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
- Pension reforms needed to help individuals through their retirements
- Companies House begins to verify identities
- Business group welcomes launch of Code of Practice
- Spending Review 'could brighten living standards outlook'
- Tax red tape costs small businesses nearly £25 billion a year
- Latest guidance for employers
- Sole traders and landlords get Making Tax Digital warning
- Chancellor unveils plans to maintain level playing field for British business
- Lack of trust and board expertise putting brakes on AI adoption
- HMRC launches new online help for compliance checks
- New crypto asset rules aim to protect consumers
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