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HMRC warns taxpayers about mid-year Capital Gains Tax changes
HMRC has issued a warning to taxpayers completing their Self Assessment tax returns that their online software cannot automatically make calculations to account for the mid-year increase in the rate of Capital Gains Tax (CGT) in 2024.
The FRS 102 changes are now in effect: What should businesses do now?
The revised version of FRS 102 has now come into effect for accounting periods starting on or after 1 January 2026 and it will affect how your business prepares accounts under UK GAAP.
As AI advances, why is it still better to use a human accountant?
We are now in that period of time between the start of the calendar year and the beginning of the tax year.
HMRC records festive tax return frenzy
According to the latest statistics from HMRC, more than 4,600 Self Assessment taxpayers completed and filed their tax return on Christmas Day.
The clock is ticking down to payrolling Benefits in Kind: What employers need to know
From April 2027, all UK employers will be required to payroll Benefits in Kind (BiKs) rather than reporting them through the traditional P11D process.
While this may feel a long way off, businesses should start preparing now so that their payroll remains compliant and employee benefits are taxed accordingly.
What changes will BiKs bring?
Payrolling BiKs means that taxable non-cash benefits, such as company cars and private medical insurance, will now be processed through payroll in real time rather than calculated and submitted annually.
These changes will reduce year-end admin for employers and provide a clear, up-to-date view of which employees are receiving which benefits.
What employers need to know
The move towards real-time reporting will affect how businesses offer staff benefits, particularly those with complex packages or with many employees receiving taxable benefits.
The main considerations include:
- Technology readiness – Payroll systems must process benefits alongside salaries accurately
- Data integration – HR and payroll teams must work together seamlessly
- Employee communication – Staff must be informed about the payroll changes and their impact
- Compliance – Incorrect calculations can create risks that are harder to correct in real time
How can employers prepare?
Employers must use the next year to assess which benefits are reported via P11D and whether their payroll system can handle real-time reporting.
Clear communication with your payroll providers can help confirm that you are ready to support payrolling BiKs and understand what additional data or system changes are required.
To reduce the risk of errors, employers may look to invest in technology and training to ensure staff who are responsible for payroll and benefits fully understand their roles and can process them accurately each month.
How to stay compliant with BiK?
Preparing for payrolling BiKs is crucial and salary sacrifice arrangements and consistent monthly calculations must be considered to avoid underpayment of tax.
With the right financial advice, you can streamline processes and ensure your payroll and benefit strategies remain compliant and efficient.
Cashflow crisis: Why SMEs continue to struggle
Recent research from the Chartered Institute of Credit Management (CICM) has revealed that 82 per cent of SMEs have faced cash flow difficulties.
For many small businesses, periods of high activity can be followed by quieter months that place pressure on finances.
While a business may look profitable on paper, poor cash flow management can quickly cause problems that could even lead to insolvency.
Why are SMEs continuing to struggle?
Cash flow determines whether your business can pay suppliers, meet payroll, cover tax liabilities and face unexpected costs.
When cash flow is healthy, businesses have the flexibility to invest and take advantage of new opportunities to grow.
However, when it is under strain, business owners may rely on short-term borrowing or delay payments, which can be a difficult cycle to break.
Late payments are one of the biggest culprits for SMEs struggling and it can just take one or two delayed invoices to stretch cash reserves.
Growing businesses can feel this even more as expansion usually means hiring staff or buying equipment long before income catches up.
How to prepare your cash flow?
Preparation is essential to avoiding a cash flow crisis. Invoices should be issued promptly, clear payment terms should be set and a consistent debt collection process should be put in place.
Many businesses can benefit from accounting software that automates invoices and reminders, while offering alternate payment methods can make it easier for customers to pay on time.
Regular cash flow forecasting can help you spot any potential shortfalls and budget spending for the quieter months.
Reviewing costs and cutting non-essential expenses during slower periods can also ease pressure on cash reserves.
If you are really struggling, external finance such as invoice finance or an overdraft facility can help bridge short-term gaps, especially when customers have long payment terms.
Prepare your finances now
Cash flow is one of the toughest parts of running a business, but early financial advice can help you set up more resilient systems and make informed decisions.
Our expert team can help strengthen your cash flow and build a cash flow reserve for when your business faces unexpected expenses or downturn.
For expert advice on keeping your cash flow healthy, contact our team today.
Employment Rights Act 2025 is here – How employers can prepare their payroll
The Employment Rights Act 2025 has reached the end of its parliamentary debate and is set to bring significant changes to UK Employment Law.
Employers are now faced with a limited window to prepare their payroll systems and processes for the upcoming reforms.
What reforms will the Employment Rights Act 2025 bring?
The Employment Rights Act’s regulations will mainly come into effect on the common commencement dates of 6 April or 1 October.
From April 2026, Statutory Sick Pay (SSP) will become more accessible as the Lower Earnings Limit (LEL) and waiting period will be removed.
Paternity leave and unpaid parental leave will become day-one rights, requiring payroll and leave-tracking systems to apply statutory entitlements from the start of employment.
A new Fair Work Agency (FWA) will be established, alongside a simplified trade union recognition process, shorter employment tribunal time limits and stronger whistle-blowing and sexual harassment protections.
From October 2026, changes to tipping laws will require fair distribution of tips through payroll in sectors such as hospitality.
These reforms will have a knock-on effect on your payroll system and careful planning is required to stay compliant.
How can you prepare your payroll?
Close coordination between payroll and HR teams is essential, as payroll teams will need to change their policies to ensure accurate pay outcomes.
Employers should start by reviewing employment contracts and payroll policies so that they comply with the new reforms.
Manager training on performance management and record keeping during probation will be critical to reduce potential litigation risks.
Clear communication with employees can allow them to understand the changes to pay, benefits and statutory entitlements and reduce the risk of potential disputes.
Why do your payroll policies and systems need to change?
These reforms will bring additional payroll and compliance implications.
Our team can offer financial and payroll advice to help your business update systems and implement changes efficiently for when the various elements of the Act come into effect.
For expert payroll advice and support, contact our team today.
MTD countdown underway – Landlords and sole traders have just months left to prepare
The Making Tax Digital (MTD) for Income Tax countdown is on and landlords and sole traders who are not prepared may face costly repercussions.
From 6 April 2026, sole traders, landlords and self-employed individuals with a qualifying income over £50,000 will be required to comply with MTD.
In the following year, the qualifying income threshold drops to £30,000, followed in April 2028 with a qualifying income threshold of £20,000.
With the first phase fast approaching, landlords and sole traders must act now and update their systems to stay compliant.
How will MTD affect sole traders and landlords?
Under MTD, the traditional annual Self-Assessment tax return will be replaced with a new system of digital record-keeping, four quarterly submissions during the tax year and a final digital declaration after the year-end.
For sole traders, MTD is a move away from paper records and spreadsheets towards fully digital accounting, so income and expenses will need to be submitted quarterly to HMRC.
Landlords will face similar changes and those with UK or overseas rental income will also need to submit quarterly updates for property income.
Landlords with multiple properties may find that their financial obligations are increasing, so preparing HMRC-compliant recording and reporting systems is crucial.
How to prepare for MTD?
Preparation for MTD starts with assessing your qualifying income.
Reviewing your most recent tax return can help determine your financial position and this should be done immediately.
The next step is moving to MTD-compliant software, as submissions must be made digitally.
Many accounting platforms are designed to simplify record-keeping and quarterly reporting, making it easier to stay compliant.
Sole traders and landlords must start the transition and move away from paper records and basic spreadsheets to keep digital records before it becomes mandatory.
Why early preparation matters
MTD is a move towards real-time financial management and waiting for the first phase to be implemented could leave you facing an unexpected penalty.
Our professional team can take some of the administrative burden off you and prepare and submit quarterly updates on your behalf.
MTD is bringing significant reform to tax filing and staying informed can give you a better understanding of your requirements, reducing the risk of any last-minute errors.
To get ready for MTD for Income Tax, speak to our team today.
What are the upcoming changes to EIS and VCTs?
Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) are both set to experience changes from April 2026, as was revealed in the Autumn Budget.
These schemes were viewed as outdated and the reforms aim to modernise their effectiveness.
This is part of the Government’s desire to be seen supporting entrepreneurship and scale-ups, while also recalibrating the balance of tax relief between different investment routes.
Who will be affected?
Following the Autumn Budget, a policy paper outlined the main measures of the proposed reforms.
This indicated that the measures will affect companies raising finance under EIS and VCTs, as well as individual investors using these schemes, fund managers and advisers involved in structuring and promoting qualifying investments.
It is hoped that several hundred businesses will stand to directly benefit from the changes, especially if they were staring down the existing funding or asset limits.
The news is less welcome for the 24,000 individual investors who are likely to be hit by the reduction in VCT Income Tax relief.
What are the key changes?
Upcoming legislation will seek to amend the Income Tax Act 2007 and bring about a host of reforms.
These include:
- The gross assets requirement for a company will increase to £30 million before the issue of shares, up from £15 million, whilst the limit for immediately after the issue of shares will increase to £35 million, up from £16 million.
- The annual investment limit will double to £10 million, up from £5 million, as will the limit for knowledge-intensive companies to £20 million, up from £10 million.
- The lifetime investment limit will also double to £24 million for companies, up from £12 million, as well as for knowledge-intensive companies to £40 million, up from £20 million
- The Income Tax relief that can be claimed by an individual investing in VCTs will be reduced to 20 per cent from the current rate of 30 per cent
Certain companies operating in Northern Ireland in specific sectors linked to electricity generation and supply will be unaffected by the changes and must follow the current limits.