News
| 09-12-2025
The recent Budget confirmed that dividend tax rates will increase from April 2026. The ordinary and upper rates of dividend tax will both rise by 2%.
| 03-12-2025
Some self-employed taxpayers who filed their 2024/25 self-assessment tax return may have been incorrectly asked to pay class 2 national insurance contributions (NIC) on their SA302
| 03-12-2025
After weeks of speculation about what Budget 2025 would contain, the Chancellor was unexpectedly upstaged when the Office for Budget Responsibility (OBR) accidentally published their report
| 25-11-2025
Legislation has been passed by Parliament that defines which properties are eligible for the new Retail, Hospitality and Leisure (RHL) business rates multipliers which come into force on 1 April 2026.
| 25-11-2025
The government has confirmed how the new Renters’ Rights Act will be phased in, setting out a three-phase approach that runs from May 2026 through to the end of the decade.
| 25-11-2025
As the festive season approaches, HM Revenue & Customs (HMRC) is urging anyone who earns money from Christmas crafts, seasonal market stalls, or selling festive items to check whether they need
| 25-11-2025
For many sole traders and small business owners, reviewing their accounting system only happens when something forces the issue. For instance, many sole traders are currently looking at whether their accounting system meets
| 25-11-2025
The Prudential Regulation Authority (PRA) has confirmed that the Financial Services Compensation Scheme (FSCS) deposit protection limit will increase from £85,000 to £120,000 from the start of December.
| 18-11-2025
As the festive season approaches, employers are being reminded of their responsibility to take reasonable steps to prevent sexual harassment at work events, including Christmas parties.
| 18-11-2025
The Information Commissioner’s Office (ICO) has opened a consultation on new guidance that sets out how it investigates potential data protection breaches and takes enforcement
| 18-11-2025
The Intellectual Property Office (IPO) has confirmed plans to raise its fees by an average of 25% from 1 April 2026, subject to parliamentary approval. The change will affect applications and renewals for patents, trademarks, and designs.
| 18-11-2025
HM Revenue and Customs (HMRC) are writing to some taxpayers to tell them what they need to do to get ready for the new Making Tax Digital rules that come into force next April.
| 11-11-2025
From 18 November 2025, identity verification with Companies House will start to be required for
| 11-11-2025
A new report from Skills England has indicated that many employers are struggling to keep pace with AI-related changes.
| 11-11-2025
HM Revenue and Customs (HMRC) has reported that over 5.6 million people have accessed its app since the start of the current tax year (6 April 2025). The app offers
| 11-11-2025
The Chancellor, Rachel Reeves, gave a surprise ‘pre-Budget’ speech last week that appeared to pave the way for tax rises in the Budget on 26 November 2025.
| 05-11-2025
The government’s Renters’ Rights Bill has now become law, following Royal Assent last week. The new Act introduces a wide range of changes for private landlords in England. The details on how and when these new rules
| 05-11-2025
The Information Commissioner’s Office (ICO) has launched a consultation on how charities can make use of new rules that will
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The recent Budget confirmed that dividend tax rates will increase from April 2026. The ordinary and upper rates of dividend tax will both rise by 2%.
For many small and medium-sized companies, dividends are central to how owners pay themselves. With the tax rates rising, your pay and profit extraction strategies will likely need a fresh look for 2026/27.
What’s Actually Changing
From April 2026:
- The dividend ordinary tax rate increases from 8.75% to 10.75%.
- The dividend upper tax rate rises from 33.75% to 35.75%.
- The dividend additional tax rate remains at 39.35%.
- The tax-free dividend allowance remains at £500
The rate you pay on your dividends will depend on the amount of your total income and the source of your income. These rates apply only to dividends – salary, bonuses and savings are taxed differently.
What the Changes Mean for Profit Extraction
As dividends have usually offered a tax advantage over salary, many directors/shareholders adopt a mix of a low salary and higher dividend income.
However, with dividend tax rising, the balance is shifting slightly. The best extraction strategy for one director may look quite different for another, especially when factors like income levels, other earnings, pensions and company profits are taken into account.
It may therefore be worth reviewing:
- Whether a different mix of salary and dividends is now more efficient for you.
- Bringing forward dividends before April 2026, where appropriate.
- The impact on cash flow if you switch to taking a larger salary instead of dividends.
If you want to review how you take money from your company, or see how the upcoming dividend tax changes could affect your take-home pay, get in touch. We can guide you through the options and help you make sure your remuneration is as tax-efficient as possible.
Some self-employed taxpayers who filed their 2024/25 self-assessment tax return may have been incorrectly asked to pay class 2 national insurance contributions (NIC) on their SA302 tax calculation. HM Revenue & Customs (HMRC) has now confirmed that this issue has been fixed.
Who was affected?
HMRC estimates that between 10,000 and 20,000 self-employed individuals who filed before 29 September 2025 may have received an SA302 showing class 2 NIC as payable when it should not have been.
How HMRC is resolving the issue
HMRC have confirmed that they fixed the issue and any SA302 forms issued since 29 September 2025 should show the correct class 2 NIC payments.
For taxpayers that were affected by the error, HMRC have said that they will make all necessary corrections by the end of December 2025. The corrections will be applied automatically and there should be no need to contact them.
Why the error occurred
From 2024/25 onwards, sole traders and self-employed partners with profits above the Small Profits Threshold (SPT) do not need to pay class 2 NIC. Instead, contributions are treated as having been paid automatically. The Small Profits Threshold (SPT) is:
- £6,725 for 2024/25
- £6,845 for 2025/26
Earlier in the year, some SA302 forms incorrectly flagged class 2 NIC as payable for taxpayers whose profits were above the threshold.
Key points if you have been affected
- If your SA302 incorrectly showed class 2 NIC as payable, HMRC will correct it automatically.
- No action is required on your part.
See: https://www.icaew.com/insights/tax-news/2025/nov-2025/tax-return-class-2-nic-issue-is-resolved-says-hmrc
After weeks of speculation about what Budget 2025 would contain, the Chancellor was unexpectedly upstaged when the Office for Budget Responsibility (OBR) accidentally published their report revealing key policy measures ahead of the official announcement.
Although the report was quickly withdrawn, the information had already been picked up by media outlets and tax commentators.
Ultimately, however, the manner in which the details were released matters less than the substance of the policies themselves. It is the impact of these measures that will be felt over the coming years.
How does Budget 2025 affect your business? Let’s take a closer look at some of the key points and consider their potential implications.
A Tax Hit for Property Owners and Savers
Budget 2025 announced that, from 6 April 2027, the government will create new separate income tax rates that apply to property income and will increase the rates for these and for the income tax rates on savings income by two percentage points.
The new rates will be as follows:
|
|
2027/28 |
|
|
Property income* |
Savings income |
| Basic rate |
£1 – £37,700 |
22% |
22% |
| Higher rate |
£37,701 – £125,140 |
42% |
42% |
| Additional rate |
Over £125,140 |
47% |
47% |
The new property income tax rates will apply to taxpayers in England and Northern Ireland. The Scottish and Welsh governments will have the power to set property tax rates for those jurisdictions.
Owners of property worth more than £2 million were also affected by the introduction of a high-value council tax surcharge, otherwise known as the ‘mansion tax’. The surcharge will be in addition to the existing council tax and will range from £2,500 to £7,500 depending on the property’s value. Properties will be valued before the introduction of the tax.
If you are a landlord, one or both of these changes could increase your costs. With the abolition of the furnished holiday lettings regime, higher stamp duty land tax on additional properties, the added responsibilities under the Renters Rights Act, and now the prospect of increased tax on property income, it is understandable to question whether continuing to let property remains worthwhile.
If you are concerned, please feel free to contact us. We can provide personalised advice to help you review your options, explore strategies to manage your tax exposure, and identify solutions that work for your individual circumstances.
Increase in Dividend Tax
If you are a company shareholder, from April 2026, the dividends you receive will be subject to higher rates of tax. The basic and higher rates of dividend tax will rise by 2% to 10.75% and 35.75% respectively.
For owner-managed companies, these increased rates raise an important question: do dividends remain a tax-efficient way to extract funds from the business? Those considering incorporating their business will also want to understand how these changes may influence their decisions.
We can provide tailored advice to help you plan effectively, ensuring that you continue to extract income in the most tax-efficient way possible. By reviewing your options in advance, you can make informed decisions that protect your hard-earned income and maximise the benefits of any available reliefs.
Increasing Payroll Costs
Even before the Budget speech, the new national minimum wage rates had been announced. These new rates come into force from 1 April 2026.
We’ve covered the details of the new rates separately, but it’s worth noting the 4.1% increase in the main National Living Wage rate that applies to employees aged 21 and over and the rise of between 6.0% and 8.5% for employees under 21 and apprentices.
Employees who are paid at higher than minimum wage rates may also be looking for comparable increases in their pay. These could mean a fairly substantial uplift in your payroll costs next April. It will be important to ensure that you budget for these costs and take them into account with any recruiting you have in mind over the next year.
Salary Sacrifice for Pension Contributions
If your business offers salary sacrifice for pension contributions, an important change is coming in 2029. At present, all pension contributions made through salary sacrifice are exempt from employer national insurance contributions (NIC), regardless of the amount. This provides valuable savings for both employees and employers.
From 6 April 2029, however, the NIC exemption will be capped at £2,000 per year for employee pension contributions made via salary sacrifice. Any contributions above this threshold will continue to receive income tax relief but will become subject to both employer and employee NICs.
Although this change is still a few years away, it’s worth considering now how it may affect the overall value of your employee pay and benefits packages.
IHT reliefs for business owners and farmers
The government is pressing ahead with plans to reform agricultural property relief (APR) and business property relief (BPR) from 6 April 2026. These are important inheritance tax (IHT) reliefs that currently mean that up to 100% relief is available on the full value of qualifying assets.
As announced in last year’s Budget, from April 2026, this 100% relief will be capped at a combined £1 million of agricultural and business property, with any excess qualifying only for 50% relief.
However, Budget 2025 did provide some good news. It added that, from 6 April 2026, any unused APR or BPR allowance will become transferable to a surviving spouse or civil partner. As a result, couples may be able to pass on up to £3 million of qualifying agricultural or business property free of IHT.
Careful planning is essential, though. Transitional rules mean that gifting assets before 6 April 2026 may not necessarily help the situation. Please speak with us for personalised advice on the best way to organise your estate where business or agricultural assets are involved.
Capital Allowances
For 2026/27, the annual investment allowance (AIA) means that qualifying new capital expenditure you make of up to £1 million can be relieved in full against the taxable profits of your business.
Disappointingly, Budget 2025 announced that the rate of writing down allowance applicable to qualifying capital expenditure that is classed as main rate pool will drop from 18% to 14% on 1 April 2026 for companies and 6 April 2026 for unincorporated businesses, such as sole traders and partnerships.
However, this reduction may be partially offset by a new 40% first year allowance (FYA) that will be available from 1 January 2026. Its usefulness to your business may be limited, though, as it will only really be of benefit where the AIA or other FYAs are unavailable.
If you are considering buying electric vehicles for your business, Budget 2025 confirmed that FYAs that give 100% relief for qualifying expenditure on electric vehicles and charging points will be extended to April 2027.
Business Rates
As announced in the 2024 Budget, two new lower business rates multipliers for eligible retail, hospitality and leisure (RHL) properties with a rateable value (RV) below £500,000 will come into effect from 1 April 2026.
These new multipliers will replace the 40% RHL relief available in 2025/26 and will be funded by introducing a higher multiplier for properties with an RV above £500,000.
Legislation and local authority guidance have already set out the eligibility criteria for RHL properties, but Budget 2025 has now confirmed that each of the new multipliers will be 5p lower than the standard multiplier for a property with the same RV.
Mandated Electronic Invoicing
Following a consultation on the topic, the government plans to make electronic invoicing mandatory for all VAT invoices starting in 2029. A detailed implementation road map is expected to be published next year at Budget 2026.
The possibility of introducing real-time reporting (RTR) is also being considered. This is where invoice information is automatically shared with HMRC, perhaps as soon as it is sent to a customer. However, the government has confirmed that this will not start in 2029. RTR would only be introduced once electronic invoicing is widely in use and well established.
We still have a few years before mandatory electronic invoicing takes effect, and it is always possible that details may evolve as plans develop. However, businesses will need to begin thinking about the practical implications now.
In particular, these changes may influence your choice of accounting software and the pace at which you digitise your invoicing processes. Ensuring that your systems can support structured electronic invoicing formats will make any transition far smoother and minimise disruption once the rules are finalised.
In Conclusion
While Budget 2025 included much talk about growth, tackling inflation and cutting the cost of living, everyone has been asked to contribute. Freezing many income tax rates and thresholds for a further three years and increasing taxes on savings, dividends and property income will mean many end up paying more over the coming years.
It may be necessary to re-examine your business and personal plans for 2026 and beyond to be as tax-efficient as possible. Remember, we are here to support you to ensure your business and personal success. Please do get in touch if there is anything that you would like to discuss.
Legislation has been passed by Parliament that defines which properties are eligible for the new Retail, Hospitality and Leisure (RHL) business rates multipliers which come into force on 1 April 2026. HM Treasury has also provided guidance to local authorities on how to apply these regulations.
Earlier in the year, the Non-Domestic Rating (Multipliers and Private Schools) Act 2025 laid the legal basis for introducing higher multipliers for the properties of large businesses and lower multipliers for RHL properties. The intention is to help high street RHL businesses that sell to in-person customers.
From April 2026, two lower business rates multipliers for RHL properties will be introduced for rateable values below £500,000.
- A small business RHL multiplier will apply where the rateable value is below £51,000.
- A standard RHL multiplier will apply where the rateable value is between £51,000 and £499,999.
The rates for these multipliers will be confirmed during Budget 2025, which is being held on 26 November 2025.
In a change from the RHL business rates relief that is currently in place, it is intended that there will be no cash cap. This means the RHL multipliers will apply to any property that meets the statutory definition of a RHL property contained in the new regulations.
Broadly speaking, the new definitions will mean that most properties receiving the 40% RHL relief in 2025-26 will qualify for the proposed lower multipliers. However, local authorities have had discretion in how they have awarded the 40% RHL relief, whereas the new RHL multipliers will only apply where the legal definition is met. This may mean that some properties currently receiving relief could fall outside the new relief measures.
To see whether your RHL business property will qualify for the new RHL multipliers, it is worth reviewing HM Treasury’s guidance
The government has confirmed how the new Renters’ Rights Act will be phased in, setting out a three-phase approach that runs from May 2026 through to the end of the decade.
Phase 1: Initial reforms from 1 May 2026
The first and most immediate changes will take effect on 1 May 2026. These include the end of Section 21 “no-fault” evictions, meaning landlords will no longer be able to evict tenants without giving a valid reason.
At the same time, if landlords need to get their property back, they will have stronger, legally valid reasons to do so. These include moving in, selling the property, dealing with serious rent arrears or tackling anti-social behaviour.
Tenants will gain other new protections, including the ability to challenge above-market rent increases intended to encourage them to leave. Landlords will also no longer be able to unreasonably refuse requests for pets.
From 1 May 2026, it will become illegal to:
- Increase rent more than once a year.
- Request more than one month’s rent in advance.
- Run rental bidding wars between prospective tenants.
- Discriminate against tenants because they receive benefits or have children.
Councils will be overseeing these new rights. Fines can reach up to £7,000 for breaches, increasing up to £40,000 for repeat or serious offences. Tenants and local authorities will also be able to seek rent repayment orders.
Guidance for landlords and letting agents will be published ahead of these changes, with councils receiving additional funding to help them prepare.
Phase 2: Ombudsman and database
The second phase, beginning in late 2026, focuses on improving oversight and resolving disputes in the private rented sector.
A new Private Landlord Ombudsman will be introduced, offering tenants a free, independent service to help them resolve complaints that have not been addressed by their landlord. This is intended to reduce the need for court action and deliver faster outcomes.
A Private Rented Sector Database will also be launched, requiring all landlords to register themselves and their rented properties. The database will be rolled out in stages across England.
Phase 3: Further quality and safety standards to follow
The final phase will introduce measures aimed at ensuring safe conditions in private rented homes, including the introduction of a Decent Homes Standard. The government also plans to consult on extending Awaab’s Law to private renting.
The government has already consulted on plans to require that all domestic privately rented properties in England and Wales meet an EPC rating of C or equivalent by 2030, unless an exemption applies. Further details on this will be set out when the government responds to the consultation.
See: https://www.gov.uk/government/news/no-fault-evictions-to-end-by-may-next-year
As the festive season approaches, HM Revenue & Customs (HMRC) is urging anyone who earns money from Christmas crafts, seasonal market stalls, or selling festive items to check whether they need to report their earnings for last year.
HMRC’s “Help for Hustles” campaign highlights the importance of understanding when extra income becomes taxable.
While selling personal belongings from a clear-out generally does not need to be reported, making or selling items for profit – such as handmade decorations, upcycled furniture or running a seasonal market stall – may be subject to tax.
What You Need to Know
Anyone who earned more than £1,000 from side hustles in the 2024-2025 tax year will need to:
- Register for Self Assessment as a sole trader.
- File a tax return.
- Pay any tax due by 31 January 2026.
The £1,000 threshold applies to all trading income combined. For example, someone earning £600 from craft sales and £500 from content creation would need to register, as their total income exceeds the threshold.
If you would like personalised advice on whether you need to file a tax return, please give us a call. We would be happy to help you!
For many sole traders and small business owners, reviewing their accounting system only happens when something forces the issue. For instance, many sole traders are currently looking at whether their accounting system meets the requirements for Making Tax Digital for Income Tax.
However, even without a regulatory change, reviewing your accounting systems can yield benefits. The right system can save you time, reduce errors and give you better insight into your business’s finances.
Here are some practical points to consider.
- Identify Your Needs
Think about what you or your team handle most often. Is it invoicing, logging expenses, monitoring cash flow, or perhaps tracking stock or projects.
You might only need some basic income and expense recording. On the other hand, features like invoice reminders, payment links in invoices, or job costing could be useful to you.
It’s often easier to start by listing your everyday tasks before you look at what software can do.
- Consider Cost, but Think in Terms of Value
The cheapest option is not always the most effective if it slows you down. A slightly higher monthly fee could be worth it if it saves you work and time.
Ease of use can add a lot of value, too. Simple screens, clear menus and good support can all make day-to-day bookkeeping much less of a chore.
- Automation and Integrations
Modern software can take care of many repetitive tasks. For instance, importing bank transactions, sending reminders, capturing invoice and receipt details can all be done by software.
If you use e-commerce platforms, job management tools or card payment services, software that can connect to them can save you time by eliminating the need to enter information twice.
- Planning for Growth
If you expect your business to grow, consider whether the system can grow with you. Some entry-level tools are perfect for start-ups but become limiting once staff, stock or more complex invoicing are involved.
- Plan for the Switch
Changing accounting systems can be disruptive; however, many platforms offer setup wizards, data import tools and clear guidance that can make the transition easier than you might expect. Choosing to switch at the start of a new financial year can make the process a lot smoother, too.
Choosing the right accounting system is not just about compliance or day-to-day record keeping – it’s an opportunity to make your business run more smoothly and give yourself clearer insight into its financial health.
If you would like help reviewing your current accounting system or recommending options that would suit your business, please feel free to contact us at any time. We would be happy to help you!
The Prudential Regulation Authority (PRA) has confirmed that the Financial Services Compensation Scheme (FSCS) deposit protection limit will increase from £85,000 to £120,000 from the start of December.
The new threshold applies per depositor, per PRA-authorised bank, building society or credit union. The PRA have confirmed that HM Treasury has approved the change.
This is the first change to the limit since 2017 and follows a consultation earlier in the year. The PRA had initially proposed that the limit should rise to £110,000, but feedback provided in the consultation and the latest inflation data prompted a higher final figure.
Temporary High Balances Limit Also Rising
Alongside the core protection limit, the cap for Temporary High Balances (THBs) will increase from £1 million to £1.4 million on 1 December.
THB protection applies to qualifying life events that can temporarily increase a customer’s account balance, such as buying or selling a house or insurance claim payouts.
Implications for Your Business
The increase in limit will be good news if you hold cash reserves in your business to cover working capital, payroll and other running costs.
It is worth noting that the limit continues to be applied ‘per depositor, per PRA-authorised institution’. This means that if you are eligible and hold cash reserves that exceed the deposit protection limit, you could gain further protection by spreading your funds across different authorised institutions.
It is worth checking whether a banking group is operating multiple brands under a single licence. This means you would only receive a single protection limit for the total amounts held across those brands.
Taking a Wider Look at Cash
For many owner-managed businesses, cash reserves naturally rise and fall throughout the year. If you find that your balances regularly build up beyond what the business needs for day-to-day operations, the increase in the FSCS limit could be a useful prompt to review how much cash the business actually needs to hold.
Spreading funds between different banks can increase the level of protection available, but it can also be sensible to take a step back and consider whether those reserves are serving a useful purpose in the business. A simple cash flow review can help identify the amount needed for routine expenses, tax payments and any planned spending over the coming months.
Where cash consistently exceeds this level, you may want to consider:
- Are there investment opportunities for the business that would fit with your business growth plans?
- Would withdrawing funds, such as by dividends, better help you achieve your personal goals?
The right choice for you will depend on your personal and business circumstances, tax considerations and your plans for the business.
If you would like tailored advice or simply assistance in clarifying what level of reserves your business needs, please get in touch. We would be happy to help you!
See: https://www.bankofengland.co.uk/news/2025/november/pra-confirms-fscs-deposit-limit-to-be-increased-to-120000-from-1-december
As the festive season approaches, employers are being reminded of their responsibility to take reasonable steps to prevent sexual harassment at work events, including Christmas parties.
The Worker Protection Act 2023 imposes a preventative duty on employers to protect staff from harassment in the workplace – whether at their usual place of work or at work-related social events.
Heightened risks during festive events
Workplace parties are often positive occasions that bring everyone together, however, the combination of social settings, alcohol, and out-of-hours events can increase the risk of inappropriate behaviour.
Employers are being encouraged to plan ahead and take practical steps to protect staff and maintain a safe, respectful environment.
This does not mean cancelling festive activities, however there is a need to consider the potential risks and take reasonable steps to prevent harm.
What should you do?
The Equality and Human Rights Commission (EHRC) has published guidance for employers on what to consider when organising workplace Christmas parties. Their top three steps are:
- Think ahead to prevent problems – these could include how you will manage alcohol, overnight accommodation and power imbalances.
- Set expectations early and remind employees of company policies.
- Consider the risk of third-party harassment, such as from other customers and members of the public.
More information can be found on the EHRC website.
For technical guidance on sexual harassment and harassment at work, see: https://www.equalityhumanrights.com/guidance/sexual-harassment-and-harassment-work-technical-guidance
The Information Commissioner’s Office (ICO) has opened a consultation on new guidance that sets out how it investigates potential data protection breaches and takes enforcement action.
Increasing transparency
The proposed guidance explains the processes the ICO follows when it suspects an organisation may have failed to comply with the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018.
Key points in the draft guidance
The draft guidance sets out:
- How the ICO decides whether to open an investigation or resolve concerns in another way.
- What can be expected during an investigation.
- How the ICO will use its information-gathering powers, including new powers under the Data (Use and Access) Act 2025 to require individuals to answer questions and organisations to provide reports.
- How decisions on the outcome of an investigation are made, including when warnings, reprimands, enforcement notices, or penalty notices may be used.
- When the ICO may consider a settlement with a reduced fine, and how that process works.
Updates to align with recent legislation
Once finalised, the new guidance will sit alongside the ICO’s Data Protection Fining Guidance, with the two forms of guidance replacing the current Regulatory Action Policy.
The Data (Use and Access) Act 2025 also extends the ICO’s investigatory and enforcement powers under the Privacy and Electronic Communications Regulations 2003 (PECR), bringing them broadly into line with the powers the ICO has under data protection law. While some differences remain, the ICO intends to apply a similar approach to both areas.
What this means for you
Where you act as a data controller or processor, awareness of this new guidance could be helpful in preparing for potential investigations and demonstrating good management of your data protection compliance responsibilities.
The consultation closes on Friday 23 January 2026.
To review the draft guidance and respond to the consultation, see: https://ico.org.uk/about-the-ico/ico-and-stakeholder-consultations/2025/10/ico-consultation-on-data-protection-enforcement-procedural-guidance/
The Intellectual Property Office (IPO) has confirmed plans to raise its fees by an average of 25% from 1 April 2026, subject to parliamentary approval. The change will affect applications and renewals for patents, trademarks, and designs.
This marks the first major fee increase in several years, with some fees unchanged for more than two decades. The IPO says the rise is necessary to keep pace with inflation and maintain the quality of its services.
The change means most fees will go up by around a quarter. For example:
- A patent search will rise from £150 to £200.
- A trademark application will increase from £170 to £205.
Full guidance will be published early in 2026 to help those whose payments fall close to the transition date.
The IPO has also updated its ‘how to pay’ information online, including revised terms and conditions for deposit account holders.
If approved, the new fee structure will take effect from 1 April 2026. Until then, the current fees remain in place.
See: https://www.gov.uk/government/news/intellectual-property-office-fees-to-increase-from-april-2026
HM Revenue and Customs (HMRC) are writing to some taxpayers to tell them what they need to do to get ready for the new Making Tax Digital rules that come into force next April.
What is Making Tax Digital?
Making Tax Digital for Income Tax is a new way for sole traders and landlords to provide their business accounts and tax information to HMRC.
It involves using software to maintain digital accounting records and then submit reports to HMRC each quarter.
From 6 April 2026, Making Tax Digital will be mandatory for almost all sole traders and landlords who had gross income over £50,000 in the 2024/25 tax year.
Why have you received a letter?
If your 2024/25 tax return has already been filed and your total gross income from self-employment and/or rental income is more than £50,000, then HMRC are likely to have written to you.
It is worth noting that even if HMRC have not sent you a letter but your income from self-employment and/or rental income for the 2024/25 tax year is more than £50,000, you will still be required to follow the new Making Tax Digital rules from next April.
What to do next
A small minority of taxpayers may be exempt from the new rules, so you may want to check this first. For instance, if it is not reasonable for you to use software to keep digital records or submit them to HMRC, it is possible to apply for exemption. HMRC would then confirm whether they accept your application.
Otherwise, you will need to:
- Choose compatible software to keep the digital records needed for the new system. If you already use software to manage your accounting information, check with your provider that the software is ready for Making Tax Digital.
- Sign up on GOV.UK for Making Tax Digital for Income Tax.
If you need any help with signing up, choosing software or submitting reports to HMRC, please get in touch. We can offer you anything from tailored advice to a full Making Tax Digital service designed to give you peace of mind.
From 18 November 2025, identity verification with Companies House will start to be required for company directors and People with Significant Control (PSCs). The measure is intended to improve the reliability of information on the UK’s company register and support efforts to reduce economic crime.
The identity verification process was introduced on a voluntary basis in April 2025. According to Companies House, more than one million individuals have completed verification since then.
Companies House Chief Executive, Andy King, described the milestone as significant, saying: “Identity verification will help make sure that the people setting up and running companies are who they say they are. This will make our data more reliable and less open to misuse, supporting a more transparent and trusted business environment.”
When to verify
The specific date by which each director or PSC needs to verify their identity varies. Companies House says it will contact each company directly with this information. Broadly, the requirements are as follows:
Directors
- Existing directors of companies will need to verify their identity as part of their company’s next confirmation statement from 18 November 2025.
- You will need to be verified if you are registering a new company that you will be a director of.
PSCs
- If you are a PSC but not a director of the company, then you will be required to verify within the first 14 days of your birth month. For example, if your date of birth is 20 December, your 14-day period begins on 1 December.
- If you become a PSC after 18 November 2025, you need to verify within 14 days of being added to the Companies House register.
How to verify
Verification can be carried out in one of two ways: directly through Companies House using GOV.UK One Login, or as an Authorised Corporate Service Provider (ACSP) we can guide you through the process.
Verified individuals will receive a personal 11 digit code through the service. They will then need to provide this personal code for each company role they hold.
Other roles
Companies House plan to introduce identity verification for other roles in the future. This will include limited partnerships and corporate directors.
If you need any help verifying your identity or that of others for your company, please give us a call. We would be happy to help you!
See: https://www.gov.uk/government/news/one-million-people-verify-identity-early-ahead-of-companies-house-changes
A new report from Skills England has indicated that many employers are struggling to keep pace with AI-related changes. Their ‘AI skills for the UK workforce’ report introduces three new tools that could help businesses build confidence and capability in using AI responsibly.
Sector-specific challenges
The report identifies sectors that face particular challenges. For instance:
- In Construction, opportunities such as drone surveying and augmented-reality training are emerging, but low digital literacy remains a barrier.
- Within the Creative Industries, freelancers and small firms are adopting AI tools for content creation but often without formal training, raising concerns about quality and originality.
- Advanced Manufacturing is already seeing benefits from automation and predictive maintenance but faces a growing skills gap as its workforce ages.
A consistent theme across all business sectors seems to be uncertainty over what is meant by “AI skills” and what staff need to learn.
Three new tools for employers
The three new tools are as follows:
- The AI Skills Framework – identifies the technical, responsible and non-technical skills needed across different job roles and levels.
- The AI Skills Adoption Pathway Model – shows how businesses typically progress from early awareness to strategic adoption of AI.
- The Employer AI Adoption Checklist – a practical tool to help businesses assess their AI skills readiness, identify workforce gaps and plan training.
These tools are designed to make AI more accessible to employers, particularly smaller businesses that often lack the dedicated HR or training teams of larger organisations.
Dr Ameen said, “AI is reshaping the world of work across sectors, but without the right skills, too many people and businesses risk being left behind.”
To find out more, the full AI Skills for the UK Workforce report and supporting tools are available through Skills England.
HM Revenue and Customs (HMRC) has reported that over 5.6 million people have accessed its app since the start of the current tax year (6 April 2025).
The app offers a range of features that can be useful in viewing and managing your tax and national insurance records.
What are people using the app for?
According to HMRC, the most accessed services include:
- Checking PAYE information, including pay before it reaches the bank – used by 4.14 million people.
- Viewing annual tax summaries – 1.94 million people.
- Accessing national insurance details, including contribution history and saving NI numbers – 1.79 million people.
- Checking State Pension forecasts – 1.49 million people.
- Viewing Self Assessment summaries and making payments – 1.19 million people.
If you’re using the app and want to make sure what the figures mean, or would like personalised guidance, please give us a call and we would be happy to help you!
See: https://www.gov.uk/government/news/lets-talk-about-tax-with-the-hmrc-app
The Chancellor, Rachel Reeves, gave a surprise ‘pre-Budget’ speech last week that appeared to pave the way for tax rises in the Budget on 26 November 2025.
What did she say?
The Chancellor’s scene setting speech outlined her priorities to cut NHS waiting lists, reduce the national debt, and improve the cost of living.
Quoting world challenges such as the continuing threat of tariffs, persistent inflation, the increasing cost of government borrowing, and pressures on public finances, the Chancellor acknowledged that productivity in the economy is weaker than previously thought.
This all means increasing pressure on revenue for the government.
The Chancellor indicated that her Budget would support businesses in creating jobs, innovating and protecting families from high inflation and interest rates. She further said: “If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit …”
This is the clearest indication yet that tax rises are coming for everyone. So, what could this mean for you in the Budget? Let’s explore some of the possibilities.
Changes already due to take effect in 2026 and 2027
There are still some measures announced in Autumn Budget 2024 that have not taken effect yet. These are:
- Capital Gains Tax (CGT): The rate of CGT where Business Asset Disposal Relief (BADR) applies will increase from 14% to 18% from 6 April 2026.
- Inheritance Tax (IHT): Restrictions on 100% relief for business and agricultural property will take effect from 6 April 2026. Unused pension funds and death benefits will be brought into IHT estates from 6 April 2027.
In addition, the new Making Tax Digital for Income Tax (MTD for IT) becomes mandatory for self-employed individuals and landlords with turnover over £50,000 from 6 April 2026. While not a tax increase, there is an increase in compliance costs to those affected.
Predictions for Autumn Budget 2025
Manifesto promises included not increasing National Insurance, income tax or VAT rates. The October 2024 Corporate Tax Roadmap commits to keeping the small profits rate and marginal relief and not increasing the 25% main rate of corporation tax. Enhanced research and development tax reliefs and the £1 million annual investment allowance for plant and machinery capital allowances are also to be kept.
However, the Chancellor’s speech now casts a doubt on these commitments. Here are a few of the possibilities we could see.
- Freeze on income tax thresholds extended: Income tax thresholds and the tax-free allowance are currently frozen until 6 April 2028. This could now be extended to 5 April 2030, bringing more people into tax.
- Increase to income tax rates: A one or two percentage point increase could be made to income tax rates. To generate sufficient tax revenues, it seems likely that the basic rate of income tax would need to be increased, not just higher rates.
- National Insurance and partnerships: A current hot topic is the suggestion that the government sees partnerships as receiving a tax break because partnership profits are distributed without having to pay 15% employers’ NI. This might result in the introduction of an additional partnership NI contribution for partners. Current speculation suggests this might be limited to LLPs rather than all types of partnership.
- Flat rate relief for pension contributions: Pension savings are currently given tax relief based on the saver’s marginal income tax rate. This could be changed so that all savers receive the same flat rate of income tax relief. This would collect more tax from higher earners.
- Reduce pension income tax-free lump sum: Individuals can often take a tax-free lump sum from their pension when they reach retirement age. Reducing the amount that can be taken tax-free could be one of the options being considered by the Chancellor.
- Cut Cash ISA saving limits: It was reported earlier in the year that the Chancellor was interested in restricting the amount that can be saved into a cash ISA. Nothing has happened on this so far, however, this could form part of the Budget announcement.
- Increase the BADR rate further: The CGT Business Asset Disposal Rate is already due to increase to 18% from 6 April 2026. This could be increased further. Another CGT possibility is that the CGT rates could be aligned with income tax rates. This might mean the current 18% rate being increased to 20% and the current 24% rate being increased to as much as 40% or 45%.
- Cap Principal Residence Relief (PRR): When an individual sells their home they pay no tax, no matter how much they receive, as PRR is unlimited. However, another possible measure could see PRR being capped.
- Further restrictions to IHT reliefs: Possible measures could include changes to the Potentially Exempt Transfer (PET) regime, reducing or removing taper relief on gifts given three to seven years before the donor’s death, and introducing annual or lifetime limits on exempt giving.
- VAT: There could be a mixture of good and bad news for VAT. One possibility could be a cut to the 5% VAT rate on household energy. However, privately funded healthcare might perhaps be subject to 20% VAT, like private education.
What should you take away?
Of course, predictions and possibilities of what might happen are speculative. However, the Chancellor’s determination to stick to her fiscal rules that keep the financial markets happy, coupled with the need to generate additional revenue, strongly suggest that there will be some wide-ranging changes in the Budget.
We will keep you updated on the Budget and any changes it brings. If you would like to discuss your personal situation and whether there are any actions you could take before the Budget, please get in touch. We would be happy to help you!
See: https://www.gov.uk/government/speeches/chancellors-scene-setter-speech-ahead-of-budget-2025
The government’s Renters’ Rights Bill has now become law, following Royal Assent last week. The new Act introduces a wide range of changes for private landlords in England.
The details on how and when these new rules will take effect are still to come, but here is a review of some of the key measures that will be introduced.
End of Section 21 evictions
The most notable change is the abolition of Section 21 ‘no fault’ evictions.
This doesn’t mean that landlords cannot evict tenants, but they will only be able to do so in certain circumstances.
Tenancy structure
The Act will replace most existing tenancy types with a single system of periodic (rolling) tenancies.
This means that if you use fixed 12 or 24-month contracts, they will no longer be possible. Tenants will be able to give two months’ notice at any time, rather than being tied in for a year or longer.
New ombudsman and registration requirements
A Private Rented Sector Ombudsman will be set up to handle complaints from tenants. Membership will be mandatory for landlords, and the ombudsman’s decisions will be binding.
A new Private Rented Sector Database will also be created. This is to help landlords understand their legal obligations and demonstrate compliance. Tenants will be able to use this when deciding to enter a tenancy agreement. Registration on the database may be necessary before being able to use certain grounds for repossession.
Other measures
Further reforms include:
- A ban on rental bidding. Landlords will be required to advertise a fixed rent and cannot accept offers above this.
- Landlords will not be able to refuse tenants because they have children or receive benefits.
- Tenants will have strengthened rights to request a pet in the property, which the landlord will have to consider and cannot unreasonably refuse.
- Application of the Decent Homes Standard and Awaab’s Law to the private sector, which will impact what is expected with the condition of properties and timescales for repairs.
- Local authority enforcement will be strengthened with the expansion of civil penalties, introducing investigatory powers and requiring local authorities to report on their enforcement activity.
Details on how and when the law will be implemented can be expected over the coming weeks.
See: https://www.gov.uk/government/news/historic-renters-rights-act-becomes-law
The Information Commissioner’s Office (ICO) has launched a consultation on how charities can make use of new rules that will allow greater use of electronic marketing in contacting their supporters.
From January 2026, the Data (Use and Access) Act will introduce a new ‘charitable purpose soft opt-in’. This will allow charities to send marketing emails and texts to people who have expressed interest in or offered to support a charity – even if they haven’t specifically ticked a consent box – provided certain conditions are met.
How the new rule will work
The change is intended to make it easier for charities to stay in touch with potential supporters and raise funds, while still protecting individuals’ data rights.
The charitable purpose soft opt-in will not apply to contacts already held in existing databases. Charities must always provide a clear opportunity to opt out – both when contact details are first collected and in every communication sent.
ICO’s consultation
The ICO’s consultation runs until 27 November and invites feedback from charities and others working in the third sector.
Emily Keaney, the ICO’s Deputy Commissioner for Regulatory Policy, said the soft opt-in is intended “to help charities stay connected with the people who want to support them, while still making sure everyone has control over how their data is used.”
Steps charities can take now
Although the new rule won’t apply until 2026, the ICO has provided some tips on what charities can do to prepare.
- Update your privacy notice – make sure it clearly explains how your charity will use their personal information.
- Plan your communications – decide how you will explain the soft opt-in when collecting new contact details, and how you’ll make it clear why someone is receiving marketing messages.
- Keep separate contact lists – since you cannot send electronic mail marketing to people whose contact details were collected before the soft opt-in commences, you’ll need to keep separate lists of those who have given their consent and those who will be contacted under the soft opt-in.
- Train your team – ensure staff know how to handle queries or complaints about marketing messages.
Next steps
Charities interested in shaping how the new rules are applied can respond to the ICO’s consultation.
See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/10/consultation-on-new-charitable-purpose-soft-opt-in-rules-to-support-fundraising/
