The 2025/26 financial year will bring new reporting requirements for UK resident directors of close companies, who are required to file a Self-Assessment tax return.

HM Revenue and Customs (HMRC) has introduced measures that will mean company directors will need to provide more information when submitting their tax return.

What will change for close company directors?

Any director completing a Self-Assessment tax return will be familiar with the form SA102. This currently asks optional questions about being a company director and whether the organisation is a close company (i.e. one controlled by five or fewer individual participators, such as shareholders or directors).

From April 2026, when you submit your tax returns for 2025/26, it will be a mandatory requirement to confirm if you are a company director and if you run a close company.

You will also need to clarify the name and registered number of your close company, the value of dividends received from the close company and the percentage shareholding in the company during 2025/26.

Where shareholdings have varied during the year, the highest percentage held must be reported.

Are there any financial penalties for non-compliance?

Because these new requirements fall outside the current penalty framework, a new £60 penalty has been introduced.

This will be applied to each failure found in your tax return.

The new penalty is needed because the information a taxpayer is being asked to provide will not impact their Income Tax or Capital Gains Tax liabilities.

Preparing for the changes

For close company directors and owners, the new changes may be challenging, particularly when gathering information around shareholding.

Our expert team can provide comprehensive, tailored advice and support to ensure you can confidently submit your tax return.

For all Self-Assessment Tax concerns, contact our team.

From 18 November 2025, identity verification will be mandatory for company directors, members of LLPs and Persons with Significant Control (PSCs).

Companies House will not be prosecuting these individuals for failure to comply for the first 12 months, but from November 2026, there will be severe consequences for non-compliance.

It is imperative that you understand what will happen if you fail to complete your identification verification before the deadline.

What happens if you do not verify your identity with Companies House?

Anyone who should have verified their identity with Companies House but fails to do so will be unable to submit their confirmation statement.

This includes those who are required to submit the statement on or sooner after the 18 November deadline.

Failure to submit this information is considered a criminal offence and persistent non-compliance can lead to directors being fined of up to £5,000, potential director disqualification and Companies House striking the company off the register.

This carries with it, its own unique penalties

Similarly, failing to verify your identity will be in breach of the law and you may be punished accordingly, including director disqualification.

How can I verify my identity with Companies House?

While it is possible to verify your identity through the GOV.UK One Login, many individuals may prefer using a registered Authorised Corporate Service Provider (ACSP).

ACSPs can manage the process end-to-end, reduce the chance of errors and file on your behalf.

This will ensure that your documents are all in order, allowing you to verify your identity efficiently without issue.

As non-compliance has such far-reaching implications, it is vital that you verify your identity before you run out of time.

To find out more about your changing obligations with Companies House filings, speak to our team today.

From January 2026, FRS 102 is going to be changing in a significant way and businesses need to be ready.

Any business that prepares accounts under UK GAAP should be aware of the impact the changes will have on how financial information is recorded and processed.

What’s changing with FRS 102?

Traditionally, most businesses have recognised revenue when the risks and rewards pass to a customer.

With the updates to FRS 102, the focus is going to shift towards transfer of control of goods or services to the customer.

This will be established through a new five-step model that is inspired by international standards (IFRS 15) and will require a closer examination of the details of contracts.

These five steps are as follows:

1. Identify a contract(s) with a customer
2. Identify promises within the contract(s)
3. Determine the transaction price
4. Allocate the transaction price to the promises
5. Recognise revenue when or as the entity satisfies the promise

Whether you supply goods, services, or a combination of both, you’ll need to track exactly what is delivered and when. Leases are also being treated differently.

Most leases will now need to be recognised on the balance sheet as both an asset and a liability.

This will serve to provide a clear overview of your obligations, but will also increase your reported liabilities.

Updates to Sections 2 and 2A will align them with international standards.

Part of this includes an explainer of how fair value is measured, alongside updates to the overall concepts used across the standard.

How can you stay compliant with FRS 102?

As with any significant changes, it is necessary to review your current procedures to find out what you need to change.

These are part of sweeping reforms designed to improve transparency and reduce the risk of errors or misstatements.

Failure to keep pace will result in penalties, so start preparing now.

Our expert team are on hand to help you review your accounts and highlight potential risk areas so that you can be prepared for the January 2026 deadline.

Keep up to date with the FRS 102 changes by talking to our team today!

A recent survey by Capital on Tap revealed that 79 per cent of small business owners do not have an exit plan.

The survey highlighted a mix of reasons behind the lack of preparation for an exit.

Emotional attachment was one of the strongest, with over a third of owners saying they could not imagine letting go of their business.

Others pointed to the difficulty of finding a buyer and the complexity of the legal process.

Why you need an exit plan

Having an exit plan in place allows you to prepare more effectively for an eventual sale, buyout or merger.

It gives you the opportunity to build value in line with your intended departure from the business so you can enjoy a better return.

Equally, life doesn’t always go according to plan. While many of you may not be ready to let go of your business now, illness, stress or sudden personal changes can force your hand at short notice.

The irony is that by trying to hold on too tightly for too long, many owners risk losing control of the outcome altogether and potentially devaluing their company.

Without an exit strategy, you could be left with little bargaining power or, in the worst-case scenario, be forced to close.

Exit strategy options:

Preparing an exit strategy requires careful consideration of all the options available to you:

• Do you want to seek a merger and acquisition transaction with another business?
• Would an Employee Ownership Trust (EOT) appeal to you?
• Have you considered a management buy-in or buy-out?
• Are there family members you would like to be your successor?

It is not safe to assume that a buyer will appear out of nowhere or that your children will want to take over one day.

You need to consider the legacy you want to leave, the financial outcome you hope to achieve and the tax implications of the different exit options.

If you are planning to sell your business, you also need to consider how you will prepare for the sale.

Are your accounts in order? Do you have a strong management team in place? Are there any issues that need fixing before the business goes to market?

Taking the time to plan now can help you achieve the best outcome and leave your business on your terms.

Contact us for expert assistance with your exit strategy.

With just six months to go before the first round of Making Tax Digital (MTD) for Income Tax gets rolled out, many sole traders are still not ready.

A survey carried out by IRIS earlier this year found that 45 per cent of UK sole traders felt unprepared for the changes.

That leaves almost half of those affected facing a serious risk of penalties once the rules take effect next year.

Who qualifies for MTD for Income Tax?

From 6 April 2026, anyone who files a Self-Assessment tax return and has gross self-employed and/or property income over £50,000 will be brought into the MTD regime.

The entry point will then reduce in stages, falling to £30,000 from April 2027 then is planned to fall to £20,000 the following year.

How the penalties work

Think of late submissions as penalty points on a driving licence. One missed quarterly update may not do too much damage, but repeated non-compliance will accumulate into a £200 fine.

Quarterly filers reach that stage at four points, while annual filers get there in just two.

The slate can be wiped clean, but only after a sustained period of meeting every single deadline.

Payment delays are treated under a new aligned system:

• No penalty if tax is paid within 15 days of the due date
• Payments made between day 16 and day 30 attract a penalty of three per cent of the balance outstanding
• By day 30, the penalty increases to six per cent

After 30 days, a second penalty begins to accrue daily at 10 per cent per year until the debt is cleared.

These charges will stop if a Time to Pay arrangement is agreed with HM Revenue and Customs (HMRC).

Additional consequences to be aware of

Besides the penalties for late submissions and payment delays, HMRC can also impose up to a £3,000 fine for failing to maintain adequate records in relation to a return. This includes not maintaining digital records or any issues with digital links within functional compatible software.

They can also issue a £300 minimum fine if you deliberately conceal information needed for HMRC to assess your liability.

Get in touch today to make sure you stay compliant and avoid MTD penalties.

HM Revenue and Customs (HMRC) has confirmed it uses AI to scan social media posts as part of criminal investigations into suspected tax and benefits fraud.

That means, if you are posting content that could be viewed as advocating for, admitting to, or describing tax avoidance, you could find yourself at the centre of legal action.

Why is HMRC browsing social media?

HMRC says AI tools have been used for several years to compile and analyse data.

It is keen to assert that it is only in criminal cases where fraud is suspected that social media checks are being conducted.

The move comes as the department is expanding compliance resources following the Government announcement of 5,500 new compliance staff.

The technology supplements human judgement and operates under legal oversight, and it is intended to free up staff to focus on helping taxpayers and targeting evasion.

Does AI help to catch fraud?

AI can pull together publicly available information from platforms and flag pieces of evidence that merit human review.

In practice, investigators have long read suspects’ social posts to spot discrepancies.

Automation speeds the collation and helps prioritise cases for investigators, but the process is not entirely without risk.

Experts caution that fake, hacked or misattributed accounts could generate false leads.

Automation may also miss context that a human reviewer would catch, so robust oversight is essential.

Be mindful of what you post online, as even jokingly describing the steps to avoid tax might put you on HMRC’s radar.

If you have any concerns about under-declaring your tax, speak to a professional confidentially rather than posting about it on social media.

This will let you get control of the situation without automatically being detected by HMRC.

If you are unsure about your position, seek professional advice before making voluntary disclosures or amending returns.

We can help make sure your tax filings are fully compliant, so please speak to our team today.

After months of uncertainty, Companies House has set the identity-verification deadline as 18 November 2025.

From that date, all new company directors and People with Significant Control (PSCs) must verify their identity.

Existing directors and PSCs will then have 12 months to complete verification, which means 18 November 2026 is the true identity verification deadline.

How should directors prepare?

If you are a new director, verify your identity before your first filing.

If you are an existing director, 18 November 2025 begins a transition year as you must be verified before your company’s next confirmation statement.

You will need to supply Companies House with your personal code and a verification statement for each director listed.

If any directors or PSCs are overseas or likely to be delayed, contact them now.

Directors with multiple companies must link the same personal code to each role separately.

Check your next confirmation date on the Companies House website, and if you need help, get in touch with our team.

How should PSCs prepare?

PSCs must provide their personal code via an online service.

Each PSC has a 14-day window to submit their code, and exact dates depend on when the PSC was registered and whether they are also a director.

If you have already verified your identity, you still need to supply your personal code and a verification statement for each role.

How do you verify?

You can use the DIY option via GOV.UK One Login or use an Authorised Corporate Service Provider (ACSP).

However, using an ACSP is the easy option if you want to ensure that there are no issues with getting your identity verified.

ACSPs can manage the entire process, reduce errors and submit filings on your behalf.

Only registered ACSPs may verify identities, so be sure to avoid unregistered third parties.

Speak to our team to make sure you are ready for the identity verification deadline!

The Treasury is reportedly revisiting Inheritance Tax (IHT) as ministers hunt for extra revenue.

While the Chancellor considers several options, IHT reforms remain a likely avenue, and now may be a good time to restructure your assets to avoid a larger IHT bill.

How could Inheritance Tax change?

No decisions have been finalised, but several serious proposals are circulating.

The clearest change already announced is that unused pension pots will be brought into the IHT net from April 2027.

That single change will bring many more estates into scope and has already altered planning strategies.

Gifting, a common tool to reduce IHT exposure, is under particular scrutiny.

Policymakers are discussing measures to curb or restrict gifting and may adjust the tapering that currently applies.

At present, gifts made within seven years of death remain relevant to IHT and are taxed at a tapered rate, while those made earlier are generally ignored.

The current rates are:

• 32 per cent for gifts made three to four years before death
• 24 per cent for gifts made four to five years before death
• 16 per cent for gifts made five to six years before death
• 8 per cent for gifts made six to seven years before death

It is believed that these rules could be subject to change in the Autumn Budget, although nothing is confirmed yet.

What can I do to lower an Inheritance Tax bill?

With uncertainty ahead, the smart first step is to quantify your estate so you know what might be exposed.

For pensions, consider how the 2027 change could shift the tax burden and whether drawing income or adjusting death benefits fits your plan.

It is then time to reassess gifting strategies.

While lifetime gifts still have value, their effectiveness will depend on any reforms brought in by the Chancellor.

Whatever the Chancellor decides, we are ready to help you review and restructure your assets to remain as tax-efficient as possible.

To ensure that you retain the most control of your assets even after you go, speak to our team for tailored Inheritance Tax planning.

With UK growth slowing to just 0.3 per cent in Q2, business confidence is fragile.

Momentum has faded after a surge in exports ahead of new tariffs earlier this year, while weaker consumer confidence and persistently high household savings add to the uncertainty.

The upcoming Autumn Budget is amplifying concerns with the expectation that the Chancellor will revisit a range of tax-raising measures to manage a potential £50 billion shortfall.

For businesses, this makes planning investment, recruitment and payroll increasingly challenging.

What might be on the table?

Recent reports suggest the Autumn Budget could bring a range of tax changes:

• Inheritance Tax (IHT) may be reformed, with reliefs on gifts scrapped and adjustments to the residence nil-rate band.
• Capital Gains Tax (CGT) rates could be aligned with Income Tax, potentially extending to high-value homes in a “mansion tax” style levy.
• The VAT threshold might be lowered to £30,000, bringing more small businesses into scope.
• Property taxes could be overhauled, with Stamp Duty replaced by a levy on higher-value homes.
• Pensions may face limits on tax-free lump sums.

Of course, all of these are speculative, but it is that uncertainty that has the capability to hold back investment.

How you can respond to change

The uncertainty is already affecting recruitment intentions, with more businesses relying on temporary or flexible contracts rather than investing in new, permanent staff.

Consumers are saving more and spending less due to caution around potential tax rises, which is hitting revenues in consumer-facing industries.

Major investment decisions are also being delayed until after the Budget in anticipation of more change.

However, even amid uncertainty, you can take steps to reduce risk:

• Plan for different tax scenarios, including higher employer costs or property and CGT changes.
• Review payroll and benefits to stay compliant and competitive.
• Streamline processes with technology to boost efficiency.
• Utilise short-term hiring options, while planning for long-term workforce needs.

Uncertainty does not have to stall growth! Contact our advisers today for tailored support and strategies to keep your business moving forward.

When the Chancellor unveiled £26 billion in additional taxes and higher employer National Insurance contributions (NIC) last autumn, the impact on business confidence was immediate.

Businesses are now trying to manage:

• The new adult National Minimum Wage rate, which has risen to £12.21.
• A 1.2 per cent rise in employer NIC.
• Statutory pay increases and extended family leave entitlements.

For labour-intensive industries such as retail, care, and hospitality, these measures pushed up employment costs by several percentage points almost overnight.

Is wage growth under pressure?

While mandated pay increases have provided a short-term boost to lower earners, broader wage growth is stalling.

A new survey prepared by the Recruitment and Employment Confederation (REC) points to starting salaries rising at the slowest pace in over four years.

Payroll budgets have been squeezed to the point where wage increases above statutory minimum are rare.

Between redundancies, job moves, fewer vacancies and career changes, there are more applicants in the job market for employers to choose from.

That supply-demand imbalance has eased pay pressures further, particularly outside specialist and technical fields.

Are businesses reluctant to hire?

The Chartered Institute of Personnel Development reports that only 57 per cent of employers plan to recruit in the next three months, down from 65 per cent just last autumn.

Vacancies for permanent roles may have decreased, but temporary and flexible contracts are helping to fill some of the gaps. However, this reflects caution rather than expansion.

Many businesses are delaying investment until there is clarity on future tax policy in the next Autumn Budget.

What it means for you

Balancing compliance with competitiveness is now a key challenge for employers.

We are working alongside businesses like yours to ease the impact of higher costs through smarter payroll planning, reviewing benefits, and using technology to improve efficiency.

Speak to us about a tailored payroll review and discover where efficiencies can ease the pressure.