The way families make Child Benefit repayments to HM Revenue & Customs (HMRC) is changing.

From the summer, many families will have the option to report their Child Benefit payments and pay the High Income Child Benefit Charge (HICBC) directly through their PAYE tax code instead of filing a Self-Assessment tax return.

How will it work?

For eligible employed parents, the option to pay directly through PAYE will be simpler compared to Self-Assessment.

However, those who wish to continue paying the HICBC through Self-Assessment may continue to do so.

Taxpayers who are required to file Self-Assessment tax returns for other reasons, such as self-employment, will still need to report the HICBC on these returns.

What is the HICBC?

The HICBC is a charge on families where one person earns £60,000 or more.

For every £200 over this amount, their Child Benefit is paid back at one per cent.

This means that families must pay back all their Child Benefit where either parent has income in excess of £80,000.

Families who effectively receive no Child Benefit because of the HICBC still receive the other perks of Child Benefit, such as National Insurance credits and a National Insurance number for each child when they turn 16.

This is why many parents continue to register for Child Benefit, despite not receiving a payment each month.

What should I do now?

To pay the HICBC via PAYE, you will need to register through HMRC’s online service.

HMRC will contact you when the service goes live.

If you have previously opted out of Child Benefit payments and would like to opt back in, you can restart your payments online or via the HMRC app.

57 per cent of small to medium-sized enterprises (SMEs) have warned of rising costs over the next quarter, according to Intuit QuickBooks’ latest Small Business Insights survey.

Given this startling figure, all businesses should take care to manage cash flow constraints caused by inflation.

Boost financial awareness across your staff

Financial awareness should not just be the preserve of your finance professionals.

Educating your whole team on spending and budgeting will equip them to handle future financial decisions.

Model different scenarios

Model different scenarios, such as supply chain issues or customer downturn, to ensure your financial forecasting is adaptable.

Although it is difficult to predict every scenario, preparing for a range of possibilities will help you to respond effectively to new challenges.

Review your numbers regularly

Schedule a regular review of your income and expenditure to help you spot problems, identify opportunities to cut costs, and assess the impact of external and internal changes.

Cloud accounting software can enhance these reviews by providing real-time data and insights into your finances.

Software can also save you valuable time and money by automating routine tasks, such as sending invoices and reminders.

Keep your credit under control

One of the single largest contributing factors to poor cash flow is outstanding payments from customers.

Improving your credit control process, including recognising outstanding payments and chasing them effectively, can help to ensure you have sufficient cash flow.

However, when it comes to persistent late payers, it may be worthwhile assessing their continued benefit as a customer and seeking redress sooner rather than later if they have a substantial amount outstanding.

Do not panic

Amidst the pressures of inflation and rising costs, it is important to stay calm.

Panicking will lead to rushed decisions that are unlikely to serve your business interests in the long run.

Instead, take a moment to step back and review the situation calmly with our expert accountants.

Protect your business against rising costs by contacting our cash flow experts today.

The UK Government has confirmed that it will reduce green levies for energy-intensive industries.

These cuts aim to drive growth in key sectors, such as manufacturing and clean energy.

What are green levies?

A green levy is an environmental charge added to energy bills to help fund renewable energy projects and reduce carbon emissions.

For many businesses, these levies have driven up energy costs and eroded international competitiveness.

What does the change mean for business?

Under the new plan, electricity bills for energy-intensive sectors could fall by up to 25 per cent from 2027.

More than 7,000 manufacturing firms are expected to benefit, according to early Government estimates.

Steel, chemical, ceramic, and paper manufacturers are among the sectors expected to see the most immediate impact due to their higher energy consumption.

However, a further trickle-down effect could benefit many more SMEs in future.

Eligibility criteria and exemption details are due to be confirmed after a two-year consultation.

What are the benefits of slashing green levies?

Key potential benefits of cutting green levies include:

• Lower operating costs
• Improved profit margins
• Increased investment in the domestic industry
• Stronger job security in energy-intensive sectors
• Enhance international competitiveness
• Lower costs further down the supply chain

However, there are concerns from environmental groups that rolling back levies could stall the UK’s progress toward net zero.

Next steps for business owners

Firms with moderate energy use may face higher levies or pricing adjustments elsewhere in the system, as the Government looks to offset the cost of exemptions.

While reforms and closer alignment with EU carbon pricing have been suggested to cover the shortfall, the full funding model remains unclear.

To prepare, you should:

• Follow consultation developments
• Assess potential cost exposure with energy partners
• Consider efficiency upgrades or fixed-rate contracts

Consult with your accountant for personalised preparation plans.

Are you affected by green levies or other forms of green taxation? To find out how we can assess its impact on your business, get in touch.

While the 2025 Spending Review focused on long-term investment rather than introducing new taxes, the scale of spending suggests that future tax rises are likely.

Where have the Government recently invested funds?

The Chancellor pledged multi-year funding for health, defence and public infrastructure, setting departmental budgets until 2028–29.

Key announcements included:

• Defence spending to rise to 2.6 per cent of GDP by 2027
• £2.3 billion annual capital boost for the NHS
• £2.4 billion a year for school rebuilding
• £15.6 billion for transport in major city regions
• £500 million for digitalising HMRC

However, funding for other vital areas like local government, policing, and the environment will either remain flat or fall.

Where will the money come from?

No tax rises today does not mean no future tax rises.

Despite assurances that new spending is fully funded, rising debt interest payments, global volatility and flatlining productivity all place pressure on the Chancellor’s future fiscal decisions.

From a technical standpoint, experts believe the most likely targets include:

• Extending threshold freezes, which quietly push more people into higher tax brackets
• Cuts or caps on pension tax reliefs
• Council tax rises passed through local government

These changes have the potential to impact both business cash flow and personal wealth, which is why advanced planning is essential.

What can you do to prepare for potential tax changes in the Autumn Budget?

The absence of immediate change should not create complacency.

Now is the right time for you to:

• Stress-test cash flow and margins under potential tax scenarios
• Revisit remuneration strategies and reliefs
• Speak to your accountant about existing tax-saving opportunities

With significant investment flowing into defence, healthcare, infrastructure and technology, now might also be an ideal time to explore public sector contract opportunities and position your business to support the UK’s long-term development.

Worried about what the Autumn Budget might hold? Do not wait, speak to our team today to prepare you and your business.

How much State Pension you get depends on your National Insurance (NI) record when you reach the State Pension age.

Gaps in your NI record could affect how much you receive. Unfortunately, too many sole traders are still missing out on the full State Pension due to a range of factors.

Why are National Insurance Contributions important?

A full State Pension requires 35 years of NI contributions or credits.

Missing even a few years can have a significant impact on the amount you receive, leaving you with less financial security in retirement.

Furthermore, if you do not meet the minimum of ten qualifying years, you will not receive a State Pension at all.

Why are sole traders missing out?

Employees usually have their NI contributions paid for them by their employer, but sole traders must pay the contributions themselves.

Unfortunately, many sole traders do not realise that they need to make these payments to qualify for the State Pension.

How do I make National Insurance contributions?

You can make NI contributions as part of your Self-Assessment tax return.

Furthermore, if there are periods when you are out of work, you can use NI credits to cover any shortfalls in your contribution record.

You can also claim NI credits if you are out of work due to childcare responsibilities or illness.

For example, those claiming Child Benefit are eligible to claim NI credits.

You can check your NI record and top up your NI contributions through the Government Gateway.

Prepare for your retirement with a full State Pension

Your NI record plays a key role in determining the value of your State Pension, so it is essential to keep on top of your NI contributions and fill any gaps in your record.

By staying proactive about your NI contributions, you will avoid any nasty surprises when you reach the State Pension age.

If you think you might be missing out on the full State Pension, we can help.

Contact us today for further guidance on making NI contributions and protecting your State Pension.

On 8 April 2025, Companies House introduced identity verification for those who make filings on behalf of a business.

It is currently a voluntary process, but will become mandatory for new businesses by the end of the year and mandatory for everyone within 12 months of their most recent filings.

Who needs to verify their identity, and how do they do it?

You will need to have your identity verified to ensure you can file with Companies House if you are any of the following:

• A director
• A Member
• A general partner
• A managing officer
• A person with significant control
• Or someone who files for the company, like a company secretary

As with most identity verification, the accepted forms of photo ID are:

• Biometric passports from any country
• UK full or provisional photo driving licences
• UK Biometric Residence Permits and Cards
• UK Frontier Worker Permits

You may also need your current address and the year that you moved in to verify your occupancy in the UK.

Verifying your identity is free when done directly with Companies House and will involve using your GOV.UK One Login and providing the relevant evidence.

Alternatively, you can have your identity verified by an Authorised Corporate Service Provider (ACSP). Your accountant will likely be registered as an ACSP.

ACSPs have committed to upholding anti-money laundering regulations and can make filings on behalf of businesses, as well as verifying identities.

Those in limited partnerships must use an ACSP for identity verification and filings as of 2026.

Once an identity is verified, it will remain so until any significant details change, such as changes to your name or address.

To stay compliant with the Companies House changes, speak to our team today!

The International Monetary Fund (IMF) has upgraded the UK’s 2025 GDP growth forecast to 1.2 per cent, citing a strong first-quarter performance and signs of a recovering economy.

The official figures indicate that increases in customer spending and business investment have contributed to this economic growth.

These early signs of recovery present an opportunity to reassess your strategy and position your business for growth.

Economic recovery strategies for your business

There are several strategies you may wish to adopt to capitalise on this predicted recovery.

• Review your cash flow – In a recovery, opportunities often require immediate investment. Cash reserves can support recruitment, marketing, or stock increases without relying heavily on borrowing.
• Amend your pricing strategy – A recovering economy typically brings inflationary pressures. Revising your pricing strategies helps to ensure your prices reflect increased costs without damaging customer relationships.
• Invest in tech – If you delayed technology upgrades during the slowdown, you may wish to invest in digital tools to enhance your business’s efficiency.
• Assess supplier relationships – Recovery periods can also put pressure on supply chains, as demand often outpaces supply. Strengthen relationships with key suppliers and review your contracts to reduce the risk of delays and secure competitive terms.
• Align your team – Ensure your team understands the business’s objectives during the recovery period. A clear direction helps people focus on the right priorities and act quickly when opportunities arise.

Although signs of economic recovery are emerging, the outlook remains uncertain, especially as many of the recent figures fail to factor in the impact of new employment costs.

If your business begins to see an upswing, you will need to prepare for the potential tax implications that may follow renewed profitability.

Proactive tax planning with your accountant can help you make the most of available reliefs and avoid any unwelcome surprises.

Contact us today to put a forward-thinking tax strategy in place for your business.

Public borrowing hit £20.5 billion in April, the highest level for that month since 1993 and nearly £3 billion above forecast.

Economists warn the Chancellor may have little choice but to plug the gap with tax rises, spending cuts or changes to fiscal rules if elevated levels of borrowing persist.

While nothing is confirmed, several areas are drawing speculation.

Income Tax

Extending the Income Tax threshold freeze beyond 2028 could push millions of people into higher tax brackets, because inflation-driven wage increases are not being matched by rises in tax thresholds.

More retirees are also being caught out with the full new State Pension edging closer to the £12,570 personal allowance.

Those with additional income from private pensions or savings could soon face basic rate tax, or higher, where none applied before.

Utilising allowances, such as the starting savings rate or Marriage Allowance, can help mitigate the impact.

Cash ISAs

There is widespread speculation that the £20,000 annual tax-free allowance will be reduced to encourage people to invest in the stock market.

A lower limit would reduce options for cash savers and expose more of your savings interest to tax.

Making full use of the allowance early in the tax year could offer some protection against mid-year rule changes.

Inheritance Tax

A revision to the seven-year gift rule is also reportedly under consideration.

Individuals planning to transfer wealth should consider acting while current rules remain in place.

On top of this, many families will also have to contend with the nil-rate freeze until 2030 and the inclusion of unspent pensions within the scope of IHT from 2027, which could already bring many more estates within the tax regime.

Stamp Duty Land Tax

Surcharges on second homes have already risen to five per cent in England and Wales.

A further rise to match Scotland’s eight per cent is not out of the question.

Buyers should factor in potential changes before committing to new property investments.

With so much uncertainty, now is the time to seek expert guidance and ensure your finances are as future-proof as possible.

Contact us for a thorough tax review and proactive advice tailored to your needs.

Receiving a Kittel VAT notice is something that many businesses dread.

HM Revenue and Customs (HMRC) can demand the repayment of tax already reclaimed, and this can sometimes amount to a significant amount of money.

The notice comes when a trader “knew or should have known” their transaction was linked to fraudulent evasion of VAT.

This makes it ineligible for a deduction of input tax.

Kittel VAT can seem like an ever-present threat hanging over traders, but there are ways to reduce the risk.

How do Kittel VAT notices get issued?

To issue a Kittel VAT notice, HMRC must establish three key elements. They need to determine that:

• VAT was fraudulently evaded
• The trader’s transaction was connected with that fraud
• The trader knew, or ought to have known, of this connection

If any of these components is missing, a Kittel VAT notice will not be issued.

The European Court of Justice (ECJ) judgement in the case of Axel Kittel & Recolta Recycling SPRL is the originator of the term, and the ruling left the exact definition of “knew or should have known” undefined.

Defining the term could have opened loopholes that businesses may have attempted to exploit, which could have jeopardised HMRC investigations.

How to avoid Kittel VAT notices?

Due diligence is the best way to avoid Kittel VAT notices.

Conducting the necessary checks that should be part of your anti-money laundering processes should allow you to avoid engaging with conduct that will leave you vulnerable to Kittel VAT notices.

You should, therefore, always conduct robust supply-chain due diligence and ensure you understand the nature of all transactions made by your business.

If you ever have any doubts, it is best to raise concerns immediately, as it may not just result in a Kittel VAT notice, but more severe instances of fraud.

You may be treated as an accomplice to this fraud if you do not perform sufficient due diligence.

Reduce the threat of the Kittle VAT Notice, speak to our team today.

The delay to payrolling Benefits in Kind (BIK) to 2027 may seem like a cause of relief for many businesses who are concerned about the extra responsibility the changes will bring, but employers should still prepare for this landmark change.

Rather than filing an annual P11D form, the changes to payrolling BIK will force businesses to complete additional admin every month.

Though the 2027 deadline may seem far off, it is worth preparing now, as the deadline is unlikely to be extended again.

What are the changes to payrolling Benefits in Kind?

The main change is the transition from an annual filing to a monthly one.

As BIK will form part of the monthly payroll, it will be subject to the same monthly tax and National Insurance Contributions (NIC) as other employee expenses.

This could impact the cash flow of unprepared businesses.

The more regular payments could reduce working capital in the short term, as monthly expenses increase.

Over time, the smaller, more regular payments should allow for better cash flow management, as the expenses associated with BIK can be managed throughout the year.

Be aware that even with this change, there is still a need to produce an annual summary of BIK, and this must be ready for 1 June.

This dual reporting increases the administrative load for businesses, who will have to endure monthly filings, as well as the compilation of an annual report.

How to prepare for the changes to Benefits in Kind

Updating your benefits policy early is advisable, as you can figure out any issues before the deadline.

While payrolling BIK is still voluntary, it is worth becoming an early adopter so that you can adjust your business operations and ensure compliance before the 2027 deadline.

Getting used to that additional burden of having to incorporate BIK into your monthly payroll may take some time, so giving yourself that opportunity to perfect the system before there is a threat of penalties is wise.

At the very least, beginning to track benefits monthly can lay the groundwork for transitioning to payrolling BIK and will help you file your final P11D in 2026, making the annual report easier to compile.

If you already payroll BIK, do not forget to re-register before 5 April 2027, as failure to do so will cause you to become noncompliant.

Take the time to get ready for payrolling Benefits in Kind. Speak to us today.