News

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.

For help reviewing your payroll system and identifying potential risks for BiKs, contact our team today.

The Chancellor, Rachel Reeves, has confirmed her plans to extend the Income Tax threshold freeze.

The original end date of 2028 has now moved to the 2030/31 tax year forcing many into higher tax bands as wages rise.

What are the current thresholds?

As it stands, the Income Tax rates are as follows:

• Up to £12,570 = 0 per cent
• £12,571 to £50,270 = 20 per cent
• £50,271 to £125,140 = 40 per cent
• Over £125,140 = 45 per cent

For those with income above £100,000, the personal allowance reduces by £1 for every £2 of income above that level.

By the time income reaches £125,140, the personal allowance is no longer applicable.

What does freezing Income Tax do?

Until 2021, thresholds rose each year roughly in line with inflation, which helped prevent tax bills rising with inflation as incomes increase.

However, the combination of this threshold freeze and rising National Minimum Wage (NMW) and National Living Wage (NLW) means that some taxpayers will find themselves dragged into tax for the first time and others into higher tax brackets.

Over time, take-home pay may grow slowly even if gross pay rises.

Who is affected the most by the Income Tax freeze?

Those earning moderate salaries and getting regular pay rises feel it first.

People on minimum wage or part-time hours who previously paid no tax may begin to pay Income Tax.

Higher earners face quicker erosion of their tax-free allowance and larger portions of their income taxed under higher bands.

Inheritance Tax (IHT) freeze extended

The IHT nil-rate band has also been frozen at £325,000 until 2031, along with the £175,000 residence nil-rate band – a year longer than anticipated.

As property values continue to increase year by year in many UK regions, more estates are likely to be liable for IHT as a result.

What should you do now?

A review of pension contributions can help limit Income Tax exposure. Estate plans should also be revisited to reflect rising asset values and longer-term IHT risk.

Speak to us today to review your personal tax position.

Last year’s Autumn Budget hit business owners hard with the announcements of changes to Agricultural Property Relief (APR) and Business Property Relief (BPR).

The new Inheritance Tax (IHT) rules, set to take effect from April 2026, could create substantial tax liabilities, especially where assets are handed down through generations.

Farmers, business owners and AIM investors are amongst those most affected by these upcoming changes and assessing your estate planning has never been more important.

With further changes to these reliefs announced in the Chancellor’s latest speech, now is the time to prepare.

What changes has the Autumn Budget brought for APR and BPR?

During her speech, the Chancellor confirmed that any unused £1 million allowance for the 100 per cent rate of APR and BPR will be transferable between spouses and civil partners, even if the first death was before 6 April 2026.

This is set to match the relief the transferable IHT nil-rate band offers and eases concerns for families who feared losing part of their relief entitlements.

However, the reforms also mean that any value above the £1 million threshold will still only receive 50 per cent relief.

This will create a 20 per cent IHT charge where the combined thresholds – nil-rate band, residence nil-rate band and APR/BPR – are exceeded. For a couple, this means that they have an effective threshold of up to £3 million.

For some people, this brings a significant change to their estate as business and agricultural assets were commonly held under the assumption they would pass tax-free upon death.

How may these changes affect you?

Many individuals now have limited time to review their Wills or consider whether lifetime gifting might be appropriate to distribute the estate in advance of their passing.

The lack of additional measures means that anyone relying on the traditional approach of passing assets upon death may be at risk of unexpected tax liabilities.

Families dealing with incapacity or outdated Wills may have challenges updating their affairs in time before April 2026.

To protect your family wealth, it is important to seek professional help when assessing how the new APR and BPR limits will affect you.

Our specialist team can advise you on your estate planning options and assess further business assets and partnerships.

Do you want to know if the new APR and BPR changes affect your estate? Speak to our team today.

The festive season is rapidly approaching and it is natural to want to treat your employees.

Unfortunately, even small gifts can have implications for your tax and National Insurance Contributions (NICs), so you should understand the implications of any kind gestures.

We are no Scrooge, we just want to help you understand how to spread festive cheer while staying tax-efficient.

What are trivial benefits in kind?

Trivial benefits are small, non-cash gifts or perks given to employees.

In order for benefits to qualify as trivial, they must meet the specific requirements from HMRC.

The gift must:

• Cost £50 or less
• Not be cash or a cash equivalent (like gift cards exchangeable for cash)
• Not be a reward for work or performance
• Not be part of an employee’s contractual benefits
• Not replace salary or bonuses

The most common examples of trivial benefits include seasonal gifts like a hamper or wine but can also include flowers or theatre tickets.

Directors can also receive trivial benefits, but these cannot have a combined worth of more than £300 per tax year.

What are the tax liabilities of trivial gifting?

Trivial benefits tend to be extremely tax-efficient as, if they meet the HMRC requirements, they are completely exempt from tax and NICs.

There is currently no need to report qualifying gifts to HMRC and they do not need to be listed on your P11D form.

It is important to declare any gift that does not fall within the criteria, as this will need to be recorded in the same way as other benefits and you will need to pay any tax or NICs owed.

If you are paying tax on employee benefits through your payroll, filing P11D forms is not required.

However, you will still need to submit a P11D(b) to pay any Class 1A NICs due.

You should track your trivial benefits to ensure that they meet the criteria and you remain compliant.

We can help you manage your obligations so your festive cheer does not turn sour.

To incorporate tax-efficient gifting into your business strategy, please get in touch with our team.

After months of uncertainty, Companies House has set the identity-verification deadline as 18 November 2025.

From that date, all new company directors and People with Significant Control (PSCs) must verify their identity.

Existing directors and PSCs will then have 12 months to complete verification, which means 18 November 2026 is the true identity verification deadline.

How should directors prepare?

If you are a new director, verify your identity before your first filing.

If you are an existing director, 18 November 2025 begins a transition year as you must be verified before your company’s next confirmation statement.

You will need to supply Companies House with your personal code and a verification statement for each director listed.

If any directors or PSCs are overseas or likely to be delayed, contact them now.

Directors with multiple companies must link the same personal code to each role separately.

Check your next confirmation date on the Companies House website, and if you need help, get in touch with our team.

How should PSCs prepare?

PSCs must provide their personal code via an online service.

Each PSC has a 14-day window to submit their code, and exact dates depend on when the PSC was registered and whether they are also a director.

If you have already verified your identity, you still need to supply your personal code and a verification statement for each role.

How do you verify?

You can use the DIY option via GOV.UK One Login or use an Authorised Corporate Service Provider (ACSP).

However, using an ACSP is the easy option if you want to ensure that there are no issues with getting your identity verified.

ACSPs can manage the entire process, reduce errors and submit filings on your behalf.

Only registered ACSPs may verify identities, so be sure to avoid unregistered third parties. We are a registered ACSP Services provider, so we are able to complete the Companies House identity verification on your behalf, saving you the time and distraction of this additional compliance.

Speak to our team to make sure you are ready for the identity verification deadline!

The Treasury is reportedly revisiting Inheritance Tax (IHT) as ministers hunt for extra revenue.

While the Chancellor considers several options, IHT reforms remain a likely avenue, and now may be a good time to restructure your assets to avoid a larger IHT bill.

How could Inheritance Tax change?

No decisions have been finalised, but several serious proposals are circulating.

The clearest change already announced is that unused pension pots will be brought into the IHT net from April 2027.

That single change will bring many more estates into scope and has already altered planning strategies.

Gifting, a common tool to reduce IHT exposure, is under particular scrutiny.

Policymakers are discussing measures to curb or restrict gifting and may adjust the tapering that currently applies.

At present, gifts made within seven years of death remain relevant to IHT and are taxed at a tapered rate, while those made earlier are generally ignored.

The current rates are:

• 32 per cent for gifts made three to four years before death
• 24 per cent for gifts made four to five years before death
• 16 per cent for gifts made five to six years before death
• 8 per cent for gifts made six to seven years before death

It is believed that these rules could be subject to change in the Autumn Budget, although nothing is confirmed yet.

What can I do to lower an Inheritance Tax bill?

With uncertainty ahead, the smart first step is to quantify your estate so you know what might be exposed.

For pensions, consider how the 2027 change could shift the tax burden and whether drawing income or adjusting death benefits fits your plan.

It is then time to reassess gifting strategies.

While lifetime gifts still have value, their effectiveness will depend on any reforms brought in by the Chancellor.

Whatever the Chancellor decides, we are ready to help you review and restructure your assets to remain as tax-efficient as possible.

To ensure that you retain the most control of your assets even after you go, speak to our team for tailored Inheritance Tax planning.

With UK growth slowing to just 0.3 per cent in Q2, business confidence is fragile.

Momentum has faded after a surge in exports ahead of new tariffs earlier this year, while weaker consumer confidence and persistently high household savings add to the uncertainty.

The upcoming Autumn Budget is amplifying concerns with the expectation that the Chancellor will revisit a range of tax-raising measures to manage a potential £50 billion shortfall.

For businesses, this makes planning investment, recruitment and payroll increasingly challenging.

What might be on the table?

Recent reports suggest the Autumn Budget could bring a range of tax changes:

• Inheritance Tax (IHT) may be reformed, with reliefs on gifts scrapped and adjustments to the residence nil-rate band.
• Capital Gains Tax (CGT) rates could be aligned with Income Tax, potentially extending to high-value homes in a “mansion tax” style levy.
• The VAT threshold might be lowered to £30,000, bringing more small businesses into scope.
• Property taxes could be overhauled, with Stamp Duty replaced by a levy on higher-value homes.
• Pensions may face limits on tax-free lump sums.

Of course, all of these are speculative, but it is that uncertainty that has the capability to hold back investment.

How you can respond to change

The uncertainty is already affecting recruitment intentions, with more businesses relying on temporary or flexible contracts rather than investing in new, permanent staff.

Consumers are saving more and spending less due to caution around potential tax rises, which is hitting revenues in consumer-facing industries.

Major investment decisions are also being delayed until after the Budget in anticipation of more change.

However, even amid uncertainty, you can take steps to reduce risk:

• Plan for different tax scenarios, including higher employer costs or property and CGT changes.
• Review payroll and benefits to stay compliant and competitive.
• Streamline processes with technology to boost efficiency.
• Utilise short-term hiring options, while planning for long-term workforce needs.

Uncertainty does not have to stall growth! Contact our advisers today for tailored support and strategies to keep your business moving forward.

When the Chancellor unveiled £26 billion in additional taxes and higher employer National Insurance contributions (NIC) last autumn, the impact on business confidence was immediate.

Businesses are now trying to manage:

• The new adult National Minimum Wage rate, which has risen to £12.21.
• A 1.2 per cent rise in employer NIC.
• Statutory pay increases and extended family leave entitlements.

For labour-intensive industries such as retail, care, and hospitality, these measures pushed up employment costs by several percentage points almost overnight.

Is wage growth under pressure?

While mandated pay increases have provided a short-term boost to lower earners, broader wage growth is stalling.

A new survey prepared by the Recruitment and Employment Confederation (REC) points to starting salaries rising at the slowest pace in over four years.

Payroll budgets have been squeezed to the point where wage increases above statutory minimum are rare.

Between redundancies, job moves, fewer vacancies and career changes, there are more applicants in the job market for employers to choose from.

That supply-demand imbalance has eased pay pressures further, particularly outside specialist and technical fields.

Are businesses reluctant to hire?

The Chartered Institute of Personnel Development reports that only 57 per cent of employers plan to recruit in the next three months, down from 65 per cent just last autumn.

Vacancies for permanent roles may have decreased, but temporary and flexible contracts are helping to fill some of the gaps. However, this reflects caution rather than expansion.

Many businesses are delaying investment until there is clarity on future tax policy in the next Autumn Budget.

What it means for you

Balancing compliance with competitiveness is now a key challenge for employers.

We are working alongside businesses like yours to ease the impact of higher costs through smarter payroll planning, reviewing benefits, and using technology to improve efficiency.

Speak to us about a tailored payroll review and discover where efficiencies can ease the pressure.