30th January 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

MTD for Landlords: Nearly There!
Making Tax Digital (MTD) for income tax will be mandated for a large group of self-assessment taxpayers from 6 April 2026, with even more individuals being mandated in 2027 and 2028.

If your combined turnover from a property or sole trade business was over £50,000 in the 2024/25 tax year, you will likely be required to comply with the MTD for income tax rules from 6 April 2026.

Reports from recent surveys indicate that many landlords are not confident that they understand the requirements of MTD for income tax. Many are concerned or worried about the changes.

If you are one of those landlords, do not worry! We can help you switch to MTD-compatible software to meet the new reporting requirements.

Over the past year, we have successfully helped many of our clients prepare for MTD. If you would like to discuss how you can meet the new requirements, please speak to us - we are happy to help!
 
Business Rates Relief for Pubs and Live Music Venues
It has been announced that eligible pubs and live music venues in England will receive a 15% discount on their business rates bills in 2026/27. Rates bills will then be frozen in real terms for a further two years.

The British Beer and Pub Association (BBPA) has said that pub landlords will breathe a sigh of relief and that the relief will “stave off the immediate financial threat posed by accelerating business costs.”

Wider concerns remain over the challenge of rising costs and squeezed profit margins.

Which pubs are eligible?
To be eligible, a pub must meet all of the following criteria.

• Be open to the general public.
• Allow free entry other than when occasional entertainment is provided.
• Allow drinking without requiring food to be consumed.
• Permit drinks to be purchased at a bar.

Businesses that will be specifically excluded are:

• Restaurants, cafes, nightclubs, snack bars.
• Hotels, guesthouses, boarding houses.
• Sporting venues.
• Festival sites, theatres, cinemas.
• Museums, exhibition halls.
• Casinos.

The government has advised local authorities that the above list is not intended to be exhaustive, and the local authority will have discretion to make the determination where eligibility is unclear.

The intent of the policy is to benefit pubs that would be classified as such by the natural meaning of the word. Being owned and operated by a brewery would be one example of this.

Which live music venues are eligible?
Properties that are wholly or mainly used for the performance of live music to entertain an audience will qualify for the relief.

The property is still likely to qualify if it is used for other ancillary activities, such as the sale of food and drink to audience members or is infrequently used in a way that does not affect its primary use, such as use as a polling station or fortnightly community event.

A property that is wholly or mainly used as a nightclub or theatre under the Town and Country Planning (Use Classes) Order 1987 (as amended) will not be considered to be a live music venue for the purposes of the relief.

What is the position in Scotland, Wales and Northern Ireland?
Business rates are devolved in Scotland, Wales and Northern Ireland.

The Welsh government has already indicated that it will explore whether additional support for pubs is needed once the final details of the announcement are known.

See: https://www.bbc.co.uk/news/articles/c78vqj99168o
 
£11 Billion Lending Package Announced to Support UK Exporters
The government has announced a significant new lending package that could make it easier for businesses to take on overseas work. Five major UK banks have agreed to make £11 billion available to help businesses invest, hire and expand into new international markets.

This is a sizeable collective move from these banks which, together, count half of all British businesses amongst their customers. This means the funding has the potential to be practical for many businesses, rather than theoretical.
 
Understanding the new lending
The money is coming directly from the banks, but UK Export Finance (UKEF) will guarantee up to 80% of eligible loans. For working‑capital loans of up to £10 million, banks can apply this guarantee automatically.

Alongside the finance itself, businesses will be able to access support from bank relationship managers and UKEF’s regional Export Finance Managers.

What this could mean in practice
The package could be useful if you have a specific overseas opportunity, but the timing or scale is putting pressure on your cash flow. For example, you might receive an order from a distributor abroad and need to buy materials upfront. Or you might want to set up a team to bid on a contract overseas but need funding to cover the early setup costs or get some certainty around the business’s working capital.

International markets can sometimes prove an effective way to grow your business. The guarantee behind the lending could make financing such a move much easier to access and open up possibilities that may have felt out of reach.

What to do if this is relevant to you
If you already have overseas customers, or if you see international opportunities that you haven’t been able to develop, it could be worth speaking to your bank about how this lending sits alongside your existing facilities.

If you would like help assessing the viability of overseas opportunities or a more general health check on your business finances, please get in touch at any time. We would be happy to help you!

See: https://www.gov.uk/government/news/uk-lenders-step-up-with-11-billion-push-to-back-british-businesses
 
FCA Launches Review into the Impact of Advanced AI
The Financial Conduct Authority (FCA) has launched a major review into how advanced artificial intelligence (AI) could affect consumers, financial markets and regulators over the coming years.

With AI already built into many services across banking and insurance, the FCA wants to understand the effects it is likely to have over the next few years.

The purpose of the review
Evidence gathered will help the FCA decide how best to support innovation while ensuring retail financial services remain safe and trustworthy. The FCA does not plan to introduce AI‑specific regulation, but it wants to consider how regulators need to evolve as AI becomes more embedded in financial services.
 
The FCA is seeking views on four key themes:

• How AI might develop, including how more autonomous or “agentic” AI systems.
• How these developments could affect firms and markets.
• What the impact on consumers will be.
• How financial regulators may need to evolve.

Wholesale markets and wider societal issues fall outside the scope of this review but will be considered where they indirectly affect retail services.

To read more about the review and respond to the call for views, see the FCA website.
 
VAT Flat Rate Scheme: Could It Work for You?
If you are a small VAT-registered business, how you calculate your VAT could make a real difference to your cash flow and the time you spend keeping records.

For some businesses, the standard method for calculating VAT is the best choice, but for others, their circumstances mean the VAT Flat Rate Scheme may be worth considering.

Here we review some of the factors involved in determining whether the VAT Flat Rate Scheme could work for you.

Comparing methods
Under the standard method you charge VAT on your sales and reclaim VAT on your purchases. You then pay the difference to HM Revenue & Customs (HMRC).

The Flat Rate Scheme uses a different calculation. You still charge your customers the usual VAT rate. However, instead of reclaiming VAT on most purchases, you pay a fixed percentage of your VAT-inclusive turnover to HMRC. The percentage amount depends on the industry your business belongs to.

Eligibility rules apply. Businesses may be able to join the VAT Flat Rate Scheme if their VAT turnover is £150,000 or less (excluding VAT).

When the Flat Rate Scheme might help
The Scheme can work well for businesses when VAT-able expenses are low. For example, a consultant or designer who mainly sells their time may find the flat rate percentage more favourable than reclaiming VAT under the standard method.

Some business owners also prefer the simplicity. Because you don’t claim VAT on purchases, other than certain capital assets over £2,000, the calculations can be quicker. 
 
When the standard method may be better
If your business regularly buys goods or services with VAT on them, reclaiming VAT through the standard method is often more cost-effective. The same can be true if you regularly make larger purchases.

Choosing a method
The best way to be sure which method is right for you is to run the numbers and compare.

If you would like advice on whether the Flat Rate Scheme is right for you, give us a call. We are happy to help!
 
Business Confidence Falls Again as Tax Concerns Reach Five‑Year High
The latest Business Confidence Monitor, an Institute of Chartered Accountants in England and Wales survey, shows confidence continuing to fall. Confidence has now fallen for six consecutive quarters and is now at its lowest since the final three months of 2022.

The survey, which gathered views from 1,000 business leaders, shows growing concern over tax complexity and the wider outlook for business activity.

Tax pressures rising
A record 64% of businesses said the tax burden was becoming a greater challenge, up from 60% in the previous quarter. According to the report, this reflected uncertainty over what tax changes might be included in the Autumn Budget 2025, combined with the effects of previous tax rises feeding through.

Regulation was the second biggest reported challenge, with 51% of businesses saying it was holding back performance. Many cited the Employment Rights Bill as a contributing factor.

Differences between sectors
Some sectors remain noticeably more pessimistic. Property, retail and wholesale continue to show the weakest sentiment, with construction close behind.
Exporters, however, were more upbeat than non‑exporters. IT and communications was the only sector to report a positive score, at +0.3. 
 
Employment and pay trends
Employment growth slowed to 0.8% in the quarter, the lowest figure since mid‑2021. Manufacturing and engineering, retail and wholesale and transport reduced their headcount as 2025 ended. However, it seems that transport and storage are the only sectors expecting to cut jobs further during 2026.

Salary growth also eased to 2.9%. This is still above pre‑pandemic levels but lower than the rises seen in recent years. The expectation is for pay to increase at a similar pace over the next 12 months.

Sales expectations improving
Despite the fall in overall confidence, there are some bright spots. Expectations for domestic sales improved for the first time since 2024, even though actual growth slowed slightly to 2.9%. Export sales growth rose to 2.5% and is also expected to continue improving in 2026.

Capital investment grew modestly to 2%, although businesses expect to slow their spending plans over the coming year.

What this means for your business
The report paints a picture of businesses managing rising costs while holding back on hiring and major investments. At the same time, the slight improvement in sales expectations suggests many firms are cautiously optimistic about trading conditions in 2026.

If you would like to review how these economic trends might affect your business plans, particularly around staffing, investment or cash flow, please feel free to get in touch. We would be happy to help you!

See: https://www.icaew.com/insights/viewpoints-on-the-news/2026/jan-2026/tax-worries-pull-business-confidence-further-into-negative-territory
 
Low Pay Commission Seeks Views on the National Minimum Wage
The Low Pay Commission (LPC) has announced a series of visits across the UK in 2026 to gather first‑hand evidence on how the National Minimum Wage is affecting employers and workers. These local meetings will help shape its recommendations to the government later in the year.

Where the LPC will be visiting

• Bradford - 18/19 March 2026. 
• Aberdeen - 15/16 April 2026. 
• Blackpool - 13/14 May 2026. 
• Peterborough - 10/11 June 2026. 
• Wrexham - 01/02 July 2026. 
• Derry - 29/30 July 2026.

The LPC will be looking to hear about:

• The economy and labour market in the area.
• The outlook for pay and employment in businesses.
• How employers and workers are affected by the rising minimum wage.
• The views of attendees on the future of the minimum wage.

To take part, contact details can be found here.
 
Ground Rent to Be Capped at £250
The government has announced a significant set of reforms to the leasehold system in England and Wales. These changes include ground rent being capped at £250. New leasehold flats will also be banned and there will be a move towards commonhold ownership.

If you own a leasehold property, these proposals could have a meaningful impact over the next few years.

Proposed ground rent cap
The headline measure is a cap on ground rent for existing leases. Under the plans, ground rent will be limited to £250 a year before dropping to a peppercorn after 40 years.

The cap aims to address long‑standing concerns about leaseholders paying rising ground rent for no clear service in return. The government has estimated that many people will see savings of more than £4,000 over the period of their lease, though the exact benefit will depend on the wording of the individual lease.

For some, the issue has been more immediate. Higher ground rents or uncertain terms can deter potential buyers or make securing a mortgage more difficult. The proposed cap could help to make a property more saleable.

The move forms part of the draft Commonhold and Leasehold Reform Bill, which was published last week. Depending on the Bill’s progress through Parliament, the ground rent cap could come into force in late 2028.

Other key changes announced
Alongside the ground rent cap, the government has set out a broader package of reforms intended to give leaseholders more control and reduce the risk of unfair practices.

The measures include a ban on new leasehold flats so that, with limited exceptions, new flats for homeownership will have to be sold as commonhold.

Forfeiture, which is the rule that allows a freeholder to take back a property if a leaseholder breaches the terms of the lease, will be abolished. Instead, a new lease enforcement scheme will be implemented.

The intention is that commonhold becomes the default model for new builds. Leaseholders in existing buildings will be able to switch to commonhold, provided the majority of residents agree.

Commonhold and how it works
Under commonhold, each homeowner owns their flat outright and also holds a share in the management of the wider building. Decisions such as annual budgets, maintenance and long‑term planning are made collectively.

The government says the updated framework will include clear rules on repairs, leadership and owners’ rights, with the aim of making it suitable for a broader range of buildings.

Next steps
A consultation on moving to commonhold is running until 24 April 2026. Once the government publishes their response to this consultation, it will become clearer how the transition to commonhold will be managed. Leaseholders will no doubt be keenly awaiting future developments.
See: https://www.gov.uk/government/news/pm-were-capping-ground-rents-at-250       

24th January 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 Management Skills Matter More Than Ever for Business Owners
Many people start a business because they are good at what they do. A great designer sets up on their own. A skilled electrician goes self-employed. A consultant turns expertise into income. What often comes later is realising that running a business and doing the work are two very different jobs.

As a business grows, management skills become just as important as technical ability for the success of the business.

What management really means in a small business
In a smaller business, management is not about hierarchy or job titles. It is about how work gets organised and how people, including you, are supported.
Good management often shows up in quite simple, everyday ways. For instance:

• Setting clear expectations with staff, contractors or clients.
• Deciding between what needs to be done now and what can wait.
• Spotting problems early, before they become expensive.
• Having time to step back and think.

Firefighting, missed deadlines, confused roles, work being redone, or feeling constantly stretched can all be signs of a need to improve how the business is being managed. These kinds of issues do not usually come from a lack of effort; they come from a lack of structure.

Why management skills often get overlooked
Management skills often fall down the priority list because time is tight and client or customer work comes first. Or it may be that managing people feels uncomfortable or unfamiliar.

However, not addressing how the business is managed means you can end up stuck in the day-to-day, with little capacity to focus on growing the business or carrying out long-term planning. 
 
How improving management skills helps your business
Businesses with clearer management tend to:

• Run more predictably, with fewer surprises.
• Retain staff for longer and reduce recruitment costs.
• Have happier customers because they deliver a more consistent service.
• Free up time for the business owner to be able to focus on strategy.

Even small changes, such as regularly checking in with staff or having clearer task planning, can have a noticeable impact.

Practical ways to build management skills
Improving management does not require formal qualifications or years of experience. For many business owners, they make progress by:

• Talking with other business owners about what works.
• Finding a mentor who can challenge their thinking and share experience.
• Undertaking some short, practical training.
• Thinking about what’s not working and making one change at a time to gradually improve it.

Just like with any other part of the business, management can be learned and improved over time.

A final thought
Good management and proper controls are vital for business success. Having the best idea in the world is only half the story. It is management skills that will make the idea work and keep you and your staff happy along the way.

Why not talk to us about one of our management improvement days? We can help you to identify your key systems and standardise how the business operates, so your efforts can be focused on where they add most value.
 
Nearly 500 employers fined over National Minimum Wage breaches
Almost 500 UK employers have been fined a total of £10.2 million for failing to pay the National Minimum Wage (NMW), with £6 million returned to 42,000 workers.

The list of named employers includes well-known high-street brands, indicating that businesses of all sizes can have difficulties in applying the minimum wage rules correctly. 
 
Implications for employers
For businesses, this latest naming round highlights the ongoing scrutiny there is on minimum wage compliance.
The NMW and National Living Wage rates increased earlier this year, with a further rise planned from April 2026. As a reminder, the rates are:

2025 rate / 2026 rate

• National Living Wage (21+): £12.21 → £12.71

• 18–20: £10.00 → £10.85

• Under 18: £7.55 → £8.00

• Apprentice: £7.55 → £8.00

Failing to pay workers correctly can lead not only to fines but also risks harm to the business’s reputation.

With employees being encouraged to obtain advice from Acas or complain to HM Revenue & Customs (HMRC), it is an important area to get right.

Strengthening enforcement
The government plans to expand oversight of labour standards in 2026 with the creation of a Fair Work Agency as part of the new Employment Rights Bill.

The agency will have powers to address employers who underpay workers and fail to pay holiday and sick pay.

If you need help with your payroll and ensuring that your staff are paid correctly, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/expansion-of-support-scheme-to-help-thousands-of-people-back-into-work
 
Private sector pay growth slows to five-year low
UK wage growth eased to 4.5% between September and November 2025, according to the Office for National Statistics, reflecting a notable slowdown in private sector pay.

Pay in private businesses rose just 3.6%, the lowest rate in five years. Public sector wages increased 7.9%, however, the ONS has said that this was likely due to pay awards being brought forward when compared with the previous year.

The labour market showed further signs of cooling. The number of people on company payrolls fell by 135,000, with the decline concentrated in retail and hospitality.

Youth unemployment for 16-24-year-olds remained elevated at 15.9%, while overall unemployment held at 5.1%, the highest since early 2021.
 
Are there any takeaways for businesses?
Economists have interpreted slower private sector pay growth as something that will ease inflationary pressures, which may help in further cuts to interest rates.

Slower private sector pay growth suggests that there could be some relief to wage pressures over the next few months, although with an increase to national minimum wage rates coming in April, hiring is unlikely to get cheaper.

The weaker hiring activity by retail and hospitality businesses suggests that consumers are feeling the pinch, which could have implications for sales income for many businesses.

See: https://www.bbc.co.uk/news/articles/cddgrg87ly5o
 
Self-employed workers able to apply for enhanced DBS checks
From 21 January 2026, new legislation allows self-employed individuals and personal employees to apply for Enhanced and Enhanced with Barred List(s) DBS checks in their own right for the first time.

Until now, self-employed people could only obtain a Basic DBS check. Where an Enhanced check was needed, an employing organisation had to apply on their behalf, which was not always possible when someone was working directly for individuals.

What’s changing
Under the new rules, self-employed workers and personal employees who are paid for their role will be able to apply for Enhanced DBS checks themselves, provided their role is eligible.

Applications must be made through a DBS umbrella body, rather than directly to DBS.

This change is expected to be particularly relevant for:

• Private tutors providing lessons directly to children.
• Carers or support workers hired directly by individuals.

What isn’t changing
The eligibility criteria for DBS checks remain the same. Only roles that already qualify under existing DBS legislation will be eligible.
Where someone works for, or is contracted by, an organisation, the existing process still applies. Employers can continue to apply for DBS checks on behalf of their staff in the usual way. 
 
How applications will work
Self-employed individuals and personal employees will need to apply through a registered DBS umbrella body. These organisations are authorised to process DBS checks and submit applications to DBS.

The existing DBS fees still apply, and umbrella bodies may charge an additional administration fee. A list of suitable umbrella bodies can be found using the find an Umbrella Body tool on GOV.UK.

If you’re hiring someone directly
If you are hiring a self-employed worker or a personal employee, you cannot apply for a DBS check on their behalf. Instead, the individual being hired must make their own application through an umbrella body.

When recruiting, you can ask to see the applicant’s original DBS certificate and use the free DBS Update Service to check whether it is still current.

If you are working independently in roles involving children or vulnerable adults, this change should make it easier to obtain the appropriate level of DBS check without relying on an organisation to apply on your behalf.

See: https://www.gov.uk/government/news/self-employed-workers-and-personal-employees-can-now-apply-for-enhanced-dbs-checks
 
Small Business Britain Launches ‘Small and Mighty Enterprise Programme’ to Support Small Businesses
Small Business Britain is set to roll out its Small and Mighty Enterprise Programme, a six-week online course designed to help sole traders and micro businesses unlock growth opportunities.

The programme combines expert guidance, mentoring, and practical resources to equip participants with a twelve-month action plan to grow and flourish over the next year. Delivered entirely online, it offers flexible learning accessible from anywhere in the UK, making it suitable for business owners with busy schedules.

Key features of the programme include:

• Live weekly sessions recorded and available on a private Small Business Britain website available exclusively to participants.
• Weekly worksheets developed by each week’s expert trainers to reinforce key learning outcomes.
• 1-2-1 and group mentoring, providing one hour of personalised guidance across the six weeks.
• Access to an exclusive community of peers and mentors for networking, advice, and sharing experiences.
• A personalised twelve-month Action Plan to guide business growth.

The course runs from 2 February to 9 March 2026, with sessions held every Monday at 10am.

Small business owners looking to develop their skills, expand their networks, and plan for growth can find more information and register via the Small & Mighty Enterprise Programme Registration page.
 
WorkWell to roll out across England
A national expansion of WorkWell, a health-and-employment support service, is set to take place across England, following a successful pilot that helped more than 25,000 people stay in or return to work.

The programme aims to support up to 250,000 more people with health conditions, and forms part of the government’s wider efforts to tackle long-term sickness absence and economic inactivity.

For employers, the key point is that WorkWell is designed as an early intervention service - stepping in before health issues lead to prolonged absence or an employee leaving work altogether.

Long-term sickness remains a significant issue for businesses. Around 2.8 million people are currently out of work due to long-term health conditions, and fit notes are issued more than 11 million times a year.

How employees can access support
Participants in the programme can be referred through:

• Their employer.
• A GP.
• Jobcentre Plus.
• Local services.
• Self-referral.

Each participant receives personalised support from a Work and Health Coach. Services offered vary depending on location, but can include physiotherapy, mental health support, workplace adjustment advice for employers and ongoing health condition management.

Businesses may want to be aware of WorkWell as a referral option for staff struggling with health issues.

See: https://www.gov.uk/government/news/expansion-of-support-scheme-to-help-thousands-of-people-back-into-work

16th January 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

Getting Ready for Making Tax Digital
With just 10 weeks or so to go until the new tax year, many businesses are preparing for the changes that Making Tax Digital (MTD) will bring. From April, sole traders and landlords with an income of over £50,000 will need to submit quarterly updates to HMRC.

It is estimated that around 900,000 individuals will be joining in April. If you are affected, this will be a major change and the earlier you can be prepared, the better.

Using approved software
MTD requires the use of software. Whether you are already a ‘digital native’ with your bookkeeping, or have not yet made the jump, it will be vital to make sure that any accounting software you use is HM Revenue & Customs (HMRC) approved for MTD use.

Use of software for keeping your accounting records can have benefits beyond helping you to comply with MTD. For instance, software can help streamline some of your work, make it easier to forecast your cash flow, help inform you in making financial decisions and help to reduce mistakes.

That means that when you are selecting accounting software, it is worth considering some of the other advantages it could give you and your business.

Registering for MTD
Based on your tax return information, HMRC will get in touch with you to let you know that you need to get ready for Making Tax Digital.

However, HMRC will not sign you up automatically. This is something you will need to do, and it is important that you do this in time.

Are there any exemptions?
There are some automatic exemptions from MTD. For instance, if you are submitting a tax return as a trustee or as a personal representative of a taxpayer who has died, there is no need to sign up for MTD. Generally, HMRC will tell you if you are automatically exempt.

In addition to automatic exemptions, there are situations where an exemption can be applied for. So, it pays to check whether your situation might mean you can apply.
 
What if your income is less than £50,000?
MTD is being given a phased introduction. MTD will become mandatory for sole traders and landlords as follows:

• 6 April 2026 - those with income above £50,000
• 6 April 2027 - those with income above £30,000
• 6 April 2028 - those with income above £20,000

It is possible to voluntarily sign up sooner if you wish.

Does MTD apply to partnerships?
Not yet, however, HMRC have advised that business partnerships will also need to use MTD in the future. The timeline for when this will happen will be set out at a later date.

Would you like help with MTD?
Choosing software can be a bit of a minefield, so if you would like support, we can offer you a tailored recommendation and any training you need. We can also handle your registration with HMRC.

If you would like ongoing help with bookkeeping, filling in the quarterly returns, or you just want us to handle the end-of-year return, please get in touch. We would be happy to help you!
 
New to Self Assessment Tax? Here’s an Explainer
If you are new to being self-employed or being a landlord, Self Assessment can feel like one of those jobs you know you should understand better, but never quite get around to.

When do you actually pay the tax? Why does January seem to be so expensive? And what on earth is a “payment on account”?

In this article, we’ll walk you through how Self Assessment tax payments work in practice, the key dates to watch, and how to avoid nasty surprises by planning ahead.
 
Understanding Self Assessment payments
Once your tax return is completed and filed, HM Revenue & Customs (HMRC) calculate how much tax you owe on all income you have earned outside of PAYE. Unlike tax taken automatically from a salary, you are responsible for paying the tax yourself. That is why knowing the deadlines is crucial.
  
For most people, there are two main types of payments to make each year:

1. Payment on account - This is essentially a prepayment for your next year’s tax. When your tax bill for a year is over £1,000, HMRC will require you to make two equal payments on 31 January and 31 July. Think of it like a deposit on your tax bill.
   
2. Balancing payment - This is the top-up for anything left over once your tax return is finalised and submitted. It’s due by 31 January following the end of the tax year.For example, say your tax bill for 2023/24 was £3,000. You will likely have paid £1,500 on 31 January 2025 and another £1,500 on 31 July 2025 as payments on account. Then, if your tax bill for 2024/25 is £3,200, you will pay the £200 balancing payment on 31 January 2026. You will also pay a £1,600 payment on account against the next year’s tax bill on the same date, which means you would pay a total of £1,800 on 31 January 2026.

If you are new to Self Assessment, then you probably will not have made any payments on account for the first tax year that you file a tax return for. So, you will need to pay the full balance for the entire tax year on the 31 January following the tax year end.

In other words, if your tax bill for 2024/25 is £3,200, you’ll need to pay £3,200 on 31 January 2026. You’ll also pay a £1,600 payment on account against the next year’s tax bill on the same date, which means you’d pay a total of £4,800.

No wonder January can feel so expensive!

How to pay
Paying is straightforward once you know the methods.

These days most people pay online through their HMRC account by bank transfer or by debit card. You can also use the HMRC app to pay your bill through your bank’s app or by using online banking.

You just need the reference numbers to make sure the money goes to the right place.

Avoiding surprises
Late or missing payments can lead to penalties and interest charges, so planning ahead is essential. A good tip is to set up a calendar reminder so that you don’t forget to make the payment on time.

Keeping a separate pot of money for tax that you save each month can also prevent you from scrambling at the last minute.

If you need help completing your tax return or want advice on paying tax, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/65-rise-in-self-assessment-payments-via-the-hmrc-app
 
Choosing an MSP: What Every Business Needs to Know
Most smaller businesses use a Managed Service Provider (MSP) to provide IT and website support. If you are not an IT expert yourself, it can be challenging to know how to select an MSP and to ensure that they will deliver the services you need for your business.

With UK businesses increasingly under attack from cyber criminals and your MSP having access to your systems and data, it’s also important to know that your MSP is serious about cybersecurity.

The National Cyber Security Centre (NCSC) has published a handy guide that can help you to ask the right questions and be able to take a proactive approach with your MSP.

What’s in the guide?
The following subjects are covered in the guide:

• Choosing an appropriate MSP - The guide includes information on the certifications you should expect to see and what should be contained in a clear contract. 
• Security issues to discuss with your MSP - These include ideas for conversations to have with your MSP on patching and updates, backups, access, logs and incident response. 
• Details to check in your MSP contract - For instance, you will want to know about your Service Level Agreement (SLA) response and resolution times, and what plans you have for systems that are coming to the end of their life.

The guide concludes with an MSP due diligence checklist that could be a useful resource when discussing your IT systems and website with your current MSP or when you need to find a new one.

To review the guide, see: https://www.ncsc.gov.uk/guidance/choosing-a-managed-service-provider-msp 
 
Backtrack on Digital ID Requirements
It appears that the government has backtracked on plans to require workers to register with its new digital ID programme to prove their right to work in the UK.
While right-to-work checks will still be carried out digitally by 2029, such as by using biometric passports, registering for a digital ID will be optional.

Transport Secretary Heidi Alexander confirmed that mandatory digital right-to-work checks will be brought in to help crack down on illegal working, but that the digital ID will be one way that a worker could use to prove their eligibility to work.

The idea of compulsory digital IDs has proved unpopular with nearly three million people signing a parliamentary petition to oppose their introduction.
Details on how the digital ID will work are not yet available. Many expect it to be based on the Gov.uk One Login and the yet to be launched, Gov.uk Wallet.

In the meantime, it is already possible to use government-certified digital verification services to do passport checks on British and Irish citizens. The Home Office also provide an online service for verifying the status of non-British or Irish citizens where the individual’s immigration status is held electronically.

See: https://www.bbc.co.uk/news/articles/c3385zrrx73o
 
Fairer Prices for Farmers on Sheep Carcases
New rules came into effect last week that mandate classification and price reporting for sheep carcases in England and Scotland. This means that the sector is now brought into line with beef and pork.

The rules should mean that producers will have clearer information on how animals are assessed and priced at slaughter, and make it easier for them to analyse market demand to see what attracts premium prices.

National Sheep Association CEO Phil Stocker described the new regulations as a helpful step that will give sheep farmers more clarity and should “create better transparency and trust through the supply chain.”

Wales and Northern Ireland will be issuing equivalent measures in early 2026.

See: https://www.gov.uk/government/news/sheep-carcase-classification-rules-to-deliver-fairer-prices-for-farmers
 
Construction Firm Fined £60,000 After Worker Falls Through Unprotected Stairwell
A Northwest construction company has been fined £60,000 after an employee was seriously injured falling through an unprotected floor opening.

The incident occurred in April 2024 at a site in Cumbria when a general labourer was sweeping dust and debris on the first floor. Boards had been laid across part of an opening for a staircase, but they did not cover the full gap, and no edge protection or warning signs were in place. While working along the boards, a newly built wall collapsed, knocking him over the unprotected edge.

The employee fell from around 2.5 to 3 metres and spent a month in hospital recovering from multiple fractures and a dislocated shoulder.

An HSE investigation found that the risk had not been addressed, there was no supervision at the time, and the worker had not been given safety instructions.
The company was found guilty of breaching Regulation 6(3) of the Work at Height Regulations 2005 and was fined and ordered to pay costs and a victim surcharge.

HSE Inspector Derek McLauchlan commented: “Any work at height is potentially high-risk and requires proper planning and implementation. This incident could have been avoided had appropriate control measures and training been in place.”

This case highlights the importance of ensuring the safety of employees working at height. A guide on what employers need to do to protect their employees from falls from height is available on the HSE website.

See: https://press.hse.gov.uk/2026/01/07/construction-company-fined-60000-after-worker-falls-through-unprotected-floor-opening/

9th January 2026 – Hillmans Weekly Update

9th January 2026 – Hillmans Weekly Update

Happy New Year, and 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

MAKING TAX DIGITAL FOR INCOME TAX – AN UPDATE
Making Tax Digital (MTD) for income tax will be mandated for a large group of self assessment taxpayers from 6 April 2026, with even more individuals being mandated in 2027 and 2028. The following MTD for income tax measures were announced at Budget 2025:
 
Let’s start with some good news! The government has announced that late filing penalties will not be issued in respect of quarterly updates in 2026/27. This easement will not apply to the 2026/27 annual tax return, which must be filed by 31 January 2028. All quarterly updates must be submitted before the annual tax return can be filed.
 
We had previously been told that taxpayers who currently report income on the SA109 self assessment page (residence, remittance basis etc) will not need to comply with the MTD rules until April 2027. Budget 2025 included a list of even more types of taxpayer who will be deferred until April 2027:

• Recipients of trust and estates income,
• Individuals who use averaging adjustments (e.g. farmers and creative artists),
• Recipients of qualifying care income, and
• Non-UK resident foreign entertainers or sportspeople. 

Taxpayers who are under deputyship will also be exempt from MTD for income tax.
 
EMPLOYEES’ WORKING FROM HOME EXPENSES
From 6 April 2026, employees will no longer be able to claim a tax deduction from their earnings in respect of expenses incurred while working from home.  Historically, some home-working employees have claimed a flat-rate deduction of £6 per week or the actual costs of working from home, if higher.
 
The government has said that such relief will be abolished because too many people are claiming the deduction when they are not entitled to it.
 
Employers will still be able to reimburse home-working expenses to employees free of PAYE tax and national insurance contributions, but only if those expenses are wholly, exclusively and necessarily incurred as a result of their employment duties. This is a high bar to cross – it generally means that the employee’s contract requires them to work from home. Employees who choose to work from home will not qualify for tax-free reimbursement.
 
MANDATORY PAYROLLING OF BENEFITS IN KIND FROM APRIL 2027
From April 2027 it will be mandatory for employers to include most benefits in kind (BiKs) provided to employees in their payroll.
 
All BiKs will need to be payrolled except employer provided living accommodation and interest free and low interest (beneficial) loans. It will be possible to payroll these two BiKs on a voluntary basis.
 
Early preparation can ensure a smooth transition to the new system with minimal disruption, cost, and impact on employees. Employers are also reminded not to underestimate the time it will take to ensure payroll processes are robust enough to handle real time reporting of BiKs.
 
We can help you with the switch to payrolling BiKs, but it’s important that your employees are made aware of the changes to how their BiKs will be taxed from April 2027. Early communication will be key to enable them to understand how this might affect their tax codes and take-home pay.
 
 It is important that you explain that:
 

• employees who are currently paying tax in arrears on their BiKs will not be doing so from April 2027 onwards – many employees may not realise that this is how they were paying tax on their BiKs, and that they will be paying tax on their BiKs in the year that they receive them.
• they may currently have a deduction in their tax code so that they pay tax on an estimated BiK – this will no longer be the case from April 2027.
• tax on BiKs will have to be paid in real time in the year that they are received.

Where an employee is also paying tax on a BiK provided in a previous year, from April 2027 it might seem to them that they are paying tax twice on the BiK. You might need to explain that they will be paying tax in real time on the BiKs they receive for that year whilst also catching up with payment of tax for the BiKs from the previous years.
 
If the move to payrolling BiKs will affect you and your employees, please speak to us. We will be happy to help you switch to the new process.
 
WHAT IS E-INVOICING?
Over the coming years we will be hearing a lot more about e-invoicing because the government has confirmed that it will be mandated for VAT invoices from 2029.  It believes that growth, administrative benefits and increased revenue can be optimally achieved by the introduction of e-invoicing. 
 
Electronic invoicing or 'e-invoicing' is the digital exchange of invoice data between a buyer and a supplier's financial systems. An e-invoice is not just a digital photograph or an email attachment – it will require both the supplier and customer to have compatible software so that data in prescribed fields can be transmitted from one to the other.
 
At Budget 2025 the government announced that in 2029, business-to-business (B2B) and business-to-government (B2G) VAT e-invoices will be mandatory. They also confirmed that real-time reporting of e-invoices to HMRC will also be mandated in future, although this will occur after 2029.
 
The government plans to announce a detailed roadmap implementing mandatory e-invoicing for VAT at Budget 2026. 
 
WHY DID THE CHICKEN GO TO THE VAT TRIBUNAL?
In WM Morrison Supermarkets v HMRC, the first tier tribunal (FTT) found that rotisserie chickens were a supply in the course of catering and therefore subject to VAT at 20%.
 
VAT legislation zero-rates supplies of food, but supplies of catering are excluded from the zero-rating.  ‘Catering’ includes supplies of hot takeaway food but not cold. ‘Hot takeaway food’ is also defined and includes any food that is kept hot after it has been heated, be it on hot plates, under heat lamps or in packaging that retains heat. This is why it is possible to buy a VAT-free hot pie or pasty; if they are neither cooked to order nor kept warm, they can be zero-rated straight out of the oven!
 
Any takeaway food that is advertised or marketed in a way that indicates that it is supplied hot will also be subject to VAT at 20%.
 
Morrisons appealed to the FTT against VAT assessments totaling £17,034,932. They argued that their rotisserie chickens were cold takeaway food and were therefore zero-rated. HMRC argued that the chickens met several of the conditions for standard-rating.
 
The FTT found that the chickens were not advertised or marketed as hot food but they were kept in packaging that retained heat. Morrisons claimed that the plastic-lined chicken bags were merely designed to contain chicken juice, but it was found that in the packaging a tightly-wrapped chicken would cool by 47.06% after 2 hours, compared with a 62.59% temperature drop for an unwrapped chicken over the same time period.
 
The chickens were therefore hot takeaway food and a standard-rated supply of catering.
 
This case demonstrates the complexities involved in establishing the VAT rating of some supplies. If you have any questions about charging VAT on your goods or services please get in touch with us.
 
ADVISORY FUEL RATES FOR COMPANY CARS
 
The table below sets out the HMRC advisory fuel rates from 1 December 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.
 
 Engines up to 1400cc
    •    Petrol: 12p (previously 12p)
    •    Diesel: 12p (previously 12p)
    •    LPG: 11p (previously 11p)

Engines over 1400cc and up to 1600cc
    •    Petrol: 14p (previously 14p)
    •    Diesel: 13p (previously 13p)
    •    LPG: 13p (previously 13p)

Engines over 2000cc
    •    Petrol: 22p (previously 22p)
    •    Diesel: 18p (previously 18p)
    •    LPG: 21p (previously 21p)

Previous rates are shown in brackets. 
  
You can also 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 (8p) per mile where the vehicle is charged at home. The rate applicable to vehicles charged using public facilities is 14p (14p) per mile.
 
Employees using their own cars
For employees using their own cars for business purposes, the Advisory Mileage Allowance Payment (AMAP) tax-free reimbursement rate continues to be 45p per mile (plus 5p per passenger) for the first 10,000 business miles, reducing to 25p per mile thereafter. Note that for NIC purposes the employer can continue to reimburse at the 45p rate as the 10,000 mile threshold does not apply.
 
Input VAT
Within the 45p/25p AMAP payments, the amounts in the above table represent the fuel element. The employer is able to reclaim 20/120 of the fuel amount as input VAT provided the claim is supported by a VAT invoice from the filling station. For a 1300cc petrol-engine car, 2 pence per mile can be reclaimed as input VAT (12p x 1/6).

The Hillmans Team wishes you a Merry Christmas

The Hillmans Team wishes you a Merry Christmas and a Happy, Prosperous New Year!

Our office will be closed for the Christmas and New Year period from 5pm on Tuesday 23rd December 2025, reopening at 9am on Monday 5th January 2026. 🎄

Merry Christmas

I hope you are keeping well.

Merry Christmas

Merry Christmas and a Happy Prosperous New Year from all the team at Hillmans Chartered Accountants. 

I wish you and those close to you the happiest and safest of Christmases.

Our Christmas Opening Hours

Our office will be closed for the Christmas and New Year period from 5pm on Tuesday, 23rd December 2025, re-opening at 9am on Monday, 5th January 2026.

19th December 2025 – Hillmans Weekly Update:

Welcome also to the final round-up of tax news and updates for 2025. Please contact us if you want to talk about how these updates affect you. We are here to support you!

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

Looking ahead to 2026: reflections for business owners
With 2025 coming to a close, you may already be starting to reflect on how the year unfolded in your business.

Your expectations may have been exceeded in some areas. Perhaps you found a new source of revenue that grew faster than you anticipated, or you had a new customer relationship that really took off. On the other hand, you might have found you were limited by rising costs, difficulties in finding staff, or changes in what your customers expect.

The economy itself has been far from predictable. While inflation does seem to have eased slightly in recent months, higher wage costs and shortages in skills have been significant factors for many businesses.

You may also be thinking about how the business has contributed toward your broader goals. For instance:

• Did it grow in the ways you planned?
• Did it give you the flexibility, resilience or capacity to pursue new opportunities?

These questions perhaps show where the business supported your ambitions, or where it might have held you back.

With these thoughts in mind, the festive break may provide a natural opportunity to consider some of your strategic priorities in 2026.

What can you do to build on this year?
For instance, did you notice any patterns emerging over the past twelve months on which of your products or services truly delivered growth for your business? Or which customer or client relationships were the most valuable? Where did your business feel most stretched by things like rising costs, difficulties in finding staff, or changes in customer expectations?

Your observations may well help you in thinking about what your priorities could be for the year ahead.
 
How can you maintain resilience in the business?
The wider economic environment and day-to-day pressures are likely to continue shaping the decisions you make in 2026.

Have you found areas where the business has shown resilience in dealing with rising costs, maintaining customer loyalty, or responding to opportunities quickly?

These are strengths you can really continue to build on.

What could be your goal for 2026?
You might be thinking about growing your business in 2026. For instance, reaching new customers in different areas, adding to your team, or investing in new technology to make your business run more efficiently.

Or maybe you see value in consolidating the gains you made in 2025, concentrating on what has delivered the strongest returns and take a leaner, more focused approach in 2026.

However you are thinking at this time of year though, we hope that you are able to thoroughly enjoy any time off you have coming. 2025 has been a year of hard work and any rest you get is well deserved.

We look forward to supporting you in 2026, helping you to build on the progress you have made, and seeing what the new year brings for your business.
 
UK economy shows mixed signals as Bank of England cuts interest rates
The UK economy continues to show a mixed picture, with recent data highlighting both relief for households and ongoing challenges for businesses.

Inflation slows
Consumer price inflation fell to 3.2% in November, down from 3.6% the previous month.

The drop was largely driven by lower prices for food, clothing, and alcohol, with particularly large decreases in cakes, biscuits, and breakfast cereals. This has perhaps provided some respite for households ahead of the festive season.

Labour market softens
The unemployment rate rose to 5.1% in the three months to October, with younger workers hardest hit as youth unemployment has increased by 85,000.

These figures likely reflect the higher employment costs that came into effect in April 2025 and many businesses may have adjusted or delayed hiring plans while waiting to see what would be contained in the recent Budget.

Wage growth is still above inflation, which may be making employers cautious about hiring, though the impact could ease as private sector pay rises appear to be slowing.

Economic growth remains fragile
Official figures show the UK economy contracted by 0.1% in October and over the three months to October.

Weakness in the production sector, particularly vehicle manufacturing which was affected by the Jaguar Land Rover cyber-attack, and flat growth in services contributed to this slowdown.

It seems likely that both consumer and business spending was dampened by uncertainty ahead of the Budget.

Interest rate cut
In response to these conditions, the Bank of England has reduced its base rate from 4% to 3.75%.

The cut aims, in part, to support growth by lowering borrowing costs. Where you have variable rate borrowings this could be good news.

As the banks adjust to the new rate, it may also be a good time to consider whether refinancing could lower your business’ costs. 

If you would like help assessing your business’ borrowing or employment costs, please do get in touch. We would be happy to help you!
 
Ensuring seasonal staff are paid correctly over the Christmas period
As the Christmas period approaches, employers should be aware that all workers, including temporary, seasonal, and short-term staff, are legally entitled to at least the National Minimum Wage (NMW) or National Living Wage (NLW).

While seasonal work roles can be short-term, the same minimum pay rules apply as for permanent staff. This means ensuring that:

• All working time is counted – This would include starting early or staying late to open or close premises, cleaning, travelling time between work locations or completing mandatory training outside of working hours.
• Deductions do not reduce pay below the minimum wage – Costs for uniforms or equipment must not leave employees earning less than the legal minimum.

Current minimum wage rates
The current rates are:

• £12.21 – Age 21 and over (National Living Wage)
• £10.00 – Age 18–20
• £7.55 – Under 18
• £7.55 – Apprentice (under 19, or 19+ in first year)

By law, employees must be paid at least these rates for all hours worked.

Enforcement and consequences
In 2024/25, HM Revenue & Customs (HMRC) identified £5.8 million in arrears due to underpayment affecting 25,200 workers. As a result, 750 penalties totalling £4.2 million have been issued to non-compliant employers.

Penalties can reach up to 200% of the underpayment, in addition to the arrears owed. Employers who fail to comply may also be publicly named and can face prosecution.

Seasonal hiring can increase the risk of inadvertently underpaying staff. If you need any help with your payroll or would like specific advice on paying staff please give us a call. We would be happy to help you!

See: https://www.gov.uk/government/news/working-over-christmas-check-your-pay
 
HMRC warns of rising Self Assessment scams ahead of January deadline
HM Revenue & Customs (HMRC) has issued a warning about scams ahead of the 31 January Self Assessment deadline.

According to HMRC, more than 4,800 Self Assessment scams have been reported to them since February 2025. In all, they have received more than 135,500 reports of suspected scams, including 29,000 that referred to fake tax refund claims.

Scammers will often target taxpayers around peak filing periods, using persuasive or threatening tactics to obtain personal information or try and get the individual to make a payment to them. Common tactics include:

• Fake tax demands via email, text or phone calls.
• Claims of refunds that require the recipient to provide banking details.
• Threats of legal action or arrest.

Lucy Pike, HMRC’s Chief Security Officer, confirmed that scammers mimic HMRC to try and catch unsuspecting victims out. Her advice is: "If any emails, text messages or phone calls appear suspicious – don’t be lured into clicking on links or sharing your personal information - report it directly to HMRC. Just search ‘report and HMRC scam’ on GOV.UK to find out more"

HMRC have confirmed that they will never:

• Leave voicemails threatening legal action or arrest.
• Ask for personal or financial information via text message or email.
• Contact someone by email, text or phone to inform them about a refund or ask them to claim one.

If you are unsure about a message you have received, please feel free to contact us and we will be happy to confirm whether it is genuine or not.

See: https://www.gov.uk/government/news/4800-self-assessment-scams-reported
 
Three quarters of farmers receive 2025 Countryside and Environmental Stewardship payments
The Rural Payments Agency (RPA) has confirmed that three quarters of eligible farmers have already received their Countryside Stewardship and Environmental Stewardship payments since the 2025 payment window opened on 1 December.

So far, more than 28,351 payments have been made, totalling £435.6 million. The RPA has said that payments will continue throughout December and into the new year.

The Countryside Stewardship and Environmental Stewardship schemes are designed to support farmers in delivering environmental benefits while maintaining sustainable food production. Eligible activities under the schemes include:

• Protecting and restoring habitats and species;
• Improving water quality and reducing flood risk;
• Enhancing carbon capture; and
• Conserving important historical and archaeological features.

According to government figures, more than half of farmers now participate in schemes that encourage nature-friendly farming methods. These schemes can provide a financial return while also helping farmers meet wider environmental and regulatory objectives.

If you are expecting but have not yet received a payment, it seems likely that it is on the way. However, if you need any help with a payment or would like some objective advice on whether your farm could benefit from environmental schemes please give us a call. We would be happy to help you!

See: https://www.gov.uk/government/news/more-than-400m-paid-out-for-sustainable-food-production
 
Derby director jailed for £80,000 Bounce Back Loan fraud
A Derby company director has been jailed after fraudulently obtaining £80,000 under the Covid Bounce Back Loan Scheme and using the funds for personal share trading.

Temidola Ojelabi, 43, managed to secure two Bounce Back Loans for Platinum Gates Limited in 2020, despite businesses being entitled to only one loan. The Court sentenced him to two years and four months in prison and disqualified him from being a company director for eight years.

Platinum Gates Limited was a company set up in 2018 as an e-commerce venture and bought and sold goods from various warehouse premises. In May 2020, Ojelabi obtained a Bounce Back Loan of £35,000 after declaring company turnover of £150,000. Within a week, he had transferred £34,000 to his personal bank account, with £29,800 later paid into an online share dealing platform.

A second application was made in June 2020, this time claiming turnover of £180,000, resulting in a loan advance of a further £45,000. The funds were again transferred to his personal account within days.

Platinum Gates Limited entered liquidation in May 2021, with both loans unpaid. The Insolvency Service is seeking to recover the funds under the Proceeds of Crime Act 2002.

See: https://www.gov.uk/government/news/derby-fraudster-jailed-after-using-covid-loan-funds-on-share-dealing-platforms
 
UK farmers trial greener, smarter technologies through new ADOPT Fund projects
New trials that explore technologies for farmers to reduce emissions, boost productivity, and strengthen farm resilience were announced last week by Farming Minister Dame Angela Eagle.

Backed by nearly £2.3 million, across 30 projects through the first round of the government’s ADOPT Fund, the trials aim to test new ideas under real working farm conditions. That should make it possible to see what really works on farms before there is any wider take-up.

Examples of ADOPT trials include:

• Peat-free compost – One project will trial compost made from short rotation coppice willow grown in agroforestry systems and blended with other local materials. Different compost mixes will be tested to assess their performance as a growing medium. The aim is to reduce reliance on peat and artificial fertilisers. 
• Low carbon machinery – Another project will involve retrofitting an older Massey Ferguson 290 tractor to run on green methanol, assessing whether conversion could provide a practical low-carbon alternative where electrification is not yet viable. 
• Digital farm management – A further project will trial a Farm Digital Twin Platform on two beef and sheep farms. Using drone imagery, farm records, and on-farm testing, the platform will support nutrient planning, environmental monitoring, and day-to-day farm management.

The ADOPT Fund, delivered in partnership with Innovate UK, is part of a wider £20 million programme for 2025/26 aimed at supporting farmer-led innovation.

See: https://www.gov.uk/government/news/farmers-lead-the-next-wave-of-greener-smarter-farming

12th December 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

Budget 2025: What Businesses Can Take from the OBR’s Verdict on Growth
The latest Budget was packed with policy announcements, but according to the Office for Budget Responsibility (OBR), these policies will not really change the UK’s growth outlook over the next five years.

Compared with the forecast it prepared in March 2025, the OBR has lifted its expectation for growth this year but then marks it down every year through to 2030. If you were hoping for a clearer sense of the economy’s direction after the Budget, the message is mixed at best.

No Further NI Increase
One point of relief from the Budget was what didn’t happen. After last year’s significant rise in employers’ National Insurance contributions, there were no major new tax costs for employers. However, meaningful pro-business measures were also limited and could leave you wondering where business growth is going to come from.

Even businesses in sectors that did receive some targeted help, including retail and hospitality, are warning that their overall cost base is still set to rise.
Two areas - business rates and wage costs - seem to be standing out.

Business Rates: Relief, But Maybe Still Higher Bills
Business rates remain a major pressure point for high street businesses, with many seeing their rateable value increase due to the 2026 revaluation.

Many shops, pubs and hospitality businesses will have their rates calculated using a lower percentage of their property value; however, taken in combination with higher valuations many businesses are braced for higher bills.

For cash flow planning, this is something to review sooner rather than later.

Wage Costs: Good for Workers, Harder for Employers
National minimum wage increases will help workers, particularly those who are younger, but it means further cost pressure on employers already managing tight margins.

This may impact your recruitment or staffing plans or mean you need to look at raising prices to cover the additional costs.
 
Salary Sacrifice Cap for Pensions
The £2,000 cap on pension salary sacrifice arrangements also attracted attention. Amounts that are contributed above the cap will become subject to employer and employee national insurance contributions, making these arrangements much less desirable.

Concerns have been raised about the impact this change could have on business investment and pension funding.

It is worth noting that these changes are not proposed to take effect until 6 April 2029. So, there is still time for employers and employees to take advantage of the current rules.

If you would like advice on how a salary sacrifice arrangement for pension contributions works, please get in touch and we would be happy to provide you with personalised advice.

Wider Access to Investment Incentives
One measure that may help some growing businesses over the longer term is the expansion of the Enterprise Investment Scheme (EIS).

EIS schemes provide tax incentives to investors who invest in smaller companies, and from April 2026, investment will be allowed into businesses that have grown beyond the previous size limits.

What to Consider Now
While the Budget’s forecasts may not paint an especially bright picture for national growth, your own plans don’t have to rise or fall with the wider numbers. Many businesses continue to expand by focusing on the areas they can influence day-to-day. You can do the same.

Some sensible steps to consider based on the Budget measures would include:

• Reviewing your business rates valuation and checking whether you are eligible for any transitional relief. 
• Update your financial projections to factor in wage increases next April. 
• Look again at any pension contribution salary sacrifice arrangements you have and make sure staff understand how the changes could affect them. 
• If you are seeking investment for your company, it could be worth looking at the updated EIS rules to see whether they might open any new opportunities for you.

If you need help working through any of these changes - or simply want a second opinion on how they affect your plans - feel free to get in touch. We would be happy to help you!

Digital Assets Become Recognised Property
A legal landmark was reached last week as the Property (Digital Assets etc) Act received Royal Assent.

The new law confirms that certain digital assets - including cryptocurrency tokens and non-fungible tokens (NFTs) - can now be formally recognised as personal property in England, Wales and Northern Ireland. In Scotland, the Digital Assets (Scotland) Bill, which will recognise digital assets as property, is currently progressing through the parliamentary process.

This new legislation puts the UK among the first jurisdictions worldwide to give digital assets the same legal standing as traditional assets. For businesses and individuals making use of Bitcoin and other digital assets, the legislation provides much-needed certainty.

By recognising digital assets as personal property, the law strengthens the protections available to owners, including:

• Clearer legal rights if certain digital assets are stolen. 
• Enabling cryptocurrency to be passed down through inheritance. 
• Recognition of certain digital assets during insolvency allowing them to be recovered by creditors.

The law should now give businesses greater legal certainty over the status of any cryptocurrency they hold.

See: https://www.gov.uk/government/news/uk-among-first-countries-to-recognise-cryptocurrency-as-personal-property
 
Changes in Funding to Apprenticeships
The Government has announced a £725 million package of reforms aimed at increasing apprenticeship and training opportunities for young people. While much of the announcement centres on tackling youth unemployment, there could be benefits for small and medium-sized businesses.

Below is an overview of what’s changing and how it could influence your workforce planning over the next few years. 
 
Fully Funded Apprenticeships for Under-25s at SMEs
One of the headline changes is the removal of the 5% co-investment rate for apprentices under 25 at small and medium-sized employers.

This means training costs for eligible apprentices will be covered entirely by government funding.

If you have previously avoided apprenticeships due to the training and assessment costs, it may be worth reconsidering them as they may be a good way to fill entry-level vacancies and develop talent internally.

Potentially More Local Support in Finding Apprentices
The announced funding includes a £140 million pilot that will give Mayors the ability to connect young people with apprenticeship opportunities.

Of course, how effective this will be depends on how the scheme is implemented locally, but this should translate to more support for you in finding applicants.

Foundation Apprenticeships and Short Courses
Additional foundation apprenticeships are due to be rolled out in sectors such as retail and hospitality.

Foundation apprenticeships were first introduced in May 2025 and are designed to bridge the gap between formal learning in school or college and the workplace helping make young people work-ready. These may be useful if you find you currently have to invest substantial time in early training.

Beginning in April 2026, the possibility of short courses will be introduced to apprenticeships allowing more flexible training options that better suit you. A new Level 4 apprenticeship in AI will also be introduced, which could help you develop skills in your workforce.

In review
Clearly, it will take time for these changes to have a meaningful effect, but it could be well worth reviewing whether fully funded under-25 apprenticeships could support your recruitment needs.

There could be further news on apprenticeships over the coming months as the government has said that the Department for Work & Pensions and Skills England will be working with businesses on the right balance to further boost apprenticeship starts for young people while delivering the right flexibilities for businesses.

See: https://www.gov.uk/government/news/50000-more-young-people-to-benefit-from-apprenticeships-as-government-unveils-new-skills-reforms-to-get-britain-working 
 
Self-Assessment: A Reminder That You Can Spread Your Tax Payments
With the festive season underway and household budgets feeling the pressure, it may be useful to know that if you are worried about paying your tax bill in one lump sum, you may be able to spread the cost.

Although the deadline to file your tax return and pay any tax isn’t until 31 January 2026, acting early can make the process far smoother - especially if you need extra time to pay.

HM Revenue & Customs (HMRC) Time to Pay service allows Self-Assessment taxpayers to set up a monthly instalment plan once their tax return has been filed.

Since 6 April 2025, almost 18,000 people have already arranged a payment plan, making use of the flexibility to manage their tax bill without falling into late-payment penalties.

Here are some key points to be aware of:

• If you owe £30,000 or less, a plan can be set up online without calling HMRC. 
• Your tax return must be filed before you can apply. 
• The amount you pay is specific to your financial circumstances. 
• You will still pay interest on the outstanding amounts, so the quicker you can pay, the better.

If it’s needed, HMRC’s Time to Tap can offer some welcome breathing space.

If you’re unsure about how this could apply to you, how to plan for your January tax bill, or what the Time to Pay option might look like in practice, feel free to get in touch. We can help you review your position early, so you have time to make the right decisions for your business.

See: https://www.gov.uk/government/news/hmrc-offers-time-to-help-pay-your-tax-bill
 
Should You Use a Password Manager?
For many, using a password manager is now a common way to look after the myriad of login details and passwords needed for all their frequently used websites. Are you using a password manager, or do you worry about how safe they are?

The National Cyber Security Centre (NCSC) provides some guidance on how password managers and passkeys can simplify your digital life without compromising your online security.

The guidance covers what a password manager is and why they can be trusted. There are also some pointers on what you should watch out for when using one.

A number of websites now offer passkeys as an alternative to passwords. If you have seen these and wonder what they are, the NSCS guide explains why they can be more secure than passwords.

To review the guide in full, please see: https://www.ncsc.gov.uk/blog-post/trust-the-tech-using-password-managers-passkeys-to-help-you-stay-secure-online
 
ICO Reports Good Progress on Website Cookie Compliance
In its latest update, the Information Commissioner’s Office (ICO) has announced that more than 95% of the UK’s top 1,000 websites now meet the rules on how they use cookies.

What are cookies?
Cookies are small files saved on a user’s device when they visit a website. Some are essential to make a site work properly, but others - particularly advertising cookies - track browsing habits so that you can be shown personalised adverts. A marketing practice that makes many people uncomfortable.

These tracking cookies can only be used if a user has given clear permission. One of the ICO’s tasks is to ensure people genuinely get that choice - and that websites respect the law by waiting for consent before placing any non-essential cookies.

What the ICO Found
The regulator assessed the 1,000 most-visited websites in the UK, looking at three straightforward points:

1. Were advertising cookies being placed before users had a chance to say yes or no?
2. Was rejecting tracking cookies just as easy as accepting them?
3. Were any tracking cookies used even when the user had refused consent?

The results show clear progress:

• 979 out of 1,000 websites now meet the basic compliance checks.
• 415 sites were already compliant when tested, while 564 improved their practices after the ICO contacted them.
• Only 21 websites are still failing, and the ICO is continuing to take action on these sites.

The ICO has said it will continue periodic checks so that websites don’t slip back into old habits.

The ICO has also mentioned that they continue to work with stakeholders on how privacy-friendly online advertising can be used where users have not granted consent but the risk to privacy is low.

See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/12/ico-action-secures-increased-cookie-compliance/