From April 2025, significant new legal obligations have come into force that will affect almost all UK companies and LLPs. Under the Economic Crime and Corporate Transparency Act 2023, Companies House has started to roll out mandatory identity verification for individuals involved in the formation, ownership, and control of UK-registered entities.

This is part of a wider drive to increase transparency, clamp down on fraudulent company activity, and prevent the misuse of UK corporate structures.

If you are a company director, a person with significant control (PSC), an LLP member, or someone involved in forming a company, these new rules are directly relevant to you.

Who must be verified?

The identity verification requirement applies to a broad range of individuals connected with UK corporate entities, including:

• Company directors (for companies registered in the UK)
• Persons with Significant Control (PSCs)
• LLP members
• Individuals forming new companies or LLPs
• Authorised agents (known as Authorised Corporate Service Providers or ACSPs)

Over time, the requirement will extend to all existing individuals in these roles. For now, it applies to any new appointment or registration made from 8 April 2025.

What is identity verification?

Verification involves confirming that a person is who they claim to be. This process must be completed through one of two routes:

1. Directly through Companies House, using a secure digital system that checks photographic ID and confirms key personal information.
2. Via an Authorised Corporate Service Provider (ACSP) – such as your accountant or solicitor – who is registered with Companies House to conduct identity checks on behalf of clients.

Only once an individual has been verified will Companies House allow them to act in their appointed role or be added to a company’s public register.

Why has this change been introduced?

The government is strengthening the role of Companies House to prevent the use of fake identities and nominee directors. Historically, it has been possible to incorporate companies with limited scrutiny of those involved. This reform aims to create a more trustworthy business environment and help law enforcement tackle fraud and economic crime.

What should companies do now?

If you are responsible for a company or LLP, it is important to act early:

• Review your existing PSCs and directors to confirm who will need to be verified
• Ensure any new appointments from April 2025 onwards complete identity verification promptly
• Discuss with your accountant or legal adviser how to manage verification – either directly or via an ACSP

Failing to comply with the rules could result in the rejection of company filings or even criminal penalties. Only verified individuals will be able to act in their roles, and unverified appointments may be invalid.

How we can help

As an authorised agent, we can conduct identity verification checks for your company or LLP. This service ensures compliance with the new rules and avoids the administrative burden of managing the process internally.

If you have any questions about how these changes affect your business or would like to arrange for us to complete identity checks on your behalf, please get in touch. We are here to help you stay compliant and informed.

Small and medium-sized hospitality businesses across the UK are set to benefit from a new government-backed scheme designed to cut energy costs and support net zero ambitions. The initiative, unveiled as part of the wider Plan for Change, will provide free energy and carbon reduction assessments to over 600 venues, including pubs, caf�s, restaurants, and hotels.

Delivered in partnership with Zero Carbon Services, a sustainability consultancy specialising in hospitality, the scheme aims to deliver more than £3 million in cost savings while reducing carbon emissions by approximately 2,700 tonnes. The initiative is part of the government’s commitment to making the UK’s hospitality sector more sustainable and economically resilient.

The hospitality sector, which includes a high number of independent and family-run businesses, plays a vital role in communities and the broader economy. It currently supports around 3.5 million jobs and contributes over £90 billion annually to the UK economy. However, rising energy prices and the pressure to become more environmentally responsible have placed significant strain on many operators.

The trial will identify practical, low-cost opportunities for energy reduction, such as sealing insulation gaps, switching to low-energy lighting, and adjusting heating systems. These changes may seem minor in isolation, but together they could deliver substantial savings and operational efficiencies.

Sarah Jones, Minister for Industry, emphasised that the government is backing the hospitality sector to thrive in a greener future. She noted that energy efficiency is not only good for the planet but also allows businesses to reinvest savings into growth, staffing, and service improvements.

Mark Chapman, Chief Executive of Zero Carbon Services, highlighted that extreme weather and climate-related pressures are already affecting the hospitality industry. From food supply disruptions to fluctuating energy demands, the sector is under increasing pressure to adapt. He pointed out that many businesses are unaware of simple, actionable steps they can take to reduce energy use and cut costs, which this new scheme is designed to address.

Trade bodies have responded positively. UKHospitality welcomed the move, saying that businesses are increasingly looking for ways to reduce emissions and become more sustainable. The British Beer and Pub Association added that the guidance and insights from the trial would be particularly valuable to small pubs trying to manage energy bills. The British Institute of Innkeeping echoed these sentiments, noting that energy costs remain a key concern for licensees and any support is timely and welcome.

The trial will run until March 2026, supported by £350,000 of government funding. It aims to create a model that could potentially be rolled out more widely across the sector. One of the added benefits is that the initiative helps to bridge the knowledge gap among business owners. While many hospitality operators want to reduce their environmental impact, only a small proportion feel confident enough to act without external support.

By connecting these businesses with trusted advisers and providing tailored assessments, the scheme hopes to remove the barriers that often prevent sustainable change.

For firms in hospitality, this is not only a cost-saving opportunity but a clear signal that environmental efficiency is fast becoming a core business strategy.

Many individuals and business owners in the UK pay their tax under the Self-Assessment system, which often involves two payments on account due each year – the first in January and the second in July. These advance payments are calculated based on your previous year’s tax bill. But what if your income has fallen and your tax liability for the current year is likely to be lower?

In that case, it may be possible to reduce the July 2025 payment, helping ease cash flow pressures or avoid overpaying tax unnecessarily. Below we explain when and how this can be done.

Understanding payments on account

Payments on account are advance payments towards your next Self-Assessment bill. They are usually required if your last tax bill was over £1,000 and less than 80% of the tax owed was collected through PAYE.

Each payment is typically 50% of your previous year’s tax liability (excluding capital gains and student loan repayments), with one payment due by 31 January and the second by 31 July.

When a reduction may be possible

If your income for the 2024-25 tax year is expected to be lower than the 2023-24 figure used to calculate your current payments on account, you may be eligible to reduce your July 2025 payment.

This situation might apply if:

• You have experienced a fall in profits from self-employment
• You have stopped working or retired during the year
• Your rental or investment income has dropped
• You have increased allowable expenses, pension contributions or losses carried forward

HMRC allows you to apply to reduce your payments on account if you believe your tax bill will be lower. This can help you avoid overpaying now and waiting for a refund after you submit your return.

How to apply for a reduction

You can apply online via your HMRC Self-Assessment account, by post using form SA303, or call and we will apply for you. The form asks for an estimate of the total tax due for the 2024-25 year, which will be used to recalculate your July 2025 instalment.

If your January 2025 payment was also higher than it should have been, HMRC will offset this when you file your tax return, and any overpaid amounts will either be refunded or credited towards your next tax bill.

Caution – do not under-estimate

It is important to be realistic. If you reduce your payments too far and your actual tax bill ends up higher than expected, HMRC will charge late payment interest on the difference from the original due date. You may also face a penalty if they believe the reduction was made carelessly or deliberately.

Keeping good records, projecting income conservatively, and seeking advice if unsure will help avoid any unwelcome surprises later on.

Summary

If your income or profits have fallen in 2024-25, you do not have to blindly pay your full July 2025 Self-Assessment instalment based on a higher previous year’s figure. With reasonable evidence, you can apply for a reduction, improving your cash flow and helping you avoid unnecessary overpayments.

Call to action:
If you think your July payment could be too high based on your current year’s income, speak to us for a quick review. We can help you assess whether a reduction is justified and make the application on your behalf to avoid overpaying.

A proposed change to the way Statutory Sick Pay (SSP) is charged is causing growing concern among UK small business owners. Under current rules, employers are only required to pay SSP from the fourth consecutive day of absence due to illness. However, upcoming reforms suggest that SSP will become payable from the very first day an employee is unable to work. While the intention is to provide greater financial support for employees, this change could place a considerable burden on small businesses, especially those already facing tight margins and limited resources.

Why the change matters

At first glance, paying SSP from day one may not seem like a dramatic shift. But for many smaller employers with limited cash flow, the cumulative cost of covering multiple instances of short-term sickness can add up very quickly. If the three-day waiting period is removed, the frequency and volume of SSP payments will likely increase, meaning that small businesses could see a noticeable rise in payroll costs.

This is particularly challenging for firms in sectors where staff absences are more common, such as hospitality, care, and retail. Unlike larger organisations, small firms often do not have the luxury of a deep bench of staff or the budget flexibility to absorb these extra costs without making adjustments elsewhere.

Wider implications for staffing and operations

One of the unintended consequences of this reform could be a reduction in new hiring. Many small businesses are already cautious when expanding their teams. The prospect of taking on new employees becomes even more daunting if each new hire potentially increases the cost of sickness cover. Some employers may respond by limiting staff hours, hiring fewer people, or relying more on self-employed workers to avoid additional employment liabilities.

Others may look at ways to reduce other overheads to compensate, which could have a knock-on effect on investment in training, marketing, or other areas essential for business growth. This may slow down expansion plans or affect service quality if resources are stretched.

Balancing support and sustainability

The goal of the SSP reform is understandable: to provide better support for workers when they fall ill. Few would argue against the principle of helping people avoid financial hardship due to short-term sickness. However, small businesses are often already operating at or near capacity, and further financial pressure without offsetting support could lead to reduced job opportunities or even force some businesses to scale back operations.

There have been calls for a government rebate or subsidy to help smaller employers manage the cost of this transition. Whether such support will be introduced remains to be seen. In the meantime, businesses are being urged to assess the potential impact on their cash flow and operations.

Revisit business plans

For small and medium-sized businesses with a significant workforce, this proposed change to Statutory Sick Pay is a timely reminder to revisit existing business plans and staffing strategies. An increase in SSP costs, even modest at first, could have a noticeable impact on cash flow, payroll budgeting, and overall financial resilience. Employers should assess whether current plans allow for such additional costs and consider updating forecasts accordingly. If your business may be affected, and you would benefit from support in reviewing your financial position or exploring ways to manage the potential cost increase, please get in touch. Planning ahead now could make all the difference later.

Employers must pay Class 1A NICs for 2024-25 benefits by 19 July (post) or 22 July (electronic). These apply to perks like company cars and private health cover-late payment risks penalties from HMRC.

Class 1A NICs are payable by employers on the value of most taxable benefits offered to employees and directors, including company cars and private medical insurance. They are also due on any portion of termination payments exceeding £30,000, provided that Class 1 NICs have not already been applied.

To ensure the payment is correctly allocated, employers should use their Accounts Office reference number as the payment reference and clearly indicate the relevant tax year and month. It is important to note that Class 1A NICs paid in July always relate to the previous tax year.

There are three key dates employers must remember for the 2024-25 Class 1A NICs. Forms P11D and P11D(b) must be submitted by 6 July 2025. Postal cheque payments must reach HMRC by 19 July 2025, and electronic payments must clear into HMRC’s bank account by 22 July 2025.

These contributions generally apply to benefits provided to company directors, employees, individuals in controlling positions, and their family or household members.

Employees using company fuel for private journeys can sidestep a hefty benefit charge by repaying the full private fuel cost to their employer by 6 July 2025. Miss the deadline, and tax becomes unavoidable.

This repayment process is known as “making good,” and requires the employee to repay the employer for private fuel no later than 6 July following the end of the tax year. For the 2024-25 tax year, the repayment must be completed by 6 July 2025.

If the repayment is not made by the deadline, the employee becomes liable for the car fuel benefit charge. This charge is calculated based on the vehicle’s CO2 emissions and the car fuel benefit multiplier. The charge applies regardless of the actual amount of private fuel used, making it potentially costly for employees who only use a small amount of fuel for private journeys, such as commuting.

To avoid the tax, the employee must fully repay the employer for all private fuel used during the year, including fuel used to travel to and from work. Accurate record-keeping is essential, as HMRC will only accept that no benefit has arisen if the full cost is repaid by the deadline. In many cases, repaying the private fuel cost can be more financially beneficial than paying the fuel benefit charge.

From April 2025, Agricultural Property Relief from Inheritance Tax now extends to land under qualifying environmental agreements. This means landowners entering long-term stewardship schemes will not lose IHT relief. From April 2026, a new £1 million limit will apply to combined APR and BPR claims-making timely planning more important than ever.

Agricultural Property Relief (APR) is a relief from Inheritance Tax (IHT) that reduces the taxable value of agricultural land and property when it is passed on, either during a person’s lifetime or after death. It allows up to 100% relief on qualifying agricultural land used for farming.

The scope of APR was extended from 6 April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, devolved governments, public bodies, local authorities, or relevant approved responsible bodies. This expansion of the relief helps to better support environmental land management without penalising landowners for switching from farming to environmental use.

The new rules will benefit individuals, estates, and personal representatives where agricultural land is shifted to long-term environmental use under formal agreements. Previously, land removed from active farming for environmental schemes could have lost eligibility for APR.

From 6 April 2026, broader reforms to Agricultural Property Relief and Business Property Relief are set to take effect. While relief of up to 100% will still be available, it will apply only to the first £1 million of combined agricultural and business property. Beyond that threshold, the relief will be reduced to 50%.

Running more than one self-employed business? HMRC will not always treat them as separate. Whether they are taxed as one combined trade or multiple depends on how your activities relate to each other. It is not a matter of choice, it is about how your business is run in practice. Get it right to avoid costly mistakes.

When someone has more than one self-employed income, one of the key issues to consider is whether to combine all profits under a single business activity or treat each separately. This depends on the nature and relationship of the activities. HMRC’s manuals set out three possible scenarios:

1. Separate Trades

If the new activity is run independently, with different staff, stock, or customers, it is treated as a separate trade. This means each business is taxed individually, and the commencement rules apply to the new one. No merging takes place unless operations later combine in substance.

2. A New Single Trade

If the new activity transforms the original business significantly, so much so that the old trade effectively ends, then both are treated as forming a new trade. The cessation rules apply to the original trade, and commencement rules apply to the new, combined business.

3. Continuation of Existing Trade

If the new activity merely expands the existing business without fundamentally changing its nature, it is treated as a continuation. Profits are combined and taxed as one ongoing trade, with no change in basis.

Understanding whether activities form one trade or multiple is crucial for correct tax treatment. It’s not just a matter of choice. It also depends on the facts and how the businesses operate and interact.

We would be happy to help you review the structure of your business to ensure compliance with HMRC guidance and avoid unexpected tax consequences.

MTD for Income Tax starts 6 April 2026 for the self-employed and landlords with £50k income. Plan early to stay compliant and avoid disruption.

MTD represents one of the most significant overhauls to the self-assessment regime since its introduction in 1997. This includes new requirements to keep digital records, using MTD-compatible software, and submitting quarterly updates of income and expenses to HMRC.

From April 2026, self-employed individuals and landlords with annual qualifying business or property income over £50,000 will be required to comply with the MTD for Income Tax rules. Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted.

This first rollout of MTD for Income Tax will affect approximately 780,000 taxpayers, with the next stage following in April 2027, extending the rules to those earning between £30,000 and £50,000. A further expansion, announced during the Spring Statement 2025, will apply MTD obligations to those with income over £20,000 from April 2028. The government is still considering the best approach for individuals earning below this lower threshold.

HMRC is asking some eligible taxpayers to sign up to its MTD testing programme on GOV.UK. This provides an opportunity to get comfortable with the new process before it becomes mandatory. Importantly, penalties for late submissions will not apply during the testing phase.

This move follows the rollout of MTD for VAT, which according to an independent report prepared for HMRC has helped over two million businesses improve accuracy and reduce errors.

As the deadline approaches, it is important to start planning in order to ensure a smooth transition to the new way of reporting Income Tax.

Is your child starting school this September? Tax-Free Childcare could save you up to £2,000 a year. Check your eligibility now and start planning ahead.

Working families whose children are starting school for the first time September 2025 could save up to £2,000 a year per child on their childcare bills, thanks to the government’s Tax-Free Childcare (TFC) scheme.

Designed to ease the financial burden of childcare, the TFC scheme offers eligible working families valuable support through a wide network of registered childcare providers. This includes childminders, breakfast and after-school clubs, and approved UK play schemes. Families can also build up their TFC account throughout the year, allowing them to save for higher childcare costs during school holidays.

The scheme is available for children up to the age of 11, with eligibility ending on 1 September following the child’s 11th birthday. For children with certain disabilities, the scheme extends eligibility until 1 September after their 16th birthday.

Under the TFC scheme, for every £8 a parent contributes, the government adds £2, effectively topping up childcare savings by 25%. This support is capped at a maximum of £10,000 in contributions per child each year, meaning parents could receive up to £2,000 annually per child, or £4,000 for children with disabilities.

TFC is open to a wide range of working families, including the self-employed and those earning the National Minimum or Living Wage. Parents on paid sick leave, maternity, paternity, or adoption leave (both paid and unpaid) are also eligible. To qualify, each parent must work at least 16 hours per week and meet minimum income thresholds. However, households where either parent earns more than £100,000 a year, or those receiving Universal Credit or employer-provided childcare vouchers, are not eligible for the scheme.

Commenting on the scheme, HMRC’s Director General for Customer Services said:

“Starting school can be an expensive time – there’s a lot to buy and organise. Now that you know where your child will be going to school, it’s a good time to start planning your childcare arrangements. Tax-Free Childcare can help make those costs more manageable. Sign up today on GOV.UK and start saving.”

With school starting in just a few months, now is the perfect time for parents to check their eligibility and take advantage of the savings available through the scheme.