JANUARY 2026 - MONTHLY NEWSLETTER RECAP

ASESA Solutions Ltd- JANUARY 2026 - MONTHLY NEWSLETTER RECAP

January focused on upcoming payroll, corporation tax, and umbrella company reforms scheduled for implementation from April 2026. Across our weekly updates, we highlighted changes that will affect employers, recruitment agencies, payroll teams, and businesses preparing for the 2026–27 tax year.

1] Student & Postgraduate Loan Threshold Changes (2026–27)

HMRC confirmed the student loan repayment thresholds effective from 6 April 2026 for the 2026–27 tax year.

• Plan 1: Threshold increases to £26,900

• Plan 2: Threshold increases to £29,385

• Plan 4: Threshold increases to £33,795

• Plan 5: Threshold remains at £25,000

  
  

Employees will continue to repay 9% of earnings above the applicable threshold. While increases for Plans 1, 2, and 4 are modest, they may slightly reduce monthly deductions.

Postgraduate loans remain unchanged, with a £21,000 threshold and a 6% repayment rate.

These updates are important for payroll planning ahead of April 2026

2] Corporation Tax Refunds & Interest

We outlined how HMRC manages Corporation Tax overpayments:

• Interest on overpayments is currently 2.75%

• Refunds must be claimed via the Company Tax Return

• Providing bank details helps speed up repayments

  
  

HMRC may offset refunds against other liabilities, such as PAYE, VAT, or future Corporation Tax bills. Any interest received is taxable and must be reported in the Company Tax Return.

3] Umbrella Company Reform – From April 2026

The government announced reforms to tackle tax non-compliance in the umbrella company market.

From 6 April 2026, responsibility for PAYE and National Insurance may move up the supply chain:

• Recruitment agencies become responsible where involved

• End clients become responsible where no agency exists

  
  

Although payment flows remain unchanged, HMRC will be able to hold agencies or end clients accountable for non-compliance.

4] Preparing for Umbrella Company Reform

Recruitment agencies were advised to prepare early by:

• Reviewing umbrella company arrangements

• Strengthening due diligence and compliance checks

• Ensuring contracts clearly define tax responsibilities

  
  

Early preparation will help reduce risk and avoid unexpected tax liabilities.

Overall Summary

January’s updates highlighted the importance of early awareness and forward planning ahead of major payroll and compliance changes coming in April 2026. Employers, agencies, and businesses that act now will be better positioned to manage risk, maintain compliance, and avoid unexpected costs in the year ahead.