In the intricate landscape of UK savings taxation, the humble ISA has long been a rare pocket of simplicity: pay in, and your returns grow free of tax. That reputation is about to be tested. As part of the Budget 2025 ISA reforms, HMRC has confirmed a new 22% charge on interest earned on cash held inside non-Cash ISAs, alongside a package of anti-circumvention rules. As accountants in Surrey serving clients across the UK, we are already fielding questions from investors, and here is what you need to know.

What Is Changing — and Why

From 6 April 2027, the annual Cash ISA allowance falls from £20,000 to £12,000 for savers under the age of 65, while those aged 65 and over keep the full £20,000 cash limit. The overall ISA allowance remains £20,000 across all ISA types. The government’s aim is to nudge more people towards Stocks & Shares ISAs and build a stronger retail investment culture.

The obvious workaround would be to open a Stocks & Shares ISA and simply hold cash in it — sidestepping the lower Cash ISA limit entirely. To close that door, HMRC has introduced targeted anti-circumvention rules.

The 22% Charge on Non-Cash ISA Interest

The headline measure is a 22% charge on interest (or the equivalent “alternative finance return”) paid on cash holdings within Stocks & Shares ISAs and Innovative Finance ISAs — the “non-Cash” ISAs. Crucially, this charge applies universally: it does not matter how old you are, which income tax band you fall into, or even whether you are a taxpayer at all. Interest on genuinely invested holdings is unaffected; it is idle cash sitting in an investment ISA that is targeted.

Two Further Anti-Circumvention Rules

The 22% charge does not stand alone. The confirmed rules also prevent transfers from non-Cash ISAs into Cash ISAs for savers under 65, and prevent holding 100% Money Market Funds within a non-Cash ISA — another route through which cash-like returns could otherwise be sheltered. Together, these measures are designed to keep the reduced Cash ISA limit meaningful. HMRC has said further operational detail will follow in its next Tax Free Savings newsletter.

What It Means for Savers and Investors

For most people who use their Stocks & Shares ISA to actually invest, the practical impact is limited. The change bites for those who park significant sums of cash inside an investment ISA — whether waiting to invest, de-risking, or using it as a de facto savings account. From April 2027, that strategy carries a 22% cost on the interest earned. Reviewing where your cash actually sits, and whether a Cash ISA, a General Investment Account or your reduced Cash ISA allowance is the better home, will matter more than ever.

How TaxDigit Can Help

These reforms sit at the intersection of savings, investment and tax planning — exactly where careful advice pays off. Our Guildford-based team helps clients structure their allowances efficiently ahead of the 2027 changes, and our personal tax specialists can review how the new rules interact with your wider position. For high-net-worth individuals and business owners, our tax advisory and planning service builds ISA strategy into a broader, forward-looking plan. You can read the government’s own confirmation in the Tax update 2026 policy paper.

Plan Ahead With TaxDigit

The 22% charge does not take effect until 6 April 2027 — which means there is time to plan, but not time to ignore it. As premier accountants in Surrey serving clients across the UK, TaxDigit will help you make the most of your allowances before the rules change. Call 01483 230 777, email info@taxdigit.co.uk, or visit our contact page for bespoke advice.

Electronic Sales Suppression — the deliberate hiding of takings through manipulated till software — is firmly in HMRC’s sights. On 23 June 2026 the government launched a consultation that could reshape the point-of-sale industry itself, proposing mandatory software standards for electronic and mobile till systems to stamp out so-called “till fraud”. For any business that takes payments through an EPOS or MPOS system, this is a development worth understanding now, while the consultation is still open.

New Till-Software Standards — HMRC electronic sales suppression EPOS/MPOS consultation closing 18 August 2026, explained by TaxDigit accountants in Surrey

What Is Electronic Sales Suppression?

Electronic Sales Suppression (ESS) — often called till fraud — is the deliberate manipulation of digital sales records to hide takings and understate turnover, all while producing a plausible audit trail. Common techniques include deleting or cancelling genuine sales, misdescribing VAT-standard items as zero-rated, or running a second “shadow” till during compliance checks. The result is under-declared VAT, income tax and corporation tax, and an uneven playing field for the honest majority of businesses.

What HMRC Is Proposing in the EPOS/MPOS Consultation

Rather than pursuing individual businesses alone, HMRC now wants to tackle the problem at source: the software. The consultation seeks views on introducing mandatory standards — such as modern encryption and standardised, tamper-resistant record-keeping — across the EPOS and MPOS sector. The aim is to make suppression tools far harder to build, sell or hide inside otherwise legitimate till systems. It builds on the government’s 2018 Call for Evidence and reflects how much the point-of-sale market has changed since.

The consultation runs for eight weeks, from 23 June to 18 August 2026, and is of particular interest to sole traders, small and medium-sized businesses in retail and hospitality, and their trade bodies. Responses can be sent to ESSpolicy@hmrc.gov.uk.

The Penalties for Electronic Sales Suppression Are Already Severe

This is not a distant threat. HMRC has held tough anti-ESS powers since the Finance Act 2022. Making, supplying or modifying an ESS tool can attract a penalty of up to £50,000 per tool. Simply possessing one triggers an initial £1,000 penalty, followed by daily penalties of up to £75 — capped at a further £50,000 — for as long as the tool is held. On top of that, businesses that have suppressed sales face assessment for the underpaid tax, interest, and separate inaccuracy penalties. New software standards would sit alongside this regime, not replace it.

What Retail and Hospitality Businesses Should Do Now

The practical message is simple: make sure your till and record-keeping are demonstrably clean. Review how your EPOS/MPOS system stores and reports sales, keep complete records that reconcile to your bank and card settlements, and — if there is any historic irregularity — consider a voluntary disclosure before HMRC comes knocking. Businesses and trade bodies with a view on the proposals also have a genuine opportunity to shape the outcome before 18 August.

Why This Matters Even If You Have Nothing to Hide

Honest retailers and hospitality operators have the most to gain from tighter standards. Electronic Sales Suppression distorts competition, letting non-compliant rivals undercut on price while starving public services of revenue. Mandatory, tamper-resistant till software would level the field — but it will also raise the baseline expectation for everyone’s record-keeping. Businesses that already keep clean, reconcilable digital records will adapt easily; those relying on ageing or loosely controlled systems should treat this consultation as an early warning to modernise now, rather than scrambling when standards become compulsory.

How Our Guildford-Based Team Can Help

As accountants in Surrey serving clients across the UK, our Guildford-based team helps retail and hospitality businesses keep their VAT and bookkeeping watertight and audit-ready. Whether you want a health-check of your till records, support with a voluntary disclosure, or help responding to the consultation, our VAT and tax advisory and planning specialists can guide you. The full consultation is published on gov.uk.

Concerned about how these changes affect your business? Talk to us today. Call 01483 230 777, email info@taxdigit.co.uk, or reach us via our contact page for bespoke, plain-English advice.

In the evolving landscape of UK personal taxation, few proposals carry the power to reshape a taxpayer’s cash flow as quietly — and as profoundly — as HMRC’s plan to collect Self Assessment liabilities sooner. On 23 June 2026, as part of its “Tax Update 2026” package, the Government opened a consultation on “timely payments” in Income Tax Self Assessment (ITSA). For the company directors, landlords and high-earning professionals we advise, it signals a meaningful shift in when, not just how much, tax falls due.

What is HMRC proposing?

At its heart, the proposal moves Self Assessment closer to payday. From April 2029, taxpayers who hold sufficient PAYE income alongside their Self Assessment sources would pay a forecast of their ITSA liability in-year, through PAYE, in each pay period — rather than waiting to settle the bill after the tax year ends. Someone paid monthly, for example, would pay their 2029/30 liability across twelve instalments, each equal to 8.3% of their forecast ITSA bill, with that forecast based on their 2028/29 return.

Crucially, these are payments on account, not a final reckoning. Taxpayers will still file a Self Assessment return, report their actual liability and reconcile through a balancing payment — or a repayment from HMRC — exactly as they do now. Forecasts can be updated where circumstances change.

Who will be affected?

HMRC estimates that of the roughly 12 million people within Self Assessment, around 7 million also receive PAYE income — and approximately 2.1 million of those are expected to have enough PAYE income to fall within the new in-year rules. The Government is separately consulting on whether other Self Assessment taxpayers, including the c. 2.5 million who currently make twice-yearly payments on account, should pay more frequently, potentially monthly or quarterly.

Directors and landlords: take note

If you draw a salary through your company and top up with dividends, or you run a property portfolio alongside employment, you sit squarely in HMRC’s sights. Spreading payments may ease the January cash-flow squeeze — but a forecast pitched too high could tie up working capital you would rather deploy elsewhere. Getting the forecast right becomes a planning discipline in its own right.

Why is this happening now?

The direction was first signalled at Budget 2025, and Tax Update 2026 fleshes out the detail. The Government’s stated aim is simplification, modernisation and fairness: smaller, regular payments, it argues, reduce tax debt and spare taxpayers the shock of large, infrequent bills. For well-advised clients, the headline is less about the principle and more about preparation — the time to model the cash-flow impact is now, well ahead of the 2029 start date.

How TaxDigit can help

As accountants in Surrey serving clients across the UK, our Guildford-based team helps directors, investors and business owners stay ahead of change rather than react to it. We can model how in-year payments would affect your cash position, keep your ITSA forecasts accurate so you never overpay, and integrate the new regime into a broader personal tax and tax advisory and planning strategy. You can also read HMRC’s full proposals in the official GOV.UK consultation.

Speak to a specialist

Change in the timing of tax is rarely as simple as it first appears. If you would like a clear, bespoke view of how HMRC’s timely-payments proposals could affect you or your business, our advisers are ready to help. Call TaxDigit on 01483 230 777, email info@taxdigit.co.uk, or visit our contact page to arrange a confidential consultation with our Guildford-based team.

Author: Amir Rafiei