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The revised version of FRS 102 accounting standards has already brought new reforms for accounting periods starting on or after 1 January 2026 and now the rules are changing again.

The Financial Reporting Council (FRC) has announced further amendments to FRS 102 and FRS 105, affecting how certain businesses present their financial statements.

With the changes taking effect over the next two years, now is the time to understand what is coming and how it could affect you.

Why are the FRS 102 rules changing again?

The updates follow the introduction of IFRS 18, which replaces IAS 1 on the presentation of financial statements.

To ensure they are aligned with international accounting standards, the FRC has introduced amendments to UK GAAP.

However, after consultation, it stopped short of adopting the full IFRS 18 model.

What are the new FRS 102 changes?

The latest amendments apply to entities using updated Companies Act formats. They include:

• Revised presentation requirements for businesses applying adapted balance sheet and profit and loss formats
• Moving presentation requirements into new appendices within Sections 4 and 5
• Updated definitions of current assets, non-current assets and current liabilities, plus additional application guidance

These changes are taking effect for accounting periods beginning on or after 1 January 2027.

Alongside this, earlier reforms came into force from 1 January 2026 and changed revenue recognition and lease accounting.

Revenue must now follow a five-step control-based model and businesses must reassess customer contracts.

Most leases must also now be recognised on the balance sheet as a right-of-use asset with a corresponding lease liability.

Instead of a single lease expense, businesses will record depreciation and interest separately.

How can you prepare?

To prepare for the current FRS 102 changes, you should now be reviewing contracts and lease liabilities and ensuring you have the correct presentation formats.

If you are unsure how the new FRS 102 rules will affect your business, now is the time to seek professional advice.

For further support, contact our team today.

From April 2026, the National Minimum Wage rates will increase once again, driving up employment costs for many businesses and requiring them to review their payroll processes.

If you haven’t considered how these new rates will affect your business, you should do so now.

What’s changing in minimum wage rates?

From April 2026, the new rates will be:

These rates are mandatory and businesses must comply to avoid penalties. This includes making sure that their payroll processes are up to date and account for employees’ ages changing and any deductions that could affect their base pay.

Steps to prepare

As the clock is now ticking to the new rates being introduced, employers should:

1. Review payroll and costs: Check how the increase will affect your payroll and plan for higher labour costs.
2. Update systems and contracts: Ensure payroll systems are updated to reflect the new rates, including reviewing employment contracts and employee records.
3. Assess pay scales: The wage rise could create pay compression. Review your pay scales to ensure fair compensation for more experienced or qualified staff.
4. Consider pricing and efficiency: You may need to adjust prices or improve efficiency to offset higher wage costs.
5. Communicate with employees: Inform your staff about the wage rise and any adjustments to pay structures.

By updating your business processes, you can manage the National Minimum Wage increases effectively without disruption. If you need any support with these payroll changes, please get in touch.

For business owners preparing to sell or exit their company, a stricter interpretation of the qualifying conditions for Business Asset Disposal Relief (BADR) and increased scrutiny from HMRC will soon be introduced.

These changes may affect the timing of a sale, the structure of your business and the tax you will pay on any gains.

What is Business Asset Disposal Relief?

BADR allows qualifying business owners to pay a reduced rate of Capital Gains Tax (CGT) on the disposal of business assets or shares. The relief currently applies up to a lifetime limit of £1 million.

Gains above this limit are taxed at the standard higher-rate CGT of 24 per cent.

What are the changes to BADR?

In April 2025, we saw the BADR rate on qualifying gains increase to 14 per cent, up from 10 per cent.

In April 2026, we will see a further increase to 18 per cent.

To put that rise into perspective, if you sold your shares and made a gain of £1m, before 6 April 2026, your tax bill would be £140,000. A sale after this date will result in a £180,000 bill.

BADR eligibility

To qualify for BADR, the following must apply for at least two years up to the point your business is sold:

• You are a sole trader or business partner
• You have owned the business for at least two years

For further information on eligibility criteria, visit Business Asset Disposal Relief: Eligibility – GOV.UK.

Structuring your sale

Two common exit strategies are Management Buyouts (MBO) and Employee Ownership Trusts (EOT).

EOTs can reward key employees while maintaining business continuity, though CGT relief is now limited to 50 per cent of the gain.

MBOs transfer ownership to the management team, providing continuity but requiring careful attention to funding and tax timing.

Next steps for business owners

You can start by asking whether the current structure reflects a trading business, whether all shareholders are aligned and if phased disposal could improve the tax position.

Review shareholdings and employee or director roles to ensure they meet the criteria.

You should also consider whether financial separation of non-trading assets will boost BADR eligibility.

Finally, forecast your tax exposure to understand the financial impact it will have on your retirement.

Speak to our team today to confirm your BADR eligibility and ensure your tax liabilities are minimised.

The new tax year is just a few weeks away, starting on 6 April, so allow us to refresh your memory of the key changes in store for 2026/27.

Personal tax

The Government has decided to continue the Income Tax threshold freeze until at least April 2031, while keeping the tax-free personal allowance at £12,570.

With these rates and thresholds remaining unchanged, we will see more individuals dragged into higher tax bands.

Inheritance Tax (IHT)

From April 2026, the 100 per cent Agricultural Relief and Business Relief will be capped at £2.5m per individual.

A 50 per cent rate of relief will apply to assets above this threshold.

However, the Government have confirmed that it will be transferable between spouses and civil partners.

Business tax

The main rate of writing down allowance will drop from 18 to 14 per cent from April 2026.

However, a new first-year allowance of 40 per cent for main‑rate assets will be available to ensure start-ups are not too disadvantaged.

Business owners looking to exit their business using an Employee Ownership Trust (EOT) will also be required to pay Capital Gains Tax (CGT) on 50 per cent of their profits, following the removal of the existing 100 per cent relief.

Will there be a wealth tax?

No, but the ordinary and upper rates of tax on dividend income will increase by two percentage points from April 2026. The additional rate will remain unchanged.

There are additional changes to consider, including new separate tax rates for property income and a new mansion tax.

However, these changes will not come into effect until April 2027 and April 2028, respectively.

Get advice for the new year

With so many changes to prepare for, or non-changes in some cases, understanding your position early gives you more options as the new tax year approaches.

To get your affairs up to date, book your 2026/27 tax planning consultation.

Since November 2025, it has become a requirement for all company directors and Persons with Significant Control (PSCs) to verify their identity with Companies House.

As this must be completed by November this year, it is concerning that many have still not done so.

This verification process is part of the UK Government’s efforts to enhance transparency and prevent fraud under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

To do this, you can use the Government’s own ‘Verify your identity for Companies House’ service, which uses GOV.UK One Login or through an Authorised Corporate Service Provider (ACSP), such as a solicitor or accountant that is registered with the scheme.

The process is simple and requires you to provide proof of identity, such as a passport or driver’s licence.

If you haven’t completed this verification process already, you could face complications when submitting your annual confirmation statement this year.

What’s changing with Companies House?

Companies House now requires all company directors and PSCs to go through the identity verification process.

This applies to both new and existing directors and it’s necessary to ensure your company complies with new anti-money laundering rules.

If you don’t verify your identity, Companies House will block your ability to file documents, such as your annual confirmation statement.

The verification process is designed to enhance the security and legitimacy of company records, making it easier to track the individuals behind UK businesses.

Not submitting it could result in penalties, fines or even the dissolution of your company.

Don’t leave it too late

Make sure you complete the identity verification as soon as possible. Without it, your company won’t be able to submit the required annual confirmation statement and you could face penalties.

Our team at Clemence Hoar Cummings are registered with Companies House as an Authorised Corporate Service Provider (ACSP) and can assist you with the ID verification process.

We know that the Companies House software can be complicated and so we want to assist you with your verification so you can continue to complete your annual filings with ease. 

If you’re unsure about the process and need further assistance with ID verification for Companies House, please get in touch with our team.

With just a few weeks before Making Tax Digital (MTD) for Income Tax comes into effect on 6 April, the countdown is on.

HMRC has been sending letters to thousands of sole traders, landlords and self-employed individuals, warning them their reporting obligations are about to change.

Whether you have received your letter or not, you should act now to ensure you are compliant.

What is MTD for Income Tax?

MTD for Income Tax is HMRC’s move towards a fully digital tax system.

If you are affected, you will need to:

• Keep digital records of your income and expenses
• Use HMRC-compatible software
• Submit quarterly updates to HMRC
• Complete an end-of-year declaration

Quarterly updates will not replace your annual Self-Assessment, but it does mean that you will interact with HMRC more regularly throughout the year.

Who will be affected?

MTD for Income Tax is being rolled out in stages based on your gross income:

• April 2026 – gross income over £50,000
• April 2027 – gross income over £30,000
• April 2028 – gross income over £20,000

Those who fall into the first phase of MTD for Income Tax in April must submit their first quarterly update by 7 August 2026.

You must also keep your digital records accurate from the start of the tax year and file your Self-Assessment return by 31 January 2027.

How can you prepare for MTD for Income Tax?

The time to act is now. You need to move away from paper records and understand your new obligations.

You will then need to choose an MTD-compatible software or use a suitable bridging solution that works for your finances. It is necessary to sign up for MTD for Income Tax, as HMRC will not automatically do this for you. You can then begin digital record-keeping.

HMRC is taking a soft launch approach to MTD for Income Tax and is waiving penalties for the first year, but you must still remain compliant.

How we can help you

Our team can advise you on your reporting requirements, help you implement the right software solution and handle quarterly submissions on your behalf.

For further advice or support, get in touch today.