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A £2.4 billion error: Why you need to ensure your accounting figures are correct
HM Revenue and Customs (HMRC) has acknowledged an error it made when publishing Valued Added Tax (VAT) figures that may impact the provisional 2025 to 2026 year-to-date receipts.
Is an audit reformation finally happening? Have your say before it’s too late!
Most business owners who are required to get an audit will likely be aware that there have been plans to reform the way that audits work for many years.
AI’s prominent rise continues but don’t underestimate the importance of accountants
Large Language Models (LLMs) like ChatGPT are proving popular with businesses for financial advice, but taking their advice can be dangerous for your company.
Why are fewer SMEs investing in their company?
Small and Medium Enterprises (SMEs) are finding the current economic climate challenging, with many reluctant to invest for fear of losing their business entirely.
Company Electric Car – HMRC introduces two separate rates
HM Revenue and Customs (HMRC) has announced its latest updates to the Advisory Electric Rate (AER) that will affect employees using a company car.
Reviewed every three months on a quarterly cycle, HMRC’s latest update confirmed that there are now two rates for home charging (eight pence a mile) and public charging (14 pence a mile).
The latest update was going to retain a single rate of 12 pence a mile, but HMRC decided to change the way it is charged, to reflect the difference in cost between home and public charging points.
Why does HMRC change the AER rate?
The purpose of regularly updating the AER rate is to reflect the different costs of charging electric vehicles.
They calculate the home rate based on the average domestic electricity price of 27.04pk/Wh and an efficiency of 3.59 miles per kWh.
The public rate has followed the same principle, but starts at a cost of 51pk/Wh.
The regular updates provide clarity for both employers and employees, while also making rates fair for both types of charging.
Why does the AER rate matter for businesses?
The AER rate is applicable for employees using company cars, as they can claim money back for using the vehicles to fulfil their duties to the company.
Need support calculating the costs?
With the rates regularly changing, you may need assistance to work out the costs.
Contact us today for advice and support.
HMRC updates the factsheet for self-review of the National Minimum Wage
With changes expected to be announced about the UK’s current National Minimum Wage (NMW) and National Living Wage (NLW) rates in the near future, HM Revenue and Customs (HMRC) has updated its checking process.
As part of HMRC’s NMW check process, you, as an employer, are required to complete a self-review of your company’s records and HMRC has updated its factsheet with what it expects employers to do.
How does the self-review work?
Your appointed case officer will tell you which information and records HMRC wants to look at because, as a UK employer, you must be paying your employees at least the NMW and NLW.
The review you conduct will depend on several factors, including the size of your workforce, the work that is carried out and the number of workers who have not been paid the correct rate of NMW.
In addition to this, you also need to consider the changing NMW rates and whether the contracts of your workers have changed.
As part of the self-review process, you will need to work out if there are any outstanding NMW debts.
You need to look at each pay reference period separately and work out if there are any underpayments, divide that by the NMW rate at the time and multiply that figure by the current NMW rate.
Once the self-review is complete, you must submit the information to HMRC and confirm employee details and the period in which they were underpaid.
You are also required to keep all details of your self-review for future reference, in case HMRC decides to run another NMW check on your company.
Support available for businesses
Analysing your payroll records will take time, but it is important that you ensure you meet the current NMW and NLW requirements.
Our expert team can help you meet your obligations and submit the correct information.
New shareholder dividend reporting requirements are fast approaching
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.
The dangers of non-compliance with the new Companies House ID verification
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.
Big changes are coming to FRS 102 – How can you prepare?
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:
- Identify a contract(s) with a customer
- Identify promises within the contract(s)
- Determine the transaction price
- Allocate the transaction price to the promises
- 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!