4th July 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

EXTRACTING FUNDS FROM AN OWNER-MANAGED COMPANY
 
“What’s the most tax-efficient way to take funds out of my company?” is perhaps the most common question put to accountants by their owner-managed company clients. The answer used to be simple: “Take a salary up to the level of the personal allowance and take the rest as a dividend”. Unfortunately, we are no longer able to give such a straightforward, one-size-fits-all answer. Put simply, the most honest answer we can give without performing individualised calculations is “It depends”!

If the director(s) need to take a market rate salary for commercial reasons (including obtaining finance in their own name or for making personal pension contributions), this should be a priority.
 
Individual calculations need to be carried out to arrive at the optimal profit extraction strategy for all but the most straightforward businesses. This is because the optimal extraction method will depend on a range of factors, including but not limited to:

• The company’s profit level, which determines its rate of corporation tax;
• The number of director/shareholders;
• The available distributable reserves in the company;
• The director/shareholder’s other income, which determines their marginal rate of income tax and the amount of Personal Allowance available to them.
• The director/shareholder’s age - those aged 66 or over do not pay employees National Insurance Contributions;
• The availability of the £10,500 Employment Allowance (EA) - the company might not qualify for EA or it might already be utilised by other employees’ salaries;
• Possible applicability of National Minimum/Living Wage legislation.

Consideration then needs to be given to the cash requirements of the director/shareholders. Extracting all available funds from the company is likely to incur a higher tax cost than extracting a set figure that is sufficient to cover living costs. Funds retained in the company will not be subject to income tax until they are taken out of the company by the director/shareholders. Alternatively, funds may be retained in the company with a view to realising a capital gain on the eventual sale or liquidation/striking off of the company. The capital gain will be subject to Capital Gains Tax and could be eligible for Business Asset Disposal Relief.
 
For many director/shareholders, the ‘classic’ extraction model of taking a salary equal to the £12,570 personal allowance, followed by dividends sufficient to cover their living requirements, is likely to be a tax efficient strategy, however, as can be seen above, there are many factors that may change the position. Individualised advice may be necessary - if you wish to discuss your profit extraction plan with us please get in touch – we’d be happy to help!

CHILDCARE ACCOUNTS CAN SUBSIDISE SUMMER CHILDCARE COSTS
If you have children under 12 who attend a nursery, after school club, playscheme or childminder, or you are considering sending them to a summer camp, you should think about setting up a tax-free childcare account. The government adds 25% to the amounts that you save in the account - up to £2,000 for each child - so £8,000 is topped up to £10,000 (a higher amount applies for disabled children).

The account is then used to pay Ofsted registered childcare providers. Note that it doesn’t need to be the child’s parents paying into the account; uncles, aunts, grandparents and others can also make payments, The government have noticed that many families who are eligible for this scheme are yet to set up their accounts, so if you are an employer you could bring this to the attention of your staff to increase the take up.

Note that parents are not eligible if either of them has adjusted net income in excess of £100,000 for the current tax year.
                                                                                                       
SALARY SACRIFICE FOR PENSION CONTRIBUTIONS
Employees who join their employer’s pensions salary sacrifice scheme stop paying pension contributions and instead sacrifice part of their gross salary in return for higher employer pension contributions. This means that both employers’ and employees’ National Insurance Contributions (NICs) are saved whilst maintaining the same amount of pensions savings. This is because employers’ pension contributions are exempt benefits and they are not caught by the salary sacrifice rules.
 
The employers’ NICs saving is the main benefit of such schemes. The employer can choose to use all or none of the saving to invest in the employees’ pensions.
 
Before implementing a pensions salary sacrifice scheme, employers should consider the drawbacks of operating one, such as the extra administration and the risks of failing to comply with National Minimum Wage legislation. Thought should also be given to the interaction with Auto Enrolment obligations.
 
Communication with employees is also essential because their reduced gross salary may affect their entitlement to earnings-based payments such as bonuses, as well as statutory payments such as sick pay.
 
For a salary sacrifice to be considered ‘successful’ by HMRC it must meet certain requirements, including amending the employees’ contracts. If you are interested in implementing such a scheme, please speak to us.
 
MTD FOR INCOME TAX: INCOME FROM JOINTLY HELD PROPERTY
If you are a sole trader or landlord with combined turnover from trade and property exceeding £50,000 in 2024/25, you’re likely to be mandated into Making Tax Digital (MTD) from 6 April 2026. Individuals with lower income will be mandated at later dates. We have covered the general MTD requirements in previous newsletters, but it’s time to focus on how MTD will apply to those with income from property that is jointly owned by more than one person.
 
The MTD legislation prescribes the various categories that should be used to record each individual item of income and expenditure. Any MTD-compatible software package or spreadsheet should enable you to categorise income and expenditure according to the prescribed categories for jointly held property income. Each quarter, year-to-date totals for each category will be totalled and submitted to HMRC in a Quarterly Update.
 
There are two easements that individuals with jointly held property income can take advantage of: 

• Easement for individuals with turnover below £90,000 per annum - instead of using the various categories, it will be sufficient to categorise each item as either ‘income’ or ‘expense’. 
• Easement for jointly held property income - this involves recording just one quarterly figure for each of the prescribed income categories and one annual figure for each of the prescribed expense categories.

If an individual qualifies, it is possible to combine the two easements, which would mean that reporting income from jointly held property would entail entering one total income figure each quarter and one annual total expense figure in quarter 4.
 
VAT ON PRIVATE TUITION
A recent First Tier Tribunal case gave us a useful reminder of the rules governing the VAT treatment of private tuition. In Rushby Dance & Fitness Centre v HMRC (TC09534), the lead appellant and three other dance tutors unsuccessfully argued that their dance classes qualified as VAT-exempt private tuition.
 
The exemption for private tuition is contained in the Value Added Tax Act 1994 (Schedule 9, Group 6, Item 2): “The supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer.”

27th June 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

Government Targets £7.5 Billion in Unpaid Tax - Focus on Business Compliance
The government has announced plans to raise an additional £7.5 billion by stepping up efforts to close the tax gap - the difference between the tax HMRC expects to collect and what is actually paid.

Figures published on 19 June show that £46.8 billion in tax went unpaid in the 2023-24 tax year. That’s 5.3% of the total tax due, slightly up from previous estimates.

Small Businesses Under the Spotlight
The data reveals that small business non-compliance accounts for 60% of the total tax gap, with Corporation Tax accounting for 40%. The most common causes are:

• Failure to take reasonable care (31%) 
• Error (15%) 
• Tax evasion (14%)

As a result, HMRC is intensifying compliance work - particularly within the small business sector - with a clear aim to improve accuracy, reduce mistakes, and clamp down on evasion.

What's Changing?
The government has committed £1.7 billion over four years to fund more HMRC staff, including 5,500 compliance officers and 2,400 debt management roles.

Meanwhile, HMRC’s Making Tax Digital (MTD) programme continues to expand. It’s expected to generate £4 billion in additional VAT over the next four years by reducing errors. MTD for Income Tax comes into force from April 2026, and this is forecast to raise £1.95 billion in additional tax revenue by 2030.

What This Means for Your Business
With HMRC stepping up compliance efforts, now is the time to make sure your business accounts and tax affairs are in order.

One of the biggest changes on the horizon is Making Tax Digital (MTD) for Income Tax, due to start in April 2026. Initially, it will affect anyone who earns over £50,000 from self-employment or property income. However, in future years this limit will drop to £30,000 and then £20,000 by April 2028.

Under MTD, you’ll need to:

• Keep digital records of your income and expenses
• Submit quarterly updates to HMRC using MTD-compatible software
• File an annual final declaration

This is a major shift in how tax is reported - and planning ahead is essential to avoid disruption.

While HMRC says the majority of taxpayers pay what they owe, the pressure is clearly growing to close gaps and improve standards - particularly among smaller businesses.

If you’re unsure whether your current systems and processes meet HMRC’s expectations or want to get ahead of the MTD changes coming in 2026, please give us a call. We would be happy to help you!

See: https://www.gov.uk/government/news/tax-gap-estimated-at-53
 
Ten Years of Free Companies House Data – and How It Can Help Your Business
Last week marked ten years since Companies House made all digital company data freely available through its online service on GOV.UK. Since launching on 22 June 2015, the Find and Update company information tool has become one of the UK’s most heavily used public data services, with over 16.5 billion searches carried out in 2023-24 alone.

The data includes details on every UK-registered company - such as directors, financial filings, registered addresses, filing history, and company status. It’s used every day by lenders, investors, regulators, law enforcement, and businesses of all sizes to make informed decisions.

How This Data Can Help You Run and Grow Your Business
As your accountant, we regularly use Companies House data behind the scenes - but it’s also a powerful tool that you can use to support growth, reduce risk, and manage your operations more effectively.

Here are some practical ways it can benefit your business:

• Check who you’re dealing with: Before working with a new supplier, customer, or partner, use Companies House to confirm their legal status, directors, and trading history. It’s a simple step that can help protect your business from fraud or unreliable firms. 
• Monitor competitors or industry trends: You can view company filings, changes in directorship, or new company formations in your sector - useful for keeping an eye on competitors or spotting new opportunities. 
• Improve credit control and chase debts: Knowing who legally controls a business (and where they’re registered) can help if you need to follow up on unpaid invoices. It’s also useful in preparing for legal action or insolvency procedures. 
• Support funding and investment conversations: When applying for finance or pitching to investors, it helps to know how your business compares to others in your industry. Accessing competitor filings can provide useful benchmarks on growth, structure, or cash flow trends. 
• Stay compliant: Seeing how other businesses meet their statutory filing requirements can help you understand what’s expected - and avoid late fees or damaging your reputation. 
• Spot opportunities to expand: Looking at newly registered businesses in your area or sector can help you identify potential customers, partners, or gaps in the market.

What’s Next?
The data is about to become even more reliable. New reforms under the Economic Crime and Corporate Transparency Act will introduce mandatory identity verification for directors and other checks to improve accuracy.

If you’re unsure how to make the most of this information or would like help integrating it into your processes - from onboarding checks to competitor tracking - let’s talk. We’re here to help you use every tool available to support the health and growth of your business.

See: https://www.gov.uk/government/news/companies-house-celebrates-10-years-of-open-data
 
Earning Extra Income? You Might Need to File a Tax Return – Here’s What to Know
If you earn extra income from a side hustle, you could be legally required to register for Self Assessment and complete a tax return - and it’s better to get ahead of it now, rather than wait until the January deadline.

The threshold is simple: if you earn more than £1,000 in a tax year from any additional income, you may need to file. This applies whether you’re selling online, renting out property, freelancing, creating content, dog walking, tutoring, or even trading cryptoassets.
 
Why Act Now?
Filing early means you:

• Avoid the stress of the January rush
• Know what you owe sooner, so you can budget or set up a payment plan
• Get peace of mind by knowing your tax affairs are in order

You don’t need to pay immediately - the deadline for payment is still 31 January 2026 for the 2024-25 tax year - but getting your return done early gives you options and avoids surprises.

Many people running side hustles or earning income outside of employment simply don’t realise that tax rules apply - until it’s too late. If you’re unsure whether you need to file, or want help staying compliant, get in touch with us. We’ll guide you through what’s required and make it as straightforward as possible.
 
New Industrial Strategy to Slash Energy Bills and Back British Business
The UK Government has launched a major 10-year Industrial Strategy aimed at cutting business costs, creating over 1.1 million good skilled jobs, and making the UK a world leader in clean, competitive industries.

A headline measure is a plan to cut electricity bills by up to 25% for more than 7,000 energy-intensive businesses starting in 2027. Companies in sectors like automotive, aerospace, steel, and chemicals will benefit from new exemptions on energy levies and deeper discounts on electricity network charges.

These changes, delivered through the British Industrial Competitiveness Scheme and an expanded British Industry Supercharger, aim to reduce the UK’s industrial energy costs - some of the highest in the developed world - and help British firms compete globally.

The new strategy also tackles delays in connecting to the energy grid, with a Connections Accelerator Service expected to launch at the end of 2025 to speed up access for major investment projects.

What It Means for Businesses Looking to Grow
The strategy includes measures that could make a real difference for businesses with ambitions to scale up or modernise. These include:

• Technology adoption support for more than 5,000 firms through the Made Smarter programme 
• A streamlined centralised Business Growth Service to make government support easier to access 
• Simpler planning rules and faster grid connections for new sites and facilities 
• Easier access to investment and skills training, including short courses in high-demand sectors 
• Cutting red tape, reducing regulatory costs for businesses by 25%

These measures may help to give growth-focused businesses the tools and confidence to invest, hire and compete.

Targeted Investment Across Key Sectors
The strategy focuses on eight high-potential sectors, including clean energy, advanced manufacturing, digital and technologies, creative industries, and professional and business services, with tailored plans and billions in public and private investment.

While the Industrial Strategy has been welcomed by many business leaders, the strategy’s success will depend on how it is delivered and implemented across the coming decade.

See: https://www.gov.uk/government/news/powering-britains-future-electricity-bills-to-be-slashed-for-over-7000-businesses-in-major-industry-shake-up
 
New Data (Use and Access) Act Receives Royal Assent — What to Do Next
The Data (Use and Access) Act 2025 (DUAA) has now received Royal Assent, introducing significant updates to the UK’s data protection framework. The new law aims to make it easier for businesses to use personal data responsibly while encouraging innovation and economic growth.

While many of the changes are pro-growth, they also require action. Some provisions will come into force in two to six months, others within 12 months - so business will need to start preparing.

Key Changes Businesses Should Know About
The DUAA introduces several new rules and clarifications, including:

• Clearer rules on data use for research
• Relaxed restrictions on automated decision making in certain circumstances
• New rules around cookie use, allowing some use without consent
• New rights for charities to send certain marketing emails without prior consent
• A requirement to take the needs of children into account if online services are provided that they are likely to use
• A new legal basis called ‘recognised legitimate interests’ for processing personal data
• A requirement to have a formal complaints procedure for data protection issues 

It also strengthens the powers of the Information Commissioner’s Office (ICO), including:

• The ability to compel witnesses to attend interviews
• Request technical reports
• Issuing fines under PECR of up to £17.5 million or 4% of global turnover

What You Should Do Now
The ICO has produced a guide for organisations on what the new Act means for them.

The guide reviews what’s changing, what’s been made easier, and the new requirements businesses need to meet.

The ICO is encouraging businesses to make themselves familiar with the changes, look at whether they are doing enough to satisfy the requirement to consider the needs of children, and start thinking about how they can help people to make complaints.

See: https://ico.org.uk/about-the-ico/what-we-do/legislation-we-cover/data-use-and-access-act-2025/the-data-use-and-access-act-2025-what-does-it-mean-for-organisations/
 
UK Watchdog Moves Toward Tighter Oversight of Google Search
The UK’s Competition and Markets Authority (CMA) has taken a key step toward stronger regulation of Google’s search business, which accounts for more than 90% of all general search queries in the country.

The CMA has proposed officially designating Google’s search services as having “strategic market status” (SMS) under the UK’s new Digital Markets regime. If the proposal goes ahead, the CMA will gain powers to introduce targeted measures to improve competition and fairness in how Google operates its search engine in the UK.

A final decision is expected by 13 October 2025, following a public consultation.

What the CMA could do
The CMA has published a roadmap outlining the types of measures it might introduce if Google is designated. Early priorities include:

• Choice screens to help people pick or switch search engines more easily, potentially including AI-assistants. 
• Fairer and non-discriminatory search result ranking. 
• More control for publishers over how their content is used in search results and AI-generated summaries. 
• Easier movement of user search data to support the development of new, innovative services.

Further measures - tackling more complex issues such as Google’s power over advertising and content publishers - would be considered from 2026 onwards.

Why it matters
Google’s search and advertising tools are used by millions of people every day and are central to over 200,000 UK businesses who use Google search advertising to reach their customers online. But the CMA has heard concerns that Google’s dominance makes it hard for others to compete fairly.

Some of the key issues raised include:

• The high cost of search advertising.
• A lack of transparency over how Google ranks and displays results.
• Challenges in securing fair terms and control over how content is used.
• Default agreements with mobile device manufacturers that make it more difficult for competitors to find customers.

A More Open Playing Field
According to Sarah Cardell, Chief Executive of the CMA: “Google search has delivered tremendous benefits – but our investigation so far suggests there are ways to make these markets more open, competitive and innovative.”
She added that the proposals aim to give users and businesses more choice and control while helping new tech firms get a foothold in the market.

The CMA says it will take a proportionate, evidence-based approach, and is seeking views from businesses, consumer groups, and other stakeholders via a consultation that is open until 5pm on 22 July 2025.

See: https://www.gov.uk/government/news/cma-takes-first-steps-to-improve-competition-in-search-services-in-the-uk
 
Government Boosts UK Export Finance with £13 Billion to Back British Industries
The government has announced a £13 billion expansion of UK Export Finance’s (UKEF) Direct Lending Facility, aimed at supporting British exporters across key industries.

Through its Direct Lending Facility, UKEF, the government’s export credit agency, helps overseas buyers finance purchases from UK suppliers. This funding uplift, part of the newly published Industrial Strategy, gives UKEF greater flexibility to support all eight Industrial Strategy sectors.
 
Alongside the lending increase, UKEF will launch a new loan guarantee scheme to support access to critical minerals. The agency also plans to legislate to raise its statutory commitment limit, allowing it to support more businesses across the country.

To strengthen local delivery, UKEF will expand its network of export finance managers, focusing on city regions and industrial clusters. These specialists offer free, impartial guidance on export finance options.

The announcement comes ahead of UKEF’s 2024-25 annual report, which is expected to confirm a record year. In 2023-24, the agency supported 650 UK businesses of all sizes and types with £8.8 billion in backing.

See: https://www.gov.uk/government/news/ukef-unveils-new-strategic-financing-for-industrial-growth 

20th June 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

Spending Review 2025: Takeaway Points for Your Business
Last week, the Chancellor unveiled her Spending Review setting out how government departments will allocate money over the coming years. While much of the focus was on large-scale public services like the NHS and schools, there are some important signals here for businesses to take note of - both in terms of opportunity and outlook.

Zero-based Review
A theme of the review was scrutiny. The Chancellor described the exercise as a “zero-based” review - meaning department budgets were built from scratch, rather than from making changes to what was already in place. The aim, according to the government, was to focus spending only where it delivers value for money.

This may strike a chord with you as a business owner. As you plan for upcoming months, there’s something to be said for taking a zero-based approach yourself.
You could do this by questioning whether each cost is still serving the business. This may help you see areas where reallocating funds could help the business grow or be more efficient.

Everyone is Under Pressure with Costs
Public sector pay rises in education and healthcare are being part-funded through expectations of increased “productivity” in those sectors.

This provides a reminder that cost pressures are widespread and efficiency will be a watchword in public contracts and procurement. If you supply to public sector organisation, you may need to be prepared for closer scrutiny of your prices and performance.

Increases in Capital Investment
Elsewhere, the review confirms increased capital investment in areas like transport infrastructure and social housing. Over time, this may bring new opportunities for construction and related industries. However, spending will be spread over a long period.

Similarly, investment in AI, tech and scientific infrastructure (including a new supercomputer in Edinburgh) could create demand for highly specialised services, but the benefits may take time to filter through.

Speeding Up Infrastructure Projects
The Chancellor also flagged changes to the way the Treasury evaluates infrastructure projects, promising a more modern approach. This might affect which types of projects get greenlit and how quickly - something worth watching if you’re bidding for public contracts or working in the built environment.

Final Thoughts
While headlines may focus on big numbers and high-level priorities, the underlying message of this Spending Review is relevant for businesses of all sizes: pressure on budgets, rising expectations of value, and a focus on getting more from what’s already being spent.

If you’d like help reviewing your own budgets or planning for the year ahead, we’re here to support you.

See: https://www.bbc.co.uk/news/articles/clyr170qm19o
 
Hiring Slows as Costs Rise
New data from the Office for National Statistics suggests that UK businesses are continuing to slow down recruitment, with job vacancies falling by 63,000 between March and May.

While this doesn’t indicate a full-blown jobs crisis, it’s a clear sign that the labour market is cooling. The unemployment rate rose to 4.6% (from 4.5%), the highest it has been in nearly four years.

What’s Driving the Change?
Rising employment costs are a big factor. From April, employers have had to pay higher National Insurance contributions, and the national minimum wage has gone up too. The figures suggest that these changes are affecting how businesses manage staffing.

According to the ONS, some employers are choosing not to replace staff when they leave or are putting off recruiting new workers altogether.

While average wage growth between February and April slowed slightly to 5.2%, it still outpaces inflation, which rose to 3.5% in April. This suggests that although wage pressure is slowing, employers still need to carefully manage pay expectations.

What This Means for Your Business
If you’re finding recruitment more difficult or too expensive, the figures suggest that you’re not alone.
 
This could be a good time to:

• Review staff roles and make sure people are focused on the tasks that really help the business succeed right now. You might find some responsibilities can be reshuffled or streamlined to save you time and money.
• Think about more in-house training. Someone already working for you might be able to take on more with the right training. This could be a better option than hiring someone in with those skills.
• Check what support is available. There may be grants, training funds or wage subsidies on offer in your area that could help with staff development and easing your costs.

If you need help with reviewing your staffing strategy or payroll planning, please give us a call. We would be happy to help you!
See: https://www.bbc.co.uk/news/articles/cp92edelzero
 
Tax-Free Childcare: Are You Benefiting?
HM Revenue and Customs (HMRC) have released their latest figures on the take-up of Tax-Free Childcare.

For the 2024-25 tax year, almost 826,000 families saved up to £2,000 per child. During March 2025, 579,560 UK families used the scheme, a 16% increase on the number using the scheme in March 2024.

What is Tax-Free Childcare?
The Tax-Free Childcare scheme allows parents to deposit money in a Tax-Free Childcare account, where the government provides a 25% top-up up to a maximum of £2,000 per child (or £4,000 if the child is disabled). For example, if parents deposit £8, the government provides a £2 top up.

The money held on deposit can be used whenever needed to pay for childcare.

Who is Eligible?
Eligibility for the scheme is based on families:

• Having a child or children aged 11 or under. Eligibility ends on the 1 September after they turn 11. For children with a disability, eligibility continues until the 1 September after they turn 16.
• Having a parent (or the parent’s partner) working an average of at least 16 hours a week and earning the National Living or Minimum Wage but not earning more than £100,000 a year each.

Families also cannot be receiving Universal Credit or childcare vouchers to qualify.

The Scheme May Benefit Employers Too
If you are an employer with staff who are parents, making them aware of this scheme may help to ease the financial burden of childcare for them. This could promote their wellbeing but also reduce the chances of you losing trained and valuable members of your team.

The scheme may also help parents in returning to work after having a child, allowing the business to continue to benefit from the experience and training you have invested in them.

For further information about Tax-Free Childcare and how parents can register, see: https://www.gov.uk/tax-free-childcare
 
Amazon Agrees to Act on Fake Reviews
Have you ever bought something on Amazon thinking it had 5-star reviews only to find the product was obviously sub-standard? Or have you found that reviews were about an entirely different product to the one you were looking to buy?

This kind of experience could become a thing of the past following new undertakings that Amazon has given to the Competition and Markets Authority (CMA).

Targeting Fake Reviews and Catalogue Abuse
Fake reviews are now banned under the Digital Markets, Competition and Consumers Act (DMCCA). However, there are also concerns around something called ‘catalogue abuse’.

Catalogue abuse is where a seller takes reviews for a well-performing product and adds them to a different product. So, for example, a product listing for headphones might show reviews that are actually for a mobile phone charger.

How Important Are Product Reviews?
Product reviews on websites are estimated to affect the buying decisions of around 90% of consumers.

Fake reviews have been a problem for some time and the CMA launched a formal investigation into Amazon over potential consumer law breaches back in 2021. Since then, the DMCCA has banned fake reviews and strengthened the CMA’s ability to tackle the problem.

Amazon’s Undertakings
Amazon have committed to put in place robust processes that allow it to quickly identify and remove fake reviews and catalogue abuse. It will also sanction businesses and reviewers that are involved in these tactics, including banning them. It will also be easier for consumers to report fake reviews and catalogue abuse.
 
Of course, not only Amazon is affected by fake reviews. The CMA has produced guidance on how businesses need to comply with consumer protection law when it comes to consumer reviews. It is now conducting an initial sweep of review platforms to see whether any need to do more in complying with the law.

See: https://www.gov.uk/government/news/amazon-gives-undertakings-to-cma-to-curb-fake-reviews
 
New Digital Hub for Technology Procurement
The UK government has announced a new digital marketplace that will change the way the public sector buys technology.

Plans are for the digital hub, which is still in early development, to help public sector organisations be able to benefit from collective buying power. The hub will also use AI to match organisations with suppliers based on their needs.

A recent State of Digital Government report showed that although many public sector organisations use similar tools, they source and negotiate contracts on an individual basis. The new digital marketplace will give users the ability to rate and review the technology they use, allowing other users to benefit from shared collective experiences.

What Could This Mean for Tech Suppliers?

• More opportunities: The platform is being designed to open the market to more UK tech firms. The target is for government contracts to increase the use of small businesses by 40% within 3 years, so more public sector opportunities could begin to appear for smaller tech businesses
  
• Prioritising customer experience: In view of the increased exposure a rating and review system brings to customer experience, this is likely to need to become a higher priority in delivering services. 
• An expectation of lower businesses: Part of the objectives of the digital marketplace is to give public sector organisations more bargaining power when negotiating tech contracts. This may mean needing to reduce costs to keep or win contracts.

The new digital platform is being created under the revised Procurement Regulations. A “digital playbook” detailing best practice in purchasing decisions is also being developed to help with public sector procurement.

Tech businesses who are, or would like to be, involved in public sector contracts will want to keep an eye on developments.

See: https://www.gov.uk/government/news/one-stop-shop-for-tech-could-save-taxpayers-12-billion-and-overhaul-how-government-buys-digital-tools

How to Protect Sensitive Personal Information
The National Cyber Security Centre (NCSC) has published new guidance to help businesses identify and protect against the risks of holding sensitive personal information.

The guidance can help you to understand what sensitive personal information is and identify any that your business holds. It also provides some principles that, if applied, can reduce risks from holding that data.

Here’s a brief review of the guidance.

What is Sensitive Personal Information?
NCSC explains that there is no formal definition of what sensitive personal information (SPI) is. They explain that it’s necessary to consider possible risks that are associated with sensitivities in information you hold about individuals. For instance, would a compromise of that information increase the risk of harm, harassment or prejudice to the individual.

Examples might include an individual’s profession, their personal life characteristic, or their status.

Assessing the Risks
The guidance advises that the severity of the impact that could arise from misuse of the data should be used to determine how strong your data protections will be. NCSC cover a few questions that can help you in making your assessment.

Nine Principles
NCSC provide nine principles that can help protect SPI as well as some example measures you can use. The principles are:

1. Understand what data you have and the risks to it.
2. Ensure only appropriate access to sensitive data.
3. Ensure you know who is accessing data which contains SPI.
4. Make sure access to sensitive data cannot be misused.
5. Avoid putting too much sensitive data together.
6. When merging data, check if SPI becomes exposed.
7. When sharing data, check if SPI becomes exposed.
8. Ensure that the records of individuals with SPI do not appear to be stored, processed or handled differently to those without such sensitive data.
9. Keep access controls to SPI separate from routine data access controls.

Final Thoughts
Cyberattacks seem to be on the increase and a data breach can have serious consequences to a business. This may particularly be the case if the business is holding sensitive personal information about individuals.

Besides fines and penalties from the Information Commissioner’s Office, there is also loss of customer trust, disruption to your business operations, costs of recovery and potential legal claims from customers or clients whose data was compromised.

If you hold sensitive personal information in your business, reviewing NCSC’s new guidance could be well worth your time.

See: https://www.ncsc.gov.uk/collection/security-principles-protecting-most-sensitive-personal-information-in-datasets
 
Fisheries and Seafood Scheme: £6 Million of Funding Released
The latest round of funding from the Fisheries and Seafood Scheme (FaSS) has been opened to seafood and marine related businesses and organisations.

£6 million of funding is being made available to support projects in the 2025/26 financial year. Projects that contribute to increasing the sustainability and resilience of the seafood sector, reducing emissions and waste, cleaning up rivers, lakes and seas, and boosting growth in the seafood sector could be eligible to receive funding up to a maximum of £250,000.

To find out more about the eligibility criteria and the application process, see: https://www.gov.uk/guidance/fisheries-and-seafood-scheme?msclkid=cbd33983b67411ecaa29012ebdc14f21
 
ICO Unveils Strategy for Protecting Information in the Age of AI
The Information Commissioner’s Office (ICO) has launched a new AI and biometrics strategy designed to help ensure organisations develop and deploy new technologies lawfully.

New research has shown that many are concerned about the consequences when AI and biometric technologies go wrong. For instance, 54% of those surveyed were concerned that use of facial recognition technology by police could infringe on their privacy rights.

Speaking at the launch of the strategy, John Edwards, Information Commissioner said: “Public trust is not threatened by new technologies themselves, but by reckless applications of these technologies outside of the necessary guardrails.”

The ICO’s new strategy will help businesses to have certainty and reassure the public. It includes conducting audits, producing guidance and developing a statutory code of practice for organisations developing or deploying AI responsibly that supports innovation but safeguards privacy.

To review the strategy in full, see: https://ico.org.uk/about-the-ico/our-information/our-strategies-and-plans/artificial-intelligence-and-biometrics-strategy/

13th June 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

NEW Companies House ID Checks: What You Need to Know and How We Can Help
Major changes are coming to how Companies House operates, and if you’re a company director or a person with significant control (PSC), these rules apply to you.
 
Under the Economic Crime and Corporate Transparency Act 2023, identity verification will soon become a legal requirement. The aim is to improve corporate transparency and prevent companies being misused for illegal purposes.
 
Key Points to Know
 
ID checks become mandatory from Autumn 2025
All new and existing directors and PSCs must verify their identity. If you’re already listed at Companies House, you’ll have 12 months from the start date to complete the process.
 
Only verified individuals or ACSPs can file from Spring 2026
From Spring 2026, only verified individuals or Authorised Corporate Service Providers (ACSPs) will be able to file updates on your behalf, including officer changes, confirmation statements, and other filings.
 
Hillmans is an Authorised Corporate Service Provider
As a registered ACSP, we can carry out the verification process for you and continue managing filings, keeping everything easy and compliant.
 
How to Verify Your Identity

1. Online via GOV.UK One Login — if you have the required ID documents.
2. In person at selected Post Offices — for eligible UK residents.
3. Through an ACSP like Hillmans — we handle the process securely and efficiently.

If you’ve already verified your identity with Companies House, you’re all set. For everyone else, act early to avoid last-minute complications.
 
What Happens Next?
 
Step 1: Verify your identity and receive a personal code from Companies House (unique to you).
Step 2: From Autumn 2025, link that code to each company role you hold with a verification statement (details coming soon).
 
Failure to comply means you won’t be able to file confirmation statements or other company documents, and penalties may apply. That’s why we recommend acting now.

Our Recommendation: Get Ahead Now
Companies House is urging early verification, especially for companies with multiple officers or overseas directors. If you’d like us to take care of the ID checks, or simply talk it through, please get in touch.
 
Named and Shamed: Employers Failing to Pay Minimum Wage
In its latest round of investigations, HM Revenue and Customs (HMRC) have named 518 employers who have failed to pay the National Living or National Minimum Wage correctly to their staff.

A total of £7.4 million will be paid by these employers to almost 60,000 workers. In addition, the employers face financial penalties of up to 200% of the amount they underpaid.

HMRC accepts that not all minimum wage underpayments are intentional, however it is clear that they will take enforcement action wherever they find employers are not paying staff correctly.

The government has provided a resource for workers to check what they are being paid and are encouraging them to use this. Support is also available from Acas.

What does this mean for employers?
Where you employ staff, it’s key that you make sure that all your staff are at least paid the National Living or National Minimum Wage rate that applies to them.

This is not always straightforward as there can be several factors to consider. It’s advisable to check the guidance each time you take on a new employee.

Some common errors employers make include:

• Making a wage deduction for items or expenses that relate to the job.
• Making wage deductions that are for the employer’s own use and benefit.
• Failing to pay for additional time added on to an employee’s shift.
• Failing to pay for time spent travelling on business.
• Failing to pay an employee for time they spend training.
• Failing to apply the annual rate increase on 1 April

Rates for 2025/26
Beginning 1 April 2025, the National Living and National Minimum Wage rates are as follows:

National Living Wage (21 and over): £12.21 per hour
18 to 20: £10.00 per hour
Under 18: £7.55
Apprentice: £7.55

If you need any help with paying your staff the correct amount or understanding how the Minimum Wage legislation applies, please get in touch at any time. We would be happy to help you!

See: https://www.gov.uk/government/news/over-74-million-put-back-in-working-peoples-pockets-by-employers
 
Emissions Cutting Trial to Benefit Hospitality Businesses
The government has published details of a new emissions cutting trial that could benefit UK pubs, cafes, restaurants and hotels.

The Zero Carbon Services Hospitality Trial will run from May 2025 until March 2026 and has been provided with £350,000 of funding. The trial will put hospitality business owners in direct contact with the expertise of trusted energy and sustainability advisers.

Could the trial be worthwhile?
It is estimated that the average pub loses £2,000 a year through energy waste. Making some gains in energy efficiency could have a real impact on the business’ bottom line.

What will the trial involve?
A total of 615 small and medium-sized businesses will be offered support during the trial. Experts will help to show where energy is being wasted and how to fix it. For instance, the scheme will help businesses in making changes such as fixing insulation gaps, upgrading to low energy lighting, and tweaking heating settings.

Businesses will receive a tailored Carbon Reduction Plan as well as having a Carbon Coach. Businesses that take part will receive around seven hours of support each month over a 3-month period.
 
Register your interest
If you are in the hospitality sector and are interested in receiving this support, you can register your interest and apply on the Zero Carbon Company’s website.

See: https://www.gov.uk/government/news/britains-hospitality-sector-to-save-3-million-under-new-scheme
 
OECD Downgrades UK Growth Forecast, Citing Debt and Trade Barriers
The UK’s economic growth is set to slow more than expected, according to the Organisation for Economic Co-operation and Development (OECD), which has downgraded its forecast for 2025 to 1.3%, down from 1.4% earlier this year.

The global think tank pointed to high government debt interest payments and new trade barriers - particularly from the US - as key reasons for the cut. It also warned that the UK’s public finances leave little room for surprises, urging Chancellor Rachel Reeves to consider a mix of targeted spending cuts and tax reforms to shore up the economy.

While the OECD acknowledged that growth in early 2025 had been better than expected, it said business confidence is now weakening and predicted further slowing to 1% growth in 2026. The state of the UK’s finances, it said, poses a real risk if fiscal rules are to be met.

Different to the IMF
To place their comments in context, the OECD’s growth forecast is still higher than the 1.2% estimated by the International Monetary Fund (IMF) reported on last week. For the IMF, this was an uplift on their previous forecast.

What’s next?
The timing of the OECD’s warning comes just ahead of Reeves’ upcoming Spending Review, where she’ll be tasked with deciding how to allocate funds between government departments.

It’s not just the UK
Due to trade tensions having a global effect, the OECD also downgraded growth forecasts for most major economies. It noted that the global economy is slowing and warned that “weakened economic prospects will be felt around the world, with almost no exception.”

While national growth forecasts can influence general outlook, they don’t have to define your business’s future. If you're looking for practical ways to keep your business moving forward in uncertain times, get in touch - we're here to help you explore the options and make confident decisions.

See: https://www.bbc.co.uk/news/articles/cq69j753egeo
 
Cyber Security Culture Principles: Culture is Key to Resisting Attack
The National Cyber Security Centre (NCSC) has launched a new set of cyber security culture principles. These have been developed following considerable research and describe the kind of culture that can help businesses stay cyber secure.

Cyber security is about protecting computers, networks and data from theft, damage, or unauthorised access. It also helps to keep personal information, business systems and online services safe from cyber attacks.

The guidance talks about cybersecurity teams and much of it may be more suited to larger organisations, however in view of how vital technology now is in business and the increasing prevalence of cyber attacks, businesses of all sizes will find some benefit in it.

Here’s a brief review of each principle.

Principle 1: Frame cyber security as an enabler, supporting the organisation to achieve its goals.
If not careful, cyber security could be seen as a barrier to getting the job done. For instance, an employee might see security procedures as wasting time that might mean losing a sale.

There may need to be an adjustment in thinking and goal-setting so that everyone sees security as something that helps the business achieve its goals – safely and with confidence. The guidance explores some ways you can achieve this.

Principle 2: Build the safety, trust and processes to encourage openness around security
If people feel there will be negative repercussions, they will be unlikely to speak up. They might cover up mistakes, not challenge others who break rules, or not volunteer ideas that could help improve security.

Therefore, it can be helpful to think about what processes you have in place to avoid this kind of thinking and help staff to feel safe.

Principle 3: Embrace change to manage new threats and use new opportunities to improve resilience
Sticking to the way things have always been done can leave a business vulnerable to new threats.

A security breach or online attack can reveal gaps in how you protect your systems or data, showing you what needs to be improved. By fixing these issues and updating your approach, your business can become more secure and be better prepared next time.
 
Principle 4: The organisation’s social norms promote secure behaviours
This means that staff are expected to act safely online, and it becomes part of how things are done in the business. When good security habits are normal and encouraged, everyone is more likely to follow them.

Principle 5: Leaders take responsibility for the impact they have on security culture
Leaders in the business have a huge influence on staff behaviour, so it’s important that security policies are supported by word and example from the top. Staff are likely to follow an example, which could mean ignoring a policy if their boss does.

Principle 6: Provide well-maintained cyber security rules and guidelines, which are accessible and easy to understand
The guidance helpfully mentions that rules that are too prescriptive become unwieldy and outdated which will eventually harm efforts to be secure. On the other hand, rules that are too vague or casual leave people stressed and unsure of what to do.

The guidance provides some ideas on how to strike the right balance.

What next?
Why not review the guidance to see how these principles could be applied in your business. The more cyber secure your business is, the more resilient it will be against threats and that can only help your business to keep growing!

See: https://www.ncsc.gov.uk/collection/cyber-security-culture-principles
 
No Border Checks for Fruit and Veg
The Department for Environment, Food & Rural Affairs has announced that incoming border checks on fruit and veg imported from the European Union will be scrapped.

The recent UK-EU trade deal included a Sanitary and Phytosanitary (SPS) agreement that will eliminate routine SPS border checks for food exports and imports between the UK and EU.

The agreement has not yet come into effect, however in an early move, the government have decided not to require checks on medium-risk fruit and vegetables that would otherwise have come into force this summer. Medium-risk fruit and vegetables include tomatoes, grapes, plums, cherries, peaches, and peppers.

This means that businesses will be able to carry on importing these items from the EU without being subject to fees or border checks.

The easement of checks, which would previously have ended on 1 July 2025, will now be extended to 31 January 2027. This extension should give time for the details of the new SPS deal to be negotiated and the deal enacted.

See: https://www.gov.uk/government/news/fruit-and-veg-import-checks-scrapped-ahead-of-uk-eu-deal

UK Beef Industry Boosted as BSE Risk Status Downgraded
The UK has received a major boost from the World Organisation for Animal Health (WOAH), which has officially recognised the country as having a negligible risk for Bovine Spongiform Encephalopathy (BSE) - the best possible status.

This change marks a significant moment for the UK’s farming and food industries. Following the BSE crisis in the 1980s, British beef exports suffered long standing bans. However, decades of commitment to animal health and biosecurity have now paid off with this new recognition of the UK’s improved risk status.

What the downgrade means

• New trade opportunities: More international markets are expected to open up to UK beef and bovine products. 
• Operational changes: Abattoirs and meat processors will benefit from changes to control measures, lowering their operational burden and unlocking financial savings. 
• Added carcass value: As an example, the ability to recover mesenteric fat could generate around £10 million per year, according to the British Meat Processors Association.

Welcome news
The announcement has been welcomed by industry leaders and government departments alike, who view it as recognition of the UK’s world-leading standards in animal health, food safety, and disease prevention.

While the news is overwhelmingly positive, farmers and livestock keepers are reminded that BSE is still a notifiable disease. Any suspected cases must be reported immediately.

See: https://www.gov.uk/government/news/uk-international-risk-status-for-bse-downgraded-in-huge-boost-to-farm-sector
 
ICO is On the Move
The Information Commissioner’s Office (ICO) has announced that it will be relocating its head office to Manchester in the autumn of 2026. Their new office will be in the Circle Square development on Oxford Road.

The ICO’s head office has been in Wilmslow for the past 40 years, but with the current lease due to expire, ICO has been reviewing its options.

Moving to Manchester will put it nearer to universities and other organisations that work in data and could help with attracting new talent in the future.

See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/06/ico-head-office-to-move-to-manchester/
 
Changes coming to cattle identification
The Department for Environment, Food & Rural Affairs (Defra) has announced that cattle identification and traceability in England will be changed over the next 2 years.

These changes, which will start to be introduced from summer 2026, will include:

• Electric ID (EID) will become mandatory for all new-born calves from 2027. Animals with eID eartags will then be able to be scanned with they are moved, rather than needing a tag number to be visually read and manually input. 
• A new cattle movement reporting system, that Defra intend to be easier to use for farmers, markets, abattoirs and regulators.

Defra have said that they will take a more proportionate approach to enforcement. This will allow livestock businesses to have the opportunity to correct issues before Defra considers taking further action.

The government’s Cattle Identification Consultation 2023 was published at the same time of the announcement, and this indicated that the industry has already expressed support for the measures.

See: https://www.gov.uk/government/news/electronic-id-for-cattle-mandatory-in-step-forward-for-uk-biosecurity 

6th June 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

HMRC SPRING TAX UPDATE
On 28 April 2025, the Government made several tax policy announcements, launched consultations and confirmed previously announced developments. Key points included:

• Mandatory payrolling of benefits in kind (BIKs) will be delayed until 6 April 2027. This is to give more time for software providers, employers and tax agents to prepare for the change.  The mandate was previously intended to take effect from 6 April 2026. From 6 April 2027, mandatory payrolling will apply to most BIKs, except for employment-related loans and accommodation benefits. These may be payrolled voluntarily from April 2027.
• HMRC revised its Check Employment Status for Tax (CEST) digital tool on 30 April 2025, to make it easier to use. HMRC is committed to standing behind the outcomes of the tool where it has been used correctly, and has published guidance on how to answer the revised questions. The tool is used by workers to help them determine whether their work on a specific engagement should be classed as employed or self-employed for tax purposes.
• If you have multiple employments or are both employed and self-employed, a cap (the 'annual maxima') limits the total National Insurance Contributions (NICs) you need to pay. If you pay more than you need to, you can make a claim for a refund from HMRC at the end of the tax year. The Government have said that the process for refunding NICs under the annual maximum rules will be reviewed to make it easier and faster for taxpayers to access refunds.
• The VAT Capital Goods Scheme (CGS) is a mandatory scheme that ensures the VAT reclaimed on certain capital assets reflects the extent to which the asset is used for taxable business purposes over a prescribed time period. The Government has announced proposals to remove computers from the list of capital assets within the scheme and to increase the VAT-exclusive value of land and buildings that are caught by the scheme from £250,000 to £600,000. No date for these changes has been announced.
• A consultation has been published on the VAT treatment of business donations of goods to charity. Views are sought on a new VAT relief aligning the treatment of goods donated for distribution to those in need or use by the charity with the existing relief for goods donated for onward sale.

IT’S P11D SEASON! 
 
P11D forms for reporting expenses and benefits in kind provided to employees and directors in 2024/25 need to be submitted by 6 July 2025. Note that paper forms are no longer acceptable; the return must be made online using PAYE Online for employers or commercial software.
Remember that reimbursed expenses no longer need to be reported where they are incurred wholly, exclusively and necessarily in the performance of the employee's duties. Dispensations from reporting are no longer required, although HMRC would expect internal controls to be in place to ensure that the expenses qualify.
 
Note also that trivial benefits provided to employees that do not exceed £50 do not need to be reported. This typically covers non-cash gifts to employees at Christmas and on their birthdays, and can include gifts of food and alcohol. Again, the employer needs to keep a record of the benefit provided and the justification. It should not be provided as a reward for past or future service.
 
OFFICIAL RATE OF INTEREST
For employers reporting beneficial loans and some employment related living accommodation on form P11D for 2024/25, the official rate of interest (ORI) to be used is 2.25%.  The charge applies where the amount of the loan exceeds £10,000.

The ORI increased to 3.75% on 6 April 2025. From 2025/26 onwards, the rate will be reviewed on a quarterly basis with any changes in the rate occurring following a quarterly review, where appropriate. If there are any in-year changes to the rate, these will take effect on 6 July, 6 October and 6 January.

DOUBLE-CAB PICKUPS – RULE CHANGES FOR BENEFIT IN KIND PURPOSES

Following a recent Court of Appeal ruling, from 6 April 2025, the classification of double-cab pickups (DCPUs) will need to be determined by assessing the vehicle as a whole at the point that it is made available to determine whether the vehicle construction has a primary suitability. If the vehicle is primarily suited to carrying goods or burden, for direct tax purposes it can be treated as a van. Most DCPUs are suited to both passenger transport and carrying goods, so they do not have a primary suitability. It therefore follows that most DCPUs are expected to be classified as cars when calculating the benefit in kind charge.
 
Transitional arrangements apply for employers that have purchased, leased, or ordered a double cab pickup before 6 April 2025, whereby they will be able to rely upon the previous treatment until the earlier of:

• disposal,
• lease expiry, or
• 5 April 2029.

2024/25 EMPLOYMENT-RELATED SECURITIES RETURNS DUE BY 6 JULY
The deadline for reporting shares and securities and share options issued to employees for 2024/25 is 6 July 2025. This is the same as the deadline for reporting expenses and benefits provided to employees on form P11D for 2024/25.

Employers must submit their employment-related securities annual returns online and attach the appropriate spreadsheet template if they have something to report. HMRC provide templates on their website that may be downloaded in order that the information may be entered and uploaded. Note that there are different templates for each of the four tax-advantaged employee share schemes – Company Share Option Plan (CSOP), Enterprise Management Incentives (EMI), Save As You Earn (SAYE) share options and Share Incentive Plans (SIP). In addition, employers need to report any other employment-related securities (non-tax-advantaged) issued to employees and directors.

We can of course assist you with the completion of the reporting obligations and with the valuation of the securities concerned.

VAT GROUPS AND ANTI-AVOIDANCE

HMRC have published Tax Avoidance Spotlight 70 ‘VAT grouping structure arrangements used by care providers’, highlighting tax avoidance arrangements used by state-regulated care providers to reclaim VAT.
 
The VAT legislation exempts supplies of welfare services where they are made by either a charity or a state-regulated care provider. The impact for the charity or state-regulated care provider is that they are unable to recover any VAT which relates to these supplies.
 
The arrangement identified in Spotlight 70 is intended to work as follows:

• An unregulated entity forms a VAT group with the state-regulated care provider, or charity. 
• Existing contracts for welfare services between the regulated body and the local authority or NHS are transferred to the unregulated provider. New contracts are drawn up with the unregulated care provider.
• The unregulated care provider then sub-contracts the physical provision of welfare services back to the regulated care provider. A facilitation measure in the VAT grouping legislation means that where services are supplied between members of the same VAT group, they are disregarded for VAT purposes. 
• As the supplies of welfare services are being made by an unregulated care provider, they are taxable at the standard rate of VAT.
• The VAT group can reclaim input tax in respect of those taxable supplies. Were it not for this arrangement, the reclaim would be blocked.

HMRC consider these specific VAT grouping arrangements to be a form of tax avoidance. They say that, where necessary, they will refuse VAT group registration applications that are designed to implement, or facilitate, these avoidance structures. They are also reviewing existing group arrangements where it is known or suspected that this avoidance arrangement is in operation. 

During this review, HMRC may request additional information and will assess each case individually.
 
If Spotlight 70 affects you, please talk to us – we are here to help.
                                                                             
ADVISORY FUEL RATES
The table below sets out the HMRC advisory fuel rates from 1 June 2025. These are the suggested reimbursement rates for employees' private mileage using their company car.
 
Where the employer does not pay for any fuel for the company car these are the amounts that can be reimbursed in respect of business journeys without the amount being taxable on the employee.
 
1400cc or less
            •           Petrol: 12p (12p)
            •           Diesel: (blank)
            •           LPG: 11p (11p)
 
1600cc or less
            •           Petrol: (blank)
            •           Diesel: 11p (12p)
 
1401cc to 2000cc
            •           Petrol: 14p (15p)
            •           Diesel: (blank)
            •           LPG: 13p (13p)
 
1601cc to 2000cc
            •           Petrol: (blank)
            •           Diesel: 13p (13p)
 
Over 2000cc
            •           Petrol: 22p (23p)
            •           Diesel: 17p (17p)
            •           LPG: 21p (21p)
 
The previous rate is shown in brackets.
 
You can continue to use the previous rates for up to 1 month from the date the new rates apply.
 
Note that for hybrid cars you must use the petrol or diesel rate. For fully electric vehicles the rate is 7p (7p) per mile.

30th 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

Bonus as Salary or Dividend: Which Pays Off?
If you run your own company, you might have the option to take a bonus either as salary or as a dividend. But which one leaves you better off?

The answer depends on several factors: how much profit your company has, your existing income, the current rates of tax and National Insurance, and whether you’re taking advantage of available allowances.

Salary: Pros and Cons
Taking a bonus as salary means it's taxed through PAYE, with income tax and National Insurance deducted at source. It can boost your pension contributions and improve borrowing power (e.g. for mortgages), but it may also push you into a higher tax band.

Dividend: Pros and Cons
Dividends aren’t subject to National Insurance and are often a more tax-efficient way of taking money out of a company. However, they can only be paid from company profits after corporation tax. Also, the tax-free dividend allowance has now been reduced to £500, so more of the dividend is now taxable than in the past.

So, which is better?
It depends. Sometimes it makes sense to mix both to strike the right balance between tax efficiency and personal financial goals.

We use tailored calculations and up-to-date tools to help clients compare the actual take-home pay of different options. What works best for one director-shareholder might not be right for another.

If you’re thinking about taking a bonus, we can help you work out the most tax-efficient way to do it, based on your company’s situation and your personal plans.

Get in touch if you'd like us to run the numbers for you.
 
When is Diversification a Good Business Strategy?
It’s long been said that putting all your eggs in one basket is risky. Many small business owners may fear that risk of becoming a reality.

Take the UK’s farming sector as an example. Faced with extreme weather, policy shifts and volatile prices, farmers have increasingly turned to other sources of income to keep their businesses viable. According to a recent BBC news article, nearly three-quarters now run at least one non-farming enterprise - anything from glamping to beauty salons to wedding venues.

It's not just farming where this lesson applies: when your main income stream becomes unpredictable or limited, diversification can help stabilise your business.

What does diversification look like?
In business terms, diversification means creating additional income streams that don’t rely on your core product or service. That could include:

• Renting out underused space or equipment
  
• Offering a new service that fits your customer base 
• Using your skills in a new market
• Turning a hobby or interest into a side income 
• Creating online or subscription-based offerings

At its best, diversification adds resilience. It spreads your risk and gives you more ways to grow. But it’s not just a fallback - it can also uncover new markets and help your business grow in a way that may not have been possible otherwise.

When is the right time to diversify?
Here are a few signs that it might be worth considering:

• Income is unpredictable or seasonal: If your sales swing wildly month to month, a secondary income stream can even things out. 
• You have unused assets: This might be space, equipment or even skills going to waste. For example, as some farmers have found, letting out buildings or land can be a smart use of what’s already there. 
• Customer habits are shifting: If demand for your core product or service is declining, diversification can help you adapt before things dip further. 
• You’re seeing unmet demand in your area or industry: If customers keep asking for something you don’t currently offer, that could be a sign there’s an idea worth exploring. 
• You’re relying too heavily on one client or sector: Many businesses felt this during the pandemic; when one client or industry struggles, it can take you with it.

A few things to keep in mind
It’s usually best to start small. You don’t need to go all in. You could try testing a new idea alongside your main business to see what works.

Try to build on what you already do or have. It’s usually easier, more cost-effective, and more likely to succeed than starting something completely new from scratch.

It’s important to be realistic about the time and costs that will be involved. Any new venture will need your attention. Make sure it’s worth the effort and doesn't distract from what’s already working for you.

Final thought
Diversification isn’t just about chasing trends. It’s about making your business more adaptable and more resilient. For some businesses, diversifying is not just a bolt-on. In a changing economy, it can be what keeps the whole business afloat.

If you're considering your business strategy, why not give us a call? We would be happy to help you review and appraise the options available to your business.
 
IMF Upgrades UK Growth Forecast: Steadier Ground Ahead?
The International Monetary Fund (IMF) has released its annual review of the UK economy and the message this year is more positive than many might have expected. The IMF has upgraded its forecast for UK growth in 2025 to 1.2%, noting that “an economic recovery is underway.”

While this may not be headline-grabbing growth, it’s a step up from earlier projections and a shift in tone from what has often been a cautious outlook.
 
Putting Things in Perspective
While the growth upgrade is welcome, it’s worth keeping in perspective. A forecast of 1.2% for 2025 is still relatively modest, and there are ongoing pressures to consider. These include inflation, which came in above expectations at 3.5% in April.

However, the IMF have expressed support for the government’s fiscal strategy, describing it as striking “a good balance between supporting growth and safeguarding fiscal sustainability.”

The IMF also noted that weak productivity continues to be a problem, but they feel the government’s Growth Mission stands a good chance of reversing this trend.

What Businesses Might Take from This
Growth forecasts matter for confidence. Even modest upgrades in official forecasts can shape investor sentiment, lending conditions, and customer demand.
Greater confidence could translate into more sales opportunities for your business.

Looking Ahead
The full IMF report will be published later this summer. In the meantime, the latest update is a reminder that despite ongoing challenges, the outlook for 2025 could improve.

If you'd like help reviewing your financial plans and forecasts, please get in touch. We’re always happy to talk things through and help you achieve a positive 2025.

See: https://www.imf.org/en/News/Articles/2025/05/27/cs-uk-aiv-2025
 
FSB Updates Guidance on Employers’ Liability Insurance
The Federation of Small Businesses (FSB) has recently updated its guidance on Employers’ Liability insurance - a useful reminder of the rules and risks around a business insurance that is legally required in the UK.

The guidance explains that if you employ anyone - including part-time, temporary, or even volunteer staff - you are likely required by law to have this cover in place. It’s there to protect businesses should an employee become ill or injured because of their work and the employer is found legally responsible.

What the FSB Highlights
The updated guidance gives practical examples of when this insurance might apply, such as:

• A worker being injured while using machinery
• An office employee developing repetitive strain injury
• A fall on a construction site leading to time off work

The costs of such claims can be significant. As the FSB notes, legal fees and compensation payments can run into tens of thousands of pounds, potentially enough to put a small business under real pressure.

The guidance also clarifies:

• The legal minimum cover is £5 million (though most insurers offer £10 million as standard) 
• Fines can reach £2,500 per day if a business is found not to have the required cover 
• The insurance certificate must be displayed or made accessible to staff – failure to do so can result in a £1,000 fine

Exemptions and Edge Cases
The FSB outlines a few cases where the cover may not be required: for example, some family businesses or sole traders without staff. But these are quite limited and the guidance suggests most businesses with paid staff will need the insurance.

Worth Reviewing
The FSB guidance could serve as a useful prompt for you to review your insurance arrangements, particularly if your staffing or business structure has changed recently.

You can find the full guidance on the FSB website.
 
Why You Shouldn’t Ignore Old Tech: New Guidance from the NCSC
The National Cyber Security Centre (NCSC) has released new guidance on how to properly retire old digital systems and devices – a process known as decommissioning. The guidance is aimed at IT teams, but there are useful takeaways for any small business that uses computers, software or online systems.

Why this matters
With so many demands on our time, it can be easy to leave old laptops or devices lying around when they’re no longer needed. But old tech can quietly become a security risk. It might still hold sensitive information or give someone a way into your systems without you realising it.

The NCSC says that getting rid of old systems safely is just as important as setting them up in the first place.

What should you do?
Here are some key tips from the guidance:

• Don’t wait until the end: Plan ahead. If you’re buying new systems or changing software, think about how and when you’ll stop using the old one. 
• Keep track of what you use: Make a basic list of your computers, software and devices. This helps you stay in control, especially if you’ve tried out different tools over the years. 
• Back up your data: Before getting rid of any computer or online service, save a full copy of the important data. This includes documents, emails, passwords, and anything you might need to recover later. 
• Wipe data properly: If you’re planning to sell, donate, or throw away an old device, make sure you clear all data first. A factory reset often isn’t enough. Look up how to securely wipe a device or ask someone to do it for you. 
• Check it’s really gone: If you’ve used someone else to help dispose of a device, ask for proof it was wiped properly. If you’ve done it yourself, keep a note of what you did and when – that may help if you encounter problems in the future.

Final thought
You don’t need to be a tech expert to take simple steps that protect your business. The NCSC’s guidance is a good reminder that old systems aren’t just clutter – they can be a risk if they’re not dealt with properly.

If you’re not sure where to start, make a list of the tech you use now, and think about what’s no longer needed. That’s often the first and most important step.
You can find more detail on the NCSC website if you’d like to explore further.
 
£30 Million Boost to HLS Payments: What It Means for Your Farm
Thousands of farmers in England are set to benefit from a £30 million uplift to Higher Level Stewardship (HLS) payments from January 2025. This could mean more money in your pocket for the work you’re already doing to protect the environment and maintain the countryside.

From 1 January 2025, payment rates will rise for 157 different HLS options.

The aim is to better recognise the work farmers do in protecting rare species, restoring habitats and maintaining traditional countryside features. The uplift also aims to bring these payments more closely in line with those offered under Environmental Land Management (ELM) schemes.

If you're already in an HLS agreement, you don’t need to do anything. The increase will be automatic, with payments starting to land from December 2025.

If you're unsure how this change might affect your current agreement or you want to explore entering an environmental scheme, please give us a call and we would be happy to help you.

For a full list of HLS payment rates from 1 January 2025, see here.

See: https://www.gov.uk/government/news/30m-boost-for-farmers-leading-the-way-in-nature-restoration
 
Changes to Planning Rules Could Make Life Easier for Small Housebuilders
The government has set out new plans aimed at helping small and medium-sized housebuilders get projects moving faster and with fewer hurdles. For housebuilders that have found themselves stuck in a slow, expensive planning process for a small site, these changes might be of interest.