UK Tax Alert 2026: Critical Deadlines, Capital Gains Changes, and Expat Obligations
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Welcome to 2026. While the calendar year has just begun, for UK taxpayers and expats, January represents the frantic "end of the tax year" regarding filings. With the January 31st, 2026 deadline looming, it is crucial to understand what needs to be submitted to avoid confusion, penalties, and excessive interest charges.
Whether you are an expat living in the UK, or living abroad with UK-sourced income (like property rental, pensions, or capital gains), here is your essential guide to navigating the 2026 tax season.
1. Two Critical Deadlines: January 31, 2026
The end of January is a dual deadline that affects two different tax years. It is vital to distinguish between them:
Submission Deadline for 2024/25: This is the hard deadline to file your online self-assessment tax return for the tax year ending April 5, 2025. If you have any untaxed income, property rental profit, or capital gains from that period, this return must be filed now to avoid penalties.
Amendment Deadline for 2023/24: This is your last chance to correct mistakes on the previous year's return. If you omitted information, need to claim a charity gift relief, or need to adjust estimated figures for the 2023/24 tax year, you must submit an amendment by January 31, 2026. After this date, the return is closed.
Pro Tip: HMRC is currently overwhelmed. Relying on phone support is often unproductive due to long wait times. The most efficient route is to ensure your return is submitted correctly online by a professional agent.
2. The "Halloween Budget" & Capital Gains Tax (CGT)
The budget released in October 2024 (dubbed the "Halloween Budget") introduced significant changes to Capital Gains Tax that are now in effect for the 2024/25 returns.
If you sold property, shares, or other assets during the 2024/25 tax year, your calculations might be complex because the rates changed mid-year:
Basic Rate: Increased from 10% to 18%.
Higher Rate: Increased from 20% to 24%.
Warning on Assessments: HMRC has admitted that their automated self-assessment systems may not guarantee a correct calculation for 2024/25 due to these rate changes occurring during the fiscal year. It is highly recommended to use professional assistance to calculate your liability manually rather than relying solely on HMRC's automated figures.
3. Cryptocurrency: Don't Forget to Report
A common oversight for investors is Cryptocurrency. In the eyes of HMRC, Crypto is a capital asset.
If you are buying and selling cryptocurrency, these are chargeable events.
You cannot treat this simply as "savings." Every trade that results in a gain is reportable.
With the reduced capital gains allowances, even modest trading activity can trigger a tax liability.
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4. Interest Rates: The Cost of Delay
Getting your tax wrong or paying late is more expensive than ever due to a disparity in interest rates applied by HMRC:
Late Payment Interest: If you owe tax, HMRC charges interest at 7.75%.
Repayment Interest: If you overpay and HMRC owes you a refund, they only pay interest at 2.75%.
Because you are charged significantly more for underpaying than you are rewarded for overpaying, accuracy is paramount. Furthermore, if you file late, you may wait over a year to receive any tax rebates due to HMRC service backlogs.
5. Expat Essentials: Remote Work & National Insurance
The Digital Nomad Trap
British nationals do not automatically have the right to work in the EU post-Brexit. However, if you have residency rights (e.g., in Cyprus, Spain, or Portugal), you can live there while working remotely for UK clients.
Income Source: If the work is contracted in the UK, the income arises in the UK and is reportable there.
Tax Residence: Because you are tax-resident in another country, you may also have a liability there. Double Taxation Treaties exist to prevent paying twice, but you must file returns to claim these reliefs.
Protecting Your State Pension
Expats often ask if they should continue paying UK National Insurance. While leaving the UK ends your automatic entitlement to some benefits, maintaining Voluntary Class 2 or Class 4 contributions allows you to accrue qualifying years toward a full UK State Pension (which requires 35 years of contributions). This is often a valuable investment for your future retirement.
6. A Note for Cyprus Residents
For those based in Cyprus, the landscape has changed. As of 2026, filing a tax return is compulsory for every resident over the age of 25, regardless of income level. If you have not updated your tax registration in Cyprus recently, you must do so to comply with these new universal filing rules.
Next Steps
Do not wait until the final week of January. Whether you need to file your 2024/25 return, amend your 2023/24 return, or adjust your Payments on Account to reflect a change in residency, proactive action is required.
Contact us today about our tax return service or book a free online review with our expatriate experts.
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