Tax debt continues to rise amid fears about HMRC powers

Overdue tax owed to HMRC had reached £44.7bn at the end of March, according to the latest official figures released in July, up from £44bn at the same time last year. This included new debt of £103,592m for the full year to the end of March, which is up on the £96,944m for last year’s figures at the same point.

Resolved debt meanwhile has risen to £101,851m for the end of March this year, up from £96,738m cleared during the equivalent period for the previous year. In total, 884,319 customers were in Time to Pay arrangements at the end of March this year, down from 913,209 in the previous year, according to analysis of the figures by BDO. For 2024 to 2025, HMRC said its tax gap – the amount of money that should be paid to HMRC in tax and the amount that is actually paid – was at 6.4%.

So, it is little surprise that HMRC is consulting on changing the rules about when tax is paid, and on whether it should have new powers to take money directly from a taxpayer’s bank account to pay their tax debt back.

Is this likely to happen?

HMRC is consulting on getting these new powers, so it could happen. But whether it happens is another story. One of the most vocal opponents to this extension of HMRC’s powers is the Low Incomes Tax Reform Group (LITRG).

It’s concerned that allowing HMRC to recover lower-value debts directly from taxpayers’ bank accounts could lead to taking money in error and creating hardship as a result, if the safeguards aren’t sufficiently tight to eliminate such mistakes.

These lower-value debts could be collected in greater volumes, and while the LITRG says it recognises “the importance of collecting tax that’s due”, it’s concerned that “some vulnerable taxpayers could be adversely affected if adequate protections are not built into the new process”, said Victoria Todd, Head of LITRG.

She added: “We understand why HMRC is looking for more effective ways to collect tax debts. However, the proposals raise some important questions about how taxpayers will be protected.

“It is important that, before any action is taken to recover a debt directly, HMRC are satisfied that the debt has been correctly identified and is genuinely due.”

What safeguards are in place to prevent financial hardship?

This would be an extension of the existing Direct Recovery of Debts powers, which are currently used only where debts exceed £1,000 and even then, only in certain circumstances. These current powers have caveats which mean HMRC must leave at least £5,000 across the taxpayers’ accounts once any money has been taken.

Under the proposed extension of these powers, the smaller tax debts of up to £5,000 for individuals or £10,000 for companies could be taken directly from their bank accounts on a monthly basis rather than as a single lump sum, and there is currently no specified minimum that must be left in the taxpayers’ accounts listed in the consultation. So, anyone already living on a tight budget could be left in real hardship and struggling to meet their essential living costs such as rent and food.

Ms Todd said: “One of the key questions is how HMRC will assess what is affordable where a taxpayer has not engaged, or cannot engage with them. Without up-to-date information about an individual’s circumstances, there is a risk that deductions could be set at an unaffordable level.

“HMRC will need to be confident that they can correctly identify potentially vulnerable taxpayers and distinguish them from those who are simply choosing not to engage.

“We welcome HMRC’s recognition that strong safeguards and clear routes for taxpayers to challenge decisions will be essential.”

We can help you

If you think you may be affected by the proposed changes, or have any other concerns about your tax position and the current tax regime, then please contact us and we will do everything we can to assist you.

Deadline nearing for those claiming roll-over relief in 2022/23

Business owners who need to claim roll-over relief for the 2022/23 tax year are being reminded by HMRC that if they made a provisional claim for business asset roll-over relief in their self-assessment for that year and haven’t yet replaced it with a final claim, they need to do so.

Roll-over relief can be claimed by a taxpayer who is trading and where a qualifying asset is sold and a new qualifying asset is acquired within a set period. If a valid claim is made, then the payment of Capital Gains Tax (CGT) on the sale of the original asset can be deferred.

A provisional claim would be made if the taxpayer intended to buy the replacement asset, but has not yet done so by the time they need to claim roll-over relief, says the ICAEW. But once the asset is acquired, they need to replace the provisional claim with the final valid claim.

When is the deadline for claims?

The final deadline for these claims is January 31, 2027, and if the final valid claim isn’t made by this time, then HMRC will withdraw any provisional claim, which would mean CGT would need to be paid.

The letter being sent out to taxpayers now by HMRC shows how to make a valid final claim, including what information needs to be provided for the claim to be accepted by HMRC. You can use form HS290 to make the claim, and anyone who doesn’t intend to buy a qualifying asset before the January 31, 2027, deadline should contact HMRC now.

This will start the process of HMRC withdrawing the provisional claim early, reducing the amount of interest you may owe on any tax due. If you are intending to buy the asset either shortly before or soon after the January 31, 2027, deadline, then HMRC will consider “reasonable time” to make the final claim, according to the ICAEW.

Let us help you

If you need help with roll-over relief, then please get in touch with us and we will do what we can to help you.

Many businesses use AI, but are they using it well?

AI is helping to save businesses hours each week, but the question now is not whether they should use it, but whether they are using it safely and ethically?

AI can be a genuinely useful tool for small businesses especially helping to draft first versions of emails, policies, proposals, social media, meeting notes, and so on. It can also turn a long, complex document into a plain English summary, suggest ways to improve a sales message, or help prepare for a difficult client conversation.

However, AI should be considered more of an assistant than a replacement for the work done by staff or a business owner. Everything your AI model – ChatGPT, Claude, Copilot, etc. – churns out can sound completely convincing. But it can make mistakes, including using outdated information to give you an incorrect answer. So, you must review any content you ask AI to create, or any analysis it does for you, carefully, especially if what you’re asking for help with is vital to your business or relates to legal or financial decisions.

What you should and shouldn’t do with AI

It might be tempting to ask AI to analyse patterns in information, such as employment records. But it is very unwise to add sensitive data to public AI platforms. Businesses also need to consider data protection rules if personal data is being processed.

If you are using an AI system that you know is secure, then it would still be sensible to be cautious. Even in this position, it would still be prudent not to add any very sensitive information to be analysed. But anyone in your IT department, or a company you use for IT support if you have a smaller business, may be able to give you guidance on this.

Remember too, no matter what you ask AI to help you create, you are still legally responsible for what you publish or send out, even if you got AI to help you write it. This is another reason why it’s vital to review everything that is produced.

How can you use AI ethically?

Using AI ethically should be mostly common sense, alongside learned good practice. For example, no-one should ever use AI to mislead customers, create fake testimonials, or impersonate people. It is also impersonal to recruit with AI, so consider the impression you’re giving your potential staff if you filter possible new recruits this way.

Creating an AI policy for the business to follow is the best way to keep your team working in the right way, as then everyone knows what is allowed, what is expected, and what tools can be used. You should include what information must never be added to an AI platform, and when the use of AI should be disclosed.

Using AI the right way can be a real benefit to your business, and keeping on the right side of ethical use will help prevent any problems further down the line.

We can help you meet your obligations

If you would like to know more about business ethics and how to keep your business moving forwards in the right way, then please get in touch and we would be happy to give you the guidance you need.

Do a mid-year business review to see if you’re on track

Most businesses will have goals that they want to hit by the year end, which is a good idea. If you know your destination, it’s easier to find the road to get there. But by doing a mid-year review, you can take a business snapshot to see if you are likely to meet those goals.

Most of us now use accounting software to deal with the Making Tax Digital regime, and this has another major benefit. Most of these systems will offer you options to check on various business reports throughout the year. So, you can see where your business is performing better or worse, and fix it.

QuickBooks, Xero, FreeAgent, or any other similar accounting system, will allow you to compare your income, costs and profits with the same period last year and see how healthy your business is. Things to consider are whether you’re selling more or less than last year, whether your costs are higher, and where your best profit margins are on different products.

You should also assess your cashflow, as that is the lifeblood of any business. See who owes you money, how quickly invoices are paid, whether you have sufficient cash to cover tax, wages, supplier payments, and upcoming bills. A business may look good on paper, but without cashflow, it can all fall apart very quickly.

Is there enough time to make changes?

If you do a mid-year business review, and you see things that could be done better, then you have time to make the necessary changes.

For example, you can also see anywhere you spend a lot of time without getting much return. This level of analysis will really help move your business to the next level. You can also check where you might be able to cut costs – lose unused subscriptions, review your prices to see if your margins are high enough, and chase any invoices that are overdue.

Setting monthly targets will also help you see on a more micro level whether your business is heading in the direction you want it to.

Let us help you

If you want some help with analysing your business at the half-year point, then please get in touch with us and we will do what we can to help you.

Late payments to small businesses face biggest crackdown in 25 years

Large companies who persistently pay small suppliers late, or have unreasonably long payment terms, are facing the toughest UK crackdown in more than 25 years, as the Government aims to tackle one of the biggest cashflow problems affecting small businesses.

The Commercial Payments Bill, also named publicly as the Small Business Protections Bill by the Government, was introduced to Parliament in May 2026 and aims to rebalance the power dynamic between large firms and smaller businesses that work with them. This includes sole traders and freelancers.

Late payments can lead to serious cashflow issues for small businesses, resulting in staff being paid late, or not at all, forcing small business owners to rely on credit, and especially spending hours chasing money which should have already been paid. Those hours mount up and could be used to move the business forwards. Government research has found staff at small businesses across the UK can spend up to 133m hours collectively chasing payments across the economy each year.

Late payments are estimated to cost the UK economy around £11 billion a year, according to Government figures, and they contribute to 38 businesses closing every day. Businesses are estimated to be typically owed £26 billion in late payments at any time, with firms affected owed an average of £17,000.

What proposals are in the Bill?

The new Bill aims to make late payments a thing of the past, as it will cost large companies more and be harder to justify. A key proposal is for a 60-day cap on payment terms for large companies paying smaller suppliers.

Long contractual payment terms, where the payment is technically made ‘on time’ but may be, say, 65 days or more after the work was completed, can create similar cashflow issues. To combat these practices, the Government is proposing reforms allowing smaller businesses to charge mandatory interest on late payments at 8% above the Bank of England base rate. This would give a current rate of 11.75%, as the Bank of England base rate was 3.75% at the time of writing.

You can already claim statutory interest and debt recovery costs if another business pays late, but the new rules would enshrine the right in legislation, making it harder for larger companies to work around it with contract terms.

Are there teeth behind the proposed legislation?

The Small Business Commissioner is expected to receive stronger powers to help deal with late payments in the UK. These include the power to investigate poor payment practices, adjudicate disputes and fine persistent late payers. Potential penalties could run into millions for large companies who are the worst offenders, as it could equate to a percentage of their overall turnover.

Emma Jones, Small Business Commissioner, said: “I am on a mission to make life easier for small firms by getting money moving faster through the economy by tackling late payments. The measures the Government has announced will strengthen the role of my office in taking on the worst payers alongside ensuring small businesses have a stronger voice on payment terms and late payment interest.

“I work with many firms, including those on the Fair Payment Code, who see the value of prompt payment to their business, but for too many late payments and long payment times persist with little accountability.

“These reforms will reduce the hours spent chasing debt, allowing small businesses to focus on more productive and enjoyable growth.”

Will it really make a difference?

Time will tell whether the rules change the behaviour of late-paying larger companies, but it is clear that late payment is no longer being treated as ‘just a normal part of business’. It ultimately has an impact on the wider economy.

Large companies who don’t pay smaller suppliers fairly, and on time, would face legal repercussions if the Bill becomes law in its current form. Prime Minister Keir Starmer said: “Small businesses are the backbone of our economy – run by people who take risks, create jobs and keep communities going. This Government is firmly on their side.

“Too many small business owners are spending hours chasing money they are owed and when payments don’t come through, the cost is personal. It’s about whether you can pay your staff, keep the lights on, or invest in your future.

“We’re changing that with the toughest action on late payments in a generation, so small businesses get paid on time and get the backing they need to grow, create jobs and serve their communities.”

Contact us

If you would like to find out how to deal with late payments and what options you have when it comes to cashflow, then please get in touch with us and we will explain what you need to know.

The Fair Work Agency begins operating

The Fair Work Agency (FWA), which was created under the Employment Rights Act 2025, is a government body which aims to both strengthen and simplify the way workers’ rights are enforced across the UK.

The FWA brings together various enforcement functions that used to sit under several separate bodies before it began its work on April 7, 2026. Its remit covers the enforcement of employment agency standards, pay-related rights including national minimum wage and national living wage. It also enforces requirements for a gangmaster’s licence and conditions for licences, and protections against serious labour exploitation, according to Gov.uk.

FWA’s enforcement authority extends across several key pieces of legislation:

• The Employment Agencies Act 1973
• Employment Tribunals Act 1996
• National Minimum Wage Act 1998
• Gangmasters (Licensing) Act 2004
• Fraud Act 2006
• Modern Slavery Act 2015
• Employment Rights Act 2025

Source: Gov.uk

What does this mean for employees?

Employees should find it easier to understand and enforce their workplace rights. Prior to the FWA, responsibility for the different aspects of employment law was spread across multiple bodies, including HMRC for National Minimum Wage enforcement, and the Gangmasters and Labour Abuse Authority for labour exploitation issues.

Over time, the expectation is that the FWA will expand its remit into areas such as holiday pay and Statutory Sick Pay enforcement. But even now, workers can have greater confidence that complaints about employment law breaches will actually be investigated.

The FWA also has powers to inspect businesses, investigate breaches, pursue employers who fail to comply fully with employment law, and to issue civil penalties. For employees who feel unable to take legal action against their employer themselves, the FWA may even support tribunal claims.

What does this mean for employers?

Employers who are already doing everything they should to protect their employees and work within the law have little to worry about. But any employer that isn’t doing everything right, or is perhaps cutting corners when it comes to employment law, needs to change their approach.

Businesses may face more inspections, be expected to keep better and more detailed records, and face larger penalties for breaches. The change will bring in more active enforcement, moving away from what has been a largely complaint-led system in the past.

The Gov.uk site states: “Where non-compliance is identified, FWA may take a range of enforcement actions depending on the nature and seriousness of the breach. It will also determine the most effective enforcement tools to address and prevent offending behaviour, ensuring that responses are proportionate and likely to prevent recurrence. These may include:

• Advice and guidance to secure compliance.
• Warning letters.
• Notices of underpayment and civil penalties.
• Naming employers for underpaying the minimum wage.
• Labour market enforcement undertakings or orders.
• Licensing action, including refusal, modification, suspension or revocation.
• Prohibition notice orders.
• Civil proceedings.
• Criminal investigation and prosecutions, where appropriate.”

Source: Gov.uk

We can help you meet your obligations

If you would like to know if your business is complying with employment law, or you simply need information on how the FWA might change what you need to do, then please get in touch and we would be happy to give you the guidance you need.

Are your employees paid the minimum wage for all hours worked?

Employees must be paid the minimum wage for all the hours they work, and while you may think you pay the right amount, it is important to check you have paid everything due.

The basic calculation to determine you have met your obligations in relation to the National Minimum Wage (NMW) can be done by dividing total pay by the number of hours worked in the reference period – which could be a week or a month – and the amount paid per hour must be at least the NMW. The levels for the NMW currently are £12.21 an hour for those over 21, £10 an hour for those 18 to 20, and £7.55 for those aged 16 to 17 and apprentices.

From April 2026, these rise to £12.71 an hour for anyone aged 21 or above, £10.85 for anyone aged 18 to 20, and £8 an hour for those aged 16 and 17 or apprentices.

When calculating if your staff have received the NMW for all their hours, you need to consider every extra hour they may have worked, which is where the calculation can become more complex.

How do you identify all hours worked?

This may seem simple to answer, but there are times when you may not realise that employees should be paid for additional time they have worked.

For example, any time they have stayed late to finish a piece of work, even if they volunteered to do so, still counts towards their hours. If they open or close the office or other commercial premises in the morning or evening, that time counts towards their work hours. So does training, if they’re required to do it, and any other time they are on site and required to work.

You can’t exempt yourself from paying for these hours by thinking ‘they’re salaried’, or ‘they volunteered to do it’. No matter why they are at work for longer than the hours they are expected to be, they must be paid the NMW for all of them.

Calculating that all hours are paid at the NMW

To make sure each person’s pay is at the right level, you need to consider the employee’s basic pay, any bonuses they may have been paid over and above their basic pay – although some are excluded from the calculation which your accountant can tell you more about – and any commission they may have been paid.

You don’t need to include overtime paid at a premium rate, such as time and a half or double time at Christmas or Easter, for example. You also don’t include expenses, benefits-in-kind, or tips, unless they are paid through payroll. But there are conditions to be aware of, so it would be best to speak to your accountant to make sure you’re including everything you should, and excluding anything that doesn’t need to be considered.

Once you have all this information, you can do the calculation to determine that all the hours worked have been paid at the NMW or above. But employers can be caught out if an employee is paid, say, a £100 day rate, and they work a 12-hour day. Or they are salaried to work 40 hours a week, but end up doing 50 hours overall. It isn’t always a simple calculation. So, if you need assistance, please speak to your accountant for advice to ensure you’re complying with all relevant regulations around the NMW.

We can help you

If you are unsure about how to do these calculations, or simply want reassurance that you’re doing everything right, then please contact us and we will do everything we can to assist you.

Christmas gifts from the taxman for your business

Christmas party season is upon us, and it will extend from early December right the way through to mid-January depending on your company. But no matter when the Christmas party is, it is important to remember that HMRC gives your company a gift each tax year to help cover the costs.

You can claim up to £150 per employee for the party, which would include an online or virtual party if your staff are spread across a wide area and you have no other way to ‘meet’. But your party must be open to all your employees for it to qualify for this relief. If you have separate parties across the different sites for your business, then you can still claim up to £150 per person, as long as every employee is able to attend at least one of your Christmas events.

The one thing to bear in mind is if you have more than one annual event for your employees, you need to consider how much you have spent across the year as a whole. For example, if you have a summer party as well as a Christmas party, the combined cost of the two for each employee cannot be more than £150.

What if the Christmas party isn’t exempt?

If you have already used up the £150 per employee allowance within the year, or the Christmas party doesn’t qualify for exemption, then your company will need to report the costs to HMRC, and pay National Insurance on them.

To do this, every employee’s P11D must include a report of the taxable expenses and benefits relating to the Christmas party. Then Class 1A National Insurance must be paid on the full cost of the event.

If the cost of the event is dealt with under a salary sacrifice arrangement, but the cost of the events is less than the salary given up, then you will need to report the salary amount instead.

Let us help you

These rules can sometimes be complicated to apply, especially if you have multiple events you claim for throughout the year. If this is the case, or you simply want to make sure you are complying with the HMRC rules, then please get in touch with us and we will do what we can to help you.

Budget 2025: What it means for you

Chancellor Rachel Reeves delivered her second Budget on November 26, and taxpayers face the highest tax burden on record as a result.

Frozen tax thresholds for everything from income tax to inheritance tax, a change in the use of salary sacrifice to make pension contributions, and a host of other measures mean the Chancellor should swell the Treasury’s coffers by as much as £26 billion in 2029/30.

You could be forgiven for thinking that, under a Labour Government, the richest in the UK would be footing most of the bill. But the reality is very different, and even the Chancellor admitted that “ordinary people will have to pay a little bit more”. That little bit more will take the UK’s overall taxation to the highest level since records began, amounting to 38% of GDP in 2030/31.

Which measures are raising the most money?

The freezing of the income tax and National Insurance thresholds is set to raise the most money. These have been frozen since 2022 and were expected to begin rising again in 2028. But Rachel Reeves has extended the freeze from 2028 to 2031, raising an extra £12 billion due to this extension alone, according to the Office for Budget Responsibility (OBR). This is a volte face compared to her previous Budget, where she said any extension of this freeze would hurt working people.

In a never-seen-before event, information contained in the Budget was released early, hours before the Chancellor stood up to deliver her Budget speech in the Commons, thanks to a mistake by the OBR which put the details on its website too soon.

Rachael Griffin, tax and financial planning at Quilter, said: “The multi‑year freeze on income tax thresholds has now been extended, locking households into one of the most powerful stealth tax rises in modern fiscal policy.

“Reeves has had to renege on what was her rabbit out of the hat moment at her maiden Budget. Given in her speech last year, she said that an extended freeze would hurt working people, this must represent breaking the party’s manifesto pledge.”

A surprising amount of money, up to £4.7 billion in 2029/30, is expected to be raised in additional National Insurance Contributions (NICs) because of the change to salary sacrifice, which will limit the amount of National Insurance relief you can receive to £2,000 a year.

Salary sacrifice is the way that many people put additional money into their pension, as taking an amount from your gross salary means your employer and you as the employee, don’t pay National Insurance contributions on the money. There is currently no limit on how much you can add to your pension this way.

Who will be most affected by this change to salary sacrifice?

The people most affected by this change, which will be in place from April 2029, are those in the private sector who use this method to add money to their pension. This is something that isn’t typically done in the public sector, said Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group.

He added: “Salary sacrifice has long been one of the most efficient ways for workers to boost pension contributions, so limiting it will inevitably increase costs and reduce take-home pay for many.

“At a time when simplicity and engagement are critical to improving savings levels, adding complexity and reducing incentives risks undermining confidence in the system. It’s also vital that consideration is given to the timing of this change.

“People will want to make use of [this] arrangement to the full extent they’re able to. Employers will still face a considerable amount of administration to comply and will need to put thought into communication. It’s also still unclear how the mechanics of the new cap will apply when people move between employers – in all likelihood, this will add further complexity. Payroll systems will need to be updated, and employers will have to manage compliance across multiple schemes and employee movements.”

What other measures were announced?

Other measures announced included a new High Value Council Tax Surcharge which affects properties worth more than £2m. There is a scale of charges for properties worth £2m to £5m or more.

The lowest surcharge, which applies to properties worth between £2m and £2.5m, is £2,500. For those valued between £2.5m and £3.5m, the surcharge is £3,500. Properties worth between £3.5m and £5m will face a surcharge of £5,000, and those worth £5m or more, will pay a £7,500 surcharge.

Landlords will also be hit with an additional 2% tax charge on their rental income from April 2027, which will take the income tax rate paid on rental income up to 22% for basic rate taxpayers, 42% for higher rate taxpayers, and 47% for additional rate taxpayers.

Electric vehicles and plugin hybrid vehicles will also face a new tax. Electric vehicle drivers will pay a charge of 3p per mile from 2028, while plugin hybrids will pay 1.5p per mile, making these vehicles considerably more expensive to run. But fuel duty continues to be frozen for now.

Contact us

If you are concerned about how any of the measures might affect you, then please get in touch with us and we will explain what you need to know.

Beware of trading when your company is insolvent

Continuing to trade while your company is technically insolvent could lead to big problems for the directors, as it could lead to limited liability no longer applying, and leave them on the hook personally for outstanding debts.

A company would be considered insolvent if it cannot pay its debts when they fall due, or its liabilities exceed its assets. There are two specific legal tests that can be applied to check if a company is insolvent:

• The Cash Flow Test (Insolvency Act 1986): the company can’t pay its bills, suppliers, HMRC or lenders on time. This would include juggling payments such as VAT or PAYE, or you’re ignoring letters from creditors.
• The Balance Sheet Test (Insolvency Act 1986): The company’s total liabilities, including contingent and future ones, are greater than its total assets.

If either of these tests are met, then the company is likely to be insolvent, even if the company is still able to trade day-to-day.

What happens if you continue to trade and meet these tests?

If you continue to trade while insolvent, it isn’t automatically illegal. But if you take on new debts or contracts while you know you can’t meet existing obligations, it can cross into wrongful trading or fraudulent trading, or both. When this line is crossed, it could carry personal consequences for directors.

For example, the detail related to Wrongful Trading under the Insolvency Act 1986, highlights that directors should have known or ought to have known that the company had no reasonable prospect of avoiding insolvency.

If you continued to trade, then you could be made personally liable for debts as a director of the business from that point onwards, and/or potentially disqualified as a director for up to 15 years. Ignorance isn’t a defence, as directors are expected to keep adequate financial records so they constantly understand their company’s solvency position.

When does it become Fraudulent Trading?

Fraudulent Trading under the same Act is where you continue trading and intentionally defraud creditors, or for any other fraudulent purpose, it then becomes a criminal offence. Under these circumstances, you could be held personally liable for debts and fines, and face up to 10 years in prison.

Under the Company Directors Disqualification Act 1986, the Insolvency Service can disqualify you for between 2 and 15 years if they find you are not considered a “fit and proper” person, which includes trading while insolvent.

Ordinarily, a limited company means the company’s debts are separated from you personally. But under the circumstances mentioned above, you can be held personally responsible for losses to creditors. But if you suspect your company could be close to the line, then there are a few things you should do:

• Stop incurring new debts.
• Record concerns in a board meeting, and call one if there isn’t one planned.
• Seek professional insolvency advice from a licenced insolvency practitioner.
• Maintain accurate records to show you acted prudently, which can provide some protection for you.
• Consider restructuring the company through administration, a Company Voluntary Agreement (CVA), or liquidation if it becomes necessary.
• Monitor cashflow weekly and monthly.
• Take early advice so you prove you have acted responsibly which means you can avoid personal risk and perhaps even rescue the business.

We can help you meet your obligations

If you have any concerns about the solvency of your business, then speak to your accountant as soon as possible. So, please get in touch and we would be happy to give you the guidance you need.

HMRC publishes new rates for employees’ electric cars

Employees with electric vehicles as company cars have seen a change in the rates they can claim for mileage allowance since September 1, but HMRC has updated the guidance on October 6 about how these new rates need to be apportioned for each journey.

The previous mileage allowance for business journeys was a flat 7p per mile no matter where the car was charged for each journey, which made calculations much easier. But now, HMRC has made it clear that the new rates of 8p per mile if the car was charged at a residential property or 14p per mile if it was charged publicly must be allocated in proportion to how much of each powered the trip.

This new guidance makes it much more complicated for company car owners with electric vehicles, as they will now need to do much more admin to ensure they don’t overclaim on their mileage allowance from HMRC.

HMRC states: “The ‘slow or fast public charge cost per kilowatt-hour’ is the Zapmap public charging price index monthly published figure for slow or fast chargers (charging speed less than 50 kilowatts), uprated with the latest estimate of electricity prices from the Office for National Statistics.”

What if my car is charged both at my house and publicly?

Whether you need to charge your car at your home or out and about as you’re driving at a public charging point, you will now need to allocate a proportion of charging time to each business journey. So, it is now vital for employers to keep records showing how each business journey was powered, and whether the electricity was bought at home or at a public charging point to offer proof for each claim to HMRC.

This means employees will need to record where the charging of the car took place – at home or at a public network charge point, how many miles each charge covered, and retain evidence of each, such as payment receipts or charging logs and mileage data. In every case, the apportionment to each charge point would need to be fair and reasonable, HMRC said.

If the public charging point costs significantly more than the 14p per mile allowed, then it is possible to claim more than the 14p per mile rate. But proof would also be needed from the public charging point if extra is claimed. These rates only apply to purely electric vehicles. Any hybrid cars would be treated as petrol or diesel for the advisory fuel rates.

The rates below are from September 1, 2025, and you can use the previous rates for up to one month from the date any new rates apply. This would mean claims up to October 1, 2025, could still use the 7p flat rate.

Source: HMRC

Let us help you

If you are unsure about how to apply the rates for electric vehicle company cars, then please get in touch with us and we will do what we can to help you.

HMRC powers to raid bank accounts for unpaid tax revived

HMRC has once again been given powers to take money owing to it directly from people’s bank accounts when people persistently fail to pay the tax due. Most taxpayers, those who pay on time and in full, will have nothing to worry about.

But the small minority that refuse to pay, even though they have the means to, are facing the long arm of HMRC reaching into their bank or building society accounts to pay their outstanding tax bill. There are safeguards in place that should ensure no-one undeserving of this action is affected, but it is important to understand under what circumstances you might face money being taken from your account directly.

These powers were used just 19 times in the two years before being paused during the Covid-19 pandemic. But during the Spring Statement this year, these powers were flagged as being revived, meaning anyone who persistently refuses to pay the tax they owe, could be affected.

Recovering debt is important and fair

Most taxpayers – around 90% last year amounting to £858.9 billion – pay their tax on time. The rest became a debt, which must be recovered from individuals and businesses because otherwise its “unfair on the honest majority”, said HMRC. The money is also needed to fund public services, and any shortfall could result in a lack of funding for essential support networks.

Most people who miss the first tax deadline pay the full tax owed if they get a reminder. But a minority of individuals and businesses fail to pay even though they can afford to. This is when the Direct Recovery of Debts (DRD), the name of this measure, is used. It has been restarted in what is being called a ‘test and learn’ phase.

The policy allows HMRC to recover money owed directly from a debtor’s account, or from funds held in cash ISAs, where the debt is £1,000 or more. But there are several safeguards in place to prevent HMRC taking money that would put people into a difficult financial position.

What safeguards are in place?

The safeguards that prevent HMRC pushing people into financial hardship are listed below, and there is also protection for people who might be seen as vulnerable customers.

The safeguards include:

• Only taking action against those who have established debts, have passed the timetable for appeals, and have repeatedly ignored our attempts to make contact. Anyone who disputes the amount owed has the automatic right to appeal.
• Guaranteeing that every debtor will receive a face-to-face visit from HMRC agents before their debts are considered for recovery through DRD, this meeting will provide a further opportunity for us to:
  • Personally identify the taxpayer and confirm it is their debt.
  • Explain to debtors what they owe, why they are being pursued for payment, and discuss payment of the debt.
  • Discuss options to resolve the debt, including offering a Time to Pay payment plan to the debtor, where appropriate.
  • Identify debtors who are in a vulnerable position and offer them the support from a specialist team to help them settle their debts.
• Only debtors who have received this face-to-face visit, have not been identified as vulnerable, have sufficient money in the bank and have still refused to settle their debts will be considered for debt recovery through DRD.
• Only considering the use of DRD on those with tax and tax credits debts of more than £1,000.
• Always leaving a minimum of £5,000 in the debtor’s accounts, so that we do not put a hold on money needed to pay wages, mortgages or essential business or household expenses.

Source: Gov.uk

Is it possible to appeal if you think HMRC has made a mistake?

If you think that HMRC has made a mistake, there is a specific and clear process you can go through if you object or appeal. There is a 30-day window once the debt recovery has been initiated, for those owing tax to lodge an objection to the actions of HMRC.

Money will be held in the account, but not transferred, and the decision about the objection will be made within thirty days. Debtors can also appeal an HMRC decision to the County Court on specific grounds, such as hardship and third-party rights.

For most people, it can be when a major life event or business issue arises which creates a cashflow problem, and people can face financial difficulty which makes it hard to pay their tax. HMRC said it “routinely takes a sympathetic approach to those who need additional support”. But it is important to get in touch with HMRC in good time, so it knows you need help.

HMRC added: “HMRC is committed to clear governance and transparency. The Commissioners of HMRC will maintain oversight of the use of the power, and statistics will be published on the number of times the power is used, and appeals are raised.”

Contact us

If you are concerned that you won’t be able to pay your tax, or you suspect there could be a chance HMRC may begin moves to recover money from your accounts directly, then please get in touch with us and we will explain what you need to know.

Proposed contactless changes could help customers

The Financial Conduct Authority (FCA) is consulting on proposals to give card providers the flexibility to decide what contactless limit would be most suitable for their customers, which could bring greater convenience to people making larger purchases.

Many card providers already offer the ability to adjust a personal contactless limit, or to turn off contact functionality for a customer’s card, and the FCA is encouraging more card companies to offer this choice.

David Geale, Executive Director of Payments and Digital Finance at the FCA, said: “We’re seeing smarter payment technology and more well-established fraud controls, so it’s the right time to let firms tailor contactless payments to fit their customers’ needs and drive innovation. While we wouldn’t expect to see immediate changes to limits by firms, they would have the flexibility to make payments more convenient for customers.

“People are still protected; even with contactless, firms will refund your money if your card is used fraudulently.”

Are contactless protections the same as regular card payments?

Contactless payments have the same protections as other card payments, so customers will be reimbursed by banks and payment firms if they are the victim of unauthorised fraud. This would include if someone’s card has been lost or stolen and is used by someone other than the cardholder.

UK Finance’s Annual Fraud Report 2025 estimates that contactless fraud currently runs at around 1.3p per £100 spent via contactless payments, while traditional payments run at 6p per £100 spend for all unauthorised fraud.

The current limit for most contactless payments is £100, and many card providers are expected to keep this limit, even if the consultation response suggests a higher limit could be more appropriate.

When does the consultation end?

Responses to the consultation should be returned to the FCA by October 15, but the FCA has already had nearly 1,300 responses to the contactless payments Engagement Paper.

This is one of around 50 measures outlined in a letter to the Prime Minster in January, which are designed to support economic growth and prioritise digital solutions.

The FCA Quarterly Consultation Paper states: “Currently, the FCA sets regulatory limits on the value and number of contactless payments that can be made before requiring authentication, typically via a personal identification number (PIN) entry. These requirements are set out in an exemption to the Strong Customer Authentication (SCA) requirements in the Payment Services Regulations 2017 (PSRs), within the Strong Customer Authentication Regulatory Technical Standards (SCA-RTS) (see ‘Current regulatory framework’).

“We propose to replace these regulatory limits with a new exemption, which would allow [Payment Services Providers (PSPs)] to process contactless payments without asking the payer to authenticate the payment, where PSPs identify the risk of a transaction to be low. It is important to note that under the proposed approach, and subject to compliance with all requirements under the rule, PSPs will be able to set their own contactless limits, including at current levels. We will continue to monitor and supervise firms to ensure they are achieving good outcomes, such as low levels of fraud, under the new exemption.”

We can help you meet your obligations

If you or your business wants to find out more about how any new contactless payment limits might affect you, then please get in touch and we would be happy to give you the guidance you need.

Are you using the best scheme for your VAT?

There are several different VAT schemes available to companies and sole traders, and which one you should use will depend on several things, such as what you or your company’s annual turnover is, and what sector your business is in.

Cash Accounting Scheme

The Cash Accounting Scheme is, perhaps, one of the easiest for companies to use, as you pay your VAT once your customer pays your invoice, and you reclaim any VAT you have paid on relevant goods and services.

To join this scheme, your turnover must be below £1.35m a year, but you must leave it if your turnover breaks the £1.6m per year barrier.

Annual Accounting Scheme

In most VAT schemes, companies or traders need to file their returns four times a year, every quarter. But with the Annual Accounting Scheme, you file your return once a year, which significantly reduces your administration.

However, if you use this scheme, you would only be able to reclaim your VAT on purchases once a year, so if you need to reclaim a lot of VAT, or you want to get more regular rebates, this wouldn’t be good for you. Conversely, you would only have to pay your VAT bill once a year, which for some could improve cashflow.

Again, to qualify for this scheme, you need to be turning over less than £1.35m a year, and again you will need to leave the scheme if your turnover goes above £1.6m a year.

Flat Rate Scheme

The Flat Rate Scheme, as the name suggests, means you will pay a single rate of VAT, which is determined by the industry you work in, and how much you spend on goods. You still charge VAT on your invoices at 20%, but you don’t need to work out how much VAT you have charged and can reclaim.

If you don’t have many vatable costs, essentially less than 2% of your VAT-inclusive turnover, or less than £1,000 a year, then HMRC classes you as a “limited cost trader”. This means no matter what sector your business is in, you must pay a flat rate of 16.5%. This is to make sure businesses don’t get too much benefit from the Flat Rate Scheme.

You can calculate if you need to pay the higher rate and work out which goods count as costs, via the link on Gov.uk. To see what the Flat Rate Scheme VAT is for your industry, you can check the table on Gov.uk.

To join the Flat Rate Scheme, you would need to have a turnover below £150,000 a year, and if you opt for this scheme, then you can’t reclaim VAT on items you purchase, except for certain capital assets over £2,000.

Example

You bill a customer for £1,000, adding VAT at 20% to make £1,200 in total.

You’re a photographer, so the VAT flat rate for your business is 11%.

Your flat rate payment will be 11% of £1,200, or £132.

VAT inclusive turnover is different from standard VAT turnover. As well as business income (such as from sales), it includes the VAT paid on that income.

Calculating two flat rates

The first calculation should start from day one of your accounting period to the last day of that flat rate. The second should start from the date of the new flat rate to the end of your accounting period.

Source: HMRC

If you’re not sure which scheme would be best for you, or whether you should change which scheme you’re in, then speak to your accountant for advice.

We can help you

Choosing the right VAT scheme can make a big difference to your business and the amount of admin you need to do, and if you’re not sure which scheme would be right for you, then please contact us and we will do everything we can to assist you.

Companies may have claimed the wrong amount of marginal relief

HMRC is contacting companies that it believes may have failed to include the correct number of associated companies in their Corporation Tax return and consequently claimed marginal relief in error.

The main rate of Corporation Tax rose to 25% on April 1, 2023, with a small profits rate of 19% introduced for companies with profits up to £50,000. But marginal relief can be claimed where company profits sit between £50,000 and £250,000, with an effective rate between the 19% and 25% rates.

This is because these thresholds are proportionately reduced where, for example, there is one associated company, and in this case, it reduces the thresholds to £25,000 and £125,000.

What is an associated company?

Companies are considered to be associated where one is controlled by the other, or the companies are under ‘common control’. But in some circumstances, these rules can be difficult to apply, according to the ICAEW, which is one reason why companies may have not declared the correct number of associated companies.

The letters from HMRC are asking companies to check their position, and to amend the Corporation Tax return where the error occurred, if there is still time. Or if it isn’t possible to amend the return because it is too late, HMRC is asking the company to make a voluntary disclosure to HMRC.

The company should also let HMRC know if it feels the information in the return was correct. But each of these responses should be received within 30 days of the date of the letter.

When is it too late to amend a Corporation Tax return?

Usually, you have 12 months from the HMRC submission deadline for your Corporation Tax return. So, if your company must file its return by December 31, 2024, you have until December 31, 2025, to make any changes.

The letter sent out by HMRC explains what each company needs to do, and how to ask for extra support if needed from HMRC. No matter what, the important thing is not to ignore it if you get one of these letters.

Other areas of company tax follow similar rules for associated companies, according to the ICAEW, including the national insurance employment allowance. So, if your company has faced a query from HMRC on this issue on Corporation Tax, then you should consider if the same issue has arisen in any other areas of company taxation.

We can help you meet your obligations

If you are unsure whether your company has fallen foul of the complexity of these rules, then please get in touch and we would be happy to give you the guidance you need.

Changes to umbrella company payments could reduce wages

Umbrella companies are typically used by recruitment agencies to employ workers on temporary contracts, in sectors like IT, healthcare, construction and education. Usually, the contractor or temporary worker will work for a client, the client pays the recruitment agency, and the agency pays you your money through the umbrella company after deducting any fees, tax and National Insurance contributions (NICs).

However, if you are one of the people working in this way, then the changes to employer NICs from April 6, 2025, mean that you could end up having less money in your pocket thanks to a quirk in the way this can impact individuals, rather than employers.

From April 6, 2025, NICs increased by 1.2% to 15% and the level at which employers begin to pay it fell from £9,100 per year to £5,000 per year. This has already caused problems for many businesses that are facing bills much higher than they had expected. These costs are borne solely by the employer in most cases, and employees should not see any impact on their salary. But with umbrella companies, the position is likely to be different, according to the Low Incomes Tax Reform Group (LITRG).

In this case, it could be the employee being paid by the umbrella company that could face paying this bill, as NICs is often deducted from the worker’s agreed rate.

Why will this affect the worker and not the employer?

Agencies are paid by companies that ask them to find employees for them, and these fees are often paid to an umbrella company that will then pass that money onto the worker for the period of time they are with the company.

Unless the recruitment agency’s client is providing the additional amount of money to cover the rise in NICs, that money is most likely going to come out of the wage that the agency is sending to the worker. This means you will have less money in your pocket, even though this NICs change was not supposed to affect employees.

The difference in the pay could be considerable. For example:

Someone starts a job in March 2025 with an assignment rate of £18 an hour. If they work 37.5 hours a week, this translates into gross pay for them of £519.37. The employment costs are £132.81.

In April 2025, the assignment rate is still £18 an hour. But the employment costs are now £145.32 due to the increased employer NIC rate. This means the person’s gross pay will be £506.77.

Source: LITRG

You may think that if you have a contract with the agency, you have a specific rate of pay. But in many of these contracts your rate of pay can be changed, providing you are being paid the minimum wage.

What can I do about this?

If you’re getting less money because of this increase in NICs, then you could ask your umbrella company to renegotiate the overall rate with your agency and/or end client, so the increase in NICs is paid by the company you work for, not you. You may not be able to do this, but it is worth asking.

If not, then you should look at the guidance created by HMRC with input from the LITRG. This outlines how umbrella companies can positively contribute to the temporary labour market.

These actions are split into two sections – operating reasonably and providing a good service. The headings for these actions include:

• Umbrella companies should be run by fit and proper people.
• Umbrella companies should be financially viable.
• Umbrella companies must follow the statutory requirements that apply to all employers.
• Umbrella companies must accurately operate the payroll for their employees.
• Umbrella companies should compete based on lawful practices.
• Umbrella companies should be clear, open and honest with the information they provide their employees.
• Umbrella companies should provide employee care.
• Umbrella companies should provide recruitment agencies with the information they need to meet their legal obligations.

Source: LITRG

HMRC is expected to begin tightening compliance around how employer NICs is charged in these cases. But if the umbrella company you’re working with isn’t complying with this guidance, then you may want to consider not working with them. You can find out more about the pay you would receive with the Umbrella Company Pay Tool, which is on Gov.uk.

We can help you meet your obligations

If you think you might be affected by these changes, then please get in touch and we would be happy to give you the guidance you need.

Companies are being warned to comply with new rules

Companies registered at Companies House are being warned to keep on top of their responsibilities, such as filing their confirmation statements on time, otherwise they could face new penalties.

Companies House will still support businesses to help them comply with their legal obligations by sending notifications via email, for example. But if warnings issued by the department are ignored, then a financial penalty could be applied. Any company or director who is found responsible for committing a more serious offence could face civil or even criminal prosecution, and/or be disqualified from being a company director.

There are other agencies that could be brought into a prosecution too if necessary, such as the Insolvency Service, among others. This could result in a sharing of intelligence between the various agencies, with cases being referred between them, which could lead to more holistic enforcement action where that is appropriate.

Any director convicted of an offence could end up with a criminal record. You can find out more about the Companies House approach to enforcement in the Companies House enforcement policy.

What financial penalties could me or my company face?

If you don’t comply with your obligations under the new rules, then you can face a fine, which will increase depending on the severity of the breach, and the number of previous breaches of a similar nature.

Source: Gov.uk

The new rules are part of the ongoing implementation of the Economic Crime and Corporate Transparency Act 2023, and increase the powers of Companies House in relation to tackling economic crime and improve corporate transparency.

Martin Swain, director of Intelligence and Law Enforcement Liaison at Companies House, said: “The introduction of these new penalties marks another significant step forward for Companies House and our transformation.

“Where our guidance and support are not enough to encourage users to comply with the law or discourage misuse of our registers, we won’t hesitate to use these new powers available to us.

“We’ll take a consistent and proportionate approach to these new powers to firmly, but fairly, enforce the law. This will improve the quality of the data on our registers and help us play a greater role in identifying, disrupting and preventing economic crime.”

Can I appeal a penalty?

You can appeal a penalty from Companies House, providing you have permission from the court to do so. This appeal would be made to either the County Court or, in Scotland, the Sheriff Court. But there are very specific grounds that must apply for you to have grounds to appeal:

You may only appeal on the grounds that the decision to issue a financial penalty, the level or type of financial penalty or any condition stated in the penalty notice:

• Is unlawful.
• Is irrational or unreasonable.
• Has been made on the basis of procedural impropriety or otherwise contravenes the rules of natural justice.

Source: Gov.uk

Any application to the court for permission to appeal must be made within 28 days from the day after the penalty notice is given. Any request for permission to appeal after this date would only be accepted if the court accepts there was a good reason for you not filing to seek permission within that period.

If you choose to appeal, you also must serve written notice of the appeal application on the registrar within seven days from the date on which the application for permission to appeal was issued. You also must outline what grounds you are making the appeal on within a statement, which can be emailed to enquiries@companieshouse.gov.uk.

You can also write to the registrar at:

Companies House
Crown Way
Cardiff
CF14 3UZ

The court will consider the appeal, and could dismiss the appeal, vary the penalty amount, change the nature of financial penalty between a daily rate, fixed penalty, or a combination of the two. The court could also quash the penalty completely, or in part.

Jonathan Upton, director of Legal Services at the Insolvency Service, said: “We are committed to working collaboratively with Companies House to help improve the integrity and transparency of the data on its register.

“Where it is appropriate and proportionate to do so, and as part of our overall approach to tackling economic crime and wrongdoing, we will utilise the powers available to us to take enforcement action against misconduct on the register.”

We can help you

If you are concerned that you have not complied with all your obligations for Companies House, then please contact us and we will do everything we can to assist you.

Have you had PAYE or other errors in your payroll? You could face a penalty

If your business has had any kind of errors in Pay As You Earn (PAYE) for your payroll, you could be facing a penalty from HMRC for not operating your PAYE correctly, including anything from not filing something at the right time, or failing to do something accurately.

Sending information in late – or failing to send it at all – is one of the main problems that employers might face. Now that the Real Time Information regime is in place for non-exempt companies, most employers must submit information electronically to HMRC each time they make an employee payment.

If you fail to file on time, HMRC will typically, but informally, allow a three-day grace period, which means you may not be charged a late filing penalty until after this, said the Low Incomes Tax Reform Group (LITRG). But don’t abuse this grace period, as employers regularly missing the filing deadline will be monitored and could eventually face a penalty.

Will I be fined for every late PAYE submission?

If you don’t file your submission on time once, then you won’t face a fine. You are allowed one error each year penalty free. But any other late submissions could face a penalty. You can find out how much this might be on GOV.UK.

The fine relates to how many employees you have, but it would be at least £100. Even if you have paid the relevant amount of PAYE or National Insurance Contributions (NICs) but fail to file the paperwork, you could still be fined.

If you are fined for a second missed payment in the same tax year, it would incur a 1% penalty of any PAYE or NICs outstanding, rising to 2% of the tax due for four missed payments, then 3% for seven missed payments and so on.

If you fail to pay any amount of PAYE due within six months, then a penalty of 5% of the outstanding amount will be charged. An additional 5% would be due if the PAYE is still not paid within 12 months. In this case, you would face these penalties on the value of the first PAYE missed payment in a year, even though this wouldn’t incur the penalties outlined earlier. There is more information about this on GOV.UK.

However, if the amount owed is less than £100, the LITRG understands that HMRC is unlikely to issue a penalty.

Is it only PAYE filings that can be a problem for businesses?

Companies must file various returns to HMRC and making errors or failing to file on time will also potentially lead to penalties. Penalties can be applied for the late filing of P11D forms for example, which could be up to £300 as an initial penalty, plus £60 a day for as long as the form isn’t filed. This is for each form, so it could become very expensive if you have a lot of employees.

If you file your company’s P11D(b) late, you could face a penalty of £100 per 50 employees for every month or part month that this form is filed late. You should also make sure the information on the P11D is correct as any form believed to be filed negligently or fraudulently could face a penalty of up to £3,000. But this would only be expected in the most serious cases, according to the LITRG.

If a taxpayer has a reasonable excuse for missing the filing deadline, then they may not be penalised. A reasonable excuse would include a partner or close relative dying just before or at the time the deadline arrived, a software glitch at the time you were trying to file, or an unexpected hospital stay, among others. Typically, it is anything that you could not have foreseen that prevents you from filing, but HMRC will consider each instance on a case-by-case basis.

You can find out more information about how to appeal any penalties you think may be unfair online at GOV.UK. If you want to find out more about this subject, then you can visit the LITRG website to find more detail, or speak to your accountant who will be able to help.

We can help you

If you have missed a PAYE or P11D payment or made errors on either and want to be sure you don’t face penalties on future filings, then please contact us and we will do everything we can to assist you.

Business compliance with HMRC costs firms £15.4 billion a year

Meeting tax obligations is costing UK firms around £15.4 billion a year according to the National Audit Office (NAO), the body responsible for scrutinising public spending, and it appears HMRC is underestimating these costs to taxpayers. This has a major impact on the profitability of UK businesses, especially during a period when Chancellor Rachel Reeves is focusing on ways to grow the UK economy.

In its latest report, The administrative cost of the tax system, the NAO is looking to make the costs of administering taxes more visible to all parties, to explore whether HMRC understands whether its administrative costs are high and/or increasing, and to establish how HMRC is working to reduce costs to taxpayers by improving efficiency and productivity. The NAO focused on the four taxes which create the highest revenues but also have the highest administrative costs. These are:

• Income tax.
• National Insurance Contributions.
• Corporation tax.

Frank Haskew, Head of Taxation, ICAEW, said: “This report highlights how the UK’s increasingly complicated tax system is saddling businesses and HMRC with extra burdens and costs, which are growing in real terms. The report also substantiates our concern that the cost to businesses of complying with their tax obligations is likely to be understated.”

What is the impact of these costs?

The NAO report highlights that compliant businesses are spending £6.6 billion in fees to agents, accountants and other intermediaries, £4.5 billion on items such as software to help them comply with HMRC rules, and around £4.3 billion on internal costs, such as hiring staff to do administrative work. Given there are 2,500 obligations across 27 policy areas, it is little wonder the costs are so high.

However, the NAO doesn’t believe that even these extraordinary figures show the complete picture, as it feels this underestimates the amount that businesses need to pay to comply with so many complex rules within the UK tax system. The figures don’t, for example, take into account all taxpayer obligations. And although HMRC has uprated these costs from research carried out in 2015 – but not since – into how much time businesses spend on tax administration, it hasn’t taken into account wider tax system changes made in the last decade.

However, the assessments of how tax policy changes impact taxpayers rarely estimate the costs of compliance for both businesses and individuals, the ICAEW said. Despite this, estimates show that HMRC is spending 15% more – or £563m in real terms – between 2019/20 and 2023/24 for administering the tax system. What this means is that HMRC spends an average of 0.51p for every £1 collected.

The cost to collect different taxes

The thing is, not every type of tax costs the same to collect. For example, income tax self-assessment (ITSA) was the most expensive to collect in 2023/24, at 2.14p per £1 collected. This is six times the amount it costs to collect income tax through PAYE.

Other costs are outlined in the table below:

Source: NAO analysis of HMRC data

Mr Haskew said: “If government is to make decisions around tax policy that properly takes into account the costs and burdens placed on businesses and HMRC, improved numerical analysis and statistics will be required across the board. A key first step would be a thorough review and update of HMRC’s standard model of the costs incurred by businesses when changes are made, which is now at least 10 years out of date.”

We can help you meet your obligations

If you want to know how you can reduce the costs associated with your compliance with HMRC requirements, then please get in touch and we would be happy to give you the guidance you need.

Company size thresholds to increase in the UK from April

The official classification of company sizes is set to change from April, with many firms being identified as smaller than they were previously, which should make filing company accounts more straightforward.

The new legislation, The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024, will increase the thresholds at which micro, small, and medium-sized companies are classified, which aims to cut the complexity in financial reporting. The existing thresholds have not changed since 2013, so it is also designed to take inflation into account in the intervening period.

The new thresholds, which come into effect on April 6, will determine the size of a business for a fiscal year, if two of three criteria are met:

* ie, total assets

Source: ICAEW

These new thresholds will apply to limited liability partnerships (LLPs) as well as limited companies.

What is the impact of these changes?

Government estimates suggest as many as 113,000 companies and LLPs that have previously been categorised as small will become micro entities. A further 14,000 are expected to move from medium-sized to small companies, and 6,000 from large to medium-sized. Any company that can go down a category will see a lower burden in reporting and auditing requirements.

Companies moving from the medium-sized to small category will no longer need a statutory audit of their accounts, or to provide a strategic report. They will also have simpler accounting requirements. But these changes would depend on whether they are part of a group. Any company moving from a small to micro entity will no longer have to provide a Directors’ Report.

What benefits will larger companies have?

Companies recategorised as medium-sized rather than large will be exempt from some Strategic Reporting requirements, including a Section 172(1) statement which outlines how directors of the company have taken stakeholder and other interests into account as per section 172, CA 2006 for the financial year.

Fahad Asgar, Technical Manager, Corporate Reporting Faculty, ICAEW, said: “The legislation includes a transitional provision for the application of the ‘two-year consecutive rule’. When determining company size for a financial year beginning on or after 6 April 2025, the transitional provision allows preparers to assume that the new thresholds had been applicable in the previous financial year. This look back is only available for the application of the two-year rule. As a result, companies and LLPs can benefit from the threshold uplift as soon as possible after the legislation comes into effect.

“Ensuring proportionality and removing duplicative reporting requirements is an important first step towards a modernised model for UK corporate reporting.”

Large and medium-sized entities will also see a raft of requirements that have previously been necessary for their Directors’ Report removed. So, they will no longer have to include information on:

• Financial instruments.
• Important events that have occurred since the end of the financial year.
• Likely future developments.
• Research and development.
• Branches outside the UK.
• The employment of disabled people (this requirement is also being removed for small entities).
• Engagement with employees.
• Engagement with customers and suppliers.

Source: ICAEW

You can find more information outlined in the Government’s explanatory memorandum.

We can help you meet your obligations

If you are unclear about what these changes will mean for your business, then please get in touch and we would be happy to give you the guidance you need.

HMRC’s gifts for the employer’s Christmas party

Each year there are a number of items you can claim for when you’re planning the firm’s Christmas party, and looking at this ahead of the festive season can result in savings for your business. To be exempt, the party must be open to all employees, be an annual event – like a Christmas party or a summer barbecue, and cost less than £150 per person to put on. These same rules apply whether a party is online or in real life.

You can put on more than one party in various locations if your business is spread across the country, provided every employee is able to attend one of them. You can also have more than one party a year, providing that the combined cost of them all is less than £150 per employee.

When might the company need to pay?

If the company events aren’t exempt, or you have used up the £150 per employee allocation earlier in the year, then you may need to report the value of the party on each employee’s P11D form and pay NICs on the value of it.

If the party is part of a salary sacrifice arrangement, and the party’s value is less than the amount of the salary given up, then you would need to report the value of the salary instead. You can find out more information on Gov.uk.

Let us help you

If your business is planning a Christmas party then, please get in touch and we will be happy to offer you the help and guidance you need.

First Labour Budget 2024 – the changes announced

Labour Chancellor Rachel Reeves delivered her first Budget at the end of October – which was also the first Budget ever delivered by a female Chancellor of the Exchequer, with Britain’s wealthiest people and businesses being asked to pay the most.

National Insurance (NI) payments made by employers are set to rise from April next year, to raise money to fill a £22 billion financial black hole the Government claims was left behind by its Tory predecessors. Other measures include changes to the inheritance tax due on farms passed down to the next generation, which have caused consternation among Britain’s farmers, and changes to Capital Gains Tax (CGT) amounts, as well as various other measures such as a continued freeze on the 5p cut in fuel duty.

What do I need to know?

Many individuals will be no worse off as a direct result of the Budget measures. The personal income tax bands remain frozen at the same level until April 2028, which means you won’t pay more tax immediately. But as your earnings increase, you may be pulled into the higher tax bands, so it could impact you as time goes on.

Capital Gains Tax (CGT) on profits generated by selling shares will rise from 10% to 18% and the higher rate will rise from 20% to 24%. But the CGT rates on selling property will stay the same. You only pay CGT on a property that is not your main residence, and that rate stays at 24% for property gains and income above the basic rate band, and 18% for anything below this.

Inheritance Tax (IHT) thresholds have also been frozen for another two years until 2030, and from 2027, any pension pots that remain unspent and will be passed onto someone else will also become subject to IHT.

How about the State Pension changes, and the minimum wage?

The minimum wage for those over 21 is rising from £11.44 to £12.21 per hour from April 2025, and for 18-to-20-year-olds it will rise from £8.60 to £10 from the same period. The ultimate plan is to achieve a long-term move to a single rate for adults.

The Basic State Pension is rising by 4.1% from April thanks to the “triple lock” as this is the rise in average weekly earnings. This will increase the State Pension from £221.20 per week to £230.25 for the full new State Pension.

One other change was the increased eligibility for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 per week.

Anything else that was announced?

There were many other things announced in the Budget, including that the £2 cap on single bus fares in England will rise to £3 from January. The Government has also committed to fund the tunnelling work to take the HS2 high speed line to Euston station in London.

Air Passenger Duty is set to go up by £2 for short haul flights and £12 for long haul flights from 2026, and rates for private jets will rise by 50%. The Government has also said it will “secure the delivery” of the TransPennine rail upgrade between York and Manchester, which contradicts reports that ministers were planning to cut costs.

An extra £500m will be set aside next year to repair potholes in England, and in a bid to push people towards using electric vehicles, Vehicle Excise Duty – the proper name for car tax – will double in the first year.

There will also be a new tax of £2.20 per 10ml of vaping liquid from October 2026, and there is a 2% above inflation rise on tobacco, and a 10% above inflation rise on hand-rolling tobacco. Tax on non-draught alcoholic drinks will rise by RPI inflation, but draught drinks will see a tax cut of 1.7%.

Contact us

This gives a small flavour of the changes announced in the Budget. If you want to find out anything else or are concerned you may have missed something that is relevant to you, then please get in touch with us and we will do whatever we can to help.

Corporation Tax reminders will no longer be sent

Businesses will no longer receive Corporation Tax reminder letters from September, so from now on, you will need to be on top of your Corporation Tax to make sure you pay everything on time and in full without any prompts.

All non-statutory Corporation Tax letters which relate to information that can be accessed through online accounts with HMRC or via Gov.uk will stop. But there are no changes to the process of Corporation Tax. This is just a way of reducing HMRC costs by cutting down on how much paper it uses to communicate with customers. It should be better for the environment too.

Which letters are affected?

From September these Corporation Tax letters will no longer be issued:

• CT205/A return reminder
• CT608 instalment payment reminder
• CT207 interest statement
• CT209 payment receipt

Source: HMRC

In addition, from October, the CT603A agent list of issued notices to deliver Company Tax return will not be sent – although customers will still receive the CT603 notice to file.

HMRC added: “We’ll also trial no longer sending CT208 reminders before we stop sending them permanently. The trial runs from September until January 2025. We will monitor the effect and stop the trial if we see a negative impact on our customers or process.”

The letters to be trialled are:

• CT208 PR1 payment reminder
• CT208 PR2 return and payment reminder
• CT208A PR2 return and payment reminder agent copy

Source: HMRC

You can also find out more about the requirements for filing company tax accounts online at GOV.UK at:

Corporation Tax accounting periods

Company Tax returns

Let us help you

If you need to make changes to any aspect of your business with HMRC or Companies House and want to discuss what these changes could mean and how to make sure you don’t miss a deadline, then please get in touch and we will be happy to offer you the help and guidance you need.

MTD to expand to income tax in 2026 – get ready!

The Making Tax Digital (MTD) regime is set to begin applying to income tax soon, and the first people to be brought into the regime will be the self-employed and landlords. Although April 2026, which is when relevant taxpayers must sign up to file digitally, sounds a long time away, it will arrive sooner than you think, and you need to be ready for the changes to avoid the chance of a penalty.

From April 2026, any self-employed person or landlord earning more than £50,000 a year from their self-employed income or property income, will need to sign up to the scheme and file their tax return digitally. Also, instead of filing once a year like you do now, you will instead be asked to send HMRC quarterly updates through compatible software. There are many different brands of software that would be suitable, so finding the right one for you is something you could start working on now in consultation with your accountant.

Even though the first sign-ups for MTD for income tax will be for those earning more than £50,000 a year, anyone earning income of more than £30,000 will also have to sign up to the regime by April 2027.

What if I earn less than £30,000?

If you earn less than £30,000 you can still sign up for the scheme voluntarily, but you will not be forced to join in these early stages. But there might still be some benefits to signing up early. Currently, HMRC is running a testing phase to find out how to make the expansion of MTD work best for the self-employed and landlords. This means if you sign up early, you may have a chance to help shape the outcome.

It will also help you to get to grips with the new system before you are obliged to use it, so you feel more confident in everything you need to do before the April 2026 or deadlines arrive.

You will also have access to a dedicated customer support team as an early adopter, who will help you understand and resolve any issues you have with filing under the new regime. Plus, you and your accountant would be supported through the process for your other tax affairs – including PAYE and self-assessment for the 2024/25 financial year.

How do I join up?

Around 780,000 people are expected to qualify to join the first phase of this round of MTD. The aim for HMRC is to improve record keeping, as you must file quarterly, and everything will be held digitally which should also reduce the number of errors on your taxes.

If you want to join up in this phase, then please contact your accountant and they can help you. They can sign up as many of their eligible clients as they want to, and this is the best way to access the new regime as you then have the backing and help of an expert to guide you through any problems. But if you want to sign up separately, you can do that providing you’re eligible.

To be eligible, there are various rules and regulations, so you need to check if any of them apply to you. These details are outlined on the Gov.uk website:

You can sign up voluntarily if (all the following):

• your personal details are up to date with HMRC
• you’re a UK resident
• you have a National Insurance number
• you have submitted at least one Self-Assessment tax return
• you’re up to date with your tax records — for example, you have no outstanding tax liabilities
• you use an accounting period that runs from 6 April to 5 April

You can also use an accounting period that runs from 1 April to 31 March, if the software you choose supports this. To use this accounting period, you must:

• select calendar update periods in the software before the first update is made
• make an adjustment at the end of your first tax year — so that your income and expenses from 1 April to 5 April are included in your tax return

If you sign up, during testing you will not be able to:

• claim carry back of losses
• change your accounting period
• change your accounting method

You cannot sign up voluntarily if you:

• have a High-Income Child Benefit Charge
• have a payment plan with HMRC
• are a partner in a partnership
• claim Married Couple’s Allowance
• claim Blind Person’s Allowance
• are currently, or are going to be, bankrupt or insolvent
• are an MP, minister of religion or Lloyd’s underwriter
• have income from being a foster carer or being in a shared lives scheme
• have income from a trust
• have income from a jointly owned property
• have income from a furnished holiday let
• are subject to a compliance enquiry
• use ‘averaging’ or other arrangements because your profits vary between years — for example, because you’re a farmer, writer or artist
• are signing up on behalf of someone else (unless you’re an agent) — this includes (but is not limited to) if you’re:
  • an insolvency practitioner
  • a nominee
  • a solicitor

Source: Gov.uk.

What software will I need to use?

There are many different types of software you can use to file digitally online, and some do not charge you to use them. But it isn’t as easy as just signing up to any software as which will suite you best will depend on what data you need to hold, how simple your tax affairs are, and how tech savvy you are.

All of the compatible software options can be found on Gov.uk, and while there are a few that are currently working, many more are being developed by some of the biggest names in online accounting. Again, you can ask your accountant for guidance on which would work best for you if you are unsure.

The new regime will mean more admin for those joining up, and collectively for everyone who is eligible and is earning more than £30,000, the cost of implementing the new regime is expected to be £561m as a one-off. But filing more regularly and keeping better records online is likely to help you with other areas of your finances too. So, there are additional benefits to signing up early.

Contact us

There are many aspects of the changes to the MTD regime that you may not feel comfortable with, but if you have any queries then please get in touch with us and we would be delighted to help you.

Keep good records to avoid a fine from HMRC

Keeping good business records is an essential part of running a business, but it is also a legal requirement when it comes to HMRC. To keep on the right side of the law, businesses and individuals should keep records of their income and expenditure for at least six years.

If HMRC decides to undertake an investigation into your tax affairs and you don’t have proper records, then you can expect a fine. So, to be sure you won’t face censure, you need to keep all your records in good order.

What information are we supposed to hold?

You need to hold various information, such as all the income and expenses you include on your tax return, receipts and invoices, and payroll records – if you have them – to verify the money and perks you have given your employees.

If you or your business is VAT registered – which is a requirement in the UK if you or your business has a turnover of more than £90,000 per year – then you will also need to keep the records of what you have put on VAT returns throughout the year.

In addition, you would need to keep a copy of other documents that support your financial transactions within your business, which includes things like your bank statements.

Why do you need to keep these records?

Holding these records will allow HMRC to review all the information you have put into your self-assessment or your company to check you have declared everything that should have been declared. But it also enables you to defend any investigations undertaken by HMRC if it believes you have tried to avoid paying tax.

You could receive a visit at any time from HMRC, whether you’re a business or an individual, and you would be expected to have your records up-to-date and available for inspection. But you will get notice in advance of a visit, and if you have an accountant then he or she will be contacted instead.

HMRC may ask to visit your home or business premises, or it can visit your adviser’s office if that is more appropriate. If you have a visit at your home or business from HMRC, your accountant or legal adviser can be present if you prefer. If you get a notification that the tax office wants to visit you, you may face a penalty if you refuse the visit or you don’t send information back.

There are some exemptions where a penalty wouldn’t be applied for refusing the visit, such as if you’re seriously ill or someone close to you has died. You can also ask HMRC to stop the check if you want to, but you will need to give them the reasons why if you don’t agree with it. You can also apply for alternative dispute resolution (ADR) at any time if you do not agree with HMRC’s decision or what is being checked.

You will be sent details of the results of the check by letter and if you have paid too much tax, this will be repaid, or if you have not paid enough tax, you will have to pay any underpaid tax within 30 days. Usually, you will have to pay interest on top from the date the tax was due. If you haven’t paid enough tax, you may also have to pay a penalty, but HMRC will consider how helpful you have been during the investigation. But if you disagree with HMRC, you can appeal a tax decision.

We can help you

If you get a notification from HMRC that you are going to receive a visit and you need our assistance to deal with this, then please get in touch with us and we would be happy to help you.

Changing VAT details must now be done online

Anyone who needs to make changes to their VAT details now needs to do this online through their VAT online account. Prior to August 5, you could use the VAT484 form, or another postal or electronic method. But this is being phased out.

The digital route is more secure and prevents delays in making the changes, according to HMRC, although anyone who is digitally excluded, for example, can still apply for changes by post on a VAT484 form.

What happens if I am overseas?

If you are based overseas, then you will need to call HMRC to make the changes as these cannot be done online and you will still need to use the VAT484 form. This can be used to change your business name or your phone number if you or your company must pay VAT.

Also, remember to update your Companies House record if you are changing your business name or the address of your business. Any other changes, such as using a different bank account, also need to be communicated as soon as possible to prevent any problems. You can find out more about how to make the changes on Gov.uk.

Let us help you

If you need to make changes to any aspect of your VAT, business or personal details with HMRC or Companies House, then please get in touch and we will be happy to offer you the help and guidance you need.

Businesses look to increase home working

The number of businesses planning to increase home working for staff has risen according to the latest official figures. In late May 2024, around one in five (19%) businesses said they either had or were intending to raise the number of staff who are working from home, with more than half citing the reduction in business overheads as their reason for the change.

Home working has become more popular since Covid, as more people realise the flexibility it offers them, and companies realised how much could be saved by allowing staff to work offsite. The largest number of respondents to the ONS Business Insights and the Impact on the Economy survey that were looking to increase home working were in London, with 28.8% of businesses there saying they wanted to move or had moved in that direction. The lowest number was in Northern Ireland, where just 19.2% of the companies surveyed said they had or planned to increase the number of staff working from home.

What does a shift to home working bring?

For many employees, homeworking provides a much better way to run their lives. They tend to have more flexibility around what they can do and when – such as fitting in a school run around online meetings – and will often be more productive as a result. After all, there is no-one to have a chat with at the water cooler in the office.

However, for others, the downside of homeworking means they lose out on social interaction that they crave, and it can be difficult for some people to ‘switch off’ from work. This is something that needs to be regimented, otherwise employees can suffer from burnout, and become less effective at their job.

For employers, there are lower overheads as they need to provide less office or other workspace for their employees, which can create big savings for a business. That said, employers still have a responsibility to ensure their employees have a good working environment, and this could include providing good-quality office furniture, such as desks and chairs, to ensure they are not at risk of injury. Employees must also do what they can to prevent injury in the same way as they would if they were in an office environment. More information can be found on the Health and Safety Executive website.

What can I expect from my employer if I work from home?

Remote working has its benefits for both the employer and the employee, but there is a lot to consider on both sides if this is put into practice. For example, it will be harder for an employer to see if you are becoming excessively stressed or overloaded by work, so good communication is vital.

Being open with your employer if you are overburdened or feel stressed is essential, because otherwise they will not know and would be unlikely to help. Keeping in regular contact with your employer and colleagues will help to keep things on an even keel and will ensure you have social interaction during the working day. It may be tempting to hide any excessive stress from an employer when you are working from home, but this won’t help either party at the end of the day. So, be upfront – your employer has the same obligations for your health and wellbeing outside of a site office as it would inside one.

One thing to also consider is whether you need to update your home insurance to cover you for working from home. Usually, you don’t need to change your insurance unless you have people coming to your home for meetings or to buy products. If you are simply doing office work from your home, the chances are you won’t need to change anything. But check with your insurer, just in case. Remember, you may have more expensive equipment in your home supplied by your employer, so you should at the very least make sure this is covered on a policy.

If you need to pay any extra in insurance, then you can ask your employer to pay this additional premium for you. You may also be able to claim some tax relief even as a PAYE employee for using your home for work, such as the cost of electricity related to work activities. This is all worth checking with your accountant as these bills can add up.

We can help you

If you are an employer or employee who is considering increasing the amount of home working you or your staff do, then please get in touch with us and we would be happy to help you identify additional savings and costs that could be created as a result.

Employer-run, relief-at-source pensions must submit return by July 5

Employers who run their own pension schemes and operate on a relief at source basis must file their return for the previous tax year by July 5. It is vital the information on the return is correct and complete, otherwise HMRC will consider the return to be incomplete even if filed on time.

You must also file form APSS590 to confirm the information within the return is true and complete. The return relates to contributions made in the previous tax year up to April 5.

How do I file the return?

HMRC is happy for you to file the return in an Excel spreadsheet which is pre-formatted to the correct structure for the return. To help you get the return right, HMRC’s pre-formatted spreadsheet will include conditional formatting, which means:

If you’ve entered too many characters in a cell, the spreadsheet column header in rows 1 and 2 will:

• Turn red.
• Stay red until you have corrected the errors.

If you submit the spreadsheet to HMRC without removing the excess characters:

• Your submission will automatically fail and the return will continue to be outstanding.
• You’ll need to resubmit an amended spreadsheet.

The spreadsheets:

• Are in Excel version 2010 (.xlsx).
• Can accept 1,048,576 rows of information.
• Have conditional formatting that detects if the specification requirements have not been met.
• Cannot check the accuracy or suitability of the data entered and the return may still fail when HMRC process this.

Source: Gov.uk

You need to send the return through the Secure Data Exchange Service (SDES), and you can contact the pension schemes helpline if you need any help or have any problems complying with the return requirements.

Let us help you

Pensions and meeting your tax reporting requirements as an employer can be complicated, but we are here to help. Please get in touch and we will be happy to offer you the help and guidance you need.

Inheritance Tax at record levels, but Business Relief can help

Inheritance Tax (IHT) has reached a record level in the UK, with £7.5 billion flowing into Treasury coffers in 2023/24, up from £7.1 billion the previous tax year. One key reason for this growing tax take is rising property prices – the average house price in the UK has reached £288,949 according to Halifax – which, coupled with the lack of increase in the basic IHT thresholds since 2009/10, means more people are being pulled into the IHT net.

Currently your estate will face IHT at 40% if it exceeds £325,000. There is another allowance – the Residential Nil Rate Band – which gives you an additional £175,000 which can be used to pass your home to a direct descendant, such as your child or grandchild. This means you have a maximum of £500,000 that you can have in your estate before IHT is applied if you have children. But you can also use any of your spouse’s allowance that has been left unused if they died before you do.

Aside from this, there are numerous ways you can reduce your IHT liability during your lifetime, including making financial or asset-based gifts to relatives, using trusts effectively, and even surviving a gift you make by at least seven years. But one other way you can reduce your IHT liability is by using Business Relief.

How does Business Relief help to reduce IHT?

Business Relief is available for business owners, and on investments in companies that qualify for it. These shares can be within private companies, or companies listed on Alternative Investment Market (AIM) – the exchange for fledgling companies. Since these companies are smaller and often less established than those on the larger stock exchanges, such as the FTSE100 or the FTSE250, there is a higher risk of losing any investment you make. It may be harder to sell the shares in a private or smaller company if you needed to.

But on the plus side, any investment in a qualifying company is outside of the IHT net after just two years, rather than the seven years required for Potentially Exempt Transfers.

Will the investment always qualify for Business Relief?

You need to be holding the qualifying investment to get Business Relief when you die. But if the company has been successful and is listed on a larger exchange, such as the FTSE100, then it will no longer qualify for Business Relief. So, you need to keep a close eye on these investments if you want to be able to use them for IHT planning. You might need to invest in another company which will then need to be held for a further two years to qualify.

Another major benefit of using Business Relief is that the investment will be in your name, and if you need to have access to that money, then you can get it – if you are able to sell your shares in the company. This way you are not relinquishing control of your own assets while you are still alive.

What about if I am a business owner – what can I do?

If you own a business, then you can benefit from Business Relief on your own business if you die while you still own it. If there is a property associated with the business, there are a range of reliefs you can access. For example:

For deaths and transfers, on or after 6 April 1996, the categories of property which can qualify as relevant business property are broadly as follows with rate of relief:

• Property consisting of a business or interest in a business: 100% relief.
• Control holdings of unquoted securities in a company: 100% relief.
• Unquoted shares in a company: 100% relief.
• Control holdings of quoted shares in a company: 50% relief.
• Land, buildings, machinery or plant used by a company controlled by the transferor or by a partnership of which the transferor was a member: 50% relief.
• Settled land, buildings, machinery or plant in which the transferor had an interest in possession and used in his business (This applies to lifetime transfers only): 50% relief.

Source: M&G Wealth

There are various other ways business owners’ estates can benefit from Business Relief, but it is a complex area. You can find more information on Business Relief and how it works on GOV.UK. But the best way to maximise any benefit is to speak to your accountant, who can explain everything to you to ensure you don’t fall foul of the rules.

Contact us

If you are a business owner, or you want to know how Business Relief could help you with your IHT planning, then please get in touch with us and we would be delighted to help you understand what you can do to reduce your liability.

The end of the P11D is expected in 2026

The P11D form which has been used to process ‘benefits-in-kind’ such as loans for season tickets and company cars will no longer be used after April 2026, as HMRC will ask businesses to deal with all these benefits through the payroll instead.

HMRC announced earlier this year that the regime for dealing with the taxation of benefits-in-kind would change as it works to simplify the tax system. HMRC plans to automate the processing of these claims through the payroll instead, which should mean these claims are processed more quickly for employees.

What changes have been decided?

Even though HMRC is planning much further ahead than has happened in the past, it still needs to produce guidance after working with industry experts. There are still some complexities that will need to be resolved before all benefits can be dealt with through the payroll. But once this is complete, it should simplify the tax affairs of 3m people and reduce the need for them to contact HMRC.

The administrative burden should also be reduced for thousands of employers, according to HMRC, as it will remove the need for 4m end-of-year returns to be submitted. The guidance “will be made available in advance of 2026,” HMRC said.

Employers will need to be ready to change their systems to deal with these changes and should keep a close eye on the employer bulletins from HMRC as they appear, and stay in close contact with their accountants so they are ready.

Let us help you

If you need any help with changing your payroll systems to get ready for the P11D changes in 2026, please get in touch and we will be happy to offer you the help and guidance you need.

Budget changes and what they mean for you

The Chancellor, Jeremy Hunt, delivered his Budget statement to Parliament on March 6, and there were various changes that should benefit individual taxpayers and businesses.

One of the biggest announcements, which takes effect from April 6, is a further reduction in the rate of National Insurance Contributions (NICs). From this date, Class 1 employee NICs will fall from 10% to 8%, while NICs for the self-employed will be cut by an additional 2p on top of the 1p announced in the Autumn Statement. This means that from April 6, 2024, the rate of Class 4 NICs will fall from 9% to 6%.

Companies will need to begin updating their payroll software soon if they haven’t already done so, to accommodate these changes.

High Income Child Benefit Charge threshold raised

The Chancellor also raised the threshold at which Child Benefit is removed for higher earners. The High Income Child Benefit Charge will rise to £60,000 from April 6, and will taper up to £80,000. So, for every £200 of income that exceeds this £60,000 limit, the charge will be 1% of Child Benefit, and when your income exceeds £80,000, the charge will equal the Child Benefit payment.

Any new Child Benefit claims made after April 6 this year and before July 8 this year will have the payments backdated, but they will be subject to the charge in the 2024/25 tax year if your income is above £60,000. A claim made in May, for example, would be backdated to February, but you would only pay the charge on this if your income is above the new £60,000 threshold.

Any business owner with employees interested in claiming Child Benefit, or who want to restart Child Benefit payments if they have opted out in the past, can share this new guidance on the charge with them.

Child Benefit claims will automatically be backdated for three months, or to the date of birth of the child if later. Anyone wanting to make a claim for Child Benefit who isn’t currently receiving it can make the claim in the HMRC app or online.

If you want more information about either the NICs changes and/or the High Income Child Benefit Charge, you can find this on Gov.uk.

New £5,000 extra ISA allowance to boost UK businesses

The Individual Savings Account (ISA) allowance was kept at £20,000 once again in the Budget – it hasn’t changed since the 2017/18 tax year – but the Chancellor did add to the ISA stable for those who are interested in investing solely in UK companies. The UK ISA – which is also being called the ‘British ISA’ or ‘Great British ISA’ allows investors to put an extra £5,000 into an ISA that supports UK businesses.

The aim is to help boost the London Stock Exchange, according to some commentators, but whether this will be effective remains to be seen.

Jason Hollands, Managing Director of Bestinvest, the online investment service owned by wealth manager Evelyn Partners, said: “The ‘British ISA’ is undoubtedly a victory for the City stockbrokers and bankers who have lobbied hard for it amid a drought in IPO and deal fees and a worrying sapping of companies listed in London to New York.

“However, I am doubtful it will drive anything like the increased flows into UK equities being talked about. Proponents claim it might drive £200 billion extra cash into UK equities over five years, but it is hard to reconcile such a figure with the fact that the existing, larger ISA £20,000 allowance attracted a lesser amount into Stocks & Shares over the last five years according to data disclosed by HMRC.”

Mr Hollands added that a relatively modest number of people currently fully use their existing £20,000 allowance and a logical step for those who will be in a position to do so and also make use of the ‘British ISA’ “will be to commit less to UK equities in their main allowance to compensate”.

What else was announced in the Budget?

Other announcements made by the Chancellor included an increase in the VAT threshold for companies from the current £85,000 to £90,000 from April. This is the point at which a company needs to formally register for VAT.

The Chancellor also removed the ‘non-dom’ status which allows people living in the UK but who consider their permanent home to be overseas, to benefit from tax exemptions, especially on foreign investments. Foreign workers and students have benefited from these, but it has been particularly useful for the wealthiest individuals who have been able to use this status to not pay tax on their worldwide income, said Rachael Griffin, tax and financial planning expert at Quilter.

She added: “People who use the remittance basis of tax, i.e. only pay UK tax on the income or gains that are brought to the UK, typically are well advised and therefore with the help of their adviser will be able to find creative ways to mitigate their UK tax liabilities regardless of the change in rules.”

The expected boost to tax revenue from this change is around £3.8 billion. But there is a chance that the rule change could discourage some wealthy people from living in or investing in the UK, even though other reasons for living here, such as political stability and the UK legal system, may encourage some of those affected to remain, said Ms Griffin.

Contact us

If you want to know how any of these or other measures announced in the Budget might affect you, then please get in touch with us and we would be delighted to help you understand your tax position.

Exporters must make declarations on a new system from March 30

Any trader making export declarations needs to move to a new HMRC system from March 30 this year. The CHIEF system is being fully replaced by the Customs Declaration System, and anyone who has been using the old system will now have to move across.

There has been a transition period from the old to the new system, but it ends on this date. You will need your Government Gateway ID to subscribe to the system, plus:

• Your EORI number that starts with GB or XI — if you do not have one you can apply for an EORI number when you subscribe — you’ll need to meet the eligibility criteria to register for an XI number.
• Your Unique Taxpayer Reference (UTR) — find your UTR if you do not know it.
• The address for your business that we hold on our customs records.
• Your National Insurance number (if you’re an individual or sole trader).
• The date you started your business.
• Your EORI number and Customs Declaration Service accounts will be linked to your Government Gateway user ID. You cannot apply for more than one EORI number using your Government Gateway user ID.

Source: Gov.uk.

What happens once I’ve subscribed to the new system?

Once you have subscribed to the new system, you will either gain access within two hours, if HMRC doesn’t need to make any additional checks, or five days if it does. It is best to give yourself plenty of time in case your access is delayed, so you don’t find yourself needing to move goods but not having access to the right paperwork.

If you have already subscribed to the new system for either imports or exports, you don’t need to sign up again.

Will I always be able to access it?

There might be times when the system isn’t available, either because of maintenance or some other problem. This could create problems if you leave too little time before you need to export or import goods from or to the UK and there is an issue.

To help prevent any problems like this, you can keep an eye on the Customs Declaration Service: service and availability issues page. It will help you avoid any planned maintenance on the site and tell you if there any problems with access. To make life even easier, you can also sign up to receive email notifications about the service availability, enabling you to plan more effectively.

Just sign in with your Gov.uk One login if you have it or sign up for this if you haven’t yet.

We can help you meet your obligations

If you need to get onto the new system for customs declarations and you’re not sure what to do, then please get in touch with us and we can explain what you need to know.

UK Export Finance doubles limit to £10m for traders

Small businesses looking to access funding to expand their exporting opportunities can now fast-track their applications with UK Export Finance, the Government’s export credit agency, and apply for twice the previous amount. The limit available now is £10m.

The move makes it “easier than ever” to sell into international markets, according to the Government, as the UKEF has now expanded its ‘auto-inclusion’ scheme which offers fast-track access to products such as the General Export Facility.

The payment terms have also increased from two to five years under the scheme, which increases the repayment flexibility available to small businesses too.

How does a business access this funding?

To access this funding, a business would need to speak to a participating bank, but the auto-inclusion removes the need for a manual intervention by UKEF, so the funding should be accessible quickly.

Charles Platts, Chair of ICAEW’s Global Trade Community Advisory Group, says: “The speed at which finance can be accessed is critical to small businesses everywhere that are considering export opportunities. By expanding this facility, UKEF is giving small businesses throughout the UK a major source of quickly accessible finance that will enable them to chase opportunities that they may have otherwise not pursued.”

Tim Reid, CEO at UK Export Finance, said: “We’re proud to celebrate another successful year of supporting UK businesses. In speaking with our customers – and especially with small businesses – it’s clear that ease of accessing finance and flexibility in repayment terms make a big difference for firms wanting to export.”

Let us help you

If you need any help with accessing financing through the UKEF scheme or in any other way, please get in touch and we will be happy to offer you the help and guidance you need.

Rumours circulate over HMRC crackdown on eBay and Etsy sales

Rumours have been circulating online that HMRC is set to crack down on tax avoidance on sales of goods on the likes of eBay and Etsy, but the basic rules haven’t changed, and anyone who was trading on one of these sites should always have been declaring their earnings to the taxman.

What has changed is that from January 1, 2024, these sites are obliged to provide information to HMRC on sellers operating through the site before January 2025. So, if you have been using these sites to sell items and generating income that should have been taxed, you should get in touch with your accountant to find out what you need to do as soon as possible.

Confusion arises because many people will sell items they no longer want or need on eBay, for example, and in most of these cases there is no tax to be paid. But if you buy goods with the intention of selling them, or you make a capital gain on what you’re selling, then there could be tax to pay.

When would you need to pay tax?

In a useful update, HMRC has outlined the various scenarios that you may find yourself in if you are selling items on one of these sites, and when you would be most likely to need to pay tax. For example, if you are selling items that you own – perhaps because you are clearing out a shed or an attic – then this is likely to be a one-off activity, and you will most probably sell the items for the same or less than you bought them for. In this case, you wouldn’t need to pay tax.

However, let’s say you sold some unwanted clothes or other items you had in the house online to either raise money or simply reduce clutter in your home. You find that you are quite good at getting a good price for these items and decide to start buying items at car boot sales or elsewhere, and then sell them online for a profit. The original sale wouldn’t be considered trading, but the later sales would as you’re deliberately buying goods to sell. In this case, you could be liable to pay tax.

You would also be considered trading if you buy and then sell model cars – another HMRC example – or other items, or you import goods to sell online for a profit. You would even be trading if you make homemade gift cards that you sell online regularly with the intention of making a profit from them.

What other ways might you be liable to tax online?

There are other ways you might be selling that could leave you open to a tax charge. One would be if you are selling online services, such as teaching a language over Zoom or Teams, for instance, or if you generate revenue by offering other services online, such as proofreading. This may not be a service you offer through the likes of eBay or Etsy, but you would be liable to pay tax on income you generate from it just the same.

In fact, any online marketplace – which includes a website or a mobile phone app – would be considered as such by HMRC if any kind of transactional trading takes place on it. These online marketplaces will soon be generating copies of your transaction history that you can get hold of to check your liabilities yourself, but that will also be sent to HMRC directly under a wide-ranging set of internationally agreed guidelines. So, make sure you know if you are expected to pay tax on these transactions, and prepare for it accordingly so you don’t have any nasty surprises.

Are there any allowances?

One thing to consider is that there are certain allowances you might be able to benefit from if you are selling goods online. For example, if your total income from selling goods or services online was less than £1,000 before you take off any costs or expenses, then you wouldn’t need to tell HMRC about it or pay any tax on this.

This is because that amount comes under the Trading and Miscellaneous Income Allowance – which also gives you a £1,000 allowance for any property income under the same legislation. But if the amount you generate is above this, then you would need to inform HMRC and pay any tax due.

Remember though, you also have the Personal Allowance, which for the 2023/24 tax year is £12,570 per year. If you don’t have a full-time job, or you earn less than this across all the ways you generate income each year, then you would still have no tax to pay. But you must still register with HMRC and file a self-assessment return each year.

If you don’t know how to do this, or need to register and file a self-assessment return, you can find more information on Gov.uk

Contact us

If you are unsure whether any of your activities could generate a tax liability, then please get in touch with us and we would be delighted to help you understand your tax position.

Chancellor announces tax cuts and business boosts

Chancellor Jeremy Hunt announced several tax breaks for individuals and businesses in this year’s Autumn Statement ahead of the General Election next year. While they will help to put a little more money back into our pockets, other decisions made over many years on areas such as the freezing of tax thresholds make them less favourable than they first appear, according to many commentators.

Cuts in National Insurance Contributions (NICs) and major changes for pensions were just some of the big announcements, in the Autumn Statement on November 22, and there is also a freeze on alcohol duty until August next year, which is good news for those who have a favourite tipple.

What were the big announcements?

The NICs cuts were some of the most significant changes – with Class 2 NICs being abolished completely for the self-employed, and Class 4 NICs to fall from 9% to 8% in the next tax year. For employees, Class 1 NICs will also fall from 12% to 10%.

Pension changes are also in the offing too, with the biggest change set to be allowing everyone to have a single pension that they choose for themselves, and they keep for their lifetime, with each employer paying into that pension pot no matter how often they change employers. The real benefit of this is there would be less chance of it getting lost or forgotten about over time.

The State Pension will also rise by more than many commentators had expected, as the Chancellor confirmed the triple lock will remain in place. So, the State Pension will rise by 8.5% – the amount wages rose by in September.

For businesses, the biggest announcement was that full capital expensing which was a measure introduced in the Budget in March and was originally intended to last three years, will now become permanent.

This is just a very small number of the 110 measures the Chancellor announced on November 22. If you want to find out more details about what Jeremy Hunt had to say, you can read his Autumn Statement online, and you can find other supporting documents – which is where the finer details are outlined – at Gov.uk.

ISAs get much needed flexibility

Individual Savings Accounts (ISAs) were given a welcome boost from next April, as the rules will become more flexible, allowing multiple ISAs of the same type to be opened in a single tax year. It will also be possible to make partial transfers of ISAs opened in the current tax year, which gives far greater flexibility to ISA savers than they have previously enjoyed.

One of the main benefits of this change is that savers in Cash ISAs will have the option to benefit more easily from better savings rates as they appear throughout the tax year. Although you can transfer your ISA currently, it is much more restricted, and you would need to move all the money in one go.

It will also be possible to invest in ‘fractional shares’ – where you invest in part of a share in a business, rather than owning a whole share – something that to this point has not been available through an ISA.

However, the ISA limits remain the same – at £20,000 for adult ISAs and £9,000 for Junior ISAs – something many commentators are unhappy about.

IR35 and National Minimum Wage updates

IR35 has been one of the most hotly contested pieces of legislation HMRC has produced, and many people have ended up with huge tax bills after it was applied retrospectively. IR35 is used to determine whether a worker should be considered an employee and therefore under the PAYE tax regime, or whether they can be considered self-employed.

Most often, this question relates to contractors who may be working under their own limited company structure, but if they are working more for one employer than any other, then HMRC believes they should be an employee of that company instead. It has resulted in many high-profile court cases, including for Eamonn Holmes and Gary Lineker.

While the contentious legislation will remain in place, one major change that will be legislated for in the Finance Bill 2023 is to allow organisations who have incorrectly categorised off-payroll workers under IR35 rules, to reduce their additional PAYE liability. This will be done by offsetting Income Tax and Corporation Tax already paid by the worker or their intermediary, where they have been found to not comply with the IR35 rules. These changes will come into effect on April 6, 2024, and typically apply to higher earners.

However, those earning at the other end of the scale got benefits too in the Autumn Statement. Anyone being paid the National Minimum and Living Wage will see their pay increase by 9.88% to £11.44 across the UK for those aged 21 and over, from April 1, 2024. Young people and apprentices will see their wages rise to £6.40 per hour.

Contact us

If you need to find out more about IR35, ISA changes, or any of the other parts of the Autumn Statement that might affect you, please get in touch with us and we would be delighted to help you make sure you are benefiting as much as possible from the changes.

Advance Valuation Rulings on imported goods

Importers of goods to the UK from overseas no longer need a business tax account to get an Advance Valuation Ruling for their goods. The rulings, which last for up to three years, mean traders and agents can act with legal certainty on the value of the goods they are importing for customs calculations.

By getting the valuation of the goods you are importing in advance, you can also be sure you’re using the correct method to work out the customs value. So, when you bring them into the UK, your customs declaration is correct.

It also helps you to have a legally backed decision for your valuation method, because if it is scrutinised at a later date, you know there should be no problem.

Who can apply for the valuation?

Traders using their own EORI number, starting with the letters ‘GB’ or an agent acting on their behalf can use the new service. But if you want an agent to apply for you, you must add them to your business tax account, or give them a ‘Letter of Authority’ to act on your behalf.

You must make the application before your customs procedures have been completed, because no valuations will be made retrospectively. You need your Government Gateway ID, and you must have identified the method of valuation you think works best for your goods. You can find out more information about the options you have here.

HMRC can refuse an application if you:

• Are not planning to import the goods.
• Are unable to supply all the necessary information about your goods.
• Have already cleared your goods through Customs Import Procedures.

Source: HMRC

You will also need supporting documents relevant to the goods you are importing, which could include commercial invoices from your overseas suppliers, copies of previous import entries, and any commercial agreement you have with suppliers. Any commercially sensitive information included as part of the application must be marked as such before you upload any of these documents.

Let us help you

If you need help to import your goods in the most tax-efficient way while also complying with all relevant laws, then please get in touch and we will be happy to offer you the help and guidance you need.

Redundancies expected to rise this year – what you need to know

The latest official figures show that redundancies are on the rise this year. Expected redundancies are up from 22,525 in June to 23,975 in July, based on the number of HR1 forms filed to HMRC. While this data lags behind real-world figures because of the way it is collated, many big companies have already announced redundancies.

The biggest so far includes Wilko. Its collapse has put around 12,500 jobs at risk. But it is far from alone in making layoffs. Deloitte is expected to lose around 800 of its UK staff, while even behemoths like Google, Amazon, Yahoo and Meta have made redundancies this year. As early as February, the Retail Gazette highlighted that 15,000 jobs in retail had been cut by the time this story was published.

Employees can do little to avoid the cull, but the least you can do is understand what you can expect from your employer. If you’re an employer, then you also need to understand your legal obligations.

Responsibilities of an employer

Let’s start with the employer’s responsibilities. To make a person or people redundant, their job or jobs must no longer exist. If this isn’t the case, it won’t be considered a genuine redundancy. Then you must choose who to make redundant.

This must be carefully considered, especially if you are making compulsory redundancies, as the people you choose must be chosen fairly. For example, under the Government’s fair selection criteria, you can consider:

• skills, qualifications and aptitude,
• standard of work and/or performance,
• attendance,
• disciplinary record.

Source: Gov.uk

You can use the ‘last in, first out’ approach legally too, providing it doesn’t unfairly impact one group over another. However, you cannot choose people based on:

• pregnancy, including all reasons relating to maternity,
• family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants,
• acting as an employee representative,
• acting as a trade union representative,
• joining or not joining a trade union,
• being a part-time or fixed-term employee,
• age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation,
• pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage.

Source: Gov.uk

For voluntary redundancies, you must be clear about how you are going to choose people, and ensure they understand you may not give them redundancy just because they applied for it. Another way to reduce staff numbers voluntarily is to offer people incentives to take early retirement. This must be offered across the entire workforce to comply with legislation. But you can’t force someone to retire early.

At all times, good communication between employers and employees is paramount, so everyone knows where they stand, and trust is maintained.

What employees need to know

Employees want to know they are being treated properly, and there are different rules employers must follow depending on how many redundancies they’re making. If it is less than 20, there are no hard and fast rules, but you should still be fully consulted on plans and kept informed of what is about to happen.

If more than 20 people will be made redundant within the same ‘establishment’ as the Government puts it, within a 90-day period, then the company must go through a ‘collective consultation’. Staff or union representatives should be informed initially if they are in your workplace, or the company must speak directly to the staff.

The consultation period must last for at least 30 days if 20-99 people are being made redundant, or 45 days if it is 100 or more. Once this is done, then you will be given notice of your redundancy. At the very least this should include:

• the reasons for redundancies,
• the numbers and categories of employees involved,
• the numbers of employees in each category,
• how you plan to select employees for redundancy,
• how you’ll carry out redundancies,
• how you’ll work out redundancy payments.

Source: Gov.uk

How is redundancy pay worked out?

How much redundancy pay you will get depends on a variety of factors, but there are rules around the minimum statutory redundancy pay that should be offered. For example, anyone not under an employment contract, those with the company less than two years, and those who have taken early retirement won’t get statutory redundancy pay. Your employer may still pay you, but it is not compulsory.

Any employee receiving redundancy pay should be told exactly how it has been worked out in a written statement. The statutory redundancy pay rules allow for amounts equivalent to:

• 5 weeks’ pay for each full year of employment after your 41^st birthday,
• one weeks’ pay for each full year of employment after your 22^nd birthday,
• half a weeks’ pay for each full year of your employment up to your 22^nd

Source: Gov.uk

The length of service is capped at 20 years under these rules, and the amount you will receive is based on the average of the amount you earned in the previous 12 weeks prior to you being made redundant. Even so, weekly pay is capped at £643 per week, and the total statutory redundancy payout is capped at £19,290. But remember, your employer can decide to pay you more, or you may be able to negotiate more.

This payment should be made when you are made redundant, but if not, or your employer doesn’t agree with the amount, you have up to three months to claim the payment due from an employment tribunal. So, even though this might be an emotional time, keep your eye on the calendar to make sure you don’t miss out. The good news is that even if you miss this deadline, the tribunal would have up to six months to decide whether you should receive the money.

We can help you

If your business needs to make redundancies, or you’re an employee about to be made redundant, please get in touch with us and we will help to either make sure you are complying with all of the relevant regulations, or receiving what you expect.

New UK Internal Market Scheme launches

A new UK Internal Market Scheme (UKIMS) has been launched to replace the old UK Trader Scheme, which will enable any registered traders to move ‘not at risk’ of entering the EU goods into Northern Ireland. The legislation, which came into force on September 30, is needed following the UK’s exit from the European Union.

The good news is that from October 2024, these ‘not at risk’ items will also be free to move without any unnecessary paperwork, checks or duties, only the existing commercial information will be needed from then onwards.

What are the changes and what do they mean?

There are three main changes under the UKIMS rules compared with the old scheme. The first is that all companies established in the UK will be able to use the scheme, instead of only those companies with a physical premises in Northern Ireland.

The second is that the turnover threshold below which companies involved in processing can move goods has risen from £500,000 up to £2m, making the scheme more widely available. The third is that even if a business is above this £2m threshold, they will still be eligible to move goods under the scheme if they are for use in healthcare, construction, animal feed or not-for-profit sectors.

All traders operating under the old scheme should have received information on how to become authorised for the new scheme. There are some additional pieces of information that need to be supplied for HMRC to complete the enrolment of these traders into the new scheme. You can get more information and guidance on what these are by clicking here.

Let us help you

If you need or want to move goods into Northern Ireland, then please get in touch with us and we will work with you to ensure you have all the relevant permissions under the new scheme.

Back to work means it’s time for business development

For most people the summer holidays will be firmly in the rearview mirror by now and they will be starting to focus on the year ahead. One way to make sure next year will be one to remember is by putting some effort into business development now, so you can start 2024 in good shape.

The EY Item Club said earlier this summer that it expects the UK economy to grow by just 0.8% in 2024, so the sooner you start working on how you can connect more effectively with your customers, whether your business is B2B or B2C, the more chance you have of boosting your profits.

Autumn is a great time for business development, as the months ahead of Christmas are key for many businesses because they plan their budgets and allocate finances to projects the following year. Getting in front of the right people now could give you a better chance of securing a piece of the pie.

Where’s the best place to start?

Most businesses will be doing some form of business development on a regular basis – and if yours isn’t, then this is something to address. Becoming complacent and relying on your current client base to keep your business afloat is a risky strategy.

If you’re new to this, then one of the best places to start is by identifying what your customer looks like. Literally. This may sound extreme, but considering who your customer is, what they are interested in and what they are going to want to spend their money on is the ideal way to target the people or businesses you want to work with.

For example, is your business selling primarily to people or other businesses locally? Could you expand your reach online? Are your customers UK-based, or can you sell your products or services globally? Once you know the answers to these initial questions, you can begin to establish who your customers are.

Where do I find them?

The next step is talking to them. This could be through advertising locally, or perhaps you could harness the power of social media to spread the word about your business. For example, LinkedIn is a great place to do some networking whether your business is B2B or B2C, or both.

Other social media sites, such as X, formerly known as Twitter, Instagram, Facebook, TikTok, Threads and so on, can be just as useful. But you will need to create regular content for them to be effective. This can take time, although there are now some useful AI tools that can do some of the heavy lifting for you. For image creation, you could check out Midjourney, or if you already use Hootsuite to manage your social media channels, then check out its AI content creator OwlyWriter AI.

AI tools aren’t perfect, but they can help take away some of the difficulties that come from starting with a blank page and give you some content to work with. You can even use AI tools to run ads for you now, just be sure you keep a keen eye on how well they are working. This is your brand we are talking about here.

I don’t like social media, what else can I do?

If you’re not a fan of social media, there are plenty of other ways to meet and greet potential new partners and customers. Check out any local trade fairs that are happening and see what it costs to go as a delegate or to exhibit. The latter will usually cost more, so do your research carefully to see who will be there so you know your efforts and money won’t be wasted.

Other business development can be done through business associations, such as the local Chamber of Commerce, or through networking at more social events, such as during a round of golf or at a tennis club.

Once you get into the swing of your business development, use a customer relationship management (CRM) system to keep on top of those conversations and important contacts. This will help you track and action anything you need to so those opportunities don’t get left to wither on the vine. Different CRMs have various pros and cons, so again do your research carefully.

Contact us

If you are considering spending money on your business development, then get in touch with us first and we will help to make sure you are getting the right tools for the job.

ECL now open online for registrations and returns

Any regulated businesses that need to sign up for the Economic Crime (Anti-Money Laundering) Levy (ECL) can now both register and make returns via the online service. Registrations and returns cannot be made by tax agents, so every affected business must sign up and make their returns directly.

To file a return online, businesses must have registered with the ECL and have requested their access code. Once they have both they can file their returns.

The ECL online service is accessible via GOV.UK and if your business needs to register, you will need:

• information about its UK revenue for the last financial year;
• the date when the organisation started anti-money laundering regulated activities;
• the contact details of a responsible person in their organisation, including all the following:
  • name;
  • role;
  • email address;
  • telephone number;
  • the business sector the organisation operates in.

Source: Gov.uk.

How often you file and pay depends on your collection authority

Depending on who your relevant collection authority is, you may need to file a return and pay a fee every year. It will be one of the Financial Conduct Authority, the Gambling Commission, or HMRC. You can find out background information on ECL at GOV.UK.

If your collection authority is HMRC, for example, then affected customer will only register for the ECL once but must submit a return and pay the ECL every year your UK revenue exceeds the threshold. This must be done by September 30 each year, so the payment for April 1, 2022, to March 31, 2023, is due on September 30, 2023.

Let us help you

If you think you may need to sign up to the ECL or have already signed up and need help with filing your returns, please get in touch and we will help guide you through the process.