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Wednesday, 3 September 2025

 

September 2025

In this month’s Enews, HMRC raises the alarm on Winter Fuel Allowance payments and we take a look at the Department for Work and Pensions’ (DWP’s) warning that future pensioners will be ‘worse off’. There are also warnings around the impact of personal guarantees, to self assessment taxpayers and landlords on the impact of Making Tax Digital and SMEs missing potential savings on National Insurance. There is also news on Tax-Free Childcare, the latest news on recruitment at UK firms to update you on and more!

HMRC warns of Winter Fuel Payment scams

HMRC has issued a warning to be on high alert for scams linked to Winter Fuel Payments after receiving 15,100 reports of bogus activity in June.

Fraudsters have been targeting vulnerable individuals using SMS messages and phishing websites. During June, HMRC took action to remove 4,600 fake websites linked to Winter Fuel Payments.

HMRC is urging individuals to be alert to suspicious communications and to report any suspect phone calls, emails or texts via GOV.UK. HMRC will never contact people by text to claim Winter Fuel Payments or request personal information.

Anyone who is eligible for Winter Fuel Payments will receive the payments automatically without having to make a claim. Any recovery of the payment for pensioners whose total income is over £35,000 will be collected via Pay As You Earn (PAYE) or self assessment, dependent on how the individual pays tax on their income.

Kelly Paterson, HMRC’s Chief Security Officer, said:

‘Don’t be fooled by these attempts by scammers to take your money or access your personal information.

‘Never let yourself be rushed. If someone contacts you saying they’re HMRC, wanting you to urgently transfer money or give personal information, be on your guard. If a phone call, text or email is suspicious or unexpected, don’t give out private information or reply, and don’t download attachments or click on links.

‘I’m urging people to be alert to scams relating to Winter Fuel Payments and to report any suspicious texts, phone calls or emails to HMRC.’

Internet link: HMRC press release

Harsh personal guarantees will chill growth ambitions, warns FSB

Personal guarantees risk holding back the growth the economy needs, the Federation of Small Businesses (FSB) has warned.

Research by the FSB shows that 60% of limited company directors would borrow to grow their business – if they did not have to put hard-earned assets like savings or their houses on the line.

By contrast, only 13% would go ahead if a personal guarantee is required.

The FSB says the practice is now widespread, with 78% of directors who applied for finance being asked for a personal guarantee. Faced with this, a quarter decided not to take up finance at all.

The FSB is now calling on the government to close the Financial Conduct Authority (FCA) loophole that leaves these loans unregulated and unsupervised by banks.

It says that without action, would-be entrepreneurs could be deterred from starting up, with personal risk outweighing ambition and ideas left unrealised.

Tina McKenzie, Policy Chair of the FSB, said:

‘Personal guarantees should never be the default setting – they must be a last resort, used with care and absolutely necessary. If we are serious about building a climate where small firms can thrive and new ideas can take root, we need to rein in their overuse.

‘Otherwise, the speed of small business growth will slow to a snail’s pace at a time we need it the most, and we risk turning away a wealth of entrepreneurial talent.’

Internet link: FSB website

Recruitment static as firms assess NICs impact

Recruitment at UK firms remained static in the second quarter of 2025 as businesses continued to assess the impact of the rise in employer National Insurance contributions (NICs), says the British Chambers of Commerce (BCC).

The BCC’s latest Quarterly Recruitment Outlook (QRO) showed that 55% of firms attempted to recruit in the last three months, broadly similar to the 54% in the first quarter.

Of those firms trying to hire staff, 73% said they experienced difficulties, a slightly improved picture from the previous quarter.

Labour costs remain the biggest cost pressure for businesses, cited by 73% of respondents, the same as in the first quarter of the year.

Jane Gratton, Deputy Director of Public Policy, at the BCC, said:

‘While it is still early days, firms are beginning to sound the alarm on the impact of NICs and other employment costs. There could a big shock coming further down the line.

‘Increased labour costs and persistent skills shortages are making recruitment a significant challenge for SMEs.

‘At the same time, growth and productivity is being stymied by persistent skills shortages, particularly in sectors like transport, logistics and construction.

‘We need urgent action by policymakers to tackle the long running skills crisis. That means a more flexible and responsive training system, better support for people facing barriers to work, and a firm commitment to no further tax hikes on business.’

Internet link: BCC website

Pensioners 'set to be worse off', warns DWP

The Department for Work and Pensions (DWP) has warned that pensioners retiring in 2050 are set to be worse off than those retiring today.

According to the DWP, nearly half of working-age adults in the UK are not saving into a private pension. More than three million self-employed workers do not currently save into a pension, it added.

Just one in four low earners are saving into a private pension, the DWP also found. The DWP warned that action needs to be taken to boost retirement savings.

In order to tackle the issue, the DWP is utilising the Pensions Commission and has initiated the next review of the State Pension age. This is currently 66 years old and will rise to 68 by 2046.

Paul Nowak, General Secretary of the Trades Union Congress (TUC), said:

'Everyone deserves dignity and security in retirement, but right now many workers – especially those in the private sector – will find themselves without enough to get by on.

'Far too many people won't have enough pension for a decent retirement, and too many – especially women, BME, disabled workers and the self-employed – are shut out of the workplace pension system altogether.'

Internet link: GOV.UK

Government publishes Finance Bill supporting documents

The government recently published draft legislation for Finance Bill 2025-26 for consultation.

The legislation includes an Inheritance Tax overhaul; measures intended to refine and simplify the Making Tax Digital for Income Tax (MTD for IT) and penalty reform regimes; tax adviser regulation; and changes to the treatment of carried interest.

Most measures included in the draft Finance Bill comprise a tax information and impact note (TIIN), which sets out what the policy seeks to achieve, and a summary of the expected impacts; draft legislation; and an explanatory note which provides a more detailed guide to the legislation.

The consultation closes on 15 September 2025. The final contents of the next Finance Bill will be decided by Chancellor Rachel Reeves.

Internet link: GOV.UK

More small firms expect to shrink than grow

The proportion of small firms expecting to contract, sell or close outnumbered the percentage hoping to grow, the Federation of Small Businesses (FSB) has warned.

The share of small businesses who said they expected their business to shrink or close, or to sell up the business over the next 12 months was 27%. This outweighed the 25% who predicted their business would expand in the second quarter of this year.

It is the first time in the history of the Small Business Index (SBI) from the FSB that the proportion of small firms bracing for contraction, sale or closure outnumbered the percentage hoping to grow.

The FSB says that the gloomy finding likely reflects small business sentiment around the introduction of higher levels of employer National Insurance contributions and rises in the National Living Wage.

It also reflects fears around the impending Employment Rights Bill, which the FSB says looks set to impose a new raft of costs and risks onto the shoulders of small employers.

Tina McKenzie, the FSB's Policy Chair, said:

'Confidence being so low and not showing any improvement since the start of the year, is bad enough.

'But add in the fact that stagnation and pessimism among small businesses spells huge risk for the overall economy, and the upcoming Small Business Strategy needs to be ambitious enough to meet the scale of the challenge facing the UK's small firms.'

Internet link: FSB website

HMRC launches online PAYE service

HMRC has launched a new online PAYE service, which it says will give 35 million workers more control over their tax affairs.

The tax authority says the new service will make it simpler and easier to check and update their income, allowances, reliefs and expenses, and will be available via their Personal Tax Account or through the HMRC app.

This service forms part of HMRC’s Transformation Roadmap that sets out ambitious plans to become a digital first organisation by 2030, with 90% of customer interactions taking place digitally.

HMRC says its plans to modernise the tax and customs system, introduce new AI technologies and work with third parties and intermediaries will make it easier for taxpayers, businesses and intermediaries to interact with it.

The digital first approach will see HMRC automating tax wherever possible and offering new digital self-serve options across a number of tax regimes.

In addition, taxpayers liable for the High Income Child Benefit Charge (HICBC) will no longer have to register for self assessment.

James Murray MP, Exchequer Secretary to the Treasury, said: ‘We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers.

‘By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share.’

Internet link: HMRC press release

Time for taxpayers to get ready for Making Tax Digital for Income Tax

Self-employed taxpayers and landlords should file their 2024/25 tax return early to find out if Making Tax Digital (MTD) will apply to them from next April, says the Low Incomes Tax Reform Group (LITRG).

Taxpayers who report more than £50,000 of gross income from self-employment and/or rental income in their 2024/25 tax return will be required to join the new Making Tax Digital for Income Tax regime from April 2026 and must have the software needed to participate.

LITRG is encouraging anyone who thinks they could be in scope of MTD from April 2026 to complete their 2024/25 tax return well in advance of the 31 January 2026 deadline to see whether their income exceeds this limit.

HMRC will use the information provided in 2024/25 self assessment tax returns to identify taxpayers who will be impacted by MTD from April 2026.

HMRC will then write to tell them they must follow the MTD rules, but this could be as late as February or March 2026.

Some people who meet the income threshold might be able to apply for an exemption from MTD if they meet certain criteria, for example if they are digitally excluded.

Sharron West, Technical Officer at LITRG, said: ‘There are still more than six months to go until the self assessment deadline for 2024/25 tax returns, but if you think you may meet the MTD threshold, you should act now.’

Internet link: Chartered Institute of Taxation website

SMEs missing out on £2.7 billion in National Insurance savings

Most UK SMEs are not using salary exchange so are missing out on a potential £2.7 billion in employer National Insurance contributions (NICs) savings, according to insurance broker Howden.

Using salary exchange to boost pension contributions and after-tax pay would also generate £1.8 billion in employee savings, Howden’s Employee Benefits research found.

The research found that in response to the NICs increase, 33% of SMEs are passing costs onto customers, which could lead to inflationary pressures in the wider economy. Meanwhile, 32% are freezing hiring, and 28% are delaying planned salary increases.

Only 29% of SMEs currently use salary exchange (also known as salary sacrifice) for pensions, which Howden says has the potential to deliver valuable savings at a time of critical economic pressures.

The research reveals a significant knowledge gap: 36% of SMEs are aware of salary exchange but have not explored it in detail, and 17% are not aware of it at all.

Cheryl Brennan, Managing Director UK Employee Benefits, Howden, said: ‘At a time when SMEs are under immense financial pressure and employees are struggling with the cost of living, salary exchange is a powerful, underused tool.

‘Our research shows that the majority of SMEs are missing out on significant savings that could be reinvested into their people and growth.’

Internet link: Howden website

Homebuyers get bogus SDLT claims warning

Homebuyers are being warned to avoid Stamp Duty Land Tax (SDLT) scams, following a landmark Court of Appeal decision.

HMRC is warning buyers to be vigilant of tax agents offering to secure (SDLT) repayments on their behalf where repairs are needed to a property they have bought.

Some agents have suggested that, for a fee, they can reclaim SDLT the buyer has already paid by saying that the property is non-residential because it’s uninhabitable.

But HMRC says that making claims of this kind often leave the homeowner liable for the full amount of SDLT, plus penalties and interest.

A recent Court of Appeal judgment in the case of Mudan & Anor v HMRC has confirmed that housing in need of repair is chargeable at the residential rates of SDLT, and that repayment claims based solely on a property’s condition are not valid.

HMRC says it is taking decisive action on spurious SDLT repayment claims, using civil and criminal powers.

Anthony Burke, HMRCs Deputy Director of Compliance Assets, said:

‘The Court of Appeal’s decision is a major win, protecting public funds. Homebuyers should be cautious of allowing someone to make a SDLT repayment claim on their behalf. If the claim is inaccurate, you could end up paying more than the amount you were trying to recover.’

Internet link: HMRC press release

Crackdown on late payments launched in plan to back small businesses

The government is set to tackle late payments to businesses with significant legislative reforms.

Late payments cost the UK economy £11 billion a year and shut down 38 businesses every day, according to the government.

The new laws are set to give stronger powers to the Small Business Commissioner to empower them to wield fines, worth potentially millions of pounds, against the biggest firms who persistently choose to pay their suppliers late.

Following the legislation, the UK will have the toughest late payments laws in the G7, the government added.

The legislation is part of reforms to back small businesses and unlock growth as part of the Plan for Change.

Business and Trade Secretary Jonathan Reynolds said:

’This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best - growing our local economies.

‘Our Small Business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need.

‘This is our Plan for Change in action, putting more money in people’s pockets, boosting local communities and ensuring Britain is a great place to do business and thrive.’

Internet link: GOV.UK

Economic confidence plummets to all-time low

Economic confidence amongst the UK’s business leaders has dropped to an all-time low, according to data from the Institute of Directors (IoD).

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, fell to -72 in July 2025 from -53 in June.

This exceeds the previous record low of -69 in April 2020 and marks the lowest reading of the Index since its introduction in July 2016.

Business leader confidence in their own organisations also fell to -9 in July 2025, from +3 in June. This is the second lowest reading of this indicator since its introduction in July 2016.

Anna Leach, Chief Economist at the IoD, said:

‘UK business leaders have entered the summer with the lowest confidence levels we’ve seen since our records began in 2016.

‘Companies continue to battle cost increases – particularly arising from the national minimum wage and National Insurance changes – and many are frustrated that while the government has been quick to raise costs for business, it has been much slower to deliver improvements to the wider business environment.

‘Last year, damaging speculation around tax rises in the lead-up to the 2024 Budget caused many firms to pause investment and hiring decisions – contributing to six months of near-zero economic growth. We’re now living with the economic consequences of those tax hikes, even as uncertainty around future costs once again builds.’

Internet link: IoD website

 

SME exporters hit by new US customs charges

President Trump’s decision to charge import duties for low value goods entering the US is a major blow to the UK’s SME exporters, says the British Chambers of Commerce (BCC).

Under an Executive Order issued by the President, duties will be payable on goods valued under $800 from 29 August 2025. These will be in line with the rates applied to other goods from each country in accordance with its tariff rates.

For most UK goods export sectors this means the tariff rate they used to have plus the additional 10% reciprocal rate applied to most UK goods since April.

Alternatively, for the first six months only, a specific rate of $80 per item would apply to low value packages from the UK entering the US. After that period, the duties described above will be enforced on all packages of UK origin in scope.

William Bain, Head of Trade Policy, said:

‘This development has been coming for several months but is still a major blow to UK exporters to the US. Smaller firms and sole traders, who have invested strongly in e-commerce sales internationally, will be worst hit.

‘But the UK is in a comparatively advantageous position in terms of these additional duties compared with those faced by other countries.

‘The EU is also likely to scrap its de minimis threshold by 2028, and the UK government is launching a review into removing the threshold here too.’  

Internet link: White House website BCC website

HMRC urges families to save money with Tax-Free Childcare

HMRC is encouraging working families to save money by signing up to Tax-Free Childcare and using one of the thousands of facilities accepting it as payment.

Tax-Free Childcare means working families can save up to £2,000 annually for each child up to the age of 11, and £4,000 for a disabled child up to the age of 16, when they’re paying for their childcare.

There are now 75,000 childcare settings accepting Tax-Free Childcare as payment including nurseries, registered childminders, holiday activity clubs. In addition, when school starts back in September it includes before and after school clubs.

Families yet to sign up for Tax-Free Childcare can do it now to pay for their summer activities or start paying into it ready for breakfast and after-school clubs when the new term starts.

Myrtle Lloyd, HMRC’s Chief Customer Officer said:

‘Whether your child is interested in football, climbing, crafting or dance, there’s a huge variety of childcare settings accepting Tax-Free Childcare. Children can learn something new and have fun with their friends while their parents save on their childcare bills. Visit GOV.UK to sign up today.’

Internet link: HMRC press release

UK labour market continues to weaken

The UK labour market continues to weaken, shedding 149,000 jobs over the past 12 months, according to the latest data from the Office for National Statistics (ONS).

The number of vacancies, which has now been falling steadily since early 2022, fell to 718,000 in June, which is a fall of 44,000 for the quarter.

Payrolled jobs are still falling fastest in the low paying hospitality sector, suggesting that the mini shock of the employer National Insurance contributions (NICs) and National Living Wage rise combination in April is still feeding through.

Pay growth continues to weaken too, but at a slower pace than the jobs market. Annual private sector wages grew by 4.8% in the year to June – down from 5.3% the year before.

Hannah Slaughter, Senior Economist at the Resolution Foundation, said:

‘The UK’s post-pandemic labour market was red hot. But that period is officially over – the labour market is loose and getting looser, having shed 165,000 payrolled jobs over the past eight months.

‘These jobs falls continue to be concentrated in low paying sectors like retail and hospitality. This reinforces the government’s decision to take a cautious approach to the minimum wage next year as the economic fallout from the recent employer NICs rise continues.’

Internet link: ONS website Resolution Foundation website

 

HMRC targets personal expenditure on self assessment

HMRC will run a digital campaign to ensure that self assessment taxpayers do not claim tax relief for personal expenditure on 2025/25 tax returns, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

HMRC has told the ICAEW that the digital campaign follows a trial in 2024.

This trial generated over £27 million in tax revenue and ‘highlighted reporting of disallowable private use in business expenditure’.

HMRC says that it will be opening more enquiries to check that sole traders, partners and landlords only claim deductions for business-related expenses. This includes ensuring that mixed use expenses are apportioned correctly between business and personal use, which considers the circumstance of the particular tax year.

The legislation states that in order for an expense to be deductible, it must be ‘incurred wholly and exclusively for the purposes of the trade’.

Where an identifiable part of an expense is incurred for trade purposes, that part of the expense is an allowable deduction. It is important that the method of apportionment used is:

  • supported by records (eg, mileage records); and
  • applied consistently from one tax year to the next.

It must also be the case that the expense is not capital in nature. Capital allowances are available for qualifying expenditure on plant and machinery.

Taxpayers have the option to use flat rate ‘simplified expenses’ to work out allowable expenses on motor costs, use of home and private use of business premises.

Internet link: ICAEW website

HMRC cuts late payment interest rate to 8%

HMRC will reduce late payment and repayment interest rates from 27 August following the 0.25% cut in the base rate earlier in the month.

The Bank of England cut the base rate to 4% on 7 August, triggering a 0.25% cut in HMRC interest rates which are pegged to the base rate.

From 27 August, the late payment interest rate will be cut to 8.0% from 8.25%.

The repayment interest rate will be cut to 3% from 3.25% from 27 August.

HMRC late payment interest is set at base rate plus 4%. Repayment interest is set at base rate minus 1%, with a lower limit - or ‘minimum floor’ - of 0.5%.

Following the cut to the base rate, Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), said:

‘The small business community will now look to lenders to reflect this rapidly across their offering, cutting the cost of finance. They will also want to see the Bank of England set out a clear path for the rest of the year, with a further easing in the base rate badly needed to reduce the financial strain they are under.

‘There will be no growth in the economy overall unless small firms are able to expand and fulfil their potential, but their confidence is still firmly in negative territory, according to our research.

‘Lower borrowing costs will encourage small businesses to invest, giving the wider economy a much-needed fillip.’

Internet link: GOV.UK FSB website

Sherod Has Gone The Extra Mile To Meet Up With Clients

Walker Thompson has a reputation for going the extra mile to deliver it's services to clients but in August one of our Directors went well beyond that.

Whilst on annual leave in Northern Greece, Sherod and his wife Pat took the opportunity to meet up in Nikiti, a village in Sithonia, Halkidiki, with Stratos Arampatsis and his wife Eleni.

Stratos and his family hail from Thessaloniki but purchased a summer home in Nikiti some 9 years ago. Eleni who holds PHD and MBA qualifications manages projects for Coventry University Services and returns to the UK several times each year. She brings a completely different meaning to flexible working arrangements as she has the summer months looking out at the Aegean from her laptop. Post Brexit, Stratos has managed many EU environmental and bio-diversity projects from his Greek base but is hopeful of gaining more UK projects in the near future making for easier meetings.

The visit ended with dinner at a local fish restaurant. Sherod said that he is very much looking forward to the next meeting!

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Thursday, 7 August 2025

Happy Birthday Walker Thompson!

 




This month we are celebrating a milestone here at Walker Thompson.

It is 40 years ago this month that the firm was created by Trevor Walker and Ray Thompson, supported by Sherod Williams.

In 1985, it was extremely difficult to find professional office space in Coventry and we spent the first few weeks of existence in the city centre, working with a shared computer, upstairs in some retail premises, courtesy of a client.

For the following two years we were based in Longford before finally moving to our present home on Binley Road in 1988.

As with most practices, time brings inevitable changes and Trevor retired in 2002, with Ray following in 2006. As many already know, Trevor sadly passed away last year. In 2008 the business was incorporated as Walker Thompson Ltd with its current Directors, Sherod, Kim Knowles and Chris Irvine.

It is particularly interesting as we think back to remember the loyal clients who followed us from our previous world and to know that we still act for some of those businesses or individuals after 40 years. Family business succession is still alive in the West Midlands.

The halcyon days of handwritten spreadsheets , alternating between red pens and green pens (depending upon the year concerned) and a different attitude to Data Protection, Anti Money Laundering and Audit Regulation.

We were at the forefront of Investors in People and Investors in Excellence- winning awards in both Standards. We are an approved training office for both AAT & ACCA.

All of this would not have been possible without the whole team at Walker Thompson and we are intensely proud of our student trainees who join as school leavers and progress to fully qualified accountants.

Our thanks to all our clients for their support and to other stakeholders who have played a part in our success.


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Tuesday, 8 July 2025

Newsletter 200

July 2025

In this month’s Enews, we look at the CIOT’s call for the government to take a strategic approach to tax policy and the government’s Industrial Strategy. We also look at a warning to taxpayers with online HMRC accounts and the gap between the tax haul expected and that actually collected. There is also news on the Pension Schemes Bill and more.

Government should take more strategic approach to tax policy, says CIOT

The government should take a more strategic approach to tax policy, consulting earlier and giving greater thought to the design of the tax system, says Nichola Ross Martin, President of the Chartered Institute of Taxation (CIOT).

In her inaugural speech as CIOT President, Ross Martin said that making a success of MTD will need HMRC and tax professionals to continue to work closely together.

She also promised to continue to press for improvements to HMRC service levels over the year ahead.

The CIOT President also encouraged the government to consider introducing a statutory employment test

In addition, she urged Institute members and employers to feed into a review of the Chartered Tax Adviser (CTA) qualification.

Ms Ross Martin said:

‘While there is plenty of argument about rates and burdens in parliament, there is very little about reform and design.

‘Take employment taxes. The PAYE system is the government’s main breadwinner. Successive governments have tweaked the rates and thresholds for national insurance but paid rather less attention to the fundamental issues as to how tax policy might adapt to cope with the changing world of work.

To pose these questions is not to argue for an ‘everything everywhere all at once’ approach to tax. But it is to point out that there is more to tax policy than rates and thresholds. Strategy is crucial.’

Internet link: CIOT website

Government introduces Pension Schemes Bill

The government has introduced the Pension Schemes Bill, which it says will make pensions easier to understand and manage as well as drive better value over the long term.

The bill will work to ensure savers get good returns and drive economic investment by requiring defined contribution (DC) schemes to prove they are value for money to avoid underperforming schemes.

It also aims to simplify retirement choices by all pension schemes offering default routes to a retirement income and consolidate and professionalise the Local Government Pension Scheme (LGPS).

In addition, it will bring together small pension pots worth £1,000 or less into one scheme certified as delivering good value and create new rules for multi-employer DC scheme ‘megafunds’ of at least £25 billion.

This is so that bigger pension schemes can drive down costs and invest in a wider range of assets and increase flexibility for defined benefit (DB) pension schemes to safely release surplus worth £160 billion, the government said.

Liz Kendall, Work and Pensions Secretary, said:

‘Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners.

‘The bill is about securing better value for savers’ pensions and driving long-term investment in British businesses to boost economic growth in our country.’

Internet link: GOV.UK

HMRC system attack is a timely reminder to keep personal data safe

Taxpayers are being urged to check their online HMRC account after scammers attempted to defraud the tax authority using individuals’ data and login details.

The Low Incomes Tax Reform Group (LITRG) is also reminding people of the importance of being vigilant and taking care of personal data.

HMRC recently announced that criminals had targeted the online tax accounts of nearly 100,000 taxpayers to try to make false tax refund claims.

In some cases, HMRC have said that criminals gained people’s login credentials and made use of existing online tax accounts. But, in others, they gained personal data that enabled them to set up new online tax accounts via the Government Gateway.

HMRC have locked down the compromised accounts as a precaution. They are writing to those affected with details on how they can regain access to their accounts.

Joanne Walker, Technical Officer at LITRG, said:

‘HMRC have confirmed that they were the victim of online scammers who tried to defraud them of money using the details of individual taxpayers.

‘While HMRC say this attack has not resulted in any tax-related financial loss for individual taxpayers, it is a timely reminder that fraud is an ongoing threat.’

Internet link: LITRG website

FCA in international crackdown on unlawful finfluencers

The Financial Conduct Authority (FCA) joined forces with eight international regulators for a week of action to combat the risks of finfluencers on social media.

Finfluencers are widespread throughout social media platforms. They promote themselves as successful entrepreneurs in luxurious destinations to lure people into paying for their services such as masterclasses to get rich quick and following their investment strategies.

Regulators from the UK, Australia, Canada, Hong Kong, Italy and the United Arab Emirates (UAE) took part in a ‘global week of action against unlawful finfluencers’ from 2 June.

In the UK, the FCA:

  • made three arrests with the support of the City of London Police
  • authorised criminal proceedings against three individuals
  • invited four finfluencers for interview
  • sent seven cease and desist letters
  • issued 50 warning alerts.

The FCA says the warning alerts will result in over 650 take down requests on social media platforms and more than 50 websites operated by unauthorised finfluencers.

Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA, said:

'Our message to finfluencers is loud and clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.'

Internet link: FCA website

Global economy set for weakest run since 2008, warns World Bank

Heightened trade tensions and policy uncertainty are expected to drive global growth down to its slowest pace since 2008, according to the World Bank’s latest Global Economic Prospects report.

Recent turmoil has resulted in growth forecasts being cut in nearly 70% of all economies - across all regions and income groups, says the Bank.

Global growth is projected to slow to 2.3% in 2025, nearly half a percentage point lower than the rate that had been expected at the start of the year, the Bank adds.

The bank says a global recession is not expected. Nevertheless, if forecasts for the next two years materialise, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s.

  1. Ayhan Kose, Chief Economist and Director of the Prospects Group at the World Bank, said:

‘Emerging-market and developing economies reaped the rewards of trade integration but now find themselves on the frontlines of a global trade conflict.

‘The smartest way to respond is to redouble efforts on integration with new partners, advance pro-growth reforms, and shore up fiscal resilience to weather the storm. With trade barriers rising and uncertainty mounting, renewed global dialogue and cooperation can chart a more stable and prosperous path forward.’

Internet link: World Bank website

Tax gap estimated at 5.3%

The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.

The tax gap is the difference between what tax is expected to be paid and actually paid.

HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.

However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.

Some of the key findings from this year’s calculations show:

  • Small businesses represent the largest proportion of the tax gap (60%).
  • Corporation Tax accounts for 40% of the total tax gap.
  • Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

Ellen Milner, Director of Public Policy, said:

‘These figures show the stubbornness of the tax gap and how optimistic the government’s target of a £7.5 billion reduction by 2029/30 is.

‘While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.

‘The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.’

Internet link: HMRC press release CIOT website

UK government launches Industrial Strategy

The UK government is aiming to slash energy prices, unlock investment and upskill the workforce in its Industrial Strategy.

The government says the Industrial Strategy was developed in partnership with business and includes targeted support for the areas of the country and economy that have the greatest potential to grow.

It says it will slash electricity costs by up to 25% from 2027 for electricity-intensive manufacturers in growth sectors and foundational industries in their supply chain.

The government says it will unlock billions in finance for innovative business, especially for SMEs by increasing British Business Bank financial capacity to £25.6 billion.

Finally, it has pledged to upskill the nation with an extra £1.2 billion each year for skills by 2028/29.

Alex Veitch, Director of Policy at the British Chambers of Commerce (BCC), said:

‘Attracting and retaining people with the right skills is crucial for business, and a fundamental part of driving economic growth.

‘We are pleased the government has listened to our calls and put skills at the heart of the Industrial Strategy. The extra cash investment for training in key sectors, such as defence and engineering, has the potential to be a real springboard for growth.

‘Further action is needed on skills, including more flexibility in the Growth and Skills Levy and a commitment to Local Skills Improvement Plans across England, many of which are successfully led by Chambers.

‘This week’s Industrial Strategy must provide an ambitious long-term plan to drive forward investment and growth through businesses across the UK.’

Internet link: GOV.UK  BCC website

Latest guidance for employers

HMRC has published the latest issue of the Employer Bulletin. The June issue has information on various topics, including:

  • PAYE Settlement Agreement calculations 2024 to 2025
  • organised labour fraud — the supply of labour through Employment Intermediaries
  • mandating the reporting of Benefits in Kind and expenses through payroll software
  • Spotlight 68 — using prepaid debit cards for profit extraction to reduce profits and disguise income
  • future changes to Statutory Sick Pay
  • parents of teens reminded to go online to extend their Child Benefit claim.

Internet link: GOV.UK

HMRC sends side hustle warning

HMRC is warning those earning extra income through a side hustle to check if they need to register for self assessment and file a tax return.

Side hustles can be any additional income stream, from online selling to content creation, from dog walking to property rental. It also includes gains or income received from cryptoassets.

Anyone who earns over the £1,000 threshold may need to register for self assessment and complete a tax return.

There is a checker tool on GOV.UK for those who aren’t sure if they meet the criteria. If they do and are new to self assessment they will need to register to receive their Unique Taxpayer Reference.

Guides for side hustlers can also be found at taxhelpforhustles.campaign.gov.uk.

Myrtle Lloyd, HMRC's Director General for Customer Services, said:

‘Whether you are selling handmade crafts online, creating digital content, or renting out property, understanding your tax obligations is essential. If you earn more than £1,000 from these activities, you may need to complete a self assessment tax return.

‘Filing early puts you in control – you will know exactly what you owe, can plan your payments, and avoid the stress of the January rush. You don't need to pay immediately when you file – you have until 31 January to settle your tax bill.’

Internet link: HMRC press release

More than 25% of UK businesses hit by cyber-attack in past year

More than one in four UK businesses have been the victim of a cyber-attack in the last year with many risking ‘sleepwalking’ into disruption, according to a new report.

The survey conducted by the Royal Institution of Chartered Surveyors (RICS) found that 27% of companies said their building had suffered a cyber-attack in the last 12 months, up from 16% a year ago.

Almost three-quarters of business leaders believe that a cybersecurity incident will disrupt their business in the next 12 to 24 months, the survey found.

The paper identifies operational technology such as building management systems, CCTV networks, Internet of Things (IoT) devices and access control systems as risk areas.

It also notes concerns that some buildings use outdated operating systems (OS). A building opened as recently as 2013 could conceivably use Windows 7; an OS that hasn’t received security updates from Microsoft in over five years.

Paul Bagust, Head of Property Practice at the RICS, said:

‘Buildings are no longer just bricks and mortar, they have evolved into smart, interconnected digital environments embracing increasingly sophisticated and ever-evolving technologies to enhance occupier experience.

‘It is inconceivable to imagine a world where technology will not continue to pose a growing risk to a building’s operation, and it is equally impossible to consider that the management of digital risks will not be needed as an imperative measure to safeguard the future of a building and prevent systems from being compromised.  

‘Failure to identify these growing digital challenges and incorporate security countermeasures risks businesses sleepwalking into cyberattacks.’

Internet link: RICS website 

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Tuesday, 10 June 2025

Newletter 199

 

June 2025

In this month’s Enews, we look at HMRC’s changes to late and penalty interest rates and the record numbers filing self assessment in the first week of the new tax year. There is news on the unpreparedness of sole traders for MTD and HMRC’s child benefit reminder to parents of older teens to update you on.  We also look at action taken against employers who fail to comply with the National Living Wage (NLW) and more.

HMRC cuts late payment interest rate to 8.25%

HMRC have reduced late payment and repayment interest rates from 28 May following the 0.25% cut in the base rate last month.

The Bank of England cut the base rate to 4.25% on 8 May, triggering a 0.25% cut in HMRC interest rates which are pegged to the base rate.

From 28 May, the late payment interest rate is cut to 8.25% from 8.5%, which was the highest rate charged since February 2000.

The repayment interest rate is cut to 3.25% from 3.5% from 28 May.

HMRC late payment interest is set at base rate plus 4%. Repayment interest is set at base rate minus 1%, with a lower limit - or ‘minimum floor’ - of 0.5%.

Following the cut to the base rate David Bharier, Head of Research at the British Chambers of Commerce said:

‘Many firms, desperate for financial respite, will be keen to see further rate cuts in the months ahead.

‘National insurance hikes, alongside other cost pressures, are already having an impact, including increased prices, hiring freezes, and reduced investment.

‘The next few months are likely to remain volatile and the full impacts of a global trade war are still uncertain. Businesses will be looking to government to provide stability and avoid any further pain.’

Internet link: GOV.UK BCC website

Record numbers file assessment in first week of new tax year

Almost 300,000 people filed their tax return in the first week of the new tax year, setting a new record, HMRC has revealed.

Self assessment taxpayers can submit their tax return for the 2024/25 tax year between 6 April 2025, the first day of the new tax year and the deadline on 31 January 2026.

This year 299,419 filed in the first week, up 28,503 compared to the 270,916 people who did so in 2020.

There were 57,815 early filers on 6 April, which was lower than the 67,870 people who did so in 2024.

HMRC is encouraging people to file early so they know what tax they owe sooner, plan for any payments in advance, make repayment claims and avoid the stress of leaving it until January.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘Filing your self assessment early means you can spend more time growing your business and doing the things you love, rather than worrying about your tax return.

‘You too can join the thousands of customers who have already done their tax return for the 2024/25 tax year by searching ‘self assessment’ on GOV.UK and get started today.’

Internet link: HMRC press release

One in four employers plan to make redundancies in next quarter

The number of employers expecting to increase staff numbers in the next three months has fallen to a record low outside of the pandemic, according to research from the Chartered Institute of Personnel and Development (CIPD).

One in four employers plan to make redundancies in the next three months, the report added.

A survey of 2,000 businesses found issues such as rising employment costs and growing global uncertainties.

The CIPD said the rate of employers expecting to increase headcount has fallen sharply among large private sector employers and in retail in particular.

James Cockett, Senior Labour Market Economist at the CIPD, said:

‘From April, employers across the UK have begun to feel the full effect of increases to National Insurance Contributions and the National Living Wage outlined in last year’s budget.

‘They’re also looking at the potential impact of the Employment Rights Bill on employment costs and plans, and this comes at a time of global uncertainty. Employer confidence is low, which is being reflected in their hiring plans.

‘The Employment Rights Bill is landing in a fundamentally different landscape to the one expected when it formed part of the Labour manifesto in summer of last year.

‘It was always going to be a huge change for employers but they’re operating in an even more complex world now. It’s vital the government works closely with employers to balance the very real risk of reductions in investment in people, training and technology with their desire to reduce poor employment practice.’

Internet link: CIPD website

 

Tax and accounting bodies back e-invoicing adoption

The UK’s professional tax and accounting bodies have backed the adoption of e-invoicing in their responses to a government consultation.

The Chartered Institute of Taxation (CIOT) says that HMRC will need to prioritise the effective implementation of e-invoicing if it is to drive its adoption among UK businesses.

The CIOT has recommended that any e-invoicing software should be built to flexible, agreed minimum standards that accommodate variations in invoicing requirements in tax legislation, while ensuring clear expectations around operability, security, and data accessibility for taxpayers.

Ellen Milner, CIOT Director of Public Policy, said:

‘If the UK government desires greater adoption of e-invoicing without mandating its use, HMRC will need to consider a package of options to encourage voluntary adoption.

‘This may include an educational and training campaign, financial incentives, providing a better business experience, effective implementation and systems that instil confidence to move along the digital journey.’

ICAEW’s Tax Faculty also responded to the consultation on increasing the adoption of e-invoicing by UK businesses and the public sector.

It said:

‘Many countries, including EU member states, have already introduced e-invoicing mandates or national frameworks. ICAEW believes that the UK’s current lack of a co-ordinated e-invoicing policy places its businesses at a growing disadvantage and could deter capital investment. The government’s consultation is a timely opportunity to close the gap and lay the foundations for future digital transformation.

‘However, successful implementation of e-invoicing will require careful planning, targeted support and alignment with existing international standards.’

Internet link: CIOT website ICAEW website

Almost half of sole traders unprepared for MTD changes

Almost half of UK sole traders feel unprepared for upcoming Making Tax Digital (MTD) for Income Tax changes, according to research conducted by IRIS Software.

The new MTD rules mandate digital record-keeping and quarterly Income Tax updates starting April 2026 and non-compliance can lead to significant penalties.

The study found that almost one in three sole traders have never heard of MTD,

MTD for Income Tax will require self-employed individuals, landlords and small businesses with sales or rents, before expenses,         over £50,000 to keep digital financial records and submit quarterly updates using compatible software from April 2026. The threshold drops to £30,000 in 2027 and to £20,000 in 2028.

The changes could place a significant burden on business owners, who will be required to submit at least five updates to HMRC each year.

Mark Chambers, Managing Director at IRIS Accountancy, said:

‘These findings highlight an important moment of opportunity for the UK’s sole traders. With MTD just around the corner, there’s a real chance for businesses to modernise their financial processes, unlock efficiencies, and gain better visibility of their income and expenses.

‘It’s encouraging to see that nearly a quarter feel ready to meet the requirements, but that leaves a significant portion not experiencing the benefits of digitalised tax reporting that compliance will bring.’

Internet link: IRIS Software website

Parents of teens reminded to extend Child Benefit claim online

Parents of 16 to 19-year-olds will receive reminders from HMRC to extend their Child Benefit claim by 31 August if their child is staying in education or training or payments will automatically stop.

Child Benefit will automatically stop on 31 August on or after a child’s 16th birthday if it’s not extended.

Between May and July, letters will be sent to parents reminding them to go online to confirm if their teenager is staying in full time education or approved training after they finish their GCSEs to continue receiving their Child Benefit.

Parents can extend their claim via the HMRC app or online on GOV.UK. The letters also contain a QR code which takes parents straight to the digital service on GOV.UK.

Child Benefit is currently worth £26.05 per week - or £1,354.60 a year - for the eldest or only child and £17.25 per week - or £897 a year - for each additional child.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘Child Benefit is an important boost to families. As soon as you know what your teenager is planning to do, extend your claim in minutes to guarantee your payments continue in September. Simply go to GOV.UK or the HMRC app to confirm today.’

Internet link: HMRC press release

Chancellor confirms ISA allowance won't be cut

Chancellor Rachel Reeves has confirmed that the annual tax-free ISA allowance won’t be reduced from £20,000.

Ms Reeves stated that she ‘absolutely wants to preserve’ the £20,000 tax-free investment people can make every year.

The Chancellor is set to launch a consultation into how the UK ISA market could be overhauled, and did not rule out changes to cash ISAs.

The overall annual savings limit remains at £20,000 for 2024/25 and 2025/26. Investors are allowed to invest in a cash ISA, an investment ISA, an Innovative Finance ISA or a combination of the three, subject to not exceeding the overall annual investment limit.

Investors are able to transfer their investments from a stocks and shares ISA to a cash ISA (or vice versa).

The Chancellor said:

‘I do want people to get better returns on their savings whether that is a pension or their everyday savings. At the moment a lot of money is put into cash or bonds when it could be invested in equities or stock markets and earn a better return from it.'

Internet link: CityAM article

Higher borrowing figures 'increase prospect of tax rises'

Experts have warned that recent higher than anticipated government borrowing figures have increased the prospect of Chancellor Rachel Reeves raising taxes at the next Budget.

Official data showed that government borrowing was £20.2 billion in April, which was an increase of £1 billion from the same month in 2024.

Experts have warned that weaker economic growth anticipated over the coming months could affect tax receipts, which would pile pressure on government finances.

The Chancellor aims to bring stability to the UK economy by paying for day-to-day government costs through tax income rather than borrowing and getting debt falling as a share of national income by the end of the current parliament.

Ruth Gregory, Deputy Chief Economist at Capital Economics, said:

‘With the Prime Minister announcing a partial U-turn on the cut to winter fuel payments, the dilemma faced by the Chancellor over how to deal with increased spending pressures in environment of low economic growth and high interest rates hasn't gone away.’

Internet link: BBC article 

 

HMRC names and shames over 500 employers for failing to pay NLW

HMRC has named and shamed over 500 UK employers for failing to pay the National Living Wage (NLW) or the National Minimum Wage (NMW).

The employers will now be forced to repay over £7.4 million to nearly 60,000 workers who had been left out of pocket.

Employers who left nearly 60,000 workers over £7.4 million out of pocket must now repay their employees.

The rates for NLW increased to £12.21 an hour on 1 April and the government says this put £1,400 into the pockets of full-time workers on NLW.

Justin Madders, Minister for Employment Rights, said:

‘There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don’t pay their employees what they are owed.

‘Ensuring workers have the support they need and making sure they receive a fair day’s pay for a fair day’s work is a key commitment in our Plan for Change. This will put more money in working people’s pockets, helping to boost productivity and ending low pay.’

Internet link: GOV.UK

HMRC Small firms held back from energy efficiency by upfront costs

Small firms are keen to become more energy efficient, but they are being held back by the high upfront cost of green investment, according to the Federation of Small Businesses (FSB).

The FSB has outlined a path to help cut carbon emissions and costs for small firms in a report.

The FSB’s report found that small businesses are keen to make investments in sustainability and to become more energy efficient through reducing their carbon footprints.

The business group says small firms across the country should be given access to the Business Energy Advice Service, which offers tailored support including free energy assessments and match-funded grants for improvements.

It also says that future solar panel grant support offered by the government should be available to commercial properties as well as domestic properties.

The current VAT zero rate for installing energy-saving materials should include commercial premises, the FSB adds.

Tina McKenzie, Policy Chair at the FSB, said:

‘The incredible inventiveness and entrepreneurialism among the small business community will be a powerful tool when it comes to cutting carbon, growing the green economy, and hitting the country’s net zero targets – if small businesses are given the tools and support they need to thrive.

‘The sustainable economy has absolutely enormous potential for growth in coming years. This is growth that we as a country need, and small firms must be given the chance to benefit from the opportunities on offer.’

Internet link: FSB website

Advisory fuel rates for company cars

New company car advisory fuel rates have been published and took effect from 1 June 2025.

The guidance states: ‘you can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 June 2025 are:

Engine size

Petrol

1400cc or less

12p

1401cc - 2000cc

14p

Over 2000cc

22p

Engine size

Diesel

1600cc or less

11p

1601cc - 2000cc

13p

Over 2000cc

17p

Engine size

LPG

1400cc or less

11p

1401cc - 2000cc

13p

Over 2000cc

21p

HMRC guidance states that the rates only apply when you either:

  • reimburse employees for business travel in their company cars
  • require employees to repay the cost of fuel used for private travel.

You must not use these rates in any other circumstances.

The Advisory Electricity Rate for fully electric cars is 7p per mile.

If you would like to discuss your company car policy, please contact us.

Internet link: GOV.UK AFR

Team Update

This month we are pleased to welcome the addition of a new member of our team.

Kerry Brookes has joined Walker Thompson in our Payroll and Bookkeeping Services section, and she will hopefully soon become a familiar name and face to clients. Her experience of various accounting software packages will be a great addition to our existing business.

Outside of work Kerry enjoys trips away in her VW Campervan.

 

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Tuesday, 13 May 2025

Newsletter 198

May 2025

In this month’s Enews, we look at the new service launched by Companies House that allows individuals to verify their identity through GOV.UK and at the cost of tax red tape on small businesses. We also look at HMRC’s warning for those sole traders and landlords who will soon be required to use Making Tax Digital and the Chancellor’s plan to level the playing field for UK businesses. We have news on pensions reforms to update you on and more.

Government calls time on red tape for pubs, clubs, and restaurants

Pubs, clubs and restaurants will benefit from a reduction in the red tape that has stifled hospitality business, the government said.

Action includes moves to improve the application of licensing laws and strengthening businesses’ competitiveness. This will give diners, pub and partygoers more time and more choice to enjoy what the UK hospitality has to offer, the government says.

The changes include a landmark pilot that could see more alfresco dining and later opening hours in London, as the Mayor of London is granted new ‘call in’ powers to review blocked licensing applications in nightlife hotspots.

The government says that if successful, this approach could be rolled out to other mayors to work with their own local police forces across England.

Businesses have long indicated that the current licensing system lacks proportionality, consistency, and transparency - creating barriers to growth and investment for business.

Chancellor of the Exchequer, Rachel Reeves, said:

‘British businesses are the lifeblood of our communities. Our Plan for Change will make sure they have the conditions to grow – not be tied down by unnecessarily burdensome red tape.

‘We’ve heard industry concerns and we’re partnering with businesses to understand what changes need to be made, because a thriving night time economy is good for local economies, good for growth, and good for getting more money in people’s pockets.’

Internet link: GOV.UK

Pension reforms needed to help individuals through their retirements

Reforms are needed to make the pension system easier to navigate successfully in order to help reduce the risk of a shortfall in retirement, according to the Institute for Fiscal Studies (IFS).

The think tank says that private sector employees are increasingly accumulating retirement savings in ‘defined contribution’ (DC) pensions (pension pots that do not guarantee a regular income through retirement).

Since 2015, people over 55 have been able to withdraw money from DC pensions in any way they choose.

According to the IFS, as this form of wealth becomes more important, people face too many complex and risky decisions through retirement.

This increases the risk that many exhaust their private resources and fall back purely on state pensions and benefits, especially later in retirement, the think tank added.

Bee Boileau, Research Economist at IFS, said:

‘The forthcoming Pension Schemes Bill is expected to introduce default retirement income solutions. Done well, these should improve outcomes for many, given the risks many face when drawing down pension savings through retirement at present.

‘But key questions remain – in particular, there will be some for whom a retirement income default will not be right. The government and pension providers must ensure that it is straightforward to opt out of whatever new defaults are introduced, and that as far as possible those making these decisions are sufficiently informed and helped.’

Internet link: IFS website

Companies House begins to verify identities

A new service has been launched that allows individuals to verify their identity directly with Companies House through GOV.UK.

The introduction of identity verification is one of the key changes to company law as part of the Economic Crime and Corporate Transparency Act 2023. Companies House has landmark new and enhanced powers to combat economic crime and boost economic growth.

More than six million people will be required to comply in the 12 months after identity verification becomes a legal requirement later this year. According to Companies House, identity verification will provide more assurance about who is setting up, running, owning and controlling companies in the UK.

Louise Smyth, CEO of Companies House, said: ‘Identity verification will play a key role in improving the quality and reliability of our data and tackling misuse of the companies register.

‘To save time later, we encourage directors, people with significant control of companies (PSCs) and those filing information with Companies House to verify their identity during the voluntary window.

‘We expect identity verification to become mandatory from Autumn 2025.’

Internet link: GOV.UK

Business group welcomes launch of Code of Practice

The Institute of Directors (IoD) has welcomed the launch of the government's new Cyber Governance package, which is underpinned by the Cyber Governance Code of Practice.

The Code of Practice shows boards and directors how to manage digital risks and protect their business from cyber-attacks.

It outlines how directors can build resilience to a wide range of cyber risks across their organisation.

The Code, which has been co-designed with technical experts from the National Cyber Security Centre (NCSC) and a range of governance experts across industry, focuses on the actions senior leaders should take to govern cyber risks effectively within their organisation.

Erin Young, Head of Innovation and Technology Policy at the IoD, commented: 'With cyber-attacks becoming more frequent, harmful and costly, cyber resilience is now a crucial boardroom responsibility. The new Cyber Governance Code of Practice provides practical guidance for boards and directors to effectively govern cyber risk and safeguard future growth.'

Internet link: IoD website

Spending Review 'could brighten living standards outlook'

Think tank the Resolution Foundation has suggested that the government's upcoming Spending Review could help to brighten the 'bleak living standards outlook' for low-to-middle income families.

The Foundation stated that the Review should prioritise spending on services they use the most, and that public services are crucial for quality of life. It said that household disposable income is expected to fall from 2025/26 but public service spending is rising by £18 billion a year in 2028/29 in real terms.

Public services are not, however, used equally across all households, the Resolution Foundation added. The allocation of extra funding between departments at the June Spending Review will determine which families benefit.

Emily Fry, Senior Economist at the Resolution Foundation, said: 'Britain's outlook for real disposable incomes is bleak, especially for poorer households after the benefit cuts announced at the Spring Statement. But the wider picture is more positive when the £18 billion boost to public services is included, as this will provide vital 'in-kind' benefits, particularly for poorer households.

'A focus on improving families' experience of a range of downtrodden services in the Spending Review could help boost quality of life for lower income families in a challenging living standards environment.'

Internet link: Resolution Foundation website

Tax red tape costs small businesses nearly £25 billion a year

Tax compliance costs the UK’s small businesses nearly £25 billion a year, according to recent research conducted by the Federation of Small Businesses (FSB).

The average small firm spends £4,500 and 44 hours a year on tax compliance, according to the research.

These annual totals could include time spent trying to contact HMRC, the cost of staff time used to manage compliance, and the price of software subscriptions and/or an external accountant, among other outlays.

Poor levels of customer service from HMRC are a recurring theme within the report, making tax compliance even more difficult and stressful for small businesses.

Tina McKenzie, FSB’s Policy Chair, said:

‘Tax compliance is far from a niche issue – it affects all five and a half million small businesses in the UK, costing them £4,500 and 44 hours a year each on average.

‘Collectively, that adds up to an annual total cost to the small business community of nearly £25 billion and over 240 million hours.

‘This is money and time that could be far, far better spent on building up their business, and the overall cost to the economy in terms of lost growth and wasted productivity is enormous.

‘Given the challenges facing the economy, and the need for growth, reducing the burden placed on small firms by tax compliance must be a priority – something the government has recognised as a priority for other regulators. HMRC should be included in the government’s drive to make regulation better support growth.’

Internet link: FSB website

Latest guidance for employers

HMRC has published the latest issue of the Employer Bulletin. The April issue has information on various topics, including:

  • the new rates of the National Minimum Wage
  • reporting expenses and benefits for the tax year ending 5 April 2025
  • changes to notifications by employers to operate PAYE on a proportion of a globally mobile employee’s income and changes to Overseas Workday Relief.
  • the tax treatment of double cab pickups.
  • Capital Gains Tax — working out your adjustment for the 2024 to 2025 tax year.

Internet link: GOV.UK

Sole traders and landlords get Making Tax Digital warning

Sole traders and landlords with an income over £50,000 have been warned that there is less than a year before they will be required to use Making Tax Digital for Income Tax (MTD for IT).

HMRC says the launch of MTD for IT on 6 April 2026 will mark a significant and time-saving change in how these individuals will need to keep digital records and report their income to the tax authority.

HMRC says that by keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities.

Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.

HMRC is urging eligible customers to sign up to a testing programme on GOV.UK and start preparing now.

Craig Ogilvie, HMRC’s Director of MTD, said:

‘MTD for IT is the most significant change to the self assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.

‘By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.’

Internet link: HMRC press release

Chancellor unveils plans to maintain level playing field for British business

Chancellor Rachel Reeves has said British businesses will be supported to trade freely as she takes action on practices that undercut fair trade, such as the dumping of cheap goods into the UK.

The government announced immediate action by the Trade Remedies Authority (TRA), the body responsible for defending the UK against certain unfair international trade practices.

The Chancellor also announced her intention to review the customs treatment of Low Value Imports, which allows goods valued at £135 or less to be imported without paying customs duty.

Major UK retailers have called on the government to amend the customs treatment, arguing that it disadvantages them by allowing international companies to undercut them.

William Bain, Head of Trade Policy at the British Chambers of Commerce (BCC), said:

‘There are still many twists and turns to go in the trade war between the US and China. It remains to be seen whether cheap Chinese goods will flood the UK as a result.

‘But the risk is present. It is sensible for the TRA to have all the necessary tools and resources to take action to prevent the UK being swamped with unfairly cheap products.

‘If domestic production suffers from a surge in imports or dumping of goods it is right that business has clearer access to make their case to the TRA. It must have the resources it needs to enforce a level playing field.’

Internet link: GOV.UK BCC website

Lack of trust and board expertise putting brakes on AI adoption

A lack of trust and a shortage of expertise at board level are limiting the adoption of AI in UK businesses, according to research from the Institute of Directors (IoD).

Just over half of survey respondents said limited expertise or understanding of models and tools at management and board level was restricting adoption of AI. In addition, 50% said that lack of trust in AI outcomes was their biggest concern.

Security risks, such as cyber, data protection and privacy, as well as employee skills gaps and ethical risks, are also significant barriers for business leaders.

Of the half of UK business leaders whose organisations use AI, 78% cite increased productivity and operational and administrative efficiencies as the most significant benefits.

Dr Erin Young, Head of Innovation and Technology Policy at the IoD, said:

‘While UK business leaders in early AI adoption are enthusiastic about greater productivity and efficiencies, they face a complex set of barriers to top-down implementation and governance – from skills and expertise gaps at board level, to a lack of trust and fundamental concerns about reliability, security and business value across AI capabilities, tools and applications.

‘Given a focus on addressing private sector user-adoption barriers in the UK government’s AI Opportunities Action Plan, it is important that these concerns are addressed strategically for businesses of all sizes across sectors in the Industrial Strategy.’

Internet link: IoD website

HMRC launches new online help for compliance checks

HMRC has launched a new online interactive tool to help guide both businesses and individuals through tax compliance checks.

The Interactive Compliance Guidance tool available on GOV.UK provides information to help customers understand:

  •         HMRC compliance checks.
  •         Why HMRC has requested specific information or documents.
  •         How to request extra support due to health or personal circumstances.
  •         How to appoint someone to act on your behalf.
  •         What to do if you disagree with a decision made by HMRC.
  •         How to pay a tax assessment or penalty.

The new tool brings together existing compliance guidance and videos in one place, making it easier to find and navigate the appropriate information, HMRC says.

Joanne Walker, Low Incomes Tax Reform Group (LITRG) Technical Officer and Customer Experience Advisory Group (CEAG) member, said:

‘When unrepresented customers have a tax compliance problem, it can be difficult for them to find the help they need.

‘This new interactive tool from HMRC makes compliance guidance readily accessible in one place, and easier for people to find the information that is relevant to them. The links to the extra support available will be especially valuable for the most vulnerable customers.’

Internet link: HMRC press release

New cryptoasset rules aim to protect consumers

The government is introducing legislation to regulate cryptoassets and improve consumer protection for the asset class.

The new rules will apply to firms offering services for cryptoassets like Bitcoin and Ethereum.

The government says that around 12% of UK adults now own or have owned crypto, up from just 4% in 2021. But it says owners have too often been left exposed to risky firms and scams.

Under the new rules, crypto exchanges, dealers and agents will be brought into the regulatory perimeter. Crypto firms with UK customers will also have to meet clear standards on transparency, consumer protection and operational resilience, like their counterparts in traditional finance.

Chancellor of the Exchequer, Rachel Reeves said that the UK and US will use the upcoming UK – US Financial Regulatory Working Group to continue engagement to support the use and responsible growth of digital assets.

Ms Reeves said:

‘Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK.’

Internet link: GOV.UK

  

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