Archives February 2025

According to HM Revenue and Customs (HMRC), an estimated 1.1 million people missed the HMRC tax return deadline recently. This means that thousands are now facing an initial penalty of £100 for failing to file their annual tax return on time, unless they can provide a valid excuse. In contrast, over 11.5 million individuals completed the self-assessment process, with more than 31,000 filing during the final hour before the deadline.

What This Means for You?

For many self-employed individuals or those with multiple income streams, filing a tax return is an annual requirement. The rush to complete these filings is understandable given the complexities involved, and for some, the pressure was compounded by unexpected issues such as IT problems at Barclays.

Although the payment deadline was set for 31 January, HMRC has been clear that late payment penalties won’t be applied until 1 March. Barclays has reassured customers that no one will incur extra costs due to delays from their technical difficulties.

Understanding the Penalties

For anyone who missed the deadline, HMRC has outlined a structured penalty system to encourage prompt submission:

• Initial Penalty: A minimum of £100, even if no tax is due.
• Daily Penalties: An additional £10 per day after three months, capped at a maximum of £900.
• Six-Month Penalty: A further charge of 5% of the tax due or £300—whichever is greater.
• Twelve-Month Penalty: An additional charge at the higher of another 5% of the tax due or £300.

HMRC’s Director General for Customer Services, Myrtle Lloyd, emphasized the importance of filing as soon as possible to avoid escalating penalties. In addition to filing penalties, there are fines and interest charges for late payment of tax owed.

Tips to Avoid Further Issues

• File Early: With the HMRC tax return deadline looming every year, filing early can help you avoid the last-minute rush and potential IT issues.
• Check Your Information: Ensure that all details on your tax return are correct to avoid delays in processing.
• Prepare for Payment: Organize your finances ahead of the tax payment deadline to prevent any late payment charges.
• Appeals Process: If you have missed the deadline, remember that you can appeal against a fine by submitting a form or writing to HMRC. However, you must have already completed the self-assessment before making an appeal.

Seamless iXBRL Filing with DataTracks

For those looking for a smoother and more efficient way to manage their tax filings, particularly ixbrl filing services, DataTracks offers industry-leading solutions:

• Fast Turnaround: Get iXBRL-ready files in 1-3 days (express delivery) or 10 days (standard delivery).
• 19+ Years of Expertise: Trusted by 7 of the top 10 UK accounting firms.
• End-to-End Support: Comprehensive services including CT600/CT1 filings.
• Flexible Solutions: Ideal for handling one file or many—customized to your specific needs.

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The Bank of England’s third interest rate cut in six months will mean more than simply cheaper loans.

On 6 February 2025, The Bank of England reduced its base rate by 0.25%, bringing it down to 4.25%. This marks the third reduction in six months and while the immediate impact might seem small, the long-term implications, particularly for those seeking commercial property finance, could be significant.

With further rate cuts predicted, should business owners hold fire on property purchases? Those who already have mortgages at a higher fixed rate won’t benefit from these changes immediately , while variable-rate borrowers will see some relief in their monthly payments (provided their product is linked to the BoE base rate). But that’s only part of the story: the repeated rate reductions are also positively impacting stress testing that will profoundly affect future lending.

The longer-term implications: The real story

The most significant impact of these rate cuts – and those predicted in the near future – will be felt in the gradual easing of affordability assessments. Over the past couple of years, as base rates rose, lenders significantly tightened their stress test requirements. At Swoop, our customers found it harder to reach agreements as the typical interest rate used as part of the  affordability assessment rose from around 5% when the base rate was near zero, to as high as 9%  in 2023. This dramatic increase in stress test thresholds inevitably limited the amount businesses could borrow, as affordability calculations were based on these much higher theoretical rates.

The recent base rate reductions, and the possibility of further cuts, could significantly alter this landscape. If base rate continues to fall and stabilise closer to 3-4% as predicted, we could see stress tests being further adjusted. For those wondering when interest rates will go down and how that impacts the wider economy, lower stress test thresholds could reignite activity in the commercial property market, making borrowing more accessible and stimulating investment.

Lenders have already been exploring ways to mitigate the impact of their affordability assessments, such as extending loan terms and offering slightly more lenient stress tests in sectors that have proven to be more resilient, such as healthcare and professional services. This flexibility demonstrates that lenders want to lend and will find opportunities to do so; with lower base rates and the potential for less stringent stress tests, we could soon see a more favourable environment for borrowers.

Sector-specific considerations

As we have seen, some sectors have already had more favourable treatment than others. Over the coming months, different sectors of the commercial property market will likely experience a quicker return to more accessible financing. Understanding these nuances is crucial for any business considering a commercial property investment, so while keeping an eye on the headline commercial mortgage interest rates is essential for any investor, the borrower waiting for the right time to buy will look further into the detail. This is where Swoop’s experience can be particularly helpful.

Looking ahead: Navigating the changing landscape

The recent base rate cuts are a positive and welcome signal for the wider economy, but uncertainty remains: factors such as inflation and potential recessionary pressures, will also play a crucial role in shaping the market. Mortgage interest rate predictions come with a disclaimer for a reason.

The landscape is evolving and those best placed to help businesses contemplating commercial property investment are experienced finance professionals who live and breathe the world of commercial mortgages. Borrower and broker should always work together to assess available options, particularly when so many factors can make a significant difference to viability. 
To explore a range of competitive commercial mortgage rates and have the support of the Swoop Funding team, create a free account today, and you’ll be matched with financing options across the whole of the market.