16th May 2025 – Hillmans Weekly Update

16th May 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Raft of tax administration measures announced: How will these affect businesses and employers?
James Murray, the Exchequer Secretary to the Treasury, made a Written Ministerial Statement that included a number of tax simplification, administration and reform measures. In total, 39 measures were announced.

Many measures are intended to reduce burdens on employers and small businesses, whereas others are designed to modernise H M Revenue & Customs (HMRC) systems and processes.

Here are five highlights included among the measures announced.

1. Delay to payrolling benefits
Mandatory payrolling of benefits in kind will now be delayed to April 2027 instead of April 2026.

Payrolling benefits is a way to report and tax employee benefits through the payroll system, rather than submitting them at the end of the tax year via form P11D. Currently, employers can voluntarily choose to payroll benefits, however the government intends for this to become mandatory.

Delaying the introduction of mandatory payrolling of benefits will give employers more time to prepare. In addition, HMRC will work to make sure that the new requirements are easy for employers to implement.

2. Simplification to Capital Goods Scheme
The VAT Capital Goods Scheme (CGS) makes you adjust how much VAT you can reclaim on expensive items like buildings or equipment if how you use them changes over time - especially if you move between taxable and exempt activities.

While no date has been mentioned yet, new legislation will be put forward to remove computers from the assets covered by the scheme. The capital expenditure value of land, buildings and civil engineering work at which CGS begins to apply will be increased to £600,000 (excl. VAT) from its current level of £250,000 (excl. VAT).

This will be a welcome simplification for affected businesses.

3. Updates to Check Employment Status for Tax (CEST) Digital Tool
HMRC is making this tool easier to use, and updates to the tool may have been made by the time you are reading this.

These are accessibility changes only though. How the CEST tool works out if a worker is self-employed or employed is not being changed.

This is unfortunate as there are occasions where the determination the CEST arrives at is not necessarily accurate. If you would like a second opinion about the results of a check you have carried out, please contact us and we would be happy to help you.

4. VAT Treatment of Business Donations of Goods to Charity
The government is to begin a consultation on the VAT treatment of business donations of goods to charity.

The consultation will look at what types of goods are donated, how they are distributed, and if there is scope to make adjustments that will balance preventing tax evasion with avoiding burdensome administration requirements.

The consultation is available to view here.

5. Less paper in the post
HMRC is aiming to reduce the amount of paper correspondence it sends out, and use digital formats instead. It expects to be able to save £50 million in print and postage costs annually by the 2028-29 tax year.

Therefore, we should begin to see fewer letters from HMRC arriving in the post as they make use of online methods. Certain critical correspondence will continue to be sent by paper post, and promises have been made not to abandon those who are unable to access correspondence by digital means.

If you are affected by these or any other measures announced in the Tax Update Spring 2025 announcement, please call us and we will be happy to help you understand how your personal situation is affected and what you need to do.

To review the Exchequer Secretary’s statement in full, please see: https://questions-statements.parliament.uk/written-statements/detail/2025-04-28/hcws607
 
Low Value Import Rules Under Review – What It Could Mean for Small Importers and E-Commerce Sellers
The government has announced a formal review of the UK’s Low Value Imports regime, which currently allows goods worth £135 or less to be imported without paying customs duties. The review comes in response to concerns from some large UK retailers, who argue that the current system gives an unfair advantage to overseas sellers.

For small businesses that rely on cross-border e-commerce, drop-shipping, or fulfilment centres based outside the UK, this review could lead to significant changes in how goods are taxed at the border.
 
 
What’s Being Reviewed?
The existing system was designed to simplify trade and reduce admin costs, particularly for lower-value items. It’s widely used by:

• Online sellers sourcing products from international suppliers. 
• Drop-shipping businesses shipping goods directly to customers. 
• Small retailers importing goods in low volumes.

However, large domestic retailers like Next and Sainsbury’s have argued that this setup disadvantages UK-based sellers who must charge VAT and, in some cases, pay tariffs on similar goods.

In response, the Chancellor announced that the Low Value Imports regime will be reviewed, with stakeholder engagement beginning next month. According to the government, the review will consider:

• The impact on UK consumers, including any changes in pricing or availability of goods.  
• Administrative complexity, especially for smaller importers.  
• Fairness and competitiveness for UK-based and international sellers.  
• The need to support innovation and flexibility in online retail models. 

Why It Matters for Smaller Businesses
For many SMEs and independent e-commerce businesses, the low value threshold helps keep costs down and margins sustainable. Changing the rules could mean higher import costs, more paperwork, or even reduced access to overseas suppliers.

That said, the government has signalled it will aim to strike a balance - ensuring fairness for all types of businesses without placing unnecessary burdens on those who rely on efficient global supply chains.

What’s Next?
The Low Value Imports review will launch in the coming weeks, with decisions likely to follow later this year. No changes have been confirmed yet, and any reform will need to take into account both business impact and consumer outcomes.

We’ll continue to track the consultation and share updates as they become available.

International business can open up many opportunities, even for small businesses. If you need any help or advice on import taxes please get in touch. We would be happy to help you.

See: https://www.gov.uk/government/news/chancellor-unveils-plans-to-maintain-level-playing-field-for-british-business

New Reforms Aim to Tackle the Growing Problem of Small Pension Pots
The government has announced plans to address the growing issue of small, forgotten pension pots - a problem affecting millions of workers who change jobs frequently and accumulate multiple small pensions over time.

Currently, there are around 13 million small pension pots in the UK, each worth £1,000 or less. That number is growing by about one million a year. For savers, this means difficulty in keeping track of retirement savings and can mean paying multiple flat rate charges which leads to lower returns. Problems are caused for the pensions industry too; they estimate that the administrative costs of managing these small pots could be as much as £225 million a year.

What’s Changing?
Under reforms being introduced through the Pension Schemes Bill, small pots will be automatically consolidated into a single pension scheme that meets certain standards - including providing good value for savers. Individuals will still have the right to opt out if they wish.

This “pot for life” approach is expected to:

• Cut down on flat rate fees applied to each small pot. 
• Make it easier for savers to manage their pensions. 
• Reduce admin costs for pension providers. 
• Improve long-term returns - the government estimates that the pension of an average earner could be boosted by around £1,000.

How It Will Work
Key features of the proposed system include:

• A Small Pots Data Platform to help identify and match savers’ small pots. 
• Clear criteria for what qualifies as a “consolidator” scheme (including good value, scale, and consumer protection). 
• An opt-out option for savers who prefer not to consolidate their pots.

Industry Reaction
The proposals have received broad support from across the pensions sector. Organisations such as the Pensions and Lifetime Savings Association, Which?, and leading pension providers have welcomed the move, saying it will reduce complexity and help people get better outcomes from their savings.
 
 
What to Watch For
The Pension Schemes Bill is due to be introduced to Parliament later this spring. If passed, it will mark a significant shift in how pensions are managed, particularly for workers with multiple jobs over their careers.

Employers may want to start reviewing how the reforms could affect their workplace schemes and communications with staff.

If you have pension pots with various providers, then there could be value in consolidating them even if their value is more than £1,000.

See: https://www.gov.uk/government/news/1000-retirement-savings-boost-from-plans-to-bring-together-small-pension-pots

New Rules Aim to Curb Sudden Bank Account Closures
From April 2026, banks and payment service providers will face stricter rules around how and when they can close customer accounts, under new legislation aimed at improving transparency and giving people and small businesses more time to respond to account closures.

The changes mean that:

• Customers must be given at least 90 days’ notice before their account is closed or a payment service is terminated - up from the current 60 days. 
• A written explanation must be provided, outlining why the account is being closed. This is intended to help customers challenge the decision, including through the Financial Ombudsman Service if necessary.

These new protections are expected to apply to contracts agreed from 28 April 2026, and are part of a wider government plan to give people and businesses more certainty and security when it comes to accessing banking services.

Why It Matters for Businesses
Small business owners in particular have raised concerns in recent years about accounts being shut down with little or no warning, often without a clear explanation. Clearly this is very disruptive and has left businesses with no time to complain or find a replacement bank.

The new rules should help to improve matters. There will however still be some exceptions - for example, where account closure is necessary for financial crime prevention.

Therefore, it’s worth being aware of these upcoming changes. While they don’t come into force until 2026, they could influence how banks handle account management going forward.

See: https://www.gov.uk/government/news/millions-of-people-and-businesses-protected-against-debanking

Cryptoasset Firms Face New Rules Under UK’s Draft Legislation
The UK government has published draft legislation that would bring cryptoasset services such as exchanges, brokers and custody providers within the scope of financial regulation for the first time. The announcement was made by the Chancellor during a major summit in London as part of UK Fintech Week.

If passed, the rules will apply to firms offering crypto-related services to UK customers - whether based in the UK or overseas. These businesses would be required to meet defined standards around transparency, customer protection, and operational resilience, similar to those in traditional financial services.

The legislation follows a 2023 Treasury consultation, and forms part of the government’s wider "Plan for Change" strategy aimed at supporting innovation in financial services. The goal is to create a more stable and secure environment for consumers, while ensuring the UK remains a centre for digital finance.

Background and Impact
According to Financial Conduct Authority (FCA) research, around 12% of UK adults currently own or have owned cryptoassets - a sharp increase from 4% in 2021. While crypto adoption has grown, the sector has also seen high-profile failures and scams, which has naturally raised concerns.
In practical terms, crypto businesses targeting UK customers will likely face new compliance requirements and potential oversight from regulators like the FCA.

International Cooperation
The Chancellor also noted plans for further engagement with US regulators, including discussions on a potential “transatlantic sandbox” to explore cross-border approaches to digital securities. This follows meetings in Washington between UK and US officials earlier this year.

What’s Next?
The government is seeking feedback on the draft legislation before introducing final measures. The Chancellor also announced that the government will be publishing a Financial Services Growth and Competitiveness Strategy on 15 July alongside the Chancellor’s Mansion House speech. This has the aim of supporting long term growth in the financial services sector.

The regulatory shift is significant for any business involved in or considering entry into the crypto space.
See: https://www.gov.uk/government/news/new-cryptoasset-rules-to-drive-growth-and-protect-consumers 
 
New International Rules to Cut Legal Costs for UK Businesses
From 1 July 2025, UK businesses involved in cross-border disputes will benefit from a major change in how their legal judgments are recognised overseas, thanks to new international rules being introduced under the 2019 Hague Convention.

The UK has officially signed up to the Convention, which means that if a UK court makes a judgment in a civil or commercial case involving a business in another participating country, that decision will be far easier to enforce abroad. As a result, businesses should save time, money, and legal uncertainty.

What’s Changing?
Currently, even when a UK business wins a case in a UK court, getting that judgment recognised and enforced in another country can be complex and slow. In some cases, it can even lead to near-identical legal proceedings starting all over again in the foreign country.

Under the new rules:

• UK civil and commercial court judgments will be recognised and enforced automatically in other countries that have signed the Hague 2019 Convention. 
• The same will apply in reverse - judgments from participating countries will be recognised in UK courts. 
• This will apply to proceedings that begin on or after 1 July 2025.

Why It Matters for Business
For UK companies trading internationally, particularly SMEs, this change could reduce the cost and complexity of resolving disputes across borders. Instead of navigating multiple legal systems, businesses will have one consistent set of rules that simplify enforcement.

It also makes the UK more attractive as a base for resolving disputes, reinforcing the reputation of UK courts and legal professionals in the global legal market.

The Convention is already in use by 29 countries including EU member states, Ukraine, and Uruguay, with more expected to join in the future.

Looking Ahead
Businesses involved in regular cross-border activity - especially those drafting contracts or managing overseas disputes - should be aware of the upcoming changes.

See: https://www.gov.uk/government/news/government-signs-new-international-agreement-in-boost-to-british-business

9th May 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great Bank Holiday weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Cyber Attacks on Retail Giants: What Every Business Should Learn
The recent wave of cyber attacks on UK retailers, including Marks & Spencer, Co-op and Harrods, is a reminder that no organisation is too big - or too prepared - to be targeted. But while the headlines may focus on the big names, there are important lessons here for businesses of all sizes.

The National Cyber Security Centre (NCSC) is working with the affected businesses. In a recent statement they said they are not yet in a position to say if the attacks are linked. However, they are saying that they have insights and there is a lot they do know.

For instance, while not confirming any details, NCSC have commented and provided advice on press speculation that social engineering was used to target IT helpdesks. By impersonating support staff - or posing as employees locked out of their accounts - a hacker might use social engineering tactics to trick people into handing over login credentials and security codes.

It’s a disturbingly simple method, but one that works.

The takeaway? People, not just passwords, are your first line of defence.
In its latest guidance, the NCSC urges organisations to review their password reset processes - especially for senior employees who have access to sensitive parts of your network. That means thinking carefully about how identity is verified when someone calls the IT help desk. Is there a secondary check? Would a fraudster be spotted?

Some in the cyber community are even suggesting codewords to help authenticate real users. But that only works if it’s part of a broader culture of awareness, where staff are trained to question the unexpected, even if it sounds routine.

Small businesses aren’t immune
While the recent attacks have hit household names, the tactics used don’t discriminate by size. If anything, smaller businesses - often without dedicated cyber security teams - can be seen as easier targets. That’s why it’s essential for you to act now:

• Review how password resets are handled internally. Who has access? What verification steps are in place?
• Use multi-factor authentication wherever possible. A password alone is no longer enough. 
• Monitor for unusual logins. Logins from unexpected locations or at odd times should trigger a red flag. 
• Recognise social engineering. You and your staff need to know how to recognise potential threats. Making updates regular and having short refresher sessions can go a long way.

Organised or opportunistic?
The advice from NCSC seems to indicate that these recent incidents are not about high-tech hacking. It’s about gaining trust and then gaining access. This makes it vital to see cyber security not as an IT issue, but a business-wide responsibility.

NCSC have warned that online criminal activity is rampant and attacks like the ones experienced by high profile retailers are becoming more and more common. Businesses of all sizes need to be prepared. The best defence for most organisations starts internally - with stronger processes, clearer communication, and a healthy dose of scepticism.

Now is the time to ask: could this happen to us?

See: https://www.ncsc.gov.uk/blog-post/incidents-impacting-retailers
 
UK-India Trade Deal Set to Unlock Major Export Opportunities for UK Businesses
The UK and India signed a new trade agreement last week that will reduce tariffs and open up one of the world’s fastest-growing markets to British businesses. The deal – described by the government as the most significant bilateral trade agreement since Brexit – is expected to boost trade by £25.5 billion a year by 2040.

For UK exporters, key benefits include lower tariffs on whisky, gin, aerospace, electricals and medical devices, cosmetics, and food products like lamb, salmon, chocolate and biscuits. Tariffs on whisky, for example, will be halved from 150% to 75%, with further reductions planned.

Indian exports will also benefit, with cuts to UK tariffs on clothing, footwear, jewellery and certain foodstuffs. Businesses are likely to benefit from lower costs for these goods once the deal comes into force – potentially within a year.

The agreement also includes improved access for UK firms in services and public procurement, as well as a three-year exemption from double social security payments for Indian nationals on short-term work visas in the UK.

Rain Newton-Smith, who is chief executive of business lobby group, the CBI, said that the deal provided a “beacon of hope amidst the spectre of protectionism”.

India is expected to become the world’s third-largest economy in the coming years, and this deal could help more UK firms tap into that growth. Businesses looking to grow their export footprint or diversify into new markets may find fresh opportunities in the Indian market.

Exporting, whether of goods or services, can be an excellent way to grow your business. If you would like to explore the value or exporting to your business, such as by considering a cost-benefit analysis, or simply want advice on dealing with Customs, please give us a call. We would be happy to help you.

See: https://www.bbc.co.uk/news/articles/c5y6y90e5vzo
 
What the New Planning Reforms Could Mean for Your Business
The government has published its Impact Assessment on the Planning and Infrastructure Bill, which indicates benefits to the economy of potentially up to £7.5 billion over the next decade.

It’s worth noting that this was the Impact Assessment’s higher estimate for how much money the Bill could add to the economy over 10 years. Its central estimate was £3.2 billion and the lower estimate was £1.3 billion.

The reforms contained in the Bill are intended to reduce red tape and speed up decision-making, with the goal of delivering 1.5 million new homes and a range of major infrastructure projects. These include new roads, railways and renewable energy developments – all areas that have traditionally been slowed down by lengthy planning processes.

What does this mean for small businesses?
While big numbers like £7.5 billion grab headlines, the real interest for smaller businesses lies in the potential knock-on effects of increased building work.

Here are a few things to watch:

• Opportunities for local contractors and trades: More housing and infrastructure means more work across the construction supply chain – from groundwork to plumbing, electrical, joinery and more. 
• Increased demand for construction-related services: Planning consultancies, architects, legal advisers and environmental surveyors may all see increased demand. 
• Growth for suppliers: Builders’ merchants, plant hire businesses, and local suppliers could benefit from larger volumes and faster project turnover. 
• Boost to regional economies: With major developments potentially reaching approval faster, towns and cities could see regeneration projects coming to life sooner – good news for hospitality, retail, and service-based businesses in those areas.

What’s next?
The Bill is still making its way through Parliament, so we may still be some way from the reforms becoming reality. However, the government’s intentions are clear. The aim is to make 150 major infrastructure decisions during this Parliament, 17 of which have already been made.

Keep it in perspective
While this all sounds positive, the true impact will depend on how effectively the changes are implemented and how quickly they feed through into actual projects on the ground. For now, businesses in construction, energy, transport and related services may want to keep a close eye on opportunities in their region – especially those tied to new developments or local authority plans.

As always, if you'd like help understanding how government policy might affect your business directly – or you're looking to prepare for upcoming changes – we're here to support you.

See: https://www.gov.uk/government/news/reforms-to-get-britain-building-will-boost-economy-by-billions
 
Consultation on US tariffs Concludes
The UK government has concluded its four-week consultation with businesses and other stakeholders on potential retaliatory action to the tariffs imposed by the US government on a range of products. Over 200 responses were submitted during the process.

The government will now analyse the feedback to try and understand the potential impact of introducing UK tariffs in response. While no decisions have yet been made, officials have confirmed that all options remain on the table.

At the same time, the UK is continuing negotiations with the US on a broader economic prosperity deal which is aimed at removing current and future tariffs altogether.

For now, businesses affected by the US tariffs – or concerned about future changes – should stay informed. The outcome of both the consultation and the ongoing US talks will influence future trade costs or opportunities.

See: https://www.gov.uk/government/news/business-review-on-us-tariffs-has-concluded
 
Helping Employees Save on Childcare: What Employers Need to Know
With many families finding out where their child will be starting school this September, now is a good time for working parents to start planning childcare. The government’s Tax-Free Childcare scheme can save them up to £2,000 a year per child – and this could be good news for employers as well as employees.

Why this matters for employers
Childcare is one of the biggest financial pressures for working families. By signposting Tax-Free Childcare, employers can support staff wellbeing, reduce financial stress, and make it easier for parents to return to or stay in work.

For every £8 a parent pays into a Tax-Free Childcare account, the government adds £2 – up to £500 every three months per child (or £1,000 if the child is disabled). The scheme can be used for a wide range of approved childcare, including:

• Childminders
• After-school clubs
• Holiday and other wraparound care

This support applies to children aged 11 or under (or up to 16 if the child is disabled).

What employees need to know
To be eligible, the parent and their partner (if they have one) must:

• Be earning at least the National Minimum Wage or Living Wage for 16 hours per week on average
• Each earn less than £100,000 per year
• Not be receiving Universal Credit or childcare vouchers

Each eligible child needs their own account, and parents must reconfirm their details every three months to continue receiving the top-up.

A useful tool for returning parents
This scheme can be particularly helpful for parents returning to work after parental leave, or those increasing their hours. As many employees will be finalising childcare for September, now is a good time to raise awareness.

What employers can do

• Share the GOV.UK link with staff: https://www.gov.uk/tax-free-childcare 
• Include information about Tax-Free Childcare in any parental leave packs or policies you provide employees with. 
• Encourage managers and HR teams to raise awareness, especially among new parents

By promoting Tax-Free Childcare, you can show support for working families and may be able to reduce a barrier that helps you keep a valued employee.
See: https://www.gov.uk/government/news/save-up-to-2000-a-year-on-childcare-for-your-new-school-starter
 
Celebrating Excellence: 197 Firms Honoured with The King’s Awards for Enterprise
Nearly 200 businesses from across the UK have received The King’s Awards for Enterprise – the UK’s most prestigious recognition for outstanding business achievement.

This year, 197 firms were honoured for their success in international trade, innovation, sustainable development, and promoting opportunity through social mobility.

Out of the 197 winners, 176 are small or medium-sized businesses (SMEs), and 27 are micro-businesses with 10 employees or fewer. This reflects the vital role that smaller firms play in driving UK growth. It is estimated that just a 1% increase in SME productivity each year for the next 5 years would add £94 billion to the UK economy.

Minister for Services, Small Businesses and Exports, Gareth Thomas said the awards celebrate “the very best of British business talent,” and praised winners for helping to boost the UK economy.

Examples of winners include:

• Sonardyne International – recognised for both International Trade and Sustainable Development in the engineering and manufacturing of their underwater equipment. 
• Delta Fire – awarded for Innovation and Sustainability in its manufacture of specialist front-line firefighting products. 
• Mixergy, based in Oxford – recognised for their energy-efficient smart hot water tanks.

Now in its 59th year, the awards (formerly The Queen’s Awards) will be presented locally by His Majesty’s Lord Lieutenants, with representatives from winners also invited to a Royal reception later in the year.

See: https://www.gov.uk/government/news/british-businesses-celebrated-in-third-year-of-the-kings-awards-for-enterprise

2nd May 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great Bank Holiday weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

MTD for Income Tax - FAQs
As covered in our update last week, Making Tax Digital for Income Tax (MTD for IT) will be introduced from 6 April 2026. Below are some frequently asked questions and answers.

Who will be affected by MTD for IT, and when?
Individuals with self employment and/or income from property will need to comply with MTD for IT once they are mandated. The commencement date for MTD for IT is 6 April 2026, but a phasing-in program will mean that some individuals are not immediately within the regime. MTD for IT applies from:

• 6 April 2026 for sole traders and landlords with qualifying income over £50,000 in 2024/25.
• 6 April 2027 for those with qualifying income over £30,000 in 2025/26.
• 6 April 2028 for those with qualifying income over £20,000 in 2026/27.

If an individual’s qualifying income exceeds the threshold in a tax year, HMRC will notify them that they are mandated to comply with the MTD for IT rules.

What is ‘qualifying income’?
Qualifying income is a person’s gross income (turnover), before expenses are deducted, from self-employment and property combined.

Does qualifying income include VAT?
HMRC will look at the tax return ‘income’ boxes to calculate qualifying income. For those using the Cash Basis, it is possible to include VAT in the tax return figures for income and expenses. If VAT is included, HMRC will include it in the individual’s qualifying income, therefore it’s best not to use VAT-inclusive figures in the tax return.

Are there any exemptions for those with a low volume of transactions?
No. If qualifying income is over the thresholds outlined above, an individual will be mandated regardless of the volume of transactions.

What do I need to do if I am mandated?
You will keep digital records in MTD-compatible software and send a quarterly update summary of your business income and expenses to HMRC. This means that each quarter, you will need to enter details of each item of income and expenditure into your software.

In addition to the quarterly record-keeping and reporting requirements, you will still need to submit an end-of-year tax return, where you enter any other sources of income (such as employment, savings or dividends) and finalise your tax position. The end-of-year return also needs to be submitted using MTD-compatible software.

Will I need to make quarterly payments to HMRC?
At this point, there are no plans to mandate quarterly payments. The due date for payment will remain 31 January following the end of a tax year, with payments on account due on 31 January and 31 July.

I’ve heard that there’s an easement for those with turnover below £90,000. What does this involve?
There is an easement, but it’s not as generous as we would like! The easement allows businesses with turnover below the VAT threshold to send totals for ’income’ and ‘expenditure’ to HMRC each quarter, instead of totals for a longer and more detailed list of income and expense categories. Each individual item of income and expenditure will still need to be entered into the MTD-compatible software, although each item can be simply categorised as either ‘income’ or ‘expenditure’.

Apparently there’s an easement for recording income from jointly held property. What does this mean?
There is a separate easement for recording and reporting jointly held property income, that can be used in conjunction with the easement for those with turnover below £90,000 (provided income for the property business is below the threshold). If both easements are used, for jointly held property, the individual can enter a single income figure into the MTD-compatible software each quarter and a single, annual total expenses figure in quarter 4.

Where an individual receives property income and incurs residential property finance costs (such as mortgage interest), they must create a separate digital record for these costs and send them separately from other expenses, even if taking advantage of this easement.

I already submit quarterly VAT returns. How will this work alongside MTD for IT quarterly updates?
MTD for IT quarterly updates are for set periods. The quarters end on 5^th July, 5^th October, 5^th January and 5^th April, although it is possible to elect to use ‘calendar quarters’ ending on 30^th June, 30^th September, 31^st December and 31^st March.

VAT quarters can end on the last day of any month, depending on your ‘VAT stagger’. If your VAT quarters do not align with the calendar quarters for MTD for IT, it may be worth considering changing your VAT stagger, so that your VAT returns are aligned with your MTD for IT quarterly updates.

What will happen if I don’t comply with the new rules?
Once you are mandated to comply with MTD for IT, a range of penalties will apply to both the quarterly updates and the end-of-year returns. A new penalty regime for late filing and late payment will apply to those who are mandated. Penalties for errors will apply to the end-of-year tax return, but not the quarterly updates.  This does not mean that erroneous ‘nil’ returns can be submitted for the quarterly updates, however. HMRC will have powers to issue penalties of up to £3,000 per quarter if you do not keep digital records. At this time, it is unclear how HMRC will use these powers because guidance has not yet been issued.

CHANGES TO THE TAXATION OF NON-UK DOMICILED INDIVIDUALS
From 6 April 2025, a new regime for the taxation of UK resident non-domiciled individuals came into effect. HMRC have published a brand-new manual on the regime which can be viewed here.
 
Until 5 April 2025, special tax rules applied to individuals who were resident in the UK but whose domicile (i.e. their permanent home, usually determined by their father’s permanent home at the time the individual was born) was outside the UK. Such individuals could choose to either pay UK tax on their foreign income and gains as they arose or, alternatively, they could claim the remittance basis, which meant only foreign income and gains remitted to the UK were taxed.

From 6 April 2025, all UK residents will be taxed on the arising basis of assessment. The remittance basis will no longer be an option. A new regime for Foreign Income & Gains (FIG) will be available to individuals for their first four years of UK tax residence after a period of 10 years non-residence. Individuals who make a claim to use the new 4-year FIG regime will not pay tax on FIG arising in those four years. Former remittance basis users will continue to pay tax on FIG that arose before 6 April 2025 that they remit to the UK.

New rules also apply for Inheritance Tax (IHT) purposes. The new test for whether non-UK assets are in scope for IHT is whether an individual has been resident in the UK for at least 10 out of the last 20 tax years immediately preceding the tax year in which the chargeable event (including death) arises. This is known as being a ‘long-term UK resident’. Where an individual is a long-term UK resident and becomes non-UK resident, they will remain in scope for IHT for a minimum of 3 years and a maximum of 10 years depending on the amount of time they resided in the UK.

HOLIDAY LETTINGS AND PROPERTY

The Furnished Holiday Lettings (FHLs) regime was abolished on 6 April 2025. What does the abolition mean for your holiday letting property?

The property will become part of either your main UK or overseas property business. This means that some of the beneficial tax rules that previously applied will no longer apply, such as:

• Tax relief for dwelling-related loan interest will be restricted to basic rate (20%).
• New capital expenditure will generally not qualify for capital allowances, Instead, the replacement of domestic items relief may apply.
• Capital Gains Tax reliefs for trading business assets (such as Business Asset Disposal Relief, Gift Relief and Rollover Relief) will no longer be available.
• Income from the property will no longer be included in ‘relevant UK earnings’ for the purposes of calculating maximum pension relief.

However, all is not lost! There are some transitional measures that you may benefit from:

• It will be possible to carry forward losses that were generated by an FHL business prior to 6 April 2025. These losses will be available for set off against future years’ profits of either the UK or overseas property business, as appropriate.
• Where an FHL business had a capital allowances pool at 5 April 2025, the pool can be carried forward within the general property business. Going forwards, it will be possible to claim writing-down allowances on the pool.
• For Business Asset Disposal Relief (BADR), where the FHL conditions were satisfied in relation to a business that ceased prior to 6 April 2025, relief may continue to apply to a disposal that occurs within the normal 3-year period following cessation. 

If your property previously qualified as an FHL and you have questions about the new tax treatment, please get in touch with us!

VAT: ‘Food’ or ‘Confectionery’?

Group 1 of Schedule 8 VAT Act 1994 specifically makes ‘food’ zero-rated, although there is a long list of ‘excepted items’ which do not qualify for the zero-rating and are therefore standard-rated. Excepted item No. 2 is “Confectionery, not including cakes or biscuits other than biscuits wholly or partly covered with chocolate or some product similar in taste and appearance”.

Note 5 expands on the meaning of ‘confectionery’, saying that it “includes chocolates, sweets and biscuits; drained, glace or crystallised fruits; and any item of sweetened prepared food which is normally eaten with the fingers”.

Over the years, there have been numerous court and tribunal cases that have considered whether or not a food item meets the definition of ‘confectionery’. The most recent case has concerned ‘Mega Marshmallows’; the kind usually toasted on a skewer over outdoor fires and barbecues.
 
In HMRC v Innovative Bites Ltd ([2025] EWCA Civ 293), the Court of Appeal (CoA) has allowed HMRC’s appeal and has remitted the case to the First Tier Tribunal (FTT) to consider whether mega marshmallows are a “sweetened prepared food which is normally eaten with the fingers”. The CoA found that both the First-Tier and Upper Tribunals had not put sufficient emphasis on the manner in which Mega Marshmallows are ‘normally eaten’.

It will be interesting to read the First-Tier Tribunal’s ruling, as toasted marshmallows are normally eaten from a skewer, albeit one that is held with fingers!

25th April 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a weekend Easter.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

MTD for Income Tax: Less Than a Year to Go
If you're a sole trader or landlord with annual income over £50,000, a major change is coming your way. From 6 April 2026, you may be required to keep digital business records and submit quarterly updates to HM Revenue and Customs (HMRC) under Making Tax Digital (MTD) for Income Tax.

This is one of the biggest shifts in Self Assessment since it was introduced, and while there are potential benefits, it will also mean significant changes in how you manage your accounts.

What’s Changing?
Under MTD for Income Tax, affected individuals must:

• Keep digital records using MTD-compatible software. 
• Submit quarterly updates of income and expenses to HMRC. 
• File an end-of-year digital tax return (replacing the annual Self Assessment tax return).

The qualifying income threshold refers to total income from self-employment and property (before any expenses or allowances are deducted).

MTD aims to move the tax system towards more frequent, digital reporting. While some businesses may find it helps with financial organisation and reduces errors, it also means a shift away from the once-a-year tax return process that many are familiar with.

The Pros and Cons
You may find some potential benefits from the new system, such as:

• More up-to-date information about your tax position. 
• Possible time savings at year-end if records are kept properly throughout the year. 
• Reduced risk of errors in tax reporting. 

However, there are going to be some potential challenges too:

• Additional administrative burden, with four quarterly update submissions plus an end-of-year tax return. 
• Requirement to purchase or subscribe to compatible accounting software, if you don’t do so already. 
• A learning curve for those less familiar with digital bookkeeping.

For many sole traders and landlords, the biggest adjustment will be the need for regular digital record-keeping rather than dealing with tax in one go at the end of the year.

What Happens Next?
MTD is gradually being introduced so that it will eventually be a requirement for any self-employed individual or landlord with qualifying income over £20,000.

• From April 2026, self-employed businesses and landlords with qualifying income over £50,000 will need to comply with the new MTD requirements. 
• From April 2027, the threshold falls to £30,000. 
• From April 2028, it drops again to £20,000.

HMRC is currently encouraging businesses to join a testing programme, which allows participants to familiarise themselves with the new system before it becomes mandatory.

During testing, there will be no penalties for late quarterly updates, making it a safer time to learn the process.

How We Can Support You
Whether you want help choosing software, setting up your digital records, or simply understanding what’s changing, we're here to guide you through the transition. Every business will be different - some may need only minor tweaks to their processes, while others may face a bigger adjustment.

If you’d like to discuss how MTD will affect you, or how best to prepare, please get in touch.

Cyber Governance: Why Boards Need to Take the Lead
For most businesses today, digital technology is fundamental to operations. With that comes the growing reality that cyber security is no longer just an IT issue - it’s a business owner and board-level responsibility.

Managing cyber risks effectively is now as essential as managing financial, legal, or operational risks. Increasingly complex supply chains and evolving threats make strong cyber governance critical not just for resilience, but for business continuity and sustainable growth.

To provide support in this area, the National Cyber Security Centre (NCSC), working alongside the Department for Science, Innovation and Technology (DSIT) and industry experts, has developed a set of resources.

While these resources have not been specifically designed for smaller businesses, the practical insights contained in the guidance can be useful to businesses of all sizes.
The resources are split as follows:

• Cyber Governance Code of Practice – sets out the most critical governance actions that directors need to take ownership of. 
• Cyber Governance Training – confirms why and how board members take those actions. 
• Cyber Security Toolkit for Boards – underpins the above two, providing in-depth support.

These tools are designed to be practical, with input from organisations like NEDonBoard to ensure relevance for board members.

While many businesses will already have some cyber security measures in place, these resources aim to help boards review whether governance structures are sufficiently robust - and, if necessary, strengthen them.

Good cyber governance is not just about compliance; it can also improve resilience of your business, protect your reputation, and put you in a better position for growth in a digital economy.

To review the guidance, see: https://www.ncsc.gov.uk/cyber-governance-for-boards/overview
 
How Rejection Can Fuel Business Success
Nobody enjoys rejection. Whether it’s a declined loan application, a missed contract, or an investor turning you down, rejection can sting - especially when you’ve poured your energy and passion into your business.

But rejection, uncomfortable as it is, can often be a powerful catalyst for success. In fact, many successful entrepreneurs credit their biggest breakthroughs to the lessons they learned when things didn’t go to plan.

Here’s why rejection could be one of the most valuable experiences for your business journey.

1. Rejection Encourages Reflection
When we experience rejection, it forces us to step back and reassess. Was my sales pitch as strong as it could have been? Is the business plan really robust? Are we speaking to the right audience?

This kind of honest reflection can uncover weaknesses we might otherwise have missed - and allow us to strengthen our business models, sharpen our strategies, and approach the next opportunity better prepared.

2. It Builds Resilience
Running a business inevitably involves setbacks. Those who succeed long-term aren't the ones who avoid failure altogether - they’re the ones who get back up after a knock.
Each rejection you survive strengthens your resilience. It builds the kind of persistence and adaptability that’s essential for navigating the inevitable ups and downs of business life.

3. Rejection Can Point You Towards Better Opportunities
Sometimes a ‘no’ clears the way for a much better ‘yes.’ A declined funding offer might push you to seek out a partner who’s a better fit. A lost customer could free up time to focus on higher-value work.

While it’s natural to feel disappointed initially, rejection can actually redirect your efforts toward opportunities that are more aligned with your goals, values, and long-term success.

4. It Teaches You How to Handle Criticism
Rejection often comes with feedback - not always well-delivered, but valuable nonetheless. Learning to separate personal feelings from constructive criticism is a vital skill for any business owner.

If you can view feedback objectively, you can use it to make real improvements. Over time, you'll build not only a stronger business but also stronger relationships with clients, investors, and collaborators.

5. Every Successful Entrepreneur Has Faced Rejection
It’s easy to look at successful businesses and assume they had a smooth journey - but behind almost every success story is a long list of rejections.

• J.K. Rowling faced multiple rejections before Harry Potter was published. 
• James Dyson built more than 5,000 prototypes before perfecting his vacuum cleaner. 
• Airbnb was rejected by investors several times before becoming a global brand.

Persistence in the face of rejection isn’t a sign of foolishness; it’s often a necessary part of the process.
 
Final Thoughts
Rejection is painful, but it’s also a sign that you’re pushing boundaries, taking risks, and putting yourself out there - all of which are essential for business growth.

If you can use each setback as a learning opportunity rather than a stopping point, rejection can become one of the most powerful tools in your entrepreneurial toolkit.

If you'd like to chat about how to build financial resilience into your business planning - or simply want some guidance for navigating the ups and downs of business life - we're always here to help.

Why Business Owners Must Stay Involved: Lessons from Elon Musk’s Recent Shift
Recent news about Elon Musk offers a timely reminder for business owners about the risks of losing focus on their core operations. After Tesla reported a sharp drop in profits and sales at the start of this year, Musk announced he would "significantly" reduce his involvement in his US government role with the Department for Government Efficiency (DOGE), refocusing more of his time on Tesla.

We are not here to discuss the politics of Musk’s government involvement, but the situation highlights a critical lesson: business owners need to stay actively engaged in their businesses, particularly during challenging periods.

When owners become too distracted by external commitments, even capable managers may struggle to maintain the same vision, energy, and strategic oversight that a founder or key leader brings. It can lead to slower decision-making, misaligned priorities, and missed opportunities - all of which can erode performance over time.
That’s not to say leaders must micromanage. Effective delegation is essential for growth. However, delegation requires structure, including: 

• Setting clear expectations and goals. 
• Regularly reviewing key metrics and financials. 
• Staying close to strategic decisions, while trusting managers with day-to-day execution. 
• Maintaining visibility with customers, investors, and employees.

Delegation without accountability can quickly become abdication - and the business can drift off course before the owner realises.

Musk’s pivot back to Tesla underscores how important it is for business leaders to balance external ventures carefully, especially when core performance starts to slip. Active leadership remains one of the greatest competitive advantages any business can have.

See: https://www.bbc.co.uk/news/articles/cy0x50yr46lo

What the Latest IMF Forecast Means for Business Owners
The International Monetary Fund (IMF) has predicted that the Bank of England could cut interest rates three more times this year, despite the UK facing higher-than-expected inflation.
Inflation in the UK is now forecast to be 3.1% for 2025 - the highest among advanced economies - largely driven by higher utility and energy bills. However, the IMF believes this spike will be temporary, paving the way for further rate reductions. It expects inflation to fall back to 2.2% by 2026, close to the Bank of England’s long-term target.
For business owners, potential rate cuts offer both opportunities and challenges:

• Lower borrowing costs could make it cheaper to invest, expand, or manage cash flow. 
• Persistently high costs - especially energy and utilities - could still squeeze margins in the short term. 
• Global uncertainty, including US tariffs, could affect supply chains, trade opportunities, and demand, depending on your sector.

The IMF also downgraded its growth forecast for the UK economy in 2025 from 1.6% to 1.1%, reflecting the impact of global trade tensions, particularly from new US tariffs.

While this is a slowdown, it still places the UK ahead of France, Italy, and Germany.

The message for businesses is clear: while interest rate cuts could support borrowing and investment, ongoing cost pressures and global instability mean careful financial management and resilience planning remain essential.

See: https://www.bbc.co.uk/news/articles/cy9vy7yq849o
 
AI Adoption on the Rise Among Small Businesses: A Boost for Productivity
According to new research, small and local businesses across the UK are increasingly embracing artificial intelligence (AI) tools to improve efficiency and streamline everyday operations.

A study led by Professor Ross Brown of the University of St Andrews Business School found that SMEs using AI tools could achieve productivity gains of between 27% and 133%. Based on interviews with nearly 10,000 businesses conducted by the Department for Business and Trade, the findings suggest AI could play a significant role in helping small and medium sized businesses make productivity gains.

Professor Brown explained, “AI potentially offers SMEs short cuts that provide quick productivity wins, like planning staff rotas or reducing food waste in a small restaurant.

These solutions are inexpensive and relatively easy to implement.”

Faire, a wholesale marketplace used by independent retailers, has also conducted its own research that highlights the growing appeal of AI. It found that 83% of 300 surveyed small businesses reported using AI tools, with more than a third doing so daily.

Examples of its use include using AI to help with marketing tasks, such as writing product descriptions and blog posts.

However, many also remain cautious in what they use AI for. For instance, over-relying on the technology for core business decisions.

While some business owners remain cautious, there’s no doubt that AI is proving to be valuable for managing many time-consuming tasks. For small businesses, AI could become an increasingly important tool in the growth of their business.

See: https://bmmagazine.co.uk/in-business/small-businesses-embrace-ai-for-quick-productivity-wins-study-finds/

18th April 2025 – Hillmans Weekly Update

18th April 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great Easter.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

UK Inflation Falls to 2.6% – But What’s Next for Your Business?
In a small bit of good news, March’s inflation figures have been released showing a drop to 2.6% from 2.8% in February. The main reason? Lower petrol prices, which has offered some relief for households and businesses alike.

However, April has brought fresh challenges. Wage costs and energy prices have already increased, and that’s expected to feed into higher costs in the coming months. The Bank of England’s last forecast showed that they expect inflation to rise again - potentially reaching 3.7% - and to stay above its 2% target until the end of 2027.

The next big date for your diary is 8 May 2025, when the Bank of England will announce whether interest rates are going up, down, or staying put. What does all of this mean for your business planning?

What to watch as a business owner
Even though inflation dipped in March, the picture ahead is more uncertain. Here are a few ways to stay on the front foot:

1. Rising costs could squeeze margins
Now could be a good time to:

• Look into fixed-rate energy deals if they are available.
• Consider if there are any ways that you could be more energy efficient.
• Speak with suppliers or landlords about cost-sharing opportunities.

2. Customers may be price-sensitive
If your costs are rising, many of your customers will be feeling the squeeze too. A smart pricing strategy will help you stay competitive without undercutting your margins:

• Consider tiered pricing or flexible packages. 
• Emphasise the value of your products or services rather than just the price.
• Keep communication open with your customer base so you understand their needs. This will help you to know how to respond. 

3. Interest rates remain a key factor
While there was an expectation that interest rates would see more cuts during 2025, this is now uncertain. Therefore, you should continue to monitor your borrowing costs, and factor potential interest rate changes into any investment decisions you are planning.

4. Staffing and wages
With living costs staying high, staff who did not receive the increase for minimum wage workers may begin looking for pay rises. If you're not in a position to match inflation, consider other ways you can support and keep your staff. For instance, you may be able to:

• Offer flexible hours or hybrid working options.
• Provide training or upskilling opportunities. 
• Show appreciation through small perks or recognition. 

Stay agile, stay informed
While the dip in March inflation is welcome, it’s not a signal that everything’s cooling down. With inflation likely to rise again, it's wise to build flexibility into your business plans.

Keep an eye on the Bank of England’s interest rate decision on 8 May. It could offer more clues about where the economy - and your costs - are headed next.

If you'd like tailored advice for your business or help adapting your plans, just shout. We’re here to help however we can.

Over 1,000 Company Directors Banned
The Insolvency Service has published its latest enforcement outcomes report for 2024-25, and it carries an important message for business owners. More than 1,000 company directors were disqualified over the year, with the majority of cases linked to abuse of Covid support loans.

Of the 1,036 directors banned, 736 were disqualified for misusing Bounce Back Loans. The average length of a ban was eight years. The report also showed that there have been 131 bankruptcy restriction orders.

Misuse of the Bounceback Loan scheme - such as inflating turnover to claim more money, or using funds for non-business purposes - has been a key focus of enforcement efforts.

Other reasons for disqualification included failing to maintain adequate accounting records, not paying tax or VAT owed to HMRC, and acting as a director while already banned.

When a director is disqualified, they are legally prohibited from managing, forming, or promoting any UK company, or any overseas company with links to the UK. This can last anywhere up to 15 years. Breaking a disqualification order can result in a fine or even a prison sentence.

Are there any take-home lessons?
For business owners, this report is a timely reminder of the responsibilities that come with being a director. Ensuring proper record-keeping, staying on top of taxes, and using financial support appropriately are not just good business practices - they’re legal obligations.

If you’re unsure about any aspect of your duties as a director, it’s always worth seeking advice early. A proactive approach can help avoid problems down the line and protect both your business and your reputation.

To view the Insolvency Service’s outcome report, see: https://www.gov.uk/government/publications/insolvency-service-enforcement-outcomes-management-information
 
Cuts to import tariffs
Amidst all the news about increased tariffs in the US, the UK government has announced a cut to zero in import tariffs on a range of 89 foreign products.
Plywood and plastics, as well as pasta, fruit juices, coconut oil, pine nuts, agave syrup and plant bulbs are all included. Construction, food and hospitality, and garden-related businesses could all benefit from reduced costs as a result.

The changes relate to goods where the UK Global Tariff applies, i.e. where the goods entering the UK don’t qualify for preferential treatment under, for example, a free trade agreement. The government anticipates that businesses will save at least £17 million because of these cuts.

The suspension to the import tariffs on these products will last until July 2027.

See: https://www.gov.uk/government/news/government-cuts-price-of-everyday-items-and-summer-essentials
 
£45 Million Tech Boost Aims to Help Farmers Increase Profits and Productivity
Farmers across the UK could soon benefit from a major new investment in agricultural technology, with the government announcing £45.6 million in funding to support innovations that boost food production, improve profitability, and protect the natural environment.

Announced on 14 April, the funding will support a wide range of technologies. These include fruit-picking robots, livestock health monitoring systems, and irrigation systems that maximise water use. The goal is to move these solutions from research labs to real farms, making them accessible and practical for everyday farming operations.
 
Support at every stage of development
The funding is spread across three special funds and will help at different stages of innovation, from early research to on-farm trials.

The first opportunity is the new Accelerating Development of Practices and Technologies (ADOPT) competition, opening on 28 April. This programme will commit up to £20.6 million in 2025-26 to help farmers test new technologies on their own farms. It's aimed at bridging the gap between new ideas and real-world applications.

To support farmers through the process, the ADOPT Support Hub will provide guidance and a £2,500 support grant to help with applications and trial setup.

Two more competitions open in May
From 5 May, two further funding rounds will launch under the Farming Innovation Programme (FIP).

The first will provide £12.5 million for collaborative research into reducing emissions from farms, supporting sustainability and climate resilience. The second also offers £12.5 million and will fund research into precision-bred crops to improve yields, reduce the need for chemical inputs, and strengthen resistance to disease. This builds on the opportunities created by the Genetic Technology (Precision Breeding) Act 2023.

What this means for farmers
These funding opportunities could help farms of all sizes adopt technology that improves efficiency, reduces emissions, or opens up new income streams.

The ADOPT Support Hub can be found here.
 
Delay to Consultation on the Tax Treatment of Predevelopment Costs
At Autumn Budget 2024, we were promised a consultation on the tax treatment of predevelopment costs. However, following the Court of Appeal’s decision on a recent case, the government is postponing publication of the consultation while it considers the implications of the decision.

The case, which is known as Orsted West of Duddon Sands (UK) Ltd and others v HMRC [2025] EWCA Civ 279, marked a victory for taxpayers and provides clarity on how capital allowances are treated on pre-construction development costs.

Capital allowances are a form of tax relief that businesses can claim when they pay out on capital expenditures. This particular case arose because of a capital allowances claim for expenditure on pre-construction development work in the years before the resulting buildings became operational. H M Revenue & Customs (HMRC) contended that this expenditure did not fit within the legal definition of what can qualify as a capital allowance and so denied the claim.

The Court of Appeal, however ruled that HMRC’s view was too narrow and upheld the taxpayer’s claim. The Court developed a ‘three-limb’ test for whether expenditure can qualify, as follows:

1. The taxpayer can demonstrate that the expenditure informed the design or installation of the asset in question.
2. The asset in question was actually acquired or constructed.
3. The expenditure wasn’t because of the particular circumstances of the taxpayer. This would, for instance, rule out financing costs.

The decision meant that costs for environmental impact assessments, geophysical and geotechnical studies and other design and installation work could qualify for capital allowances.

Is this the end of matters?
Possibly not. HMRC may appeal the case to the Supreme Court. However, the government has committed to looking at how to provide greater clarity on what qualifies for different capital allowances and simplifying the law and tax treatment of predevelopment costs.

Therefore, once the government has digested the results of the decision, they may move to adjust the legislation rather than continue to pursue the matter through the courts.

If you need any advice on how the appeal decision may affect predevelopment expenditure you have made or are planning to make, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/tax-treatment-of-predevelopment-costs-update-on-consultation

Do You Employ Workers in the Gig Economy?
If so, there are now new legal requirements to carry out checks confirming that anyone working in their name is eligible to work in the UK. Previously, these requirements did not apply to ‘gig economy’ and zero-hour workers.

The gig economy refers to short-term, flexible or freelance jobs where workers are paid per “gig” or task, rather than receiving a regular salary or long-term employment contract. These arrangements are often popular in the construction, food delivery, beauty salon and courier service sectors.

Businesses hiring workers in the gig economy will need to ensure they have systems in place to check the status of workers they hire. Failing to comply could result in fines of up to £60,000 per worker, business closures, director disqualifications and potential prison sentences of up to 5 years.

See: https://www.gov.uk/government/news/crackdown-on-illegal-working-and-rogue-employers-in-gig-economy
 
Personal Meat Import Ban Now Extended to Cover All EU Countries
As concern over foot and mouth disease (FMD) cases in Europe continues to grow, travellers are now banned from bringing cattle, sheep, goat and pig meat as well as dairy products from EU countries into Great Britain for personal use.

The ban includes sandwiches, cheese, cured meats, raw meats and milk whether packed or packaged or bought at duty free.
The new restrictions extend those already in place for personal imports from Germany, Hungary, Slovakia and Austria because of outbreaks in those countries.

While FMD does not pose a risk to humans, the effect on animals and the agricultural sector can be significant.

The government as confirmed that there are currently no cases of FMD in the UK, however the UK Chief Veterinary Officer is urging livestock keepers to remain vigilant.

See: https://www.gov.uk/government/news/government-extends-ban-on-personal-meat-imports-to-protect-farmers-from-foot-and-mouth

11th April 2025 – Hillmans Weekly Update

Welcome to our latest round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!

Have a great weekend.

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

US Tariff Increases: 7 Concerns and What You Can Do About Them
The US tariff saga continues to rumble on, and global markets have been tumbling. Retaliations - repeated in some cases - between certain countries and the US give more force to a growing global trade dispute.

Even though the UK’s main rate is a relatively low 10% (25% on British cars) - and you might not trade with the US at all - there is growing concern about what this means for global supply chains, pricing and business confidence.

What could this all mean for your business? Read on as we look at 7 areas of concern and what you can do to protect your business.

1. Confidence is Falling – And That Could Hit Your Sales
Financial markets have dropped and business confidence has taken a knock. When uncertainty rises, both consumers and businesses tend to hold off on spending – especially on goods and services they see as non-essential.

Even if you don’t sell internationally, your customers might pull back. That could mean fewer orders, delayed projects, or reduced repeat business – especially if your product or service is considered a “nice-to-have.”

What you can do:

• Focus on customer retention. You could consider offering flexible options, smaller packages or promotions that keep work flowing. Staying visible and keeping communication open are also key.
• Think creatively about how you present the value of your business to customers, so that they see your products or services as something they can’t do without, even in lean times.
• Review your sales mix: do you rely heavily on one or two customers or sectors that might be vulnerable?

Tip: Review your last 6 months sales. Are there any signs of slowing down? If so, look at how to build a simple cash buffer now or explore ways to even out income.

2. Costs May Rise
Tariffs add costs all along the supply chain. Even if you buy from UK suppliers, they may be importing parts, packaging or materials that are now more expensive.

Your costs could rise quietly. Even if the increases are small, they can add up over time and erode your margins.

What you can do:

• Look at setting up a cost tracker for the things you buy and monitor it on a monthly basis. Just a spreadsheet can do the job – if you need help we can help you to set this up.
• Then, review your profit margins and consider whether you need to adjust your own pricing.

Tip: If you haven’t done a cost review in the last six months, now’s the time. We can help you to compare supplier prices or look at your gross margin trends.

3. Understand How Your Customers Are Being Affected
Even if you are not directly affected, your customers might be. You might begin to notice changes in order sizes, slower repeat business, or requests for longer payment terms. However, without understanding why this is happening, it’s hard to respond effectively.

What you can do:

• Talk to your top clients. Ask them how their business is doing, what challenges they’re facing and whether they’re seeing cost increases or changes in demand.
• You can then use that insight to anticipate trends, adjust what you are offering to customers or support them more proactively.

Tip: Consider doing a quick check-in with your top 5-10 customers this month – a short email or phone call can uncover valuable information and strengthen the relationship at the same time.

4. You May Need to Rethink Supplier Relationships
Your suppliers may be facing pressure from tariffs, transport delays or their own cost increases. So, you may see price hikes, but also product shortages or slower delivery times as your suppliers struggle to maintain reliability.

What you can do:

• Check your top 3-5 suppliers. Where do they source from? Is that likely to create an issue for them and you?
• You could also build a back-up plan in case one supplier becomes unavailable or unaffordable.

Tip: Don’t wait for a crisis. Reach out to your key suppliers now and ask if they expect any disruption or price changes in the next 3-6 months.

5. You Might Be Affected by What Happens to Other Countries
The US has sharply increased tariffs on China and other major economies and some are retaliating. While changes to US tariffs don’t directly impact on the UK’s own trade relationships with other countries, the potential upshot is that global supply chains could be redrawn.

That may mean some new opportunities for UK businesses, but it could also mean that products become harder or more expensive to get.

What you can do:

• Firstly, look at your stock and equipment. Are there any items you’d struggle to replace quickly?
• If you’re planning to invest in equipment, could there be any value in doing it now before prices rise further?

Tip: If you import or rely on imported goods – even indirectly – it may be worth speaking to your supplier about forward ordering or locking in current prices.

6. The UK May Respond Too – Which Could Shift Things Again
The UK government is currently consulting on whether to introduce retaliatory tariffs, with the consultation not due to end until 1 May 2025. It is under pressure to act and if it does, that could shift the landscape again, which could affect prices, sourcing options and trade relationships.

This could mean more changes to the cost or availability of goods, particularly if you rely on imports. But it could also create new opportunities – especially if UK-made goods become more competitive or if others pull out of markets you could move into.

What you can do:

• Be cautious about entering long-term supplier contracts if there’s a risk of tariff-related changes in the coming months.
• Look out for new local suppliers who may become more competitive if tariffs rise.
• Explore whether any competitors are stepping back from markets or products you could step into.
• If you manufacture or source items in the UK, consider whether the changing conditions could allow you to promote “locally made” or tariff-free products more effectively.

Tip: Uncertainty often leads to hesitation. If you’re able to act quickly, you might spot growth opportunities others miss. Stay informed and curious.

7. Stay Focused on What You Can Control
There’s a lot of noise and uncertainty and with so much change happening globally, it’s easy to feel like your business is at the mercy of outside forces. While you can’t control tariff decisions or market reactions, you can stay proactive in how you respond.

Businesses that stay alert and adaptable tend to handle economic shocks better and will often come out stronger on the other side.

What you can do:

• Review your cashflow and key costs regularly. Even a simple monthly check-in can help you spot trends early.
• Keep communication open with customers and suppliers so you’re not surprised by any changes.
• Take time to assess where your business is most exposed, whether that’s in pricing, sourcing of materials or services, or customer demand.

Tip: Uncertainty is a good time to revisit the basics – know what you spend, what you earn, and how long you could keep going if things got tight. Even simple tracking can give you clarity and confidence.

Final word
While the tariffs may feel far away, their effects could come closer to home quickly. So, it’s an important time to pay attention to what is happening and any early indications that your business could be affected. We are here to help you stay ahead of the curve and make informed decisions.

Do you need help spotting the risks (or opportunities) for your business? Get in touch and let’s talk it through.
 
New Companies House ID Checks: What They Mean for You
From 8 April 2025, Companies House has launched a new identity verification system as part of changes under the Economic Crime and Corporate Transparency Act 2023.

If you’re a director, person with significant control (PSC), or someone who files on behalf of a company, this applies to you.

What’s Changing
Everyone involved in setting up or running a UK company will soon need to verify their identity, either:

• Through their GOV.UK One Login, or 
• Via a registered Authorised Corporate Service Provider (ACSP) - like us.

ACSPs have been able to register since 18 March 2025 with individuals being able to start verifying their identity via GOV.UK from 8 April 2025.

While verification is currently voluntary, it will become a legal requirement later in the year, likely autumn 2025. For existing companies, it will be built into the confirmation statement process.

How We Can Help
As your accountant and an approved ACSP, we can handle the identity verification for you. That means:

• No need to manage GOV.UK logins or extra admin. 
• We’ll complete the checks and ensure they’re properly recorded. 
• You’ll be compliant ahead of the deadline.

This is especially useful if your company has multiple directors or PSCs.

If we already look after your company filings, we’ll be building ID checks into our work over the next few months.

If you currently look after your own company filings and would like help, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/companies-house-starts-to-verify-identities
 
Stress Awareness Month: Tackle Workplace Stress
During April, the Health and Safety Executive’s (HSE) Working Minds campaign is inviting employers to follow five simple steps that can help to prevent and reduce workplace stress.

The Working Minds campaign involves 5 Rs:

• Reach out and have conversations.
• Recognised the signs and causes of stress.
• Respond to any risks you have identified.
• Reflect on actions you’ve agreed and taken.
• Make it Routine.

Employers are being encouraged to focus on one R for each week of the month.

The Working Minds campaign is designed to help employers meet their legal duty to prevent work related stress and support good mental health in the workplace. It includes a range of tools that includes free online learning, Talking Toolkits, risk assessment templates and examples.

See: https://press.hse.gov.uk/2025/04/02/april-is-stress-awareness-month-tackle-stress-in-the-workplace-with-five-steps-in-five-weeks-2
 
New neonatal care law now in force
The Neonatal Care (Leave and Pay) Act 2023 came into force on 6 April 2025. This law provides a new leave and pay entitlement for parents with a baby in neonatal care.

Depending on how long their baby is in neonatal care, parents will now have the right to have up to 12 weeks leave and pay. This right is in addition to other time off and pay.

Who is the leave and pay available to?
The time off is available to the birth parent, father or partner, spouse, civil partner or adoptive parent.

When can the leave be taken?
A parent with a baby up to 28 days old that is admitted to neonatal care is eligible for up to 12 weeks leave. The leave must be taken within 68 weeks of the baby’s birth.

How do parents need to inform their employer?
Parents can self-declare and should contact their workplace HR representative to go through the specifics of their personal situation.

Acas has provided some helpful guidance on the new law, which can be found here.

Dan Ellis, Acas Interim Chief Executive, said: “Becoming new parents can be an incredibly stressful time, especially if their baby requires care in hospital for a while. Any employee that requires time off to help care for their child in these circumstances should be treated with compassion and understanding. Our advice provides employers and managers with guidance on how they can support staff members who need to take neonatal care leave.”

See: https://www.acas.org.uk/acas-publishes-new-guidance-on-neonatal-care-leave
 
Why Seeking Help When Your Business Faces Insolvency is the Right Move
Running a business comes with financial risks, and sometimes, companies struggle to stay afloat. While facing insolvency is undoubtedly stressful, seeking professional help early can prevent serious legal consequences.

A recent case involving a Cheshire builder highlights the risks of mishandling insolvency and why business owners should act responsibly when financial difficulties arise.

A Cautionary Tale: Builder Faces Sentence for Misconduct
Gary Roberts, a builder from Cheshire, was recently sentenced to six months in prison, suspended for two years, after fraudulent behaviour while his company, GR Developments 1 Ltd, was in financial trouble.

In 2021, he took £17,000 from a customer for home improvements, knowing his company was insolvent, and failed to complete the work. He also paid himself over £11,000 from company funds at a time when the business was entering liquidation.

His actions left the homeowner out of pocket and living in a home with its back exposed to the elements. He has been banned from serving as a company director for 10 years and has been ordered to pay more than £10,000 in compensation to his victim.

The Insolvency Service emphasised the seriousness of his misconduct, noting that businesses have a duty to act responsibly even when facing financial difficulties.

Why Seeking Help is Crucial
While seeking help may seem embarrassing, it can bring benefits that may even include saving the business from going under. Here are some key benefits.

1. Avoid Legal Consequences – Directors who continue trading or remove assets when they know a company is insolvent risk severe penalties, including disqualification, fines, and even imprisonment.
   
2. Protect Your Reputation – Mishandling insolvency can cause lasting damage to your professional reputation, making it difficult to secure future business opportunities or financial support. 
3. Maximise Financial Options – Consulting insolvency professionals early can help explore options like restructuring, administration, or voluntary liquidation, potentially saving the business or reducing losses. 
4. Minimise Losses for Creditors and Customers – Acting responsibly ensures that customers, suppliers, and creditors are treated fairly, reducing financial harm to others. 
5. Ensure Compliance with the Law – Insolvency laws exist to protect businesses and the wider economy. Seeking expert advice ensures you follow the correct legal processes and avoid doing something, even unintentionally, that creates problems for you later.

Conclusion
Facing insolvency is challenging, but acting responsibly can protect you, your business, and your stakeholders. The case of Gary Roberts serves as a reminder that failing to handle insolvency properly can lead to severe consequences.

If you are concerned that your business may be in financial trouble, don’t wait - give us a call for a confidential, no blame discussion that will help you to navigate the situation legally and ethically.

See: https://www.gov.uk/government/news/cheshire-builder-sentenced-after-taking-payments-from-customer-for-work-he-did-not-complete

Post Office Moving to Full Franchising
The Post Office has announced plans to transfer its last 108 company-run branches to franchise partners, completing its move to a fully franchised network.

The change, due by autumn (subject to government funding), affects around 1,000 staff, who will be offered roles with new owners or voluntary redundancy.
Post Office chairman Nigel Railton has said that the 108 branches will stay in place or relocate nearby.

New franchisees may include Tesco, Ryman, and independent sub-postmasters, which may bring Post Office counters into new retail settings.

Concerns and Reactions
The Communication Workers Union (CWU) has criticised the plan as ‘privatisation by the back door’ and called for government intervention. They argue that franchising has already led to a decline in service levels in some areas.

What’s Next
The Post Office says franchising will help save £40m and improve postmaster pay by up to 10%, while still meeting its commitment to maintain at least 11,500 branches across the UK. Local consultation on branch changes is expected in the coming weeks.

Tip for business owners: If your business relies on nearby Post Office services, keep an eye out for local updates and consider alternative access points or digital solutions if service levels change.

See: https://www.bbc.co.uk/news/articles/cd02nr0y0rjo
 
Could the Home Building Fund Help You?
Homes England has a Home Building Fund available to help housebuilders based in England that are struggling to access finance from traditional lenders.
Whether the homes are destined for sale or rent, the Fund can provide loans that are tailored to your business’ circumstances and can be used to pay for development costs.

In order to qualify for help, you need to:

• Be a UK-registered corporate entity or limited liability partnership.
• Be planning to build 5 or more homes on a site in England.
• Have outline planning permission in place on land that you have a controlling interest in.

To learn more about the Fund, see: https://www.gov.uk/guidance/levelling-up-home-building-fund-development-finance