In this instalment of our eBay Elevate webinar series, finance and tax specialist Faye Watts explores upcoming tax changes, how this could impact your finances, and how you can be prepared.

Tax changes in the New Year

Tax is a necessary part of business. It’s therefore important to treat tax like any other business cost, as it too impacts your cash flow. Like other business costs, tax is also subject to change - and when these changes are happening, it can (literally) pay to be as prepared as possible.

Our latest eBay Elevate webinar is designed to help you do exactly that. In this engaging 35-minute session, finance and tax specialist Faye Watts explores upcoming tax changes, how they may impact your business, and some of the ways you can plan ahead.

If you missed it, fear not! You can watch the webinar on demand, which explores:

Upcoming tax changes that will have the biggest impact on small businesses

1. Tax free personal allowance of £12,570 and higher rate income tax threshold of £50,270 will remain until April 2028. National Insurance thresholds will remain until April 2028. This means that as incomes rise, more people will be paying tax and also paying tax at a higher rate.

2. No change to the £85,000 VAT registration threshold. This means that more small businesses will need to become VAT registered as prices rise in line with inflation and commercial needs.

3. The corporation tax rate is rising from 19% to 25% on profits above £50,000 from April 2023. This means that companies with profits in excess of £50k will be subject to more tax at marginal rates in excess of 25%.

4. Dividends tax rates have risen by 1.25% from April 2022. This means that as incomes rise, more people will be paying tax and also paying tax at a higher rate.

Be sure to watch the webinar for a more detailed overview of upcoming tax changes.

Making Tax Digital (MTD) is here to stay

If you have a VAT registered business, you are already required to keep digital records and file your tax returns using compatible software. MTD for Income Tax will come into effect from April 2026 for the self-employed (and landlords) with income over £50k (April 2027 for income between £30k-£50k).

Top tip: if you’re not using it already, use this time to experiment with different tax software to see which one works best for you.

Should I be self-employed or set up a limited company?

Deciding whether to be self-employed or set up a limited company is a common question in business. Unfortunately, there’s no one-size-fits-all solution to decide what’s best for you. But the below can help you to make an informed decision:

Self-employed

• Easy to register with HMRC (CWF1 form)

• Annual Self-Assessment Tax Return and less statutory requirements

• Keeping simple records

• Income Tax rates (20%, 40% & 45%)

• Commercial disadvantages and risk

• Personal assets more exposed

Being a company

• Separate legal entity

• Corporate veil for companies and LLPs

• Ring-fence liabilities (minimising commercial risk)

• Statutory requirements (Companies House & HMRC)

• Director requirements and duties

• Keeping detailed records (balance sheet)

• Corporation tax plus personal tax on drawings

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