1st August 2025 – Hillmans Weekly Update

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

Have a great weekend.

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

HMRC Releases Transformation Roadmap
On 21 July 2025, HM Revenue & Customs (HMRC) announced its Transformation Roadmap – a plan to modernise the UK’s tax and customs systems by 2030.

HMRC have said that the aim of the Transformation Roadmap is to make the tax administration system more automated, more focused on self-service and better set up to get things right first time. The roadmap includes more than 50 IT projects, services and measures.

Let’s see what some of these include.

New PAYE service
As part of the Transformation Roadmap, a new online PAYE service will be launched that’s designed to give all UK PAYE taxpayers easier access to their tax affairs. Through their Personal Tax Account or the HMRC app, employees will be able to check and update things like:

• Income details
• Tax codes
• Allowances and reliefs
• Work-related expenses

For employees, this should mean more visibility and control of their tax. For employers, it could mean fewer questions from staff about their tax codes or deductions - especially if you're already fielding those awkward "why has my tax changed?" queries.

If you run payroll or support employees with benefits or expenses, it’s a good idea to keep an eye on these updates. Over time, staff might expect you to understand and even guide them through using these services.

Push for 90% Digital by 2030
HMRC is clear that they feel the future is digital. Their goal is for 90% of customer interactions to happen digitally by 2030.

That means less reliance on letters and phone calls, and more emphasis on apps, online forms, and AI-powered assistants. In fact, HMRC believes they can save £50 million a year just by reducing paper correspondence.

Post will still exist, but only for critical correspondence and those who genuinely need it.
 
AI and Automation
Artificial Intelligence (AI) is playing a big role in this transformation. HMRC will use it to:

• Help staff summarise calls and cases
• Improve online guidance with digital assistants
• Spot fraudulent documents using biometric checks
• Develop principles for how third-party software (like payroll or tax apps) should interact with HMRC systems

It seems there is a growing emphasis on real-time data and compliance. For example, the introduction of a Digital Disclosure Service will allow taxpayers to correct mistakes more easily - but also means HMRC will have better tools to spot issues.

What Else is Coming Soon: A Few Key Projects
A few measures that HMRC are planning to rollout in this tax year include:

• SMS confirmations for Self Assessment updates and some PAYE services
• A more streamlined process for registering or exiting Self Assessment
• Voice biometrics to speed up telephone verification
• A new option for higher earners to manage Child Benefit charges through their tax code

There’s also a focus on tackling offshore tax avoidance, especially among high-net-worth individuals. Tax avoidance amongst non-compliant umbrella companies will also be targeted.

What’s Coming Later?
HMRC will be looking at how they can modernise the penalties they charge for late tax payments and will be providing an update on how they plan to do this later in the year.

Other measures that are in the pipeline include:

• Digitising the Inheritance Tax service
• Allowing agents to submit information that affects a tax code digitally
• An electronic trade documentation pilot looking at how to improve customs operations

New legislation is also planned for April 2026 that will make recruitment agencies legally responsible for accounting for PAYE where they use umbrella companies - so if you use workers in such an arrangement that’s going to be worth a closer look.
 
What Should You Do Now?
Here are a few simple steps to consider:

• Encourage employees to activate and explore their Personal Tax Accounts if they have questions about their tax code. 
• If you use payroll software, keep an eye on updates from your software provider to make sure your system remains compatible with future HMRC requirements 
• Stay informed - we’ll be keeping an eye on the rollout and will continue to share relevant updates. 
• Plan ahead for compliance - it looks as though HMRC will be quicker to penalise when things aren’t done right.

If you’re unsure how these changes might affect your business - or you’d like help reviewing your payroll, compliance processes, or digital readiness - we’re here to support and help you.

To read the Transformation Roadmap in full, see: https://www.gov.uk/government/publications/hmrc-transformation-roadmap/hmrcs-transformation-roadmap
 
New Charity SORP Is on the Way: What Trustees and Finance Teams Should Know
If you're involved with a charity - whether you're on the board, manage the accounts, or provide support behind the scenes - you may have heard that there are some changes coming to the way charities report their finances.

The biggest step in that process has been completed with the consultation into the new Charities Statement of Recommended Practice (SORP) now closed. Over 140 stakeholders submitted their views, and these are now being analysed to help shape the final version of the guidance.

So, what should charities be doing in the meantime?

What Is the SORP?
The SORP (Statement of Recommended Practice) is the framework that sets out how charities should prepare their accounts to comply with UK accounting standards.

The SORP-making body includes the Charity Commission for England and Wales, the Office of the Scottish Charity Regulator (OSCR), and the Charity Commission for Northern Ireland.
 
When Will the New SORP Apply?
The updated SORP is expected to be published in October 2025. It will apply to financial years starting on or after 1 January 2026.

So, if your charity’s financial year runs from January to December, you'll be using the new SORP from January 2026. If your year starts in another month, the changes will kick in at the beginning of whichever month starts your 2026/27 financial year.

What Should You Do Now?
While the full guidance won’t be finalised until October, the Charity Commission are urging charities to get ready for the changes the Financial Reporting Council introduced on lease accounting and revenue recognition.

Those changes involve:

• Lease accounting: There are changes to how leases are reported in the accounts. Most leases will now appear on the Balance Sheet, although there are some exceptions. 
• Revenue recognition: This is all about when income is recognised in your accounts. The new rules may change how you account for grants, donations, contracts, and trading income - particularly where there are conditions attached.

If you'd like a friendly chat about what these changes might mean for your charity, or if you want to schedule a SORP-readiness review later this year, just get in touch. We’d be happy to help you.

See: https://www.gov.uk/government/publications/charity-commission-news/charity-commission-news-july-2025
 
Government Borrowing Jumps – Are Tax Rises on the Way This Autumn?
UK government borrowing was £20.7 billion for June, according to new figures from the Office for National Statistics (ONS) - an increase of £6.6 billion compared to the same month last year.

While the overall figure is broadly in line with forecasts for the year so far, the rise has added pressure on Chancellor Rachel Reeves ahead of the Autumn Budget. Higher spending on public services, rising interest payments on debt, and weaker-than-expected tax receipts have contributed to the increase.

What does this mean for taxpayers?
Economists now widely expect that the Chancellor will need to find £15–25 billion later this year to meet her fiscal rules - particularly the commitment to:

• Not borrow for day-to-day spending
• Get debt falling as a share of national income by 2029–30

This makes tax rises a real possibility in the upcoming Budget.

What kind of tax changes could we see?
Obviously, nothing has been confirmed yet, but there is speculation about extending the freeze on income tax thresholds beyond 2028, which brings more people into higher tax bands over time

Other possibilities might include targeted tax increases on capital gains, dividends, pensions, or business reliefs, or maybe reforms to tax breaks - particularly those perceived as benefiting higher earners or larger businesses.

At this stage it’s difficult to predict what could change, however we’ll continue monitoring developments as the Budget approaches. If you’d like to talk through your tax planning or discuss what changes could mean for you, please get in touch.

See: https://www.bbc.co.uk/news/articles/cwygq5plz04o
 
New Law Aims to Make Online Marketplaces Safer for Business Buyers
If your business sources products from online marketplaces - whether for resale, internal use or part of a service - you may soon benefit from tighter product safety rules.

The newly passed Product Regulation and Metrology Act gives regulators more power to crack down on unsafe goods sold online. It’s part of the Government’s Plan for Change and aims to hold online platforms like Amazon, eBay and others to the same safety standards as high street retailers.

The move follows rising concerns over dangerous products. As an example, there’s been an increase in safety incidents involving e-bikes and e-scooters, many of which involve unsafe lithium-ion batteries.

Online marketplaces will soon be expected to:

• Prevent unsafe products from being listed
• Ensure sellers meet product safety obligations
• Provide clearer information to buyers
• Cooperate with regulators

If you’re buying for your business, this should mean that you can be more confident about the safety of items you buy online. It may be worth making sure that any online marketplaces or suppliers you use are complying with the new rules as they come into effect.

See: https://www.gov.uk/government/news/tough-new-laws-to-make-online-marketplaces-safer
  
Revived Pensions Commission Aims to Secure Better Retirements
The government has announced the revival of the Pensions Commission, twenty years after it helped bring in automatic enrolment. Its goal is to stop future pensioners from being worse off than those retiring today.

New government analysis suggests some worrying trends:

• 45% of working-age adults are saving nothing into a pension
• 4 in 10 people are undersaving for retirement
• Self-employed workers, low earners and some ethnic minorities are most at risk of falling behind
• There’s a 48% gap in private pension wealth between men and women

It’s estimated that people retiring in 2050 could see 8% less private pension income than today’s pensioners.

What’s the Commission going to do?
The newly revived Commission will look at what may be stopping people from saving enough and will issue its final report in 2027.

What does this mean if you’re a business owner or self-employed?
If you're self-employed or run a small business, this news is a reminder to check in on your own retirement planning. The figures suggest that 3 million self-employed people aren’t saving into a pension.

However, these figures don’t factor in that many business owners look to use their business as their pension. For instance, you may be planning to sell the business or property within it to fund retirement.

Whatever the case, it’s practical to regularly review your planning to check that you will have enough to retire on. Contributing to pensions also carry some tax advantages which can be worth factoring in.

Possible effects on employers could include auto-enrolment being expanded with increased costs or administration work. It’s too early to know what the Pension Commission will recommend, but it could pay to watch developments so that you can be prepared.

See: https://www.gov.uk/government/news/government-revives-landmark-pensions-commission-to-confront-retirement-crisis-that-risks-tomorrows-pensioners-being-poorer-than-todays
 
Worrying Drop in Small Business Confidence: More Businesses Expect to Shrink or Close
New figures from the Federation of Small Businesses (FSB) show that for the first time in 15 years, more small businesses expect to shrink, close or sell up in the coming year than those planning to grow. It’s a significant shift - and one the FSB has called “a very dangerous situation” for the UK’s small business sector.

This net-negative growth reading in the FSB’s Small Business Index underlines just how tough trading conditions remain for many firms, despite falling inflation.

Among the issues that the FSB have identified that continue to put pressure on small businesses are:

• Late payments, particularly from larger customers
• Issues around proposals being made in the new Employment Bill
• Reliance on personal guarantees when seeking finance

Small businesses are resilient, but it’s clear that challenges are mounting. If you need help, whether it’s rethinking your plans or looking at restructuring or exit options, please feel free to give us a call to talk through the numbers. We’d be happy to help you!

See: https://www.fsb.org.uk/media-centre/national-news/fsb-weekly-brief-newsletter-friday-18-july-2025-MCXKQVRRIZKZC7RF2MBYWE3L5OWE

25th July 2025 – Hillmans Weekly Update

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

Have a great weekend.

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

HMRC Releases Transformation Roadmap
On 21 July 2025, HM Revenue & Customs (HMRC) announced its Transformation Roadmap – a plan to modernise the UK’s tax and customs systems by 2030.

HMRC have said that the aim of the Transformation Roadmap is to make the tax administration system more automated, more focused on self-service and better set up to get things right first time. The roadmap includes more than 50 IT projects, services and measures.

Let’s see what some of these include.

New PAYE service
As part of the Transformation Roadmap, a new online PAYE service will be launched that’s designed to give all UK PAYE taxpayers easier access to their tax affairs. Through their Personal Tax Account or the HMRC app, employees will be able to check and update things like:

• Income details
• Tax codes
• Allowances and reliefs
• Work-related expenses

For employees, this should mean more visibility and control of their tax. For employers, it could mean fewer questions from staff about their tax codes or deductions - especially if you're already fielding those awkward "why has my tax changed?" queries.

If you run payroll or support employees with benefits or expenses, it’s a good idea to keep an eye on these updates. Over time, staff might expect you to understand and even guide them through using these services.

Push for 90% Digital by 2030
HMRC is clear that they feel the future is digital. Their goal is for 90% of customer interactions to happen digitally by 2030.

That means less reliance on letters and phone calls, and more emphasis on apps, online forms, and AI-powered assistants. In fact, HMRC believes they can save £50 million a year just by reducing paper correspondence.

Post will still exist, but only for critical correspondence and those who genuinely need it.
 
AI and Automation
Artificial Intelligence (AI) is playing a big role in this transformation. HMRC will use it to:

• Help staff summarise calls and cases
• Improve online guidance with digital assistants
• Spot fraudulent documents using biometric checks
• Develop principles for how third-party software (like payroll or tax apps) should interact with HMRC systems

It seems there is a growing emphasis on real-time data and compliance. For example, the introduction of a Digital Disclosure Service will allow taxpayers to correct mistakes more easily - but also means HMRC will have better tools to spot issues.

What Else is Coming Soon: A Few Key Projects
A few measures that HMRC are planning to rollout in this tax year include:

• SMS confirmations for Self Assessment updates and some PAYE services
• A more streamlined process for registering or exiting Self Assessment
• Voice biometrics to speed up telephone verification
• A new option for higher earners to manage Child Benefit charges through their tax code

There’s also a focus on tackling offshore tax avoidance, especially among high-net-worth individuals. Tax avoidance amongst non-compliant umbrella companies will also be targeted.

What’s Coming Later?
HMRC will be looking at how they can modernise the penalties they charge for late tax payments and will be providing an update on how they plan to do this later in the year.

Other measures that are in the pipeline include:

• Digitising the Inheritance Tax service
• Allowing agents to submit information that affects a tax code digitally
• An electronic trade documentation pilot looking at how to improve customs operations

New legislation is also planned for April 2026 that will make recruitment agencies legally responsible for accounting for PAYE where they use umbrella companies - so if you use workers in such an arrangement that’s going to be worth a closer look.
 
What Should You Do Now?
Here are a few simple steps to consider:

• Encourage employees to activate and explore their Personal Tax Accounts if they have questions about their tax code.
  
• If you use payroll software, keep an eye on updates from your software provider to make sure your system remains compatible with future HMRC requirements 
• Stay informed - we’ll be keeping an eye on the rollout and will continue to share relevant updates.
  
• Plan ahead for compliance - it looks as though HMRC will be quicker to penalise when things aren’t done right.If you’re unsure how these changes might affect your business - or you’d like help reviewing your payroll, compliance processes, or digital readiness - we’re here to support and help you.

To read the Transformation Roadmap in full, see: https://www.gov.uk/government/publications/hmrc-transformation-roadmap/hmrcs-transformation-roadmap
 
New Charity SORP Is on the Way: What Trustees and Finance Teams Should Know
If you're involved with a charity - whether you're on the board, manage the accounts, or provide support behind the scenes - you may have heard that there are some changes coming to the way charities report their finances.

The biggest step in that process has been completed with the consultation into the new Charities Statement of Recommended Practice (SORP) now closed. Over 140 stakeholders submitted their views, and these are now being analysed to help shape the final version of the guidance.

So, what should charities be doing in the meantime?

What Is the SORP?
The SORP (Statement of Recommended Practice) is the framework that sets out how charities should prepare their accounts to comply with UK accounting standards.

The SORP-making body includes the Charity Commission for England and Wales, the Office of the Scottish Charity Regulator (OSCR), and the Charity Commission for Northern Ireland.
 
When Will the New SORP Apply?
The updated SORP is expected to be published in October 2025. It will apply to financial years starting on or after 1 January 2026.

So, if your charity’s financial year runs from January to December, you'll be using the new SORP from January 2026. If your year starts in another month, the changes will kick in at the beginning of whichever month starts your 2026/27 financial year.

What Should You Do Now?
While the full guidance won’t be finalised until October, the Charity Commission are urging charities to get ready for the changes the Financial Reporting Council introduced on lease accounting and revenue recognition.

Those changes involve:

• Lease accounting: There are changes to how leases are reported in the accounts. Most leases will now appear on the Balance Sheet, although there are some exceptions.
  
• Revenue recognition: This is all about when income is recognised in your accounts. The new rules may change how you account for grants, donations, contracts, and trading income - particularly where there are conditions attached.If you'd like a friendly chat about what these changes might mean for your charity, or if you want to schedule a SORP-readiness review later this year, just get in touch. We’d be happy to help you.

See: https://www.gov.uk/government/publications/charity-commission-news/charity-commission-news-july-2025
 
Government Borrowing Jumps – Are Tax Rises on the Way This Autumn?
UK government borrowing was £20.7 billion for June, according to new figures from the Office for National Statistics (ONS) - an increase of £6.6 billion compared to the same month last year.

While the overall figure is broadly in line with forecasts for the year so far, the rise has added pressure on Chancellor Rachel Reeves ahead of the Autumn Budget. Higher spending on public services, rising interest payments on debt, and weaker-than-expected tax receipts have contributed to the increase.

What does this mean for taxpayers?
Economists now widely expect that the Chancellor will need to find £15–25 billion later this year to meet her fiscal rules - particularly the commitment to:

• Not borrow for day-to-day spending
• Get debt falling as a share of national income by 2029–30

This makes tax rises a real possibility in the upcoming Budget.
What kind of tax changes could we see?

Obviously, nothing has been confirmed yet, but there is speculation about extending the freeze on income tax thresholds beyond 2028, which brings more people into higher tax bands over time

Other possibilities might include targeted tax increases on capital gains, dividends, pensions, or business reliefs, or maybe reforms to tax breaks - particularly those perceived as benefiting higher earners or larger businesses.

At this stage it’s difficult to predict what could change, however we’ll continue monitoring developments as the Budget approaches. If you’d like to talk through your tax planning or discuss what changes could mean for you, please get in touch.

See: https://www.bbc.co.uk/news/articles/cwygq5plz04o
 
New Law Aims to Make Online Marketplaces Safer for Business Buyers
If your business sources products from online marketplaces - whether for resale, internal use or part of a service - you may soon benefit from tighter product safety rules.

The newly passed Product Regulation and Metrology Act gives regulators more power to crack down on unsafe goods sold online. It’s part of the Government’s Plan for Change and aims to hold online platforms like Amazon, eBay and others to the same safety standards as high street retailers.

The move follows rising concerns over dangerous products. As an example, there’s been an increase in safety incidents involving e-bikes and e-scooters, many of which involve unsafe lithium-ion batteries.

Online marketplaces will soon be expected to:

• Prevent unsafe products from being listed
• Ensure sellers meet product safety obligations
• Provide clearer information to buyers
• Cooperate with regulators

If you’re buying for your business, this should mean that you can be more confident about the safety of items you buy online. It may be worth making sure that any online marketplaces or suppliers you use are complying with the new rules as they come into effect.

See: https://www.gov.uk/government/news/tough-new-laws-to-make-online-marketplaces-safer
 
Revived Pensions Commission Aims to Secure Better Retirements
The government has announced the revival of the Pensions Commission, twenty years after it helped bring in automatic enrolment. Its goal is to stop future pensioners from being worse off than those retiring today.

New government analysis suggests some worrying trends:

• 45% of working-age adults are saving nothing into a pension
• 4 in 10 people are undersaving for retirement
• Self-employed workers, low earners and some ethnic minorities are most at risk of falling behind
• There’s a 48% gap in private pension wealth between men and women

It’s estimated that people retiring in 2050 could see 8% less private pension income than today’s pensioners.

What’s the Commission going to do?
The newly revived Commission will look at what may be stopping people from saving enough and will issue its final report in 2027.

What does this mean if you’re a business owner or self-employed?
If you're self-employed or run a small business, this news is a reminder to check in on your own retirement planning. The figures suggest that 3 million self-employed people aren’t saving into a pension.

However, these figures don’t factor in that many business owners look to use their business as their pension. For instance, you may be planning to sell the business or property within it to fund retirement.

Whatever the case, it’s practical to regularly review your planning to check that you will have enough to retire on. Contributing to pensions also carry some tax advantages which can be worth factoring in.

Possible effects on employers could include auto-enrolment being expanded with increased costs or administration work. It’s too early to know what the Pension Commission will recommend, but it could pay to watch developments so that you can be prepared.

See: https://www.gov.uk/government/news/government-revives-landmark-pensions-commission-to-confront-retirement-crisis-that-risks-tomorrows-pensioners-being-poorer-than-todays
 
Worrying Drop in Small Business Confidence: More Businesses Expect to Shrink or Close
New figures from the Federation of Small Businesses (FSB) show that for the first time in 15 years, more small businesses expect to shrink, close or sell up in the coming year than those planning to grow. It’s a significant shift - and one the FSB has called “a very dangerous situation” for the UK’s small business sector.

This net-negative growth reading in the FSB’s Small Business Index underlines just how tough trading conditions remain for many firms, despite falling inflation.

Among the issues that the FSB have identified that continue to put pressure on small businesses are:

• Late payments, particularly from larger customers
• Issues around proposals being made in the new Employment Bill
• Reliance on personal guarantees when seeking finance

Small businesses are resilient, but it’s clear that challenges are mounting. If you need help, whether it’s rethinking your plans or looking at restructuring or exit options, please feel free to give us a call to talk through the numbers. We’d be happy to help you!

See: https://www.fsb.org.uk/media-centre/national-news/fsb-weekly-brief-newsletter-friday-18-july-2025-MCXKQVRRIZKZC7RF2MBYWE3L5OWE

18th July 2025 – Hillmans Weekly Update

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

Have a great weekend.

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

UK Economy: Growth Falters, Inflation Rises – Practical Takeaways for Business Owners
Business owners across the UK are facing an increasingly complex economic picture. Inflation has crept up again and recent figures show the economy has contracted for two months in a row. So, what’s really going on - and what should you be doing as a business owner?

Inflation rises again
The latest figures from the Office for National Statistics show inflation rose to 3.6% in the year to June, up from 3.4% in May. This is the sharpest increase since January 2024 and was driven mainly by rising motor fuel and food prices. Food price inflation has increased for the third consecutive month.

The Bank of England expects inflation to peak around 3.7% in the summer before easing towards its 2% target later in the year. But for now, rising prices are continuing to put pressure on households and businesses alike.

Economic growth faltering
The economy shrank by 0.1% in May, following a 0.1% fall in April. These figures were worse than expected and are mainly down to a drop in manufacturing and weak retail sales. While the economy saw strong growth earlier in the year, that now looks like a temporary boost - partly due to changes in US tariffs and the end of the UK stamp duty break.

Although the economy isn’t technically in recession, it is clearly struggling. Business confidence and activity in some sectors remain fragile, and growth may be modest in the months ahead.

Interest rate cuts on the horizon
There may be some relief ahead in the form of lower interest rates. Bank of England governor Andrew Bailey has said he believes the path for rates is “downward”, and many economists expect a rate cut at the next review in August.

Rates currently sit at 4.25%. A rate cut would reduce the cost of borrowing and could help ease pressure on mortgages, loans and credit. The Bank is being cautious because inflation is above target. However, Mr Bailey indicated that if the job market is showing signs of cooling down the Bank will be prepared to make cuts.

There are signs of that happening. The number of job vacancies has fallen to its lowest level since 2021, and more people are now available for work.

Many employers are struggling to absorb increased payroll costs due to the government’s recent increase in National Insurance for employers as well as the National Living Wage. As an example, National Trust cited these as reasons for its plan to cut 550 jobs from its payroll over the next few weeks. 

What are the takeaways for your business
Here are some key takeaways and practical tips for navigating the current climate:

1. Keep an eye on costs: With inflation on the rise again, review your costs - especially around fuel, food and other goods affected by price increases. If you can, negotiate supplier contracts early to lock in rates. 
2. Plan for potential interest rate cuts: If your business has borrowing (loans, overdrafts or credit lines), a rate cut in August could reduce your costs. Consider reviewing repayment terms or refinancing if you expect rates to drop further later in the year. 
3. Watch your cashflow: If the economy is stalling, demand in some sectors may weaken. Make sure you have a clear view of your cashflow over the next 3-6 months. Adjust your spending plans if needed and chase payments due from your customers promptly. 
4. Take care with hiring decisions: Given slower economic growth and higher employer NICs, it’s sensible to be cautious with recruitment. Consider flexible or temporary options if you’re unsure about long-term demand. 
5. Exporting? Look abroad for growth: Some UK businesses are still thriving by focusing on overseas markets. If your product or service can be exported, this may be a way to grow even if domestic demand softens. 
6. Be ready for tax changes at the Autumn Budget: The Chancellor will face difficult choices later this year, and some are anticipating further tax changes. We’ll be keeping you updated as we learn more.

Final thoughts
It’s a challenging environment, but not without opportunities. If you stay alert, control what you can, and keep your plans flexible you’re likely to be well placed to keep your business resilient as the economic picture develops.

If you need help reviewing your costs, cashflow or hiring strategy in light of these changes, we’re here to help.
 
Are You Making Use of the Employment Allowance?
The Tax Faculty of the Institute of Chartered Accountants in England and Wales (ICAEW) is encouraging employers to take a fresh look at the Employment Allowance. If you have a payroll and are not already claiming this allowance, it could reduce your employer national insurance contributions (NICs) by up to £10,500 for the 2025/26 tax year.

It’s a simple, practical incentive that’s already widely used – over 1.2 million employers claimed it in 2024/25 – but some businesses are still missing out, especially newer or smaller employers unfamiliar with the scheme.
What is the Employment Allowance?
The allowance reduces an employer’s Class 1 NIC liability, and is applied through your payroll, meaning you feel the benefit in real time.

• The allowance reduces the employer’s NIC liability, not an employee’s. 
• It’s worth up to £10,500 in 2025/26.

Who can claim?
The ICAEW’s Tax Faculty point out that all employers, including businesses, charities and individuals employing a care or support worker can claim, with the following exceptions:

• Public authorities (who do 50% or more of their work in the public sector) other than charities. 
• Single-director companies where the director is the only paid employee.

One restriction to note is that if you employ someone whose earnings are subject to the off-payroll working rules, or a nanny or gardener or someone else providing personal household or domestic work (and they’re not a carer or support worker), then the allowance can’t be used to offset the Employers NIC due on their specific wages.

Also, if your business operates multiple payrolls or is connected to other companies (e.g. within a family business structure), you can only claim once. Determining whether companies are connected isn’t always straightforward to work out, so it’s best to get advice if you’re unsure.

What’s new for 2025/26?

• The maximum allowance has risen to £10,500 (previously £5,000). 
• Restrictions that previously blocked many larger employers from climing have been lifted. 
• It no longer counts as de minimis state aid, simplifying compliance for many.

Can you claim for previous years?
Yes - you can go back four tax years. Which means if you were eligible but didn’t claim Employment Allowance for the 2021/22 tax year, you still have until 5 April 2026 to make a claim.

The eligibility requirements can vary for different tax years, so the ICAEW advises that you check the specific eligibility rules for each year before making a retrospective claim.

Bottom Line
If you’re not already taking advantage of it, the Employment Allowance offers real cash-flow benefits. If you would like help in making a claim or checking if you are eligible, please get in touch and we would be happy to help you.

See: https://www.icaew.com/insights/tax-news/2025/jul-2025/how-to-make-the-employment-allowance-work-for-you
 
Windows 10 Is Ending: Are You Ready?
The UK’s National Cyber Security Centre (NCSC) is urging businesses to prepare for the fact that Windows 10 will no longer be supported from 14 October 2025.

If your business still uses Windows 10 on its computers, it’s time to start planning your next steps.

Why does this matter?
Once Windows 10 support ends, it won’t receive any more security updates. That means if hackers discover a weakness, they can use it to break into your systems - and there won’t be a fix. This is exactly what happened in the past with older versions of Windows, leading to major cyberattacks that caused chaos for businesses.

Why aren’t businesses upgrading?
One reason is that Windows 10 still feels modern. It still works well for many people and so it’s easy to forget it’s over 10 years old.

Another issue is that the newer version - Windows 11 - has stricter hardware requirements. In simple terms, many older computers can’t run it. If your devices don’t meet the minimum standards, you won’t be able to upgrade without replacing them.

Why upgrading is worth it
If something’s working well for you then there’s no doubt that replacing it may seem an unnecessary hassle. There are some advantages to Windows 11 though that may make the effort and money worthwhile.

Windows 11 is designed to be much more secure from the start. It includes built-in features that help protect your business from viruses, hacking attempts, and stolen passwords - often without needing any extra effort from you.

What the NCSC recommends
Although there are still a few months before support for Windows 10 ends, NCSC is recommending that you start planning to move to Windows 11 as soon as possible.

This gives you time to review which computers may need replacing and make the switch without disruption to your business.

If you’re not sure where to start, speak to your IT provider or support team. The earlier you act, the smoother (and safer) the transition will be.

See: https://www.ncsc.gov.uk/blog-post/getting-your-organisation-ready-for-windows-11-upgrade-before-autumn-2025
 
Smoother UK Trading Ahead: Reforms to Internal Market Act Planned
New government reforms to the UK Internal Market Act aim to make it easier for businesses to trade across England, Scotland, Wales and Northern Ireland - with less friction and more certainty.

Following feedback from businesses, the changes are designed to simplify the rules that apply when trading across the UK’s four nations, while still allowing each devolved government to reflect local priorities.

What’s changing?

• Clearer and more consistent rules across the UK to help avoid confusion and unexpected costs when doing business across borders. 
• Fewer trade barriers – particularly when rules in one nation differ slightly but don’t have major economic impacts. 
• Greater transparency and engagement in how new rules are developed, with opportunities for businesses to get involved made easier. 
• Devolved governments will still be able to make decisions that suit their regions, but the process will be more collaborative and business-focused. 

Why it matters
The UK’s internal market supports over £129 billion of trade each year – a lifeline for many small and medium-sized firms, especially those in Scotland, Wales and Northern Ireland, where sales to the rest of the UK often make up over half their external trade.

What business owners should consider

• If you trade across borders within the UK, you may find processes more straightforward in future, with less chance of being caught out by diverging regulations. 
• Keep an eye on consultations and rule changes, particularly in sectors like manufacturing, chemicals, food, and retail – areas likely to see more aligned rules. 
• Use the breathing room to plan – clearer rules mean more confidence in pricing, logistics and investment decisions.

This could be a positive step for UK-wide trade, particularly for businesses that operate across more than one nation. If that’s you, it’s worth reviewing how these reforms could help you.

See: https://www.gov.uk/government/news/improved-trade-rules-to-boost-business-and-growth-across-the-uk
 
Starbucks Tightens Office Rules – Should Your Business Follow?
Starbucks is telling its corporate staff to return to the office four days a week – or take a one-off payment and leave. From October, employees in the US and Canada must be in between Monday and Thursday, up from three days.

The company’s CEO, Brian Niccol, says the change is part of a broader turnaround plan to revive sales and performance. In-person working, he argues, is essential to rebuild collaboration and company culture.

This move follows similar decisions from firms like Amazon and JP Morgan. Research shows about one-third of remote-capable workers in the US are now back in the office full-time, while around 45% follow a hybrid model.

Is this something you should think about?
In the UK, hybrid working is still common – but some employers are starting to rethink how flexible they want to be.
Here are some points to consider:

• Review what your business needs: If you're trying to drive growth or change, more in-person time may help. If things are stable, hybrid may still work well. 
• Be clear and consistent: Whatever model you choose, make sure expectations are understood by your team. 
• Focus on results: If remote staff are delivering, think carefully before requiring more office time without a strong reason. 
• Stay alert to staff needs: The right balance may shift over time. Keep communication open with your team. 
• Flexibility still matters: In a tight labour market, hybrid working remains a big draw for attracting and keeping talent.

Starbucks’ move won’t be right for everyone - but it’s a sign that some firms are pushing back against remote work. It may be time to review your own policy and ask: is it still working for the business?

See: https://www.bbc.co.uk/news/articles/ce9xpdvgv8vo
 
Choosing a Business Rates Agent: New Advice Available
New guidance on using an agent to manage your business rates has been published by the Valuation Office Agency (VOA).

Many business owners choose to made their own business rates, but others prefer the convenience of appointing an agent to help them. The VOA are keen to make sure that business owners exercise care in choosing an agent. They say that while the majority of business rates agents are reputable and provide a good service, there are a small minority that act in bad faith.

The VOA’s new guidance encourages the following:

• Do your research
• Beware of big promises
• Understand your contract
• Follow best practice in appointing an agent and monitoring their work afterwards.

To review the advice in full, see: https://www.gov.uk/government/news/how-to-choose-a-business-rates-agent 

11th July 2025 – Hillmans Weekly Update

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

Have a great weekend.

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

Where Did the Money Go?
If you’ve ever reached the end of a busy month wondering where your profits have gone, you’re not alone. For many small business owners, cash seems to disappear faster than it arrives.

While sales are important, its cash flow – the money coming in and going out – that keeps your business alive. So, asking “Where did the money go?” can be your key to regaining control of your cash.

Where to Start
Effective cash management starts with visibility. Without a clear understanding of where your money is going, it’s difficult to:

• Spot wasteful or unnecessary costs
• Plan for tax payments or seasonal dips
• Invest with confidence in equipment or opportunities to grow
• Avoid last-minute scrambles to cover payroll or bills

In short, if you can’t track it, you can’t manage it.

Common Money Drains
Business owners are often surprised by how much they spend on the “small stuff” - subscriptions, software licenses, office supplies, travel costs, or energy bills. These often fly under the radar but add up quickly. Similarly, inconsistent pricing, uncollected invoices, or excess stock can quietly eat away at your margins.

What You Can Do

1. Review Your Spending Monthly: Make time each month to review your bank statements and P&L reports. Look for patterns, unexpected charges, and trends in your expenses. This will make it easier to see where adjustments can be made to reduce spending. 
2. Use Cash Flow Tools: Accounting software or spreadsheets can make a huge difference. A simple Excel cash flow template can allow you to forecast, monitor, and adjust in real time. 
3. Separate Personal and Business Finances: Mixing the two creates confusion and risk. Keeping them separate makes your cash situation easier to monitor.
4. Set Spending Limits: Give yourself boundaries, capping monthly spend in certain areas. Being disciplined will help you to avoid overspending. 
5. Revisit Your Pricing: If your costs have increased but your prices haven’t, your margins may be suffering. Reviewing your pricing structure will help you to make sure your income is keeping pace with your expenses.

The Takeaway
Asking “Where did the money go?” isn’t a sign of failure - it’s a sign that you’re ready to take control. By building better awareness of how money flows through your business, you’ll be better placed to plan, save, and grow.

Fancy taking this a step further? Why not get in touch and we would be happy to help you!
 
Is it Too Hot or Cold to Work? What Employers Need to Know
With the UK experiencing more frequent extremes in temperature - both hot and cold - it’s worth brushing up on what the law says about working conditions, and what you can do to keep your team comfortable and safe.

The Health and Safety Executive (HSE) provides a useful guide that can help you make sure you’re one step ahead of the law.

Is there a maximum workplace temperature?
You might be surprised to learn there’s no legal upper limit when it comes to how hot a workplace can be. That’s because some working environments - like bakeries or foundries - naturally reach high temperatures due to the nature of the job.
However, that doesn’t mean employers can ignore the heat. Under health and safety law, you must:

• Keep workplace temperatures at a comfortable level
• Provide clean and fresh air

And the minimum?
For indoor workplaces, the rules are a little clearer:

• The temperature should be at least 16°C
• If the work involves ‘rigorous physical effort,’ it can be as low as 13°C

Outdoor working comes with extra risk
Working outdoors in hot (or cold) environments can quickly affect your employees’ health. There can be long-term health effects too, such as skin cancer. And the weather can affect an employee’s ability to handle machinery or other tasks safely.

It’s therefore important to make sure you have measures in place to protect those who may be working outdoors.

If your business involves extreme temperatures
In some sectors, extreme temperatures are part of the job. If this applies to your business, then you would need to consider things like heat stress, dehydration or cold stress.

Final thoughts
There may be no fixed maximum temperature at work, but the key principle is that employees should not be working in conditions that put their health at risk. If your team is too hot or cold, it’s worth reviewing what you can do to help. Sometimes, just making a few small adjustments can make a real difference.

See: https://www.hse.gov.uk/temperature/employer/index.htm
 
Employment Rights Bill: New Measures Announced for NDAs and Bereavement Leave for Pregnancy Loss
The Employment Rights Bill is currently making its way through Parliament, and some important amendments have been announced that employers will want to be aware of.

These two updates relate to how employers handle issues of harassment and pregnancy loss.

1. Non-Disclosure Agreements (NDAs): New Restrictions on Use
The Bill includes a proposal to ban the use of NDAs that prevent employees from speaking out about harassment, including sexual harassment and workplace discrimination. These clauses, which can often be found in settlement agreements, will no longer be enforceable where their purpose is to stop someone from discussing such experiences.

Witnesses will also be protected – meaning that individuals who have seen or supported someone through harassment can speak up without risk of breaching confidentiality.

This means that where NDAs have been used to silence or discourage people from speaking about an allegation of harassment or discrimination, that approach will no longer be supported by law.

2. Bereavement Leave for Pregnancy Loss: A New Legal Right
Another key amendment introduces a new right to bereavement leave for families affected by a pregnancy loss before 24 weeks.

Currently, statutory Parental Bereavement Leave only applies where parents lose a child under 18 or experience stillbirth after pregnancy has reached 24 weeks. This change recognises that grief doesn’t depend on how far along a pregnancy was.
 
What to consider:
Employers will need to offer protected time off for pregnancy loss from day one of employment, once the Bill becomes law.
This is a good opportunity to review your bereavement and sickness policies, and make sure they reflect the needs of employees going through these difficult experiences.

Many businesses have already taken steps to build more compassionate policies in this area, and this change will help ensure greater consistency and clarity across the board.

Wider context: The Plan for Change
These proposals sit alongside wider measures in the Bill aimed at improving job security and working conditions. The government has said these reforms are intended to support both workers and businesses, helping employers build strong, sustainable teams while protecting people through major life events.

We’d recommend that you continue to monitor developments as the Bill progresses through Parliament. This will allow you to be ready with your policies and communications with staff.

To review more information on the NDAs measure, see here. To review more information on the measure for bereavement leave, see here.
 
Could Reading More Help Your Business?
The Department for Education has announced a National Year of Reading, launching in January 2026, in a bid to reverse the steady decline in reading for pleasure among young people.

According to a survey carried out by the National Literacy Trust, just 1 in 3 of children and young people aged 8 to 18 said they enjoyed reading in their free time in 2025. Less than 1 in 5 said they used their free time to read daily. This is the lowest these statistics have been in 20 years.

The National Year of Reading campaign aims to reignite a reading culture by involving parents, schools, libraries, and businesses. While the initiative is focused on children and families, there could be wider benefits.

Reading regularly for pleasure has been shown to reduce stress and can improve decision-making. Considering the multiple responsibilities you juggle, reading may not only lessen your stress levels but also freshen your approach when it comes to work.

Books can also give you new ideas - whether it’s a biography that reshapes how you think about leadership, or a business title that gives you some new marketing strategies.

Reading for pleasure is also linked with stronger writing skills. Being a more confident and a clearer communicator, whether in an email or a client pitch, could benefit you in your interactions with customers and suppliers. A culture of reading within your team could similarly have a positive effect on how your staff engage with customers and each other.

There are community-level benefits too. A more literate population supports a stronger workforce. Supporting reading initiatives - by partnering with schools, donating books, or perhaps encouraging employees to read with their children - could play a part in helping to build the foundations of a more skilled and confident workforce in the long term.

The National Year of Reading presents a timely reminder: reading is not just for classrooms and libraries. It can be a practical and powerful tool in your personal growth and in developing your business.

See: https://literacytrust.org.uk/news/parents-urged-to-read-more-to-boost-childrens-life-chances/
 
ICO Seeks Views on New, Privacy-Friendly Approach to Online Advertising
The Information Commissioner’s Office (ICO) has launched a call for views that could shape the future of online advertising - and potentially offer businesses a way to maintain revenue without compromising user privacy.

The proposals relate to how the ICO enforces regulation 6 of the Privacy and Electronic Communications Regulations (PECR). This is the rule that currently requires websites to get user consent before storing or accessing information that is used for deploying online advertising technologies.

Exploring Alternatives
The ICO is encouraging feedback on a new risk-based enforcement approach that would allow online advertising to be served to users who haven’t given consent, where the risk to their privacy is low.

Importantly, the regulator is not stepping back from requiring consent where personal data is involved in ad targeting. That principle still stands firm. But the aim is to help businesses explore new models that respect users’ choices while still generating income.

The issue with online advertising is that it typically involves considerable processing of personal information to identify and deliver behavioural advertising. However, the ICO takes the view that this amount of processing may not be necessary.

Stephen Almond, the ICO’s Director of Regulatory Risk, put it simply: “Online advertising doesn’t have to come at the expense of privacy… Our role isn’t to dictate how that’s done – it’s to remove unnecessary regulatory barriers and open the door to responsible innovation.”

Updated Guidance on Cookies and Similar Technologies
Alongside this, the ICO has also published a revised consultation on its Storage and Access Technologies (SATs) guidance. This reflects changes introduced by the Data (Use and Access) Act 2025, which now allows consent-free use of cookies for certain low-risk activities - such as gathering anonymous data to improve site performance.

What Businesses Should Consider
If your business runs a website, this could simplify things for you, particularly where you might only use cookies for analytics or testing purposes.

If you’re involved in online advertising, digital publishing, or operate a website that uses cookies, this may be a good time to review your current setup – could low-risk, privacy-friendly alternatives work for your business?

The ICO is also commissioning more user research to better understand public attitudes around online tracking and consent.

Key Dates
The consultation on the ICO’s approach to regulating online advertising will close on 29 August 2025.
The SATs guidance consultation closes on 26 September 2025.
These consultations will feed into the ICO’s final guidance and a formal statement due in early 2026.

See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/07/ico-opens-door-to-privacy-first-advertising-models-with-proposed-new-enforcement-approach/
 
Pension Reforms: What Can You Do to Prepare?
The Government's new Pension Schemes Bill, currently before Parliament, introduces wide-reaching reforms aimed at improving outcomes for pension savers. These changes will not only affect how pensions are administered but also impact scheme selection, cost management, and employee engagement over the long term.

Figures released last week suggest that the average worker on an average salary saving into a pension pot over their working life could benefit by up to £29,000 when they retire.
 
Here are two of the measures that could particularly affect small employers.

1. Automatic Consolidation of Small Pension Pots
Small pension pots under £1,000, often created when employees change jobs, will now be automatically consolidated into large, authorised schemes that have been certified as delivering good value.

This change will reduce the administrative work involved in holding and reporting on multiple inactive pots. This could have an indirect benefit to employers too.

2. Schemes Will Need to Prove They Are Value for Money
Pension schemes will need to meet new regulatory standards to prove they offer long-term value, not just low charges. This will help protect savers from getting stuck in underperforming schemes. The intention is to help employees get the best possible retirement outcomes.

As an employer, you will need to make sure the default pension scheme you use is meeting these standards. Failing to do so will run the risk of being required to switch schemes.

In addition, a poorly performing scheme could affect the value of the benefits package you offer and might lead to losing existing or potential employees.

What Can You Do to Prepare?

• It may be worth speaking to your pension adviser so that they can provide you with specific advice on the pension scheme you use and its value. 
• As the value-for-money requirements become clear, review your pension provider to ensure they’re on course to meet the requirements. 
• Employees may have questions about how the changes may affect their pension, so be ready to communicate with them early and provide support where needed. 
• These changes may create an opportunity to re-evaluate how your workplace pension supports retention and financial security for your workforce.

By staying ahead of these changes now, you can ensure your business continues to provide high-quality, compliant pension arrangements that support your employees' long-term financial wellbeing.

See: https://www.gov.uk/government/news/workers-in-line-for-29000-boost-thanks-to-landmark-pensions-bill

4th July 2025 – Hillmans Weekly Update

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

Have a great weekend.

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

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

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

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

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

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

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

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

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

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

27th June 2025 – Hillmans Weekly Update

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

Have a great weekend.

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

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

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

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

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

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

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

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

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

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

Under MTD, you’ll need to:

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

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

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

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

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

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

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

Here are some practical ways it can benefit your business:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Some of the key issues raised include:

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

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

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

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

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

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

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

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