In the first month of 2025, online trading platforms such as eBay, Airbnb and Vinted had to provide HMRC with a report on their users’ sales in 2024. This was the first time such reporting had been due, although the origins of the requirement date back to 2020 when the Organisation for Economic Co-operation and Development (OECD) published model rules targeted at tax avoidance via digital platforms. When it first emerged that HMRC would be sent this information there was a flurry of inaccurate media coverage with scare-mongering headlines such as ‘eBayers to be taxed’. In response, HMRC issued a press release before Christmas with the straightforward headline, ‘No tax changes for online sellers’. While ‘no change’ is factually correct, it may feel like a change for those questioned by HMRC on their selling activities. With this in mind, it is important to understand the rules. HMRC will only receive a report from a platform if, in 2024, the individual: • Had sales of at least €2,000 (about £1,700); or • Made at least 30 sales. The reports have nothing directly to do with personal tax liability, although they will encourage HMRC to raise queries about whether one exists. If all you are doing is selling your unwanted items online, that is not a taxable activity. What HMRC wants to know about is people who are: • Trading, i.e. buying items for resale at a profit; or • Providing services, be that driving a van or letting out a property. These activities have always been taxable – hence HMRC’s “no change” stance. However, even if you do have trading or rental income, you will not have any tax liability if: • Your total gross trading/services profit (i.e. before deducting any expenses) is not more than £1,000 in a tax year; and/or • Your total rental income (again before expenses) is similarly no more than £1,000 in a tax year. These £1,000 annual trading and property allowances are little known and are as much about saving HMRC administrative hassle as helping their ‘customers’. As ever in tax, the finer the detail, the more useful understanding it can be. Tax treatment varies according to individual circumstances and is subject to change. The Financial Conduct Authority does not regulate tax advice.

It is the turn of the year. The health secretary of the relatively new Labour government announces a commission to review the financing for long-term care of the elderly. Can you name the year? You may not be surprised to know that there are two correct answers: 1997: in December of this year, Frank Dobson, the Health Secretary in Tony Blair’s new government, fired the starting gun for a Royal Commission report with the title "With Respect to Old Age: Long Term Care – Rights and Responsibilities." The report was published in March 1999 and its main recommendation – that the state should pay for personal care – was rejected by the government in July 2000 2025: in January of this year, Wes Streeting, the Secretary of State for Health and Social Care in Sir Kier Starmer’s government, said he would be launching an independent commission into adult social care. An interim report is due in 2026 which “will identify the critical issues facing adult social care and set out recommendations for effective reform and improvement in the medium term”. The commission’s final report which, among other elements, consider “how to best create a fair and affordable adult social care system for all” is due by 2028. Between 1997 and 2025, there were numerous other commissions, white papers, inquiries and reviews. These have mainly focused on England, as from the late 1990s social care became the responsibility of devolved governments. Nevertheless, the four countries’ long-term care funding rules all have a similar structure and rely in some part on means-testing above relatively modest thresholds. For example, in England an individual with capital of over £23,250 is responsible for the full cost of their care. England had been due to have a new care-funding scheme with a fee cap of £86,000 from October 2023. However, this was deferred until 2025 by the previous Chancellor and then abandoned by the current Chancellor last July on the grounds that the funding did not exist. Given that the next election is due by mid-2029, it seems unlikely that any reforms to care funding in England will be legislated for until the next decade. If you are concerned about how you will need to fund your or a loved one’s long-term care, early planning is the first step.

NS&I can trace its roots back to 1861, when Gladstone, then Chancellor of the Exchequer, launched the Post Office Savings Bank. NS&I’s latest quarterly results show that on 30 September 2024, it held £233.9 billion on behalf of investors. That might seem like a lot of money, but it’s a small amount considering the vast budgetary hole the current government is trying to navigate between spending and revenue. The figures that came out alongside the Autumn 2024 Budget revised the 2024/25 gap – officially called the Central Government Net Cash Requirement – to £165.1 billion. Another £139.9 billion is needed to repay existing government debt which matures in 2024/25, bringing the total to over £300 billion. In other words, the entire stock of NS&I, accumulated over 163 years, would cover the equivalent of about nine months of government financing. In terms of how much fresh cash NS&I is currently raising, its impact can be counted in days, not months. In the first six months of 2024/25, NS&I’s net inflow was £3.3 billion – four days’ worth of government financing. Currently government bonds (gilts) account for the lion’s share (a projected £296.9 billion in 2024/25) of government financing. That makes NS&I a minnow, picking up the public’s retail pennies rather than institutions’ warehoused pounds. Arguably, if NS&I did not exist, it would not be invented today. But it does exist, and the government would not want to see the NS&I’s £230 billion+ disappear, so it will continue to survive. In recent months, NS&I has been cutting rates on many of its products, from Premium Bonds (prize rate now 4.0% against 4.4% in November 2024) through Income Bonds (3.44% now against 3.93% in mid-November 2024) to two-year Guaranteed Growth Bonds (3.60% now against 4.60% in early September 2024). NS&I rarely tops the rate tables, and recent cuts have left it languishing at the point where better returns can be found elsewhere. If you hold NS&I investments, it is worth checking whether they still are the right home for your cash. Our pick of leading current leading interest rates can be found here. Those holding larger cash amounts might also like to ask us about our Cash Management solutions.

Six steps to improve your financial efficiency and resilience in 2025

If you are approaching the end of your 5-year fixed rate mortgage and currently enjoying an interest rate of around 2%, you have probably been watching the fluctuations of interest rates with some trepidation. The November 0.25% cut from the Bank of England has not fed through to your prospective remortgage interest rate and some lenders are even going in the opposite direction of the Bank and nudging rates upwards. What’s going on? The answer is nothing unusual, despite the contrary movements. It is a common misconception that the Bank of England controls interest rates. The Bank does manage short-term interest rates by setting its Bank Rate, which is the rate it pays on the money it holds for commercial banks. By fixing a minimum fully secure return that the commercial banks can earn, the Bank of England influences what those banks can charge for lending. The key point is that the Bank of England is setting a short-term rate which can theoretically, change every six weeks, when the Bank’s Monetary Policy Committee meets to set rates. Longer term interest rates are not usually controlled by the Bank of England but set by the markets. The markets will take account of the current Bank Rate but if a fixed rate for, say, 5 years is under consideration, then the market is implicitly estimating the movement of Bank Rate over the next 60 months. As with any medium-term financial forecast, that forward-looking calculation has a wide range of factors built in. The result can be that as the short-term Bank Rate is cut in response to current economic conditions, longer term rates rise because of the markets’ views of longer-term prospects. The graph above illustrates how the Bank Rate and the yield on 5-year fixed rate government bonds have moved between mid-July and mid-November in 2024. While the Bank Rate has fallen 0.5% over the period, the yield on the five-year gilt has risen by about 0.4%. That reflects the market changing its mind about how quickly and how far the Bank will cut rates. If your mortgage is due for refinancing soon, you may find yourself hopefully watching the markets for signs of that change of mind. Your home is at risk if you do not keep up with repayments on a mortgage or other loan secured on your property.

Financial Conduct Authority (FCA) publishes a review of the cash savings market following evidence of some dubious tactics at play.

Central banks around the world are beginning to cut interest rates with the European Central Bank leading the way.

The yearly inflation figure fell from 0.9% to 2.3% in April, so why does inflation still feel high?

With allowances frozen or cut, you may have underpaid tax for 2023/24.