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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.

As the deadline for Self Assessment passes, new data from HMRC shows that taxpayers paid a staggering £325 million in fines and interest last year after failing to meet the 31 January deadline.

Recent analysis of HMRC’s publicly available statistics found that around 600,000 individuals were hit with penalties for filing or paying late, which serves as a clear warning to those who still have returns or payments outstanding.

Fines for late tax returns and payments

HMRC’s systems automatically issue a £100 penalty for missing the filing deadline, even if no tax is owed, with further fines issued if payment or filing of a tax return isn’t completed within certain time frames.

Fines for late filing are as follows:

Fines for late payments are as follows:

HMRC estimates that £8.7 billion of Self Assessment tax went unpaid in the 2023/24 cycle. This represents 12.5 per cent of the £69.6 billion it expected to collect for the year.

Across all taxes, around £44 billion is now overdue, with the vast majority already in line for formal debt collection.

Be prepared for Self Assessment

For many taxpayers, the real issue is a lack of preparation rather than an unwillingness to pay.

Underestimating a tax bill, poor record keeping or leaving everything until the last minute can lead to panic and costly mistakes.

Once penalties and interest start to accumulate, the situation can quickly spiral out of control.

Setting aside funds throughout the year and seeking advice well before the deadline can make a significant difference.

If you are unsure about your Self Assessment obligations or are worried about an existing liability, speak to us as soon as you can.

Energy bills, staffing, borrowing costs, taxes and supplier expenses are just a few of the reasons behind the added financial pressure business owners are currently facing.

As we get closer to the new tax year, it is the ideal time to review your business plans and check that your pricing strategy remains fit for purpose.

Why you should review your pricing strategy now

Reviewing pricing regularly is a key part of maintaining a viable and sustainable business.

Many businesses set prices once and only revisit them when they encounter challenges.

If you leave your prices unchanged for too long, especially amid current economic pressures, you are likely to see your profit margins shrink.

A more regular review can help avoid this.

How to review your pricing strategy

Before making any changes to your pricing strategy, ask yourself:

• Have your business costs increased in the 2025/26 tax year?
• Have you added any new services or products, or upgraded older ones?
• Are your prices in line with what your competitors charge?
• Are your current prices still yielding a sustainable profit?
• Have your customers’ needs, budgets or buying behaviour changed recently?

These are just a few of the questions we ask our clients to think about.

Pricing decisions should reflect both the value you deliver and the cost of running your business.

If your prices are not covering your overheads or generating sustainable profits, it may be time to increase them.

Need help reviewing your pricing strategy?

We understand that this can feel uncomfortable for some business owners who worry that raising prices will push customers away.

However, most clients are far more focused on the quality, reliability and expertise they receive from the service or product than on small price changes.

As long as increases are fair and correlate to the value you deliver, clients often accept the added costs without issue.

It is good practice to review your prices regularly so that you can make smarter decisions for your business’s future.

Our team are happy to assist you with this, so that you create a strategy that works well for you.

Get in touch if you would like help reviewing your pricing strategy.

Recent media coverage has publicised the possibility of a new tax on people who leave the UK, calling it an “exit tax”.

This type of regime already exists in several countries, including France, Spain, Canada and Australia, and is now being discussed as a possible option for the UK Government to raise revenue.

What is an exit tax?

An exit tax in the UK would impose a levy, likely 20 per cent, on gains accumulated while a person was a UK tax resident.

Unlike Capital Gains Tax (CGT), which applies to assets when you sell them, a regime like this could mean assets, such as shares and property, could be treated as though they had been sold at the point a person leaves the UK.

Tax would then be calculated on the increase in value to date.

What is the current tax situation when you leave the UK?

Currently, individuals who leave the UK can typically dispose of assets after departure without incurring UK CGT, as long as they remain abroad for a minimum of five years.

However, a move towards a more immediate exit tax could have a consequential impact on those considering a change in residence, potentially restricting international mobility.

How could an exit tax affect you?

Business owners would need to take extra care because shareholdings in trading companies, growth shares and other long-term investments may carry unrealised gains.

An unexpected tax charge at the point of departure could prove challenging, particularly where assets are difficult to sell, as the individual may not have the cash available to settle the bill at that time.

What should you do now?

At this point in time, there is no certainty as to whether an exit tax will even be introduced or what it might entail, making it difficult to effectively plan.

However, the ongoing discussions serve as a reminder that decisions around residence, investment timing and business succession should be made carefully, with future implications in mind.

Professional advice can help ensure that long-term plans remain in tandem with your goals. Get in touch today to discuss your tax liabilities.

Small businesses have been given a reprieve, after Companies House confirmed that its plans to require the filing of profit and loss accounts from April 2027 are on hold.

A new update to official guidance confirms that the change will not go ahead on that date, with the reforms currently under review.

Companies House has said businesses will receive at least 21 months’ notice before any new implementation date is introduced.

Reforms under the Economic Crime and Corporate Transparency Act (ECCTA) 2023

The proposal had formed part of wider reforms under the ECCTA 2023, aimed at improving corporate transparency.

Under the original plans, micro entities would have been required to file both a balance sheet and a profit and loss account.

Meanwhile, small companies would have needed to submit a balance sheet, profit and loss account, directors’ report and, where relevant, an auditor’s report.

However, concerns were raised about whether the move struck the right balance between tackling economic crime and placing additional burdens on smaller businesses.

There was also a notable fear that it would make sensitive financial data public that could risk the competitive viability of smaller businesses.

As a result, the timeline has been paused by Companies House while the reforms are reconsidered.

Only a temporary reprieve for small business owners

For many small business owners, this will be welcome news, but it is only a temporary reprieve.

It is important not to see this as the end of the story. The reforms have only been delayed and not scrapped entirely.

A revised timetable could still bring profit and loss accounts into the public filing framework in the future.

Next steps for small businesses

Businesses should continue to keep their financial records in good order and maintain strong internal reporting processes.

Greater transparency remains a clear direction of travel for Companies House and HMRC, even if the pace of change has slowed for now.

We will continue to monitor developments closely and keep you updated as soon as further details are confirmed.

In the meantime, if you require any assistance with your Companies House responsibilities, please get in touch.