the summer months settle in, many people take the opportunity to pause and reflect on their finances. For those running small businesses or working as sole traders, August can be an ideal time to look at pension contributions. The first quarter of the 2025/26 tax year has passed, but there is still plenty of time to plan ahead. A well-timed pension contribution can make a real difference to your overall tax position. It reduces taxable income, supports your retirement goals and can improve cashflow planning for the remainder of the financial year. Many clients use this point in the year to check whether their existing payments are on track with their income and profit forecasts. Pensions Contributions Pension contributions remain one of the most effective ways to reduce your tax bill while planning for the future. For the 2025/26 tax year, the annual allowance is £60,000 or 100% of your earnings, whichever is lower. Contributions within this limit qualify for tax relief at your marginal rate. Higher-rate and additional-rate taxpayers receive relief through Self Assessment, while basic-rate relief is added automatically by pension providers. For company directors and business owners, there is a further opportunity to make employer contributions through the company. These payments are usually deductible as a business expense, reducing Corporation Tax liabilities. To qualify, the contributions must be wholly and exclusively for the purposes of the business, meaning they should be reasonable and consistent with the size and profitability of the company. Sole traders and contractors can also benefit by contributing personally into a private pension or self-invested personal pension (SIPP). Even modest monthly payments can grow significantly over time, especially when combined with tax relief. Reviewing contributions mid-year makes it easier to adjust future payments rather than trying to catch up later. How it impacts you The impact of pension contributions goes far beyond retirement savings. For individuals, contributions directly lower taxable income, which may reduce exposure to higher tax bands or preserve allowances that are withdrawn as income rises. For example, those earning between £100,000 and £125,140 can use pension payments to bring income back below the threshold where the personal allowance begins to taper away. For company directors, pension contributions offer one of the most efficient ways to extract profits. Rather than drawing additional salary or dividends, a pension payment can provide long-term benefit while lowering the immediate tax burden. It is also a legitimate way to reward yourself for your efforts without increasing payroll costs. For many people, August is a good time to check progress. Income from the first few months of the tax year provides a reliable guide to what total earnings might look like. Using that data, you can decide whether your pension payments are on track or whether there is scope to add more before the financial year closes. This mid-year awareness often prevents the last-minute rush that leads to hasty and less strategic decisions in March. What you can do Start by reviewing your income and profit forecasts for the 2025/26 tax year. Once you have a clear picture, check how much of your annual allowance has already been used. If you are a company director, speak with your accountant about making employer contributions from the business rather than personal funds, as this can offer additional savings. If your earnings fluctuate, consider spreading contributions over several months rather than making one large payment at the end of the year. Regular payments help smooth cashflow and make it easier to manage both business and personal finances. Those who have not yet used their carry forward allowances from the past three tax years may also have scope to make larger payments without breaching limits. Reviewing these figures now ensures that no allowance is lost when the new financial year begins in April 2026. Finally, make sure that your pension provider and accountant are aligned. Keeping both informed means tax relief is claimed correctly and no payments are missed from the accounts. At Ledgr Accountants, we help clients plan contributions in a way that fits both personal goals and business strategy. It is a simple step that delivers long-term financial clarity. Ish Mukit Senior Accountant References https://www.gov.uk/tax-on-your-private-pension/annual-allowance https://www.gov.uk/workplace-pensions https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

The housing market in July 2025 sits at an interesting crossroads. After two years of rapid adjustment, conditions have steadied. Buyers and sellers are still active, but confidence is subdued. The pace of price growth has slowed across most regions, with data from the Office for National Statistics (ONS) showing average UK house prices broadly flat compared to the same period last year. Behind that stability lies a shift in behaviour where people are making fewer speculative purchases and more long-term, needs-based decisions. Mortgage rates remain the key influence on activity. The Bank of England’s Money and Credit report for June shows that new mortgage lending is below historic norms, reflecting the continued caution of both banks and borrowers. Fixed-rate deals remain in the mid-5% range, and affordability checks remain tight. This has cooled demand, particularly in high-value regions where household incomes simply cannot stretch further. Housing Market The latest ONS Private Rent and House Prices bulletin confirms that prices have stabilised nationally, but with strong regional contrasts. Markets in the North and Midlands continue to show modest growth, supported by better affordability and strong local demand. In contrast, the South and parts of London are seeing small declines as higher interest costs continue to bite. Mortgage activity remains restrained. The Bank of England’s June 2025 Money and Credit data shows that the number of mortgage approvals for house purchases has hovered just below 60,000 which is well under the long-term average. Buyers are taking longer to commit, and lenders are requiring larger deposits to offset risk. Many households are opting to remortgage rather than move, preferring stability over expansion. The rental market, however, is still running hot. Demand for rental properties remains high, driven by affordability pressures that have kept potential first-time buyers on the sidelines. The ONS reports continued rental price growth across all UK regions, adding pressure to tenants even as landlords face tighter margins due to higher mortgage costs and reduced tax relief. Construction activity has been steady but unspectacular. Builders have continued to grapple with rising material and labour costs, which has slowed the pace of new developments. The GOV.UK House Price Index summary for June 2025 notes that housing supply remains constrained, helping to underpin prices despite weak demand. The overall picture is one of stability as the market finds its balance in a higher-rate environment. How it impacts you For homeowners, the biggest challenge remains mortgage affordability. Those coming to the end of fixed-rate deals this summer are facing noticeable jumps in monthly payments. Refinancing at higher rates has become the norm, and the reality is that many households are having to adjust budgets to accommodate the increase. For landlords, the story is one of tightening margins. Higher borrowing costs and stricter lending criteria have made expansion more difficult. Many are focusing on efficiency by improving existing properties rather than buying more and re-evaluating their portfolio structures to manage tax exposure more effectively. Small business owners who use property as collateral also face a more cautious lending climate. The cost of finance is higher, and lenders are placing greater emphasis on cashflow projections and risk management. For those considering property purchases or refinancing commercial premises, this environment calls for more strategic planning and realistic forecasting. Despite the challenges, stability in prices offers reassurance that the market is not in decline. For buyers, this means less fear of falling values; for investors, it means reliable long-term returns once rates begin to normalise. The key is preparation where buyers should be aligning borrowing, investment, and budgeting decisions with realistic expectations. What you can do Navigating the housing market in 2025 is less about timing the market and more about financial readiness. Homeowners should begin reviewing mortgage options several months before their current deal expires. Even small differences in rates can amount to thousands of pounds in annual costs, so locking in early can make a meaningful difference. Those planning to buy should approach affordability with realism. Stress-testing mortgage offers at current rates and not historic lows. This ensures that repayments remain manageable if conditions stay tight into 2026. Taking time to strengthen credit profiles and build larger deposits will also improve access to better deals. For landlords, this is a good moment to reassess property ownership structures. Incorporation, refinancing, or better expense management can help offset the impact of higher interest costs and lower tax relief. Ensuring that rent reviews and expense tracking are up to date can further protect profitability. Businesses with property assets should plan ahead for renewals and refinances. High borrowing costs can affect both capital investment and working capital, so clear financial forecasting is essential. Proactively managing loan-to-value ratios and engaging lenders early will help maintain flexibility if rates start to fall later in the year. At Ledgr Accountants, we help clients interpret these housing and finance trends through a practical lens by providing clarity on cashflow, tax planning, and investment strategy so that property decisions feel steady, not stressful. Thowsif Mukit Commercial Manager References   https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/privaterentandhousepricesuk/june2025 https://www.bankofengland.co.uk/statistics/money-and-credit/2025/june-2025 https://www.gov.uk/government/statistics/uk-house-price-index-for-june-2025/uk-house-price-index-summary-june-2025

As we reach the middle of 2025, the question dominating the UK economy is how the Bank of England will steer monetary policy in the months ahead. After a year of persistent inflation and cautious rate decisions, June offers a critical moment to assess whether the central bank will hold steady, start cutting, or remain restrictive. For small businesses, sole traders, contractors, and households, the Monetary Policy Outlook is more than financial headlines. Interest rate decisions directly influence mortgage payments, borrowing costs, savings returns, and the overall pace of the economy. Monetary Policy Outlook In June 2025, inflation remains above the Bank’s 2% target, averaging around 3.2% in recent months. While this is an improvement from the peaks of 2022-23, the slowdown has not been sharp enough to allow policymakers to declare victory. Growth indicators, however, point to weakening momentum - consumer demand is softening, and business investment remains uneven across sectors. The Monetary Policy Committee (MPC) therefore faces a delicate balance. Cutting too soon risks inflation flaring up again, while keeping rates too high for too long risks stalling growth further. Current expectations suggest the Bank is likely to maintain its cautious stance through the summer, keeping rates elevated but signalling openness to cuts later in the year if inflation data continues to ease. Financial markets have already started pricing in gradual reductions by the end of 2025, but much depends on how wage growth and energy costs develop over the coming months. How it impacts you For households, the monetary policy outlook determines whether mortgage and loan costs stay high or begin to ease. Many families are still rolling off older fixed-rate mortgage deals, meaning the difference between rates staying elevated or beginning to fall can significantly affect disposable income. For small businesses, borrowing to invest in equipment, staff, or expansion remains more expensive when interest rates are high. This can delay growth plans or put pressure on cashflow. Contractors and freelancers may see demand vary as businesses hold back on projects until borrowing becomes cheaper. Savers, on the other hand, have benefited from higher returns in recent months. A slower pace of rate cuts means savings accounts and bonds may continue to offer stronger yields for the time being. But once cuts begin, those returns will likely taper off, making it important to plan ahead. What you can do Households should review their mortgage deals, especially if current fixed terms are ending. Exploring refinancing options early can reduce exposure to higher costs if rates remain elevated over the summer. Small businesses should factor cautious borrowing costs into their cashflow forecasts. Delaying non-essential capital spending, renegotiating supplier terms, or reviewing credit facilities can help maintain stability until rates ease. Contractors should keep in close contact with clients, recognising that projects may be delayed in high-rate environments. Offering flexible arrangements or diversifying services can help offset lulls in demand. Savers should take advantage of the current higher yields, locking in competitive rates where possible before cuts arrive later in the year. Diversifying savings and investment strategies can also protect against future changes. At Ledgr Accountants, we help clients translate these macroeconomic signals into practical financial strategies. Whether you are managing household costs, planning property investments, or forecasting for your business, our role is to provide clarity and keep you ahead of the curve. Thowsif Mukit Commercial Manager References   https://www.ukfinance.org.uk/system/files/2025-06/Monthly%20Economic%20Review%20-%20June%202025.pdf https://www.gov.uk/government/statistics/forecasts-for-the-uk-economy-june-2025