19th June 2026 – 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

Companies House to bring in changes to accounts filing from April 2028
Companies House will introduce changes to accounts filing due to governmental reforms under the Economic Crime and Corporate Transparency Act 2023 (ECCT Act 2023).

The changes will now come into effect from April 2028, rather than April 2027, to give companies more time to prepare.

The reforms include requiring small companies and micro entities to file profit and loss accounts with Companies House as other companies do. They will have the option to opt out of publishing this information on the public register.

As with Making Tax Digital, companies will be required to file annual accounts via commercial software.

The new rules will introduce additional limitations, including removing the option for companies to file abridged accounts and reducing the number of times a company can shorten its accounting reference period. There will also be a strengthened eligibility statement for all companies claiming an audit exemption and a requirement that the component parts of the accounts and reports be filed together.

Companies House will contact all companies via their registered email address to tell them about these changes and signpost available guidance.

Although transparency and data clarity were prime factors in the planned changes, allowing small companies and micro-entities to opt out of publishing their filed profit and loss accounts protects their privacy and mitigates commercial risks.

Software-only accounts filing
From April 2028, Companies House will require all UK-registered companies to file their accounts in Inline eXtensible Business Reporting Language (iXBRL) format by using commercial software. This applies to companies that file their own accounts and those using third-party agents or accountants to file their annual accounts. Web and paper-based filing systems will be closed for account filings.

The full details of changes will be confirmed in due course but are likely to increase the operating costs of small businesses.

To select a software provider, Companies House recommends using the interactive list of software providers on GOV.UK. 

https://www.gov.uk/software-company-accounts

AI chatbot for government queries
The government has made a new Artificial Intelligence (AI) tool available on the GOV.UK app called GOV.UK Chat. It draws on official government guidance, including tax, to answer questions. 

According to the government press release, GOV.UK Chat is an Artificial Intelligence (AI) chatbot designed for people to ask questions in plain language and receive instant, clear and 'reliable' answers drawn from official government information. The aim is to reduce demand for helpline services and speed up searches for information on the GOV.UK website.

Users of the AI chatbot will be able to get answers on a range of subjects, including tax. It is important to note GOV.UK Chat has limitations. While it uses HMRC guidance on the GOV.UK website to source answers to tax questions, it does not source information from HMRC's manuals.

This makes it unlikely to be useful beyond answering basic tax questions.

Businesses should also be aware that GOV.UK Chat is only available on the GOV.UK app. This means any use by your staff that is related to your business will likely be on their personal devices using personal logins, which could raise privacy and data security concerns.

Additionally, as with any AI tool, the answers given may not be accurate or complete and 'hallucinations' can cause AI tools to present incorrect responses as fact.
  
Snapshot of entry-level hiring in the UK
LinkedIn and the AI & the Future of Work Unit are partnering to investigate the structural forces shaping labour market outcomes. The initial brief provides a snapshot of hiring data for entry-level and more senior positions in the UK.

There is increasing concern that opportunities for those entering the workforce are narrowing. Since entry-level hiring shapes the long-run composition of the workforce, it will affect the supply of skilled workers for years to come.

Some of the early conclusions may come as a surprise. Entry-level hiring is falling in step with the broader market. Averaged across industries, the entry-level trajectory closely mirrors all senior roles.

Since the post-pandemic hiring surge, the UK’s hiring rate has turned negative. As of April 2026, it sits at minus 14% year-over-year, with every tracked industry in decline. However, not all entry-level roles are declining. Of the 38 UK entry-level occupations above LinkedIn’s minimum hiring threshold in April 2026, 30 are declining with only eight growing. 

The analysis found that information-processing roles are weakening while relational roles are growing. The disconnect is not about whether candidates are skilled, but about whether they are skilled in the ways employers currently demand.

The steepest declines are concentrated in information-processing and professional roles:

• Software Engineer (–27%).
• Graphic Designer (–28%).
• Accountant (–29%).
• Product Manager (–24%).
• Data Analyst (–15%).
• Legal Assistant (–14%).
• Data Engineer (–11%).

The strongest growth is in sales and customer-facing roles: Retail Assistant (+25%), Sales Development Representative (+17%) and Business Development Representative (+16%).

The full report can be found at: https://www.gov.uk/government/publications/entry-level-hiring-in-the-uk-a-snapshot/a-snapshot-of-entry-level-hiring-in-the-uk
 
Solving fundamental challenges in your business
Most business owners will face a moment when something in the business feels persistently, stubbornly wrong. Perhaps sales are stalling, staff keep leaving or cash always seems tight.

These could be described as fundamental challenges. These challenges generally don’t go away on their own and can erode the business if not addressed. How, then, can a fundamental challenge in your business be solved? Let us take you through a method that we have found to be effective.

Step 1 - Identify the real problem
Since you want to avoid treating a symptom rather than the cause, it is worth spending time working out what the real problem is. For example, high staff turnover might seem like a case of not being able to recruit the right people, but the root cause might be unclear role expectations or a poor working environment.

Ask 'why' repeatedly until you get to the root of the problem. A useful way to approach this is to write down the problem in one clear sentence, then challenge each assumption in that sentence.

Step 2 - Define what the problem means to the business
Once you have identified the root problem, the next step is to work out how it's affecting the business. For instance, you could consider:

• What results are you not getting in the business because of this problem? For example, if sales performance is inconsistent and targets are being missed, this is stalling the growth of your business.
• What is the financial effect of not dealing with the problem? That could include the difference to your bottom line and whether some of the business’s borrowing is unnecessary or the cost of lost opportunities.
• How is the problem distracting the business from its long-term objectives? Perhaps there is no time to do meaningful strategic work because too much time is lost on firefighting.

This step helps you to quantify the effect the problem is having on your business. Sometimes it can reveal that a problem has less of an effect than you thought. It may be more productive to put effort in elsewhere. On the other hand, once you are clear how much a problem is holding your business back, you gain the motivation to sort it out.

This step also provides you with clarity. A vague problem stays unsolved, whereas when a problem and its impact are clearly defined, it can be tackled more easily.

Step 3 - Identify the system needed to solve the problem
Most fundamental business problems exist because a reliable system is absent. So, give some thought to what type of system, if introduced, would make it difficult for the problem to continue happening. For example:

• A people system involving set hiring criteria, an induction process and regular appraisals of staff turnover.
• A sales system with pipeline management, scripts or set processes and accountability for inconsistent revenue.
• A financial system including cash flow forecasting, debtor management and payment terms for cash flow problems.

Step 4 - Design the system
Having identified what type of system can help, the final step is to design that system so that it works for you.
You will need to decide who will design the system and what the main steps might be. What forms and documents will be needed to operate the system? Will any employee training be needed to get the system up and running effectively?
Conclusion

Fundamental challenges rarely solve themselves. If they are approached methodically, you can find the solution and help your business to continue growing.

If you would like a structured way to work through this process, we have put together a Fundamental Challenges Worksheet that guides you step-by-step, from pinpointing the real problem to mapping out the system that will solve it. To request your free copy, simply get in touch, and we will send it straight to you.
 
Delayed payments and rising costs see Britain’s builders tottering on collapse
A new report has concluded that late payments and rising costs are crippling Britain’s construction sector. Firms already in or at risk of financial distress make up more than eight in ten companies.

The report, Fixing the Foundations, was based on a survey of senior financial managers of property and building companies in the UK, and it found worrying trends.

• 93% report late payments from clients, contractors or supply chain partners, running an average of 53 days overdue.
• One in five (20%) firms now finance their own projects while they wait to be paid.
• 18% say late payments represent one of the single biggest threats to their business.

Rising costs are also a significant problem hitting profit margins. Inflation factors such as COVID, higher employment costs, the Russian invasion of Ukraine, the Middle East conflict and unpredictable US tariffs have not only increased costs but also delayed projects.

For contracts that were signed before climbing inflation, one in five companies have seen seriously reduced profitability and a further 18% say some have been delayed to the point of no longer being profitable at all.  

Another serious concern included supply chains, according to the report’s publisher, Menzies. 18% were not confident that their business could survive a single insolvency or change in the supply chain.

If you would like help with cash flow analysis and prompt payments, just let us know. We can look at your numbers together and ensure you are prepared.
 
New concierge service and visa scheme unveiled for UK’s fastest-growing firms
London Technology Week saw the government make a series of announcements aimed at supporting Britain’s high-growth business sectors.

The Chancellor, Rachel Reeves, announced two new schemes, including visa fee reimbursement for scale-ups in digital and tech, life sciences and clean energy and allowing the Office of Investment to offer fast-track referral for a UK Expansion Worker sponsor licence.

Both measures are intended to help high-potential international businesses set up in the UK more quickly and help UK firms attract exceptional skills, boosting competitiveness.

The measures come hand-in-hand with the Department for Business and Trade announcing a bespoke concierge service for Britain’s fastest-growing companies. Details of the new concierge service remain vague but entail offering support services that will be ‘joined up’.

The government is now looking for a private sector partner to run a pilot to strengthen the UK’s scale-up pipeline.

Targeting ‘the most promising scale-ups’, its official role will be tiered support to unlock deals, unblock delays and create jobs, growth and opportunity for businesses across the UK. It will be supported by the Global Talent Taskforce.

A year ago, the government invested £54 million in the launch of its Global Talent Taskforce, set up to attract ‘world-class’ researchers and their teams to the UK by covering relocation and research costs over five years.

Whether the challenge is regulation, access to finance, procurement, another barrier to growth or access to global talent, the new service’s role will be to ensure government acts quickly and decisively.
 
Small businesses get helping hand with strengthened debt advice
A new £4 million funding boost has been given to business debt advice services to help small businesses and the self-employed. The funding will go towards expanding access to expert support to help them get back on track, giving a leg up to an additional 16,000 businesses over the next three years.

This is building on the existing Business Debtline service run by the Money and Pensions Service.

The new funding will support the government’s Plan for Small Business that helps small businesses access the tools and support they need. This modernisation fund will allow them to spend more time helping their clients, particularly in complex cases that may need additional support.

11th June 2026 – 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

Why every growing business needs a business plan
You have the idea, the energy, and maybe even your first customers. So why slow down to write a business plan? It can seem like something banks ask for, but not something that really helps you run your business.

However, for small and growing businesses, a well-crafted plan is not red tape. It is one of the most practical tools you can have to grow your business.

A plan forces clarity
Day-to-day, running a business makes for a busy work life, and this can stop you from properly considering some vital questions. For instance, where exactly is your revenue coming from in 12 months? What happens if your biggest customer leaves? How much working capital do you need?

Writing a business plan forces you to answer these questions. The process of articulating your market, your competitors, your pricing and your costs often reveals assumptions you had not realised you were making. That clarity is very valuable and can make a significant difference to your day-to-day decision-making.

It aligns your team
As businesses grow, it becomes more difficult for everyone in the business to work towards the same goals.

A business plan gives everyone a shared reference point: the direction the business is going, what the goals are and the reasoning on key decisions.

A concise, well-structured plan covering your value proposition, target market, financial projections and key milestones can help your team to keep working towards common goals as the business expands.

It's essential for funding
Whether you're approaching a bank for a business loan, pitching to investors, or applying for a grant, a business plan is almost always required.

A strong plan lets lenders and investors know that you understand your business deeply. It allows you to show not just the opportunity, but also how you will manage the risks.

A clear, realistic, well-evidenced plan helps you to stand out. It also protects you. The discipline of putting forecasts and projections together often reveals whether funding is the right choice for your business.

It becomes your measuring stick
A business plan can be a living document that you return to regularly.

You can compare where you said you would be against where you are. For instance:

•    Are sales higher than you forecast? If so, you can find out why and do more of it.
•    Is it taking longer than expected to find customers? You have an early warning sign that you can act on.

Comparing your plan to reality allows it to become a management tool to help you make better decisions.

Start simple
When urgent tasks demand your attention each day, taking time to write a business plan may seem too much. However, for businesses that are serious about growing, the thinking needed to put together a business plan is never wasted. Start with a single page covering your business model, your target customers, your competitive advantage and your key financial assumptions. Build from there.

If you would like help to craft a business plan to enable your business to grow, why not ask us about our business plan workshop and practical tools? We would be happy to help you!

CMA finds petrol stations are not taking advantage of Middle East conflict
The Competition and Markets Authority (CMA) has released its latest monitoring report that looks at how the Middle East conflict is affecting fuel prices and assesses fuel margins.

The CMA’s analysis of April concludes that wholesale costs are the main reason for increases in prices and that retailers are not actively changing their pricing strategies to take advantage of the crisis. However, since supply conditions have improved, they note that they would be concerned if the current high prices persist.

A minority of retailers had increased their margins in March. The CMA has investigated this and determined that this was due to price increases by competitors and setting prices to mitigate supply constraints and inventory pressures.

However, the CMA has noted that average fuel margins remain at historically high levels and April saw a slight increase in them. The average is now 11.3 pence per litre, even though inventory and wholesale costs had somewhat stabilised by the end of April.

They conclude that competition in the retail fuel market is weak, with retailers adopting passive pricing policies rather than actively competing to win customers.

The CMA’s Chief Executive, Sarah Cardell, has pointed out that Fuel Finder can help drivers save up to £9 a tank. Fuel Finder allows navigation apps and websites to compare fuel prices so that drivers can locate cheaper petrol.

The CMA has said it will be paying close attention to whether improved supply conditions seen in April are reflected in retail prices. Its next update will be published in August and will consider how the market has developed through to the end of June.

Consultation launched on suspending tariffs on everyday essentials
The government has launched a consultation on suspending tariffs for 125 everyday essential items.

Garlic, avocados, mangoes, nectarines, vegetable oil, baked beans, baked goods, chocolate, sauces, and soft drinks all stand to benefit from targeted cuts to tariffs.

This move would follow the tariff suspension on a selection of agricultural and food products in April 2025.

A suspension of tariffs on certain fertilisers is also being considered to help farmers with rising fertiliser prices caused by the conflict.
The government is seeking views from businesses and other stakeholders on the potential impact of the proposals.

To see full details of the consultation and respond, see: https://www.gov.uk/government/consultations/call-for-input-on-goods-for-cost-of-living-tariff-suspensions/call-for-input-on-goods-for-cost-of-living-tariff-suspensions

Pressure selling tactics ruled to be illegal
A High Court order has confirmed that Emma Sleep, a mattress seller, behaved illegally and broke consumer law by using misleading countdown timers, false ‘high demand’ messages and ‘discount claims’.

Concerns were raised about Emma Sleep in 2022 over behaviour that misled shoppers and pressured them into making rushed purchases. This included the use of discounts, countdown clocks and other claims that urgency was required.

Following the Competition and Markets Authority’s (CMA) investigation, Emma Sleep was taken to court in 2024 for failing to take action to address the CMA’s concerns.

The company has now given binding undertakings to stop its illegal practices and ensure that future claims on its website are clear, accurate and do not create a false impression that people need to act quickly. Emma Sleep will also not be able to use ‘limited time’ sales or discounts where, after the deadline passes, a similar deal continues.

Hayley Fletcher, Senior Director of Consumer Protection at the CMA, said, “Businesses should be clear on what the law says: using fake countdown clocks on misleading ‘discounts’ to push people into spending is illegal.”

The case against Emma Sleep commenced prior to the CMA receiving new powers in April 2025 that allow it to decide independently whether the law has been broken, without having to go through courts. It can now fine companies up to 10% of their global turnover and secure refunds for affected customers.

The CMA is determined to use its powers and has launched investigations into 14 businesses to date. Its investigation of the AA resulted in £4.2 million in fines and £760,000 in customer refunds.

Emma Sleep faces a further trial starting in early June in relation to reference pricing. The CMA has indicated that it is keen to stamp out illegal practices that take advantage of consumers. Hayley Fletcher said, “Our message to businesses is simple - get your house in order or deal with the consequences.”

How can you make AI work effectively for your business?
Artificial Intelligence (AI) continues to make headlines. Anthropic, the company behind chatbot Claude, has filed paperwork in the US to go public. At its last valuation, the company was worth £717 billion.

AI news is not all positive, though. For example, Instagram’s AI chatbot is reported to have been tricked by hackers into gaining access to other people’s accounts.

The BBC ran a feature article last week showing that many businesses seem to be confused about how best to roll out AI.
In some cases, it seems firms are prioritising the use of AI just so that they can say they are embracing it. Other businesses are looking for staff to use AI but are not always clear on why they are adopting it and how they expect to benefit.

Businesses could be wasting effort and missing out on potential gains. What are some practical suggestions you could use in your business to make sure that AI is working for you?

1. Define your objectives
First, consider what your reason for using AI is.

Are you looking to increase profitability so that youcan sell the business? Are you trying to reduce time spent on low-value tasks to increase availability for higher-value tasks?

The clearer you are about why AI is important to your business, the more focused you will be in picking AI tools and promoting their use in ways that will benefit your business.

2. Map your processes before you automate them
Before reaching for an AI tool, document what your current processes actually look like.

If a process is already inefficient or poorly defined, using AI to automate it will often only produce inefficient or poor results faster.

Take time to map out the steps of a process and identify where the bottlenecks are. Then ask whether AI is the right solution or whether a simpler fix might do the job just as well.

3. Start small and measure everything
Pilot AI tools in one team or on one specific task rather than rolling them out across the whole business all at once.

Set clear criteria for what you are expecting to achieve before you begin and then evaluate honestly whether the results justify wider adoption.

What does success look like in concrete terms? Is it hours saved, error rates reduced or revenue generated? If you cannot measure it, you cannot know whether it is working.

4. Get staff onboard
If staff do not understand why a tool is being introduced or how to use it, it is unlikely they will use it effectively.

Anyone using AI tools should be given training on the ethics and risks of using AI, including its limitations. For instance, AI tools can exhibit bias and hallucinate information. They are also designed to flatter the user rather than provide objective information.

Involve staff early in identifying where AI could genuinely help them and make training practical and relevant to their actual role. Staff will be reluctant to use AI if they believe an AI tool is there to replace them, so be clear that the goal is to make their working lives easier, and not to replace them, if that is the case.

5. Assign clear ownership
Someone in the business needs to be responsible for your AI strategy. Without that role being looked after, tools get adopted inconsistently and they are not evaluated properly.

It does not need to be complicated. You might simply need to assign a senior person to take responsibility for reviewing what tools are in use, what they are costing and what they are achieving.
 
6. Review regularly and be willing to stop
AI tools, like any other business investment, should be reviewed periodically. What made sense 12 months ago may no longer be the best option.

Build in a regular review, quarterly or twice yearly, where you honestly assess which tools are earning their place and which are not.

7. Keep human judgment in the loop
AI can process information, generate options and surface patterns that humans might miss. What it cannot reliably do is exercise judgment, take accountability, or understand the nuances of your customer relationships and business culture.

Make sure that important decisions still involve a human who understands the context, and that your team knows when to trust the AI output and when to question it.

Conclusion
The businesses that will get the most from AI are not necessarily those that adopt it earliest or most enthusiastically. They are the ones that have the clearest view about what problem they are solving, the most disciplined about measuring results, and the most honest when something is not delivering.

Continue to treat AI as you would any other significant business investment, with curiosity, rigour and a healthy dose of scepticism. 

Amendments made to 2026 Supporting Small Business Relief
A letter to local authorities confirms amendments that the government has made to the eligibility criteria for Supporting Small Business Relief, a scheme available in England.

Eligibility for the relief has been aligned with the treatment of vacancy and reoccupation under Transitional Relief.

Under the updated rules, a change of ratepayer or a period of vacancy after 31 March 2026 will not affect eligibility for the Supporting Small Business Relief scheme. Eligibility will still be lost if the property becomes occupied by a charity or a Community Amateur Sports Club.

The change has been made to reflect the fact that the relief is intended to mitigate business rate bill increases as a result of revaluation. The change has been backdated to 1 April 2026.

5th June 2026 – 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
 
Introducing the TaxStore® Tax Hub
This week we would like to introduce you to our Tax Hub (https://www.taxstore.com/tax-hub), which provides practical tax guides, resources and information for individuals, landlords, sole traders and business owners.

Whether you are looking to understand your tax obligations, plan ahead for future tax bills or learn more about the reliefs and allowances available, the Tax Hub is designed to make tax simpler and easier to understand.

Featured Articles This Week

How Much Should You Save for Tax?
A practical guide explaining how much individuals, sole traders and business owners may wish to set aside for future tax liabilities, helping to avoid unexpected tax bills and improve financial planning.

Read the article here:
https://www.taxstore.com/how-much-should-you-save-for-tax

Can You Claim for a Home Office to Save Tax?
An introduction to the tax reliefs that may be available when working from home, including the different methods of claiming home office expenses and the key points to consider.
https://www.taxstore.com/can-you-claim-for-a-home-office-to-save-tax

Read the article here:
https://www.taxstore.com/can-you-claim-for-a-home-office-to-save-tax

New tax articles and resources are added regularly, so please bookmark the Tax Hub and check back for the latest tax guides, planning tips and practical advice.

You can explore the wider TaxStore® platform here:
https://www.taxstore.com

GREAT BRITISH SUMMER SAVINGS
On 21 May 2026, the Chancellor, Rachel Reeves MP, announced ‘Great British Summer Savings’, a package of measures aimed at cutting costs for families, particularly those with children. 

The following two measures are of particular importance to businesses:

TAX-FREE MILEAGE RATES
A 10p per mile increase in tax free mileage rates will apply in the 2026/27 tax year, backdated to April 2026. The increase relates to the amount per business mile driven that attracts tax relief and affects both employees and the self-employed. HMRC’s mileage rates guidance has been updated as follows:

For the self-employed:
Vehicle: Cars and goods vehicles – first 10,000 miles
Flat rate per mile for 2026/27: 55p
Flat rate per mile before 6 April 2026: 45p

Vehicle: Cars and goods vehicles – after 10,000 miles
Flat rate per mile for 2026/27: 25p
Flat rate per mile before 6 April 2026: 25p

Vehicle: Motorbikes
Flat rate per mile for 2026/27: 24p
Flat rate per mile before 6 April 2026: 24p

For employees:
Vehicle: Cars and vans – first 10,000 miles
Flat rate per mile for 2026/27: 55p
Flat rate per mile before 6 April 2026: 45p

Vehicle: Cars and vans – after 10,000 miles
Flat rate per mile for 2026/27: 25p
Flat rate per mile before 6 April 2026: 25p

Vehicle: Motorbikes
Flat rate per mile for 2026/27: 24p
Flat rate per mile before 6 April 2026: 24p

Vehicle: Bicycles
Flat rate per mile for 2026/27: 20p
Flat rate per mile before 6 April 2026: 20p

Note that only the rate for cars and vans for the first 10,000 miles has increased; other rates are unchanged.

TEMPORARY REDUCED RATE OF VAT
From 25 June to 1 September 2026, the 5% reduced rate of VAT will apply to the following eligible activities:

•    Children’s meals. To qualify for the reduced rating, the meal:
•    Must be held out for sale as a meal for children.
•    Must be a supply of catering by a restaurant, café or similar establishment and consumed on the premises.
•    Must not be takeaway food.
•    Can include drinks.
•    Children’s cinema, theatre, show and concert admissions tickets.
•    Admission to qualifying attractions that are suitable for children. This includes amusement parks, museums, heritage sites, zoos and soft play areas. The reduced rate applies to all admissions, regardless of the customer’s age.

If you’d like to know more about these measures please get in touch - we can discuss how they may affect you and your business.

DIVIDENDS ON THE 2025/26 SELF ASSESSMENT TAX RETURN 
For taxpayers required to submit a self assessment tax return, new boxes on the 2025/26 employment page form will require the following information for each directorship held by an individual:

•    If the company was a close company;
•    The company’s name and registration number;
•    Dividends the taxpayer received from the close company during the tax year; and
•    The highest percentage shareholding that the taxpayer held during the tax year.

A penalty of £60 may apply for failing to provide the required information. It is therefore important that you notify us of each directorship that you held during the year. In light of HMRC’s recent scrutiny of close company dividends, it will be wise to make sure that dividend procedures are tight, lawful and compliant. Please do contact us if we can assist in this regard.

RESEARCH & DEVELOPMENT: AN UPDATE 
NEW R&D TARGETED ADVANCE ASSURANCE SCHEME
HMRC have introduced a targeted advance assurance service for Research and Development (R&D) tax relief claims. The service, which is a pilot, aims to provide Small and Medium-sized Enterprises (SMEs) with clarity on complex or high-risk areas before a claim is made.

The new targeted scheme is open to any SME wishing to obtain HMRC’s assurance in any of the following areas:

•    Whether the project meets the definition of R&D for tax purposes.
•    Whether overseas expenditure qualifies for relief.
•    Whether the company can claim R&D relief where work is contracted by one company to another.
•    Whether the company qualifies for exemption from the PAYE and National Insurance contributions cap.

The scheme will run alongside the existing full claim advance assurance service, which is only available to first-time claimants.

R&D CLAIMS AT THE FIRST TIER TRIBUNAL
A recent First Tier Tribunal case (Beer Express Ltd v HMRC) demonstrates the pitfalls involved in overreliance on R&D advisers. The FTT’s task was to answer a straightforward question: had Beer Express proved that its projects met the BEIS Guidelines for R&D?
Under those guidelines, qualifying R&D must aim to achieve an advance in science or technology by resolving genuine technological uncertainty - not merely improving a company’s own processes.

The Tribunal found there was no clear explanation of the technological baseline, no defined advance, and no identified uncertainties for any of the projects. 

Instead, the supporting reports were described as vague and unconvincing, offering little more than high-level descriptions.

Equally damaging was the absence of input from a “competent professional” - someone with the technical expertise to explain why the work qualified. Beer Express’s director was found to be honest and credible, but lacked the detailed technical knowledge required.

When HMRC challenged the claims, the adviser who had prepared them had disappeared, leaving Beer Express to defend a case it could not fully explain. 

The FTT dismissed the appeal in full, concluding that Beer Express had failed to discharge the burden of proof required to access R&D relief.

In recent years, HMRC have vastly increased their scrutiny of R&D claims, so it is important to use advisers who are competent in this area.

EMPLOYMENT STATUS OF PROFESSIONAL FOOTBALL MATCH OFFICIALS 
In Professional Game Match Officials Ltd (PGMOL) v HMRC, the First-tier Tribunal (FTT) concluded that football referees engaged by PGMOL were not employees for tax purposes. The decision followed a long procedural history, including appeals up to the Supreme Court, and focused on the correct application of employment status principles.

PGMOL provides referees for professional football matches. HMRC argued that match officials should be treated as employees, meaning that PAYE and National Insurance contributions should have been applied to match fees. 

The case had already been considered by multiple courts. The Supreme Court confirmed that when a referee accepted a match appointment, there was sufficient mutuality of obligation and a framework of control. However, it sent the case back to the FTT to determine the overall employment status using a comprehensive test.

The FTT considered the overall relationship between PGMOL and the referees. Key findings included:

•    No ongoing obligation: PGMOL was not required to offer matches, and referees were not required to accept them. 
•    High level of flexibility: Referees could decline appointments or withdraw without sanction. 
•    Short, discrete engagements: Each match appointment was a separate, limited arrangement. 
•    Limited integration: Refereeing was generally undertaken alongside other full-time work. 

The FTT concluded that, viewed as a whole, the relationship lacked the characteristics of employment. The referees were self-employed, and therefore PGMOL was not required to operate PAYE or account for employer National Insurance on the payments made to them.

This case shows the numerous factors that must be considered when determining whether a worker is employed or self-employed. 
If you have any questions regarding your employment status, or of the status of individuals you engage, please get in touch – we’d be happy to help.