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In April 2025, the UK’s ‘non-domicile regime’ was replaced with a new set of rules centred around an individual’s tax residency, taking in factors like an individual’s links to both the UK and other countries and trust structures they are connected to.

What was introduced?

A new four-year Foreign Income and Gains (FIG) regime has been introduced, which allows UK tax residents to be exempt from most forms of foreign income and gains from these taxes during their first four years as a UK tax resident.

The FIG regime is accessible for any individual provided they have been a non-UK tax resident for at least ten consecutive years before the first of the four-year regime kicks in.

If you do make a claim, the years you make a claim for will see you lose some tax allowances and the ability to deduct any foreign losses from taxable gains.

It’s important to note that the regime doesn’t automatically take effect, so you need to check before you apply.

You have the option to choose which of the four years to claim and all foreign income must be reported to HMRC, whether you claim the relief or not.

Have trust structures changed?

The changes announced also impact trust structures for non-UK residents, because the protected status on those trusts has been removed.

This means the scope for taxation has been increased significantly for the settlor.

While this is primarily a concern for non-UK resident trusts with living tax settlors in the UK, the extent of the exposure will be determined by several factors.

These factors include:

• The beneficial class of the trust
• The investment profile
• Whether the settlor is eligible to claim the four-year FIG regime.

Inheritance Tax (IHT) liabilities may also increase as a result.

For discretionary trusts, your residency status will determine whether IHT applies, although this will be unchanged if a settlor passed away before the rules came into effect on 6 April 2025.

If you have international connections and are unsure about the new regime, our team can help.

We can explain the new legislation and help you map out a plan to manage the changes.

Contact us if you need tax advice on the new residency rules.

HMRC has confirmed it is changing the way it will handle tax on bank and building society interests.

What has HMRC changed?

Since October 2025, HMRC has been sending out Simple Assessment letters to individuals who may owe tax on interest incurred from banks and building societies between April 2024 and April 2025.

The letters clarify the exact amount of tax owed on the interest during the 2024/25 tax year, why you owe that amount and how to pay your tax bill.

You may have received an initial Simple Assessment letter, but HMRC may send another to you if your bank or building society has provided updated information to the tax authority that includes any accrued interest.

If you have already paid following a first letter, you will need to calculate the outstanding debt and pay that off.

It’s important to remember that banks and building societies report the interest you receive to HMRC each year, meaning that even though you didn’t declare it, HMRC is aware and the letter outlines what you need to do.

What if the figures don’t match?

You don’t need to be concerned if the figures from your tax code and bank statements do not match what is shown, as a number of factors may be taken into consideration.

These include some interest on your personal savings allowance that can be tax-free, only taxable interest is included in your tax codes and when preparing assessments, HMRC may be estimating figures based on the data available to them.

You can contact HMRC directly to dispute the letter, but this must be done within 60 days of receiving the letter.

If you are unsure about a Simple Assessment letter you’ve received, our team of experienced accountants can help you review it, check that it has been reported correctly and outline the steps you need to follow to ensure HMRC is satisfied.

Contact us today for expert advice and support.

With the November Budget just weeks away, one rumour appears to be gaining more traction than others.

Media reports suggest that the Chancellor, Rachel Reeves, may introduce a new National Insurance charge on partnerships in her Budget announcement.

What is being considered?

It is understood that the Government is exploring the idea of applying an employer-style National Insurance charge to partnership profits.

This follows a paper published by the CenTax think-tank, which recommended the Government equalise the employer NIC treatment of partners with employees.

Currently, partners are treated as self-employed, so the 15 per cent NIC charge, introduced in April 2025, does not apply to their earnings.

If the change mirrors the employer rate, it could amount to an effective tax rise of about seven per cent for higher rate taxpayers in a partnership once deductibility is taken into account.

It is not yet known whether the charge would apply only to limited liability partnerships (LLPs) or to all partnerships.

What are the possible implications?

LLPs are widely used across professional and private capital sectors. Any additional charge would increase costs and may encourage firms to reconsider their structures.

Some may look at incorporating, allowing profits to be retained at the 25 per cent Corporation Tax rate rather than being taxed on distribution.

Others may restructure internally to balance compliance and flexibility.

Partnerships outside financial services, including medical and agricultural practices, could also be affected.

However, there are further rumours that suggest Rachel Reeves could introduce an exemption for medical professionals.

A full consultation would be expected to help firms prepare, so if partnership NICs are introduced, it is unlikely to start before April 2026.

What should you do?

There has been no formal confirmation of the possible change, but Treasury officials have not denied the reports.

Given the potential impact, partnerships should review their current structure and model possible outcomes ahead of the Budget.

Contact us to prepare your firm for the best possible response if new charges are confirmed.

In the October 2024 Budget, the Government confirmed reforms to Inheritance Tax (IHT) that will take effect from April 2026.

The changes will restrict the availability of Business Property Relief (BPR), which helps reduce the tax liabilities of family-owned businesses.

The new £1 million BPR cap

BPR currently gives up to 100 per cent relief on qualifying assets, allowing them to pass free of IHT if the right conditions are met.

However, from April 2026, only the first £1 million of qualifying business assets will receive 100 per cent BPR. Any value above that figure will be eligible for 50 per cent relief.

The standard 40 per cent IHT rate will then apply, creating an effective 20 per cent IHT charge on death.

The cap will apply per individual and will not be transferable between spouses. Each trust will have its own £1 million limit. However, individuals cannot create multiple trusts to multiply the allowance.

Why family firms are at risk

A significant number of private sector businesses in the UK are family-run – estimated to be more than 5 million in total.

Many of them already exceed £1 million in value once property, retained profits and other assets are included.

BPR has enabled family businesses to pass down wealth from generation to generation without triggering Inheritance Tax liabilities.

However, the new restrictions could leave them facing a substantial IHT bill if no planning takes place.

Steps to take before IHT reform in 2026

Succession planning will be important for family-run business owners, even if you do not plan to exit or retire soon.

Families should review ownership structures to see whether shares can be distributed among family members or held in trust.

Transfers before April 2026 may allow access to more than one, £1 million allowance, but professional guidance is necessary to avoid unintended tax consequences.

A review of the balance sheet can identify and remove assets that do not qualify for relief, while planning for liquidity helps ensure beneficiaries have funds available to pay any tax without needing to sell trading assets.

Contact us to reduce future tax exposure and ensure a smooth transition to the next generation.

HMRC has confirmed that the upcoming increase in company size thresholds will apply to the off-payroll working rules.

From 6 April 2026, more end-client companies will qualify as “small” and fall outside of the scope of the IR35 Off-Payroll Working (OPW) regime.

What it means to be IR35-exempt

A company that is IR35-exempt does not have to apply the OPW rules, when engaging contractors who operate through their own limited companies.

This means the client is not required to decide the contractor’s IR35 status or make tax deductions at source.

The responsibility for determining whether an engagement is inside or outside IR35 instead reverts to the contractor’s company.

Meeting the company size criteria

The clarification follows changes introduced in April 2025, under the Companies Act 2006.

From the 2026–27 tax year, the turnover threshold for a small company will rise from £10.2 million to £15 million and the balance sheet total from £5.1 million to £7.5 million.

The employee threshold will remain at an average of 50 per month. Meeting any two of these three criteria will classify a company as small.

The updated thresholds are believed to better reflect inflation and business growth.

HMRC’s clarification means that around 14,000 companies currently defined as medium-sized will be reclassified as small come 6 April 2026.

How to prepare for April 2026

End-clients should confirm and communicate their company size status to agencies and contractors well in advance, because IR35 responsibilities depend entirely on that status.

Communicating company size early helps all parties:

• Apply the correct IR35 procedure from the outset
• Avoid disputes over who is responsible for deductions and liabilities
• Ensure consistency across the supply chain
• Reduce the risk of retrospective HMRC challenges

Misunderstandings about a company’s size could lead to incorrect tax treatment, non-compliance and potential financial penalties.

The news is likely to be welcomed by contractors as well, as it will potentially allow more of them to operate outside of IR35.

Speak to our team for advice on how you can remain compliant when the new thresholds take effect in April 2026.

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!