20th February 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

Personal Tax Changes Coming in April 2026
With just a few weeks to go until the beginning of a new tax year, a new round of tax changes take effect from April 2026. While many people won’t see a big difference in their day-to-day tax position, there are some areas worth having on the radar.

Here is a run-through of some of the changes you may want to be aware of.

Dividend Tax Rises
The tax rates for dividends are rising from April 2026. The basic rate and higher rates are each increasing by two percentage points to 10.75% and 35.75%, respectively. The dividend additional rate remains at 39.35%.

Many company owners rely on a combination of salary and dividends for their pay. If that’s you, it’s important to review how you draw income and whether your current mix of salary and dividends still makes sense.

Thresholds Remain Frozen
The tax-free personal allowance and income tax thresholds all remain frozen and are set to stay that way until 2030/31. That ongoing freeze will continue to pull more people into higher rates of tax.

For Scottish taxpayers, there is an increase to the basic and intermediate rate thresholds. This means that lower earners will see a small increase in their take-home pay. However, because of fiscal drag, higher earners will be increasingly drawn into paying additional tax.

National Insurance and Voluntary Contributions
People with gaps in their national insurance contribution (NIC) record, those who are self-employed with low profits, or those who work overseas often consider making voluntary contributions.  

From 6 April 2026, the rate for Class 2 NICs (applicable to the self-employed) will be increased from £3.50 to £3.65. The rate for voluntary Class 3 NICs will increase from £17.75 to £18.40.

Aside from the increase in rates, a major change is that voluntary Class 2 NIC will no longer be an option for periods spent abroad. Making voluntary Class 3 contributions will be possible, but the qualifying criteria have been tightened.
 
Capital Gains Tax (CGT)
Business owners thinking about selling or restructuring should be aware that capital gains that are subject to business asset disposal relief or investor’s relief will be taxed at 18% for 2026/27, an increase from 14% in 2025/26.

Reliefs for disposals to employee ownership trusts have also been scaled back and the rules for share reorganisations have been tightened. Both changes are already in force.

These changes won’t affect everyone, but if you are considering business succession or restructuring, getting the timing and your approach right continues to be key.

Inheritance Tax - Agricultural and Business Property Relief Changes
As has been widely publicised, changes to Inheritance Tax (IHT) to Agricultural Property Relief (APR) and Business Property Relief (BPR) will come into force on 6 April 2026.

These reliefs were previously unlimited, but from April, 100% relief will be capped at £2.5 million of combined agricultural and business assets. Thereafter, the relief reduces to 50%. Unused amounts can be passed to a spouse or civil partner.

The £2.5 million limit is higher than initially proposed, but those who may be affected by the new cap may want to consider whether there are ways to rearrange their estate that would be effective in saving tax.

In Conclusion
If you are affected by any of these changes for 2026/27 and would like help in making sure you are in the best tax position possible, please get in touch. We would be happy to help you!

See: https://www.icaew.com/insights/tax-news/2026/feb-2026/prepare-for-2026-27-individuals
 
Could a Fiscal “Traffic Light System” Help Your Business Cut Through Uncertainty?
A leading think tank has criticised the fiscal rules that the Chancellor uses to determine the government’s tax and spending plans. The Institute for Fiscal Studies (IFS) has suggested that reducing complex finances to a pass‑or‑fail number misses the bigger picture.

The Treasury, on the other hand, has said that the rules are helping to keep borrowing costs down and support long‑term investment.

Of course, which view is correct when it comes to managing the country’s finances could be an endless debate. However, the IFS proposal brings up an interesting idea that many businesses are using with success.

The IFS Proposals
The IFS are advocating moving to a fiscal “traffic light” system. Rather than judging the economy against the one requirement for “headroom”, a broader set of indicators should be assessed. And given a green, amber or red status.

Why This Idea Might Feel Familiar to Businesses
This traffic‑light idea is something many businesses already use informally. For instance, it’s very common to track financial health and business performance using a dashboard of red, amber and green indicators.

Business owners can get an ‘at-a-glance’ look at the different areas of the business and quickly flag potential problems.

Applying a Traffic‑Light System to Your Own Business
A simple set of indicators is often all that is needed. Three or four core measures can help to assess the business and check its day‑to‑day resilience. For example:

• Cash flow - green if you have several months’ operating expenses covered; amber if cash is tightening; red if you’re relying on short‑term borrowing.  
• Debt levels - green if repayments are comfortable; amber if interest is creeping up; red if refinancing is looming or facilities are nearly maxed out.  
• Profitability - green if margins are holding; amber if costs are rising faster than prices; red if losses are recurring.  
• Sales pipeline - green if opportunities are converting; amber if lead volumes drop; red if future revenue is unclear.

Businesses using a traffic‑light approach tend to make decisions earlier - whether that’s tightening costs, adjusting pricing, or negotiating with lenders. It also helps everyone in the business get a picture of what’s happening without necessarily needing to dive into pages of accounts.

If you would like help building a simple financial traffic‑light dashboard tailored to your business, we would be happy to work with you in developing something that is based on the metrics that matter most to your business.

See: https://www.bbc.co.uk/news/articles/c1kg48m937wo
 
UK Unemployment Rises as Wage Growth Slows
The UK’s unemployment rate has risen again, according to the latest data from the Office for National Statistics (ONS). In the three months to December 2025, unemployment increased to 5.2%, up from 5.1% in the three months to November. This marks the highest rate in almost five years.

Alongside the rise in unemployment, annual wage growth has slowed to 4.2%, its weakest pace in close to four years.

This combination of slower wage growth and rising unemployment suggests a cooling labour market.

Businesses Reacting to Higher Costs
Part of the slowdown may be linked to increased employment costs. The 2024 Budget raised employer national insurance contributions and increased the minimum wage.

Some businesses appear to have chosen to delay recruitment or leave vacancies unfilled as they review budgets for the year ahead.

Younger Workers Bearing the Brunt
The unemployment rate for 16–24-year-olds has risen to 16.1%. For school leavers and graduates, securing an entry-level role has become increasingly competitive.

Analysts have also raised concerns that investment in artificial intelligence could reduce the number of traditional starter roles over time, adding further pressure to new entrants to the job market.

Interest rates
The slowdown in wage growth may influence the Bank of England’s next decision on interest rates and could give room for a further rate cut.

Looking ahead
For your business, a softer labour market might make it easier for you to fill certain vacancies, with more applicants available for job openings. However, it could also hint at weaker consumer confidence that may lead to slower sales. If you are planning investment, recruitment or borrowing in the coming months, this may be a useful moment to revisit those plans rather than rush decisions.

See: https://www.bbc.co.uk/news/articles/c1l7pedyzjeo
 
Campaign Urges SMEs to Adopt Cyber Essentials as Cyber Threats Rise
A new campaign has been launched to encourage small and medium-sized businesses to take some simple, practical steps to protect themselves from the most common cyber-attacks. The main drift is that basic cyber hygiene still prevents the majority of incidents.

According to the Cyber Security Breaches Survey 2025, 43% of businesses and 30% of charities reported having experienced some kind of cyber security breach or attack in the last 12 months. Across the UK economy, cyber threats are estimated to cost £14.71 billion each year. For many businesses, a single major attack could be enough to put trading at risk.

Cyber Essentials
The campaign centres on Cyber Essentials, which was developed by the National Cyber Security Centre (NCSC) and the Department for Science, Innovation and Technology. It focuses on five key protections that most businesses can implement without needing to have specialist IT expertise. These are:

• Firewalls
• Secure configuration
• Software updates
• User access control
• Malware protection

These five areas address the weaknesses most commonly exploited by cyber criminals. Basic oversights, such as out-of-date software or a lack of control over who has access to IT systems, continue to be the root causes of many incidents.

Getting Started
To help businesses get started, some free resources are being promoted as part of the campaign, including:

• Cyber Essentials Readiness Tool - an online self-assessment to identify gaps
• Free 30-minute consultations with an NCSC-assured advisor for SMEs preparing for certification

While it can be tempting to think you are too small to be a target, most cyber-attacks are automated and opportunistic and look for weaknesses in systems regardless of the size of the business. This campaign is a timely reminder that basic measures can significantly reduce the likelihood of disruption, protect cash flow and help safeguard customer trust.

See: https://www.gov.uk/government/news/businesses-urged-to-lock-the-door-on-cyber-criminals-as-new-government-campaign-launches
 
Inflation Drops to 3%
According to the latest figures released by the Office for National Statistics, UK inflation eased to 3% in January, down from 3.4% in December. Lower food, fuel and airfare prices appear to have been the biggest contributors to the reduction.

It’s important to remember this doesn’t mean prices are falling; they are just rising more slowly. Businesses still dealing with higher wages, energy and supplier costs will know that firsthand.

The combination of softer inflation and a slowdown in wage growth has increased expectations that the Bank of England will cut interest rates again when its Monetary Policy Committee (MPC) meets in March.

The latest inflation figure may suggest some better news for businesses over the coming months. Perhaps an easing of costs generally, or some relief from interest costs, particularly if your business has an overdraft or variable-rate loans.

See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
 
Employment Rights Act - What is Changing First?
A new website has been launched by the Department for Business and Trade (DBT) offering practical guidance and support on the changes that the Employment Rights Act will introduce and what they can do to get ready.

The website provides details of upcoming changes, including several that come into force from April 2026. These include:

• Statutory Sick Pay - No earnings threshold and no three-day waiting period mean more employees will now qualify. 
• Day-one family leave - Paternity Leave and Unpaid Parental Leave a right from the first day in a job. 
• Bereaved Partner’s Paternity Leave - A new right for time off following the death of a child’s mother or primary adopter. 
• Collective redundancy protections - The protective award for non-compliance is being increased. 
• Stronger protections for workers who report sexual harassment. 
• A new body called the Fair Work Agency will work to uphold workers’ rights and support businesses with compliance.

The website includes details on how to prepare for changes and a timeline of when further changes will be introduced. It can be found here and would be well worth saving to your browser favourites. 

13th February 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

Is “996 culture” Working Culture Relevant to Your Business?
The BBC has published an in-depth piece on “996 culture” - the practice of working 9 am to 9 pm, six days a week.
Although the examples mostly come from US tech companies, there are some useful lessons for UK business owners. Here are some points that stood out to us.

The Appeal of 996
The article looks at AI start‑ups in the US that openly promote 70‑hour working weeks, often attracting young, ambitious staff who see long hours as a badge of honour. Some businesses even advertise these expectations upfront.

996 culture is not new or unique to the US. It first gained popularity in China a decade ago when it was seen as a powerful tool in helping tech companies and start-ups gain traction. However, it led to a backlash of complaints about workers’ rights that led to a legal crackdown.

However, based on the BBC’s report it seems that competition in AI is pushing founders in the US to demand extreme commitment. They fear being beaten to market and believe working more hours equates to faster progress.

Concerns About 996
The report highlights several problems with the 996 approach.

For instance, while it is understandable and may even be expected that a founder with skin in the game would be working 70-80 hours per week, expecting the same of employees may not achieve more productivity and can exclude workers who would be vital to the business’s interests.

Continual long hours lead to long-term burnout and bring other health risks. For instance, the BBC notes the conclusions reached by an analysis published in 2021 by the World Health Organisation (WHO) and the International Labour Organisation (ILO). This showed that working 55 hours or more a week increased the risk of dying of heart disease by 17% when compared with working 35-40 hours. The risk of stroke also increased by 35%.

Besides health concerns, productivity does not increase in line with the number of hours worked. Research by Michigan State University suggests that employees are no more productive working 70 hours per week than if they worked 50 hours per week.

Could 996 Culture Work for You?
While 996 culture is not mainstream in the UK, there are proponents. In addition, for workers at large corporate law firms and investment bankers, the idea of working 70 hour weeks may feel commonplace. Some may enjoy what has been called “work-life integration.” However, there are downsides.

The Working Time Regulations mean that working more than 48 hours a week on average is not allowed unless the employee chooses to opt out and work longer, or they are doing a job that has exceptions under the law. This means that 996 is possible; pressuring staff to conform rather than giving them a genuine choice would be risky.

Practically speaking, a 996 approach may also make recruitment trickier. Employees would need a compelling reason to work 70 hours a week against a 35-hour week in an alternative job.

Over-reliance on unpaid or excessive overtime can also harm productivity, especially in the long run. Investing in skills, automation and smarter workflows could give a better return than working longer days.

For smaller businesses in particular, culture is a competitive advantage. A reputation for balanced, sustainable working patterns can make working for you more appealing and reduce the risk of employees leaving.

Finding a sustainable pace
If you are a business owner, the idea of 996 may feel uncomfortably familiar. Especially in the early stages of a business, there will inevitably be phases when the hours creep up. But if you feel this is becoming a permanent way of working, it’s usually a sign the business needs something to change rather than you simply working harder.

Often, the pressure comes from a few predictable places – cash flow tightness, gaps in capacity, unclear business processes or work that only you can do because no one else has been shown how. These business issues are often fixable once they have been identified.

If cutting back your hours is something you are aiming for, the first step is usually to understand where the strain is coming from. Once you can see that clearly, it becomes easier to work towards a more manageable workload. Sometimes just a small change in how the business is organised can make a big difference.

Whether you are thinking about workplace culture or your own situation, if you would like to talk things through or to see how your business could be made more scalable and less reliant on your time, please get in touch. We would be happy to help you continue running and growing your business sustainably.

See: https://www.bbc.co.uk/news/articles/cvgn2k285ypo
 
New Detail Published on How Last Year’s Budget Leak Unfolded
The government has now published its Review into the 2025 Autumn Budget leak, explaining how the Office for Budget Responsibility’s Economic and Fiscal Outlook (EFO) was accessible online an hour before the Chancellor was due to speak.

The Review sets out measures that will be taken to prevent this from happening again.

What actually happened?
The Review incorporates findings from the National Cyber Security Centre’s investigation, which found that the leak was a result of repeated attempts to access the webpage holding the EFO, rather than a hostile cyber-attack.

The fault lay in a misconfiguration in the way that the OBR’s website was set up. This meant that the webpage holding the report was accessible earlier than the OBR intended. Users who guessed the webpage address correctly based on previous reports were able to access the report.

The investigation found that around 520 of the 534 early access attempts were linked to just four IP addresses from the same internet provider. Investigators believe it is reasonable to assume this was the same individual or organisation.

The one or more individuals who secured early access seem to have then used social media and messaging apps to spread word of the early access. In all, the EFO was downloaded 24,701 times before the mistake was noticed.

What is changing?
The OBR is due to publish an EFO at the time of the Spring Forecast announcement on 3 March 2026. Historically, the OBR has published these reports on its own website rather than a government website in order to maintain its independence.

However, because of the sensitivity of the information contained in the EFO, it will be published on GOV.UK by HM Treasury. HM Treasury has commented that doing this will not give it access to any information ahead of time of which it is not already aware.

For future EFO and other market-sensitive publication releases, it is planned that OBR will move to using GOV.UK.

In readiness for the 2026 Budget, likely to be held in the autumn, there are plans to bring in other internal measures that will enhance security and limit data access.

To read the Budget Information Security Review in full, see: https://www.gov.uk/government/publications/budget-information-security-review
  
CMA Moves to Secure Fairer App Store Rules for UK Businesses
The Competition and Markets Authority (CMA) has announced a set of proposed commitments from Apple and Google that could make it easier for UK businesses that rely on app stores to reach their customers.

The CMA is inviting views on these commitments until 3 March 2026, with plans for them to take effect from 1 April 2026.

What’s happening?
The CMA has been working with Apple and Google since both companies were given “strategic market status” (SMS) in late 2025.
Almost all UK mobile devices run either Apple’s iOS or Google’s Android system, an effective duopoly, and the status gives the CMA powers to require changes where it sees problems for competition or fairness.

Rather than going straight to imposing conduct requirements, which can take time to implement, voluntary commitments have been agreed with Apple and Google to deliver immediate improvements.

What the commitments mean in practice
The UK app economy is big business, valued at £28 billion as of 2025 and supporting around 400,000 jobs. Many UK companies now depend on mobile apps as a core part of how they serve customers.

For UK businesses and developers, the proposed measures focus on four practical areas:

• App review: Apple and Google are committing to distribute apps on their app stores in a fair, objective and transparent way. They will not discriminate against apps that compete with their own, nor will they give preferential treatment to their own apps. 
• App ranking: The new commitments mean Apple and Google should not favour their own apps, nor push down apps that compete with them. 
• Data collection: Apple and Google have committed not to use data they gather from developers during an app review unfairly; for example, not using insights from your app to develop competing features. 
• Interoperability: Apple has agreed to make it easier for developers to more easily request interoperable access to features and functionality within their mobile operating systems. They have also committed to considering requests fairly and objectively. 

Monitoring
To ensure the commitments are met, the CMA will publish reports using data from Apple and Google. This will include:

• Percentage of apps submitted for review that are approved, rejected or appealed.
• Time taken for app reviews.
• The number and outcome of complaints.
• Interoperability requests made to Apple, outcomes and how quickly the requests are handled.

What next?
Chief Executive of the CMA Sarah Cardell said that the proposed measures are “important first steps while we continue to work on a broad range of additional measures to improve Apple and Google’s app store services in the UK, for example, by enabling more choice and innovation in digital wallets”.

The CMA is looking for views on the proposed commitments by 3 March 2026, with implementation planned from 1 April 2026.

See: https://www.gov.uk/government/news/cma-secures-commitments-from-apple-and-google-to-improve-fairness-in-app-store-processes-and-enhance-ios-interoperability
 
HMRC Moves to GOV.UK One Login for New Users
HM Revenue & Customs has started using GOV.UK One Login for taxpayers signing up to its digital services for the first time.

This means that if you do not already have a Government Gateway account, you will now register using an email-and-password login rather than needing to obtain a 10-12 digit Government Gateway ID.

For now, this only affects new HMRC users. Existing Government Gateway users do not need to switch yet.

Even if you already have a GOV.UK One Login that you use for another government service, you will still need to use your government gateway to access HMRC’s services for the time being.

HMRC plans to roll out GOV.UK One Logins gradually and will contact existing users when it is ready for them to move over.

Eventually, GOV.UK One Logins will become the single login for everything from filing a tax return to renewing a passport.

If you need help registering for or accessing HMRC services, please contact us. We will be happy to help you! See:
https://www.gov.uk/government/news/hmrc-introducesgovukonelogin-for-new-customers
 
DBS Launches New Safeguarding Podcast for Employers
The Disclosure and Barring Service (DBS) has launched a new weekly podcast series, ‘DBS discussions: Safeguarding in Focus,’ aimed at employers, HR teams and anyone working in safeguarding.

Each episode of the podcast features a DBS specialist explaining how key DBS processes work in practice. Topics will include:

• How DBS checks fit into recruitment.
• Common questions from employers.
• Clarity on eligibility and regulated activity.
• How barring decisions are made.
• The role DBS plays in wider safeguarding.

The first episode was released on 9 February 2026, and introduced the function of DBS and the impact of checks in recruitment.

New episodes will be available each week on Spotify, Amazon and YouTube.

6th February 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

Salary Sacrifice: Tax Efficient Options for Employers and Employees
With costs rising, many employers and employees are looking for practical ways to reduce outgoings without cutting benefits. Salary sacrifice can be an excellent tool to do this, but many businesses overlook it.

In short, salary sacrifice lets an employee give up part of their gross salary in exchange for a benefit such as a pension contribution, an electric car or a bike. Because the exchange happens before tax and National Insurance (NI), both sides can save money while staff gain a more attractive package.

A proposed cap on National Insurance relief for pension contributions received heavy publicity after the Autumn Budget 2025 announcement. However, the cap will not come into force until 6 April 2029. Until then, the advantages existing under the current rules remain available.

For employers, salary sacrifice can be an effective way to enhance benefits, improve recruitment and retention, and reduce tax costs. For employees, it can make benefits they value more affordable at a time when cash flow really matters.

If you want to understand how the numbers stack up for your business, we would be happy to help you calculate and compare the tax and NI position and show you exactly how salary sacrifice could work in practice for you and your team.
 
CMA Proposes New Rules to Give Businesses More Control Over Google Search
The Competition and Markets Authority (CMA) has announced a set of proposed measures aimed at increasing fairness, transparency and choice for businesses and consumers using Google’s search services in the UK.

Given that Google accounts for more than 90% of general search queries in the UK and took over £10 billion in UK search advertising spend last year, these changes could have a meaningful impact on how businesses promote themselves online.

Google was designated with Strategic Market Status (SMS) in October 2025, which doesn’t imply wrongdoing, but it does allow the CMA to impose conduct requirements.

Below is a summary of what is being proposed and what it may mean in practice for businesses relying on Google to reach customers. 
 
Improving user choice in search
Google is normally set as the default search service in its Android operating system and Chrome browser.

The CMA is proposing that it be made easier for users to choose which search service they want to use and be able to switch services more easily. If implemented, Google would be required to display more choice screens and give users the ability to change which search service they want to use at any time.

This change intends to help users select alternative search providers rather than defaulting to Google. That might mean a need to review advertising spend with Google but could also lead to lower advertising costs if competition between the various search providers increases.

Publisher choice and transparency
Content publishers, such as news outlets, blogs and others producing specialist content, are seeing a decline in the number of ‘clicks through’ to their websites because of generative AI features that Google is using.

The measures proposed would allow publishers more control over whether their material can be used within AI features, such as AI Overview, including being able to opt out.

There would also be clearer information for publishers on how their content is being used and Google would be required to take steps to ensure that any content used is properly attributed to the publisher.

Fair ranking
Search services are a key way of finding online customers, but many businesses lack confidence in how Google ranks websites.

Google can make changes to its algorithms at any time. This can result in additional costs to businesses as they try to understand what has changed and adjust their websites to ensure they stays visible in search rankings.

The CMA is looking to impose some ‘fair ranking’ conduct requirements. These include:

• Google not being allowed to discriminate based on whether the website has chosen to advertise on or has some other commercial arrangement with Google. A business opting out of its content being used in Google’s AI features could also not be discriminated against.
• Greater transparency on search rankings and a requirement to provide sufficient notice and information on upcoming changes.
• A clear and accessible process for complaints, with accountability to the CMA.

For businesses that rely heavily on search visibility, this could offer more confidence that search performance isn’t being undermined by opaque algorithms or unfair advantages.

Data portability
Google currently offer users the ability to transfer their search data to another provider. However, this is provided voluntarily, and the CMA is looking to make it a legal requirement.

What happens next?
The CMA is consulting on the proposals, and feedback is open until 25 February 2026. A final decision will follow once the responses have been assessed.
To review the consultation and participate, see: https://connect.cma.gov.uk/google-search-conduct-requirements
 
New Fuel Finder Scheme Helps Petrol and Diesel Price Comparison
Drivers can now compare fuel prices from every petrol station in the UK, thanks to a new government scheme designed to make fuel costs more transparent and to encourage greater competition between forecourts.

Beginning last week, every garage and fuel station must report its petrol and diesel prices to a central government database within 30 minutes of changing them. This data is then made available to apps and websites that motorists can use.

This means that apps such as PetrolPrices, Waze, MyRAC, and the AA app, as well as some in-car navigation systems and online map services can now pull in up‑to‑date pricing.

Motoring groups say that there can be differences of up to 20p per litre depending on where in the country petrol or diesel is bought. The Competition and Markets Authority (CMA) has also observed that fuel retail prices tend to “rise like a rocket but fall like a feather.”

If your business involves regular car travel, this could be a simple way to help keep your fuel costs down.

See: https://www.bbc.co.uk/news/articles/cp80dpzdg37o
 
Tech Giants Join Push to Improve Workplace Accessibility
The government has brought together major technology companies - including Google, Meta, Microsoft and Amazon - with disability charities to discuss how modern tech can help remove barriers that prevent disabled people from finding and keeping jobs.

The focus was on practical tools that are already available and how these could be more widely adopted. These include screen readers, real-time captioning and new AI-powered visual description tools.

This roundtable ties in with wider government plans, including the Connect to Work programme which is aiming to help 300,000 sick or disabled people into employment.

Plans are also afoot to overhaul the Disability Confident scheme with tougher standards and tailored support for smaller businesses. 19,000 employers have already signed up.

If you are an employer, the increased focus on making the workplace more accessible for disabled people may mean there are increasing opportunities to unlock talent that could both provide benefits to the community and improve your business.

See: https://www.gov.uk/government/news/tech-giants-meet-disability-sector-to-break-down-barriers-at-work
 
Lanarkshire to Benefit from New AI Growth Zone
Lanarkshire is set for a major investment boost with the launch of a new AI Growth Zone around DataVita’s data centre site in Airdrie.

Working with AI cloud firm CoreWeave, the project is expected to create more than 3,400 jobs over the coming years, including around 800 higher‑skilled roles linked directly to AI and data centre operations. Fifty apprenticeships will also be offered to help develop the next generation of AI expertise.

Alongside the jobs, the project includes a substantial community fund. As the site expands, up to £543 million could be invested into local programmes over 15 years, supporting skills and training packages, after-school coding clubs, and local charities and food banks. DataVita’s parent company, HFD Group, will also contribute £1 million a year to local charities.

Once completed, the Lanarkshire site will be one of the most advanced AI sites in the world. This is the fifth AI Growth Zone announced in the past year, joining sites in Oxfordshire, North and South Wales and the North East of England.

For local businesses, these zones could mean opportunities during the construction phase, as well as longer-term demand for specialist services once the site is up and running.

See: https://www.gov.uk/government/news/more-than-3400-jobs-and-targeted-support-for-local-communities-to-help-tackle-the-cost-of-living-as-lanarkshire-named-latest-ai-growth-zone 
 
Deadline Approaching for Business Rates Valuation Checks
Enterprises that pay business rates are being encouraged to check their current property valuation and make sure the details held by the Valuation Office Agency (VOA) are correct.

If you believe your valuation is wrong, you have until 31 March 2026 to request any changes to your current valuation.

After that, a new rating list comes into effect on 1 April, and you will only be able to request changes to your new 2026 valuation from that date.

To request any changes, you need a business rates valuation account. If you haven’t used yours recently, it’s worth checking that you can still log in. The verification process to claim a property can take up to 15 working days, so it’s sensible not to leave this until the last minute.

You will need a Government Gateway user ID or a One Login account to sign in to your account.

Support is available on GOV.UK for anyone needing help with registration.

See: https://www.gov.uk/government/news/deadline-for-challenging-your-business-rates-valuation

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).