Newswire

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.

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.

For support with your NMW self-review, contact our team.

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.

For all Self-Assessment Tax concerns, contact our team.

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.

To find out more about your changing obligations with Companies House filings, speak to our team today.

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:

1. Identify a contract(s) with a customer
2. Identify promises within the contract(s)
3. Determine the transaction price
4. Allocate the transaction price to the promises
5. 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!

A recent survey by Capital on Tap revealed that 79 per cent of small business owners do not have an exit plan.

The survey highlighted a mix of reasons behind the lack of preparation for an exit.

Emotional attachment was one of the strongest, with over a third of owners saying they could not imagine letting go of their business.

Others pointed to the difficulty of finding a buyer and the complexity of the legal process.

Why you need an exit plan

Having an exit plan in place allows you to prepare more effectively for an eventual sale, buyout or merger.

It gives you the opportunity to build value in line with your intended departure from the business so you can enjoy a better return.

Equally, life doesn’t always go according to plan. While many of you may not be ready to let go of your business now, illness, stress or sudden personal changes can force your hand at short notice.

The irony is that by trying to hold on too tightly for too long, many owners risk losing control of the outcome altogether and potentially devaluing their company.

Without an exit strategy, you could be left with little bargaining power or, in the worst-case scenario, be forced to close.

Exit strategy options:

Preparing an exit strategy requires careful consideration of all the options available to you:

• Do you want to seek a merger and acquisition transaction with another business?
• Would an Employee Ownership Trust (EOT) appeal to you?
• Have you considered a management buy-in or buy-out?
• Are there family members you would like to be your successor?

It is not safe to assume that a buyer will appear out of nowhere or that your children will want to take over one day.

You need to consider the legacy you want to leave, the financial outcome you hope to achieve and the tax implications of the different exit options.

If you are planning to sell your business, you also need to consider how you will prepare for the sale.

Are your accounts in order? Do you have a strong management team in place? Are there any issues that need fixing before the business goes to market?

Taking the time to plan now can help you achieve the best outcome and leave your business on your terms.

Contact us for expert assistance with your exit strategy.

With just six months to go before the first round of Making Tax Digital (MTD) for Income Tax gets rolled out, many sole traders are still not ready.

A survey carried out by IRIS earlier this year found that 45 per cent of UK sole traders felt unprepared for the changes.

That leaves almost half of those affected facing a serious risk of penalties once the rules take effect next year.

Who qualifies for MTD for Income Tax?

From 6 April 2026, anyone who files a Self-Assessment tax return and has gross self-employed and/or property income over £50,000 will be brought into the MTD regime.

The entry point will then reduce in stages, falling to £30,000 from April 2027 then is planned to fall to £20,000 the following year.

How the penalties work

Think of late submissions as penalty points on a driving licence. One missed quarterly update may not do too much damage, but repeated non-compliance will accumulate into a £200 fine.

Quarterly filers reach that stage at four points, while annual filers get there in just two.

The slate can be wiped clean, but only after a sustained period of meeting every single deadline.

Payment delays are treated under a new aligned system:

• No penalty if tax is paid within 15 days of the due date
• Payments made between day 16 and day 30 attract a penalty of three per cent of the balance outstanding
• By day 30, the penalty increases to six per cent

After 30 days, a second penalty begins to accrue daily at 10 per cent per year until the debt is cleared.

These charges will stop if a Time to Pay arrangement is agreed with HM Revenue and Customs (HMRC).

Additional consequences to be aware of

Besides the penalties for late submissions and payment delays, HMRC can also impose up to a £3,000 fine for failing to maintain adequate records in relation to a return. This includes not maintaining digital records or any issues with digital links within functional compatible software.

They can also issue a £300 minimum fine if you deliberately conceal information needed for HMRC to assess your liability.

Get in touch today to make sure you stay compliant and avoid MTD penalties.