19th September 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

ADJUSTMENTS FOR PRIVATE USE
HMRC will be running a digital campaign aimed at encouraging accurate private use adjustments of business expenses that are reported via Self Assessment returns. 
 
To be allowable for tax, expenses must be 'wholly and exclusively' incurred for the purposes of the business, with any appropriate adjustments being made for private use. Expense claims should therefore be restricted to those that relate to business use only, with partial claims for mixed private and business expenditure being apportioned based on the circumstances of the particular tax year.
 
Following a trial in 2024 involving 600,000 self-assessed individuals who were encouraged to make accurate private use adjustments, HMRC reported widespread inaccurate reporting of disallowable private use. HMRC now intend to open more enquiries into private use adjustments for business expense claims.
 
STATUTORY SICK PAY – CHANGES FOR EMPLOYERS FROM APRIL 2026
The Department for Business and Trade (DBT) has announced that major reforms to Statutory Sick Pay (SSP) will take effect from April 2026. The reforms will enhance employee rights but potentially raise costs for employers. The key changes are:
 

• SSP will be payable from the first day of sickness absence (currently SSP is payable after the third day).
• Employees will no longer be required to meet the £125 per week earnings threshold to qualify for SSP.
• For those earning less than £125 per week, their SSP entitlement will be the lower of:
  • 80% of their normal weekly earnings; and
  • The set rate of SSP (currently £118.75 per week).

The SSP reforms will present an additional cost to many employers already dealing with the recent increases to National Minimum Wage and Employers’ National Insurance.
 
It should be remembered that, unlike statutory maternity and paternity pay, SSP cannot be recovered from HMRC. Forecasting for potential increases in payroll costs will be essential, particularly for businesses that experience high levels of staff absence.
 
Employers are responsible for ensuring employees are paid the right amount of SSP at the right time. It is important to ensure payroll systems are updated in time for April 2026.
 
DILAPIDATED PROPERTY: WHEN CAN SDLT BE RECLAIMED? 
HMRC have issued a warning to taxpayers to be vigilant of tax agents offering to secure Stamp Duty Land Tax (SDLT) repayments on certain property purchases.
 
The warning reminds property buyers to be aware of tax agents claiming that, for a fee, SDLT can be reclaimed on residential property purchases when they are in need of repair. Such properties in need of repair when purchased are generally chargeable to the residential rates of  SDLT, regardless of their condition.
 
HMRC say that claims of this kind often leave the homeowner liable for the full amount of SDLT plus penalties and interest. They are taking action on spurious SDLT repayment claims and will use civil powers to deal with the minority who undermine the tax system.
 
The warning follows the recent Court of Appeal (CoA) decision in Amarjeet and Tajinder Mudan v HMRC. The case found that a property that was dilapidated and vandalised when it was purchased still constituted residential property, meaning higher residential rates of SDLT were payable on the purchase.
 
The couple who bought the property believed that it was not suitable for use as a residence at the point of purchase and, having paid SDLT at the residential rates, subsequently tried to reclaim 'overpaid' SDLT on the on the basis that the property was not fit for human habitation and was non-residential, so the non-residential rates should have applied.
 
The CoA found that property used as a dwelling is residential for SDLT purposes regardless of how dilapidated or unmodernised it is.
 
WINTER FUEL PAYMENT CLAWBACK 
Individuals born before 22 September 1959 and living in England, Wales or Northern Ireland are likely to be entitled to a Winter Fuel Payment (WFP) of between £100 and £300 for this upcoming winter (2025-26). Payments will be made in November or December 2025. However, HMRC will claw back (or “recover”) the WFP if the individual’s income exceeds £35,000 in the year to 5 April 2026.
 
In most cases, the recovery of the 2025-26 WFP will be made automatically via PAYE in the 2026-27 tax year, with HMRC adjusting the recipient's tax code to collect around £17 per month between April 2026 and March 2027 (based on a typical WFP of £200).
 
However, for individuals in self-assessment, recovery of the WFP will instead take place as part of the tax return. For 2025-26 tax returns, HMRC will automatically include the 2025-26 WFP, and the WFP recovery will be collected as part of the balancing payment on 31 January 2027. 
 
Individuals can check whether, and how, HMRC will recover their WFP using a new online tool. 
 
For more on the WFP, its recovery, and opting out, please see https://www.gov.uk/winter-fuel-payment.
 
VAT – RETAILERS AND THIRD-PARTY CONTRACTORS 
We are aware that HMRC is challenging retailers that supply flooring, kitchens, and bathrooms where the retailer refers the customer to third party contractors for fitting services. Typically, HMRC will argue that a single supply of goods and fitting services is being made by the retailer. In many cases, the third-party fitters are not registered for VAT, meaning HMRC can increase the VAT due if the fitting were deemed to be a supply made by the VAT-registered retailer.
 
In a recent First Tier Tribunal case, United Carpets (Franchisor) Limited v HMRC, the Tribunal found that the retailer concerned did not supply fitting services. This was because in-store signage explicitly stated that the store did not provide fitting services. The retailer’s only role in the fitting of the flooring was ‘introductory’ in that it merely put a customer in contact with a fitter. The contracts to fit the flooring were between the customer and the fitter, and the obligation to pay the fitter was with the customer.

To minimise the risk of a challenge from HMRC, both the contractual position as well as the commercial and economic reality of the arrangements need to demonstrate that the supply of goods, and the fitting services, are two distinct and separate supplies made by two different suppliers.
 
ARTIFICIAL INTELLIGENCE – FRIEND OR FOE?
 In a recent Upper Tribunal case (HMRC v Marc Gunnarsson), a taxpayer did not have any professional representation and used Artificial Intelligence (AI) software to draft his skeleton argument in the run-up to the hearing.
 
The Upper Tribunal found that Self-Employment Income Support Scheme (SEISS) claims made by the taxpayer - a director of a limited company - were incorrect and he was required to repay the amounts received.
 
His skeleton argument referred to three First Tier Tribunal decisions to support his case, but those cases did not exist – they had been ‘hallucinated’ by generative AI.
 
The use of AI is increasing, and it is important to verify that the information generated is accurate before relying on it. There is a real danger that inaccurate or fictitious information may be used as evidence in legal proceedings.
 
Whilst AI obviously has advantages in today’s world, when it comes to tax, it’s very important to verify tax advice with a Charterted Accountant.

12th September 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

How Employers Can Improve Gender Equality at Work
The government has recently published new guidance on how businesses can improve gender equality in the workplace. The advice is intended to be practical and based on evidence of what really works, rather than theory.

The guide contains details of effective actions, where there is strong evidence that the action is effective, and promising actions, where evidence is promising but limited.

You can use this resource to develop action plans in your own business that help to create a more inclusive work environment. Here’s a brief review of what is contained in the guidance.

Start with the data
The guide recommends that you first take a data-driven approach. It provides some questions that can help you identify where gender imbalance might be occurring.

For instance, you could ask:

• Are women more likely to be recruited into lower-paid roles compared to men?
• Do starting salaries or bonuses differ by gender?
• Do people get “stuck” at certain levels in your business?
• Do you support part-time employees to progress?

Answering questions like these can help you better focus your efforts.

The guidance continues by breaking actions down across four stages of the employee lifecycle.

1. Hiring and selection
Using standardised hiring and selection processes is recommended as an effective way to minimise the risk of bias and select the right person for the job.

One of the clearest findings is that flexibility matters. Job adverts that openly state flexible working options attract many more applicants, and more women apply for senior roles when flexibility is built in.

Employers are also encouraged to make interviews structured and transparent, with all candidates asked the same questions and scored in the same way.

Pay and promotion policies should be clear, too. Clearly stating the salary range and whether the salary is negotiable is recommended.

2. Talent management, learning and development
Equality is not just about recruitment. Retaining and supporting staff is equally important.

A key recommendation in this area is to increase transparency in your promotion, pay and reward processes. Employees should be clear on what is involved in getting a pay increase or how promotions are decided.

Increasing accountability assists with doing this. For instance, managers in the business should understand that the decisions they make on pay and promotions need to be objective and evidence-based, and their decisions can be reviewed by others.

3. Inclusion and retention
Flexible working arrangements and generous parental leave policies are key to retaining staff, helping them balance their home and work responsibilities.
Advertising and offering all jobs as having flexible working options is recommended. However, employers also need to ‘walk the talk’. For instance, senior people in the business should be encouraged to ‘role model’ for working flexibly and champion flexible working.

The guidance also identifies the need to challenge the gender stereotype that it is a woman’s role to take on caring responsibilities. Improving workplace flexibility for everyone can help both women and men combine work with family and other parts of their lives. Therefore, you could:

• Openly encourage and enable men to work flexibly too. This avoids flexible working being seen as only a benefit for women.
• Avoid a ‘one size fits all’ approach, such as specifying the number of days employees can work from home, as this may create a gender gap.
• Talk to fathers, not just mothers, about changing working patterns when they have children.

4. Leadership and accountability
Change is most effective when it is led from the top. The guidance suggests that business leaders set specific, clear and time-bound goals that are challenging but realistic. Progress towards these goals should be tracked and reviewed regularly.

Some employers appoint a senior diversity lead or create a task force and empower them to keep things on track, and this has been linked to better outcomes for women at work.
 
In conclusion
The guidance contains information about many other actions in these four areas that may be effective for your business.

Creating an inclusive culture in your business is a key way to improve fairness, widen your talent pool, and benefit from a more motivated and diverse workforce. The guidance is well worth your time to read it in full. It can be found here:

https://www.gov.uk/government/publications/how-to-improve-gender-equality-in-the-workplace-actions-for-employers/how-to-improve-gender-equality-in-the-workplace-actions-for-employers
 
How Should You Respond to Cyber Attacks?
Cyber-attacks are on the increase, and smaller businesses are by no means immune. Have you been the victim of an online scam or cyber-attack? Or worried that something like that may happen?

If so, a collection of resources on the National Cyber Security Centre (NCSC) could be helpful to you. The guidance is broken down across six topics and provides practical advice on what to do. Here’s a summary.

Phishing
Phishing involves receiving a suspicious message that usually includes a link to collect information from you.

NCSC advise that it’s important not to click on links in such a message or enter any information. However, if you have already done this, there are still important actions you can take to protect yourself, including:

• Contacting your bank if you have shared banking details.
• Using antivirus software.
• Changing passwords.
• Reporting it.

Business payment fraud
Criminals send emails that appear to be tailored to your business that are designed to trick you into believing you are dealing with a legitimate contact. They might send an invoice that looks real but contains a virus or change the bank account details you normally pay into.

If you have been caught out, NCSC encourage you not to panic and contact your bank directly, making sure to use their official website or phone number.

Hacked accounts
NCSC provide a useful checklist of actions you can take if you can’t access one of your online accounts, or have noticed some unusual activity on an account.

Ransomware attack
In a ransomware attack, an attacker may encrypt your electronic device or the data stored on it and demand payment in exchange for decrypting the device or data.

There are recommended actions you can take in these circumstances, and NCSC also provide their view on paying the ransom and the dangers you face if you decide to pay.

Infected devices
If you have a device that is behaving strangely, this may be because of malware.

The guidance explains what you need to do confirm whether your device is infected, and what you can do to try and fix it. NCSC highlight that you are likely to lose any data that wasn’t backed up in your ‘last known’ good backup; however, trying to rescue data while your device is still infected runs the risk of carrying the problem through even after your device has been wiped and reinstalled.

Denial of Service (DoS) attack
A DoS attack will make your website or network unreliable or unresponsive, which could be critical to your business.

NCSC provides guidance on what to do and how to defend your business from this threat.

To review the resources in full, see: https://www.ncsc.gov.uk/section/respond-recover/sole-small
 
Extended Producer Responsibility (pEPR): First Invoices Due October 2025
From October 2025, businesses that fall under the UK’s Extended Producer Responsibility for packaging (pEPR) scheme will receive their first invoices, covering the period from 1 April 2025 to 31 March 2026.

These invoices, called Notices of Liability, will be based on the packaging data you submitted for 2024.

What to expect
Invoices will be issued through the Report Packaging Data (RPD) system, which only registered users can access. PackUK will notify Primary Contacts and Approved Users of the invoice and how to access it.

However, if your finance team will need access, it would be worth making sure they are set up on the system before October.

If you have not logged into the RPD system recently, then PackUK has recommended that you log in again before October to check your details. This will minimise delays to accessing your account when you need to in October.

The size of your liability will depend on your submitted data and the overall figures from all producers. In some cases, fees may be recalculated later in the year if there are material changes.

Payment and deadlines
You will need to either pay in full within 50 days or sign up to a four-instalment plan.

It’s important to note that these invoices are classed as statutory debts, so late payment penalties apply and PackUK will not issue purchase orders or VAT numbers.

Being late in paying could be expensive. You may be liable to a variable monetary penalty of (whichever is greater):

• 20% of the unpaid fees; or
• 5% of your UK turnover (2% of UK group turnover if registered as a group).

Preparing now
To be ready for October:

• Check your RPD login details and contact information.
• Ensure your finance team have access if they need it.
• Review your submitted 2024 packaging data and calculate what the fee is likely to be based on published material rates.
• Prepare any necessary internal processes to ensure the invoice is paid in good time.

Further details
Further guidance and contact information if you need support can be found here: https://www.gov.uk/government/news/preparing-for-pepr-year-1-invoicing-key-information-for-liable-producers
 
Contactless Payments: Could the £100 Limit Soon Disappear?
The Financial Conduct Authority (FCA) has launched proposals that could see the £100 limit on contactless card payments raised - or even removed altogether. If agreed, shoppers may soon be able to pay for larger supermarket trips or restaurant bills with just a tap, without needing to enter a PIN.

Why now?
When contactless payments were introduced in 2007, the limit was only £10. It has been raised gradually over time, most recently to £100 in October 2021.

The FCA says this latest proposal reflects both rising prices and the way technology is changing how people pay. Digital wallets on smartphones already allow unlimited contactless payments because of the added security from face ID or fingerprint checks. As a result, many are now using their smartphone to pay rather than using a card.

How it would work
Under the new plans, banks and card providers - not the FCA - would decide whether to raise limits. Some may even let customers set their own cap, or keep the limit lower if they prefer. Payment terminals would also need reprogramming to accept higher-value card transactions.

Although many consumers remain cautious - 78% of those who responded to an FCA consultation wanted the £100 limit to stay - providers argue that fewer interruptions at the till would mean faster payments and less “friction” for both businesses and customers.

Concerns about fraud
Each increase in the limit has raised questions about security. The FCA has put forward this most recent proposal despite consumers and industry respondents already saying they preferred the current rules.

The FCA admits in its own analysis that higher limits would likely increase losses from fraud, but it says detection systems are improving. It also stresses that consumers remain protected: they would be refunded if their card was used fraudulently.

At present, safeguards already require a PIN if a series of contactless payments exceeds £300 or if more than five transactions are made in a row. Many banks also allow customers to lower their own contactless limit or switch it off entirely.

Next steps
The FCA’s consultation runs until 15 October, and changes could be introduced early next year. If adopted, the four-digit PIN could become an increasingly rare part of everyday shopping.

For now, the £100 limit remains in place, but businesses may want to prepare for a shift in how customers choose to pay.
See: https://www.bbc.co.uk/news/articles/czjv7jy2r9vo
 
Celebrating 10 Years of HSE’s Risk-Reduction Through Design Awards
This year is the 10th anniversary of the Health and Safety Executive’s (HSE) ‘Risk-reduction through design’ awards, which recognise UK employers who have taken practical steps to reduce musculoskeletal disorder (MSD) risks in the workplace.

Jointly sponsored by the Chartered Institute of Ergonomics and Human Factors (CIEHF), the awards celebrate large and small businesses that have introduced design changes to reduce the strain of lifting, pushing, pulling, awkward postures or other manual handling activities. Past winners have ranged from food production to construction, all united by a focus on healthier, safer workplaces.
 
Why enter?
By submitting a nomination, employers can:

• Gain national recognition for innovation and commitment to worker wellbeing.
• Share their success to inspire others

There are two award categories: Best overall MSD risk reduction through design, and a dedicated SME award recognising the vital role smaller businesses play.

How to apply
Nominations are open now to UK employers and will close on 31 January 2026.

An independent judging panel will select the winners, who will be announced at the CIEHF awards event in April 2026.

For full details and to submit a nomination, visit the HSE website.

5th September 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

Six Lessons for Businesses from Royal Mail’s Return to Profit
After three years of losses, it’s been reported that Royal Mail has returned to profit under its new owner, Czech billionaire Daniel Kretinsky.

While the £12m profit (excluding redundancy costs) is modest compared to the £336m loss the year before, it marks an important shift for a company that has faced falling demand, rising costs, and hits to its reputation.

Royal Mail’s story provides food for thought on what it takes to adapt and grow your business in tough market conditions. Here are five lessons.

1. Shift Focus to Growth Areas
Royal Mail recognised that letter volumes are in long-term decline (down 4% in the latest year), but parcel volumes are rising (up 6%). By pivoting investment and strategy towards parcels - where customer demand and profitability lie - the business is working to realign itself with market reality.

The lesson? Analyse your income streams to see if there are any areas where customer demand is increasing. Then focus more resources in that area, even if it means letting go of parts of the business that once seemed core.

2. Streamline Operations
Royal Mail has already stopped second-class letter deliveries on Saturdays to save costs. The Universal Service Obligation (USO) requires Royal Mail to deliver letters six days per week, Monday to Saturday, and parcels Monday to Friday.

However, the USO is currently being reviewed and Royal Mail has argued that reducing second-class deliveries to every other weekday would save up to £300 million a year. It feels this would give it a “fighting chance.”

The lesson? Regularly review the way your business operates to see if you’re doing work that drains resources but adds little value. Small changes in the way you do things could unlock big savings.

3. Innovate for Customer Needs
Royal Mail plans to install 3,500 solar-powered parcel post boxes across the UK. Solar panels on the top of the post boxes will power a digitally-activated drawer allowing for the posting of items as large as a shoebox.

Customers will be able to use the Royal Mail app to use the service and can request proof of posting and tracking of their parcel, making it a more convenient way for customers to send small parcels.

The lesson: Innovation not only can improve your reputation as a sustainable business but also help you better meet the needs of your customers. Innovation doesn’t have to be high-tech or complicated. Ask: ‘What small changes would make my customers’ lives easier?’

4. Invest in Brand and Trust
Despite foreign ownership, Royal Mail kept its name, UK headquarters, and tax residency for at least five years. This was an agreed condition when Royal Mail was bought out, and the government has kept a so-called “golden share” that allows it veto rights on certain changes. However, this requirement has helped to maintain continuity and trust with customers.

The lesson? In times of change, you can reassure your customers by keeping the things they rely on most consistent – whether that’s your level of service, how you communicate with them, or the quality of your products. Familiarity helps build trust and loyalty.

5. Be Willing to Make Tough Calls
Royal Mail has shed staff, absorbed strikes and endured reputational knocks. Yet leadership has made difficult and sometimes unpopular choices to put the company back on a sustainable path.

The lesson? Growth often requires tough decisions, whether on staffing, pricing, or cutting loss-making activities. Avoiding them only delays how long it can take to put the business back on a positive footing.

6. Adapt Business Models to Long-Term Trends
The shift from letters to parcels reflects a deeper societal trend - digital communication replacing paper. Royal Mail’s survival depends on embracing this shift rather than resisting it.

The lesson? Take time to examine what the long-term trends in your industry are. Are you positioned to thrive in five or ten years’ time, or might you be clinging to models that show signs of being in decline?

What’s the key takeaway from all this?
Royal Mail’s modest profit shows that even a 500-year-old organisation can adapt when forced to. Focusing on growth areas, cutting what no longer works, innovating around your customers’ needs, investing in trust, making tough calls and staying in touch with long-term trends can help your business continue to grow and thrive.

If you’d like to talk through how these kinds of lessons could apply to your own business – whether that’s managing costs, adapting services, or keeping customers onside – we’d be happy to help!

See: https://www.bbc.co.uk/news/articles/cger3w129l0o
 
Rising Borrowing Costs Put Pressure on the Chancellor
The UK government is facing a fresh financial squeeze after long-term borrowing costs climbed to their highest level in a generation. The yield on 30-year government bonds (known as gilts) has reached 5.72% – the highest since 1998.

For the government, this means it is now significantly more expensive to borrow money, adding pressure on Chancellor Rachel Reeves to increase taxes ahead of the Budget later this year.

For businesses, tighter government finances could shape tax and spending decisions over the coming months.

Why borrowing costs matter
Governments raise money by selling bonds to investors, promising to repay them in future with interest. The yield on those bonds – effectively the interest rate – has been rising for months. Higher yields mean the government must spend more just to service its debt, reducing the funds it has available for day-to-day spending or investment.

Rachel Reeves has set herself two “non-negotiable” fiscal rules:

• By 2029–30, all day-to-day government spending must be funded through tax income rather than borrowing.
• Government debt must be falling as a share of national income by the same year.

The challenge is that her buffer – the margin of safety built into her plans – is slim at around £10bn.

Why are costs going up?
The UK is not alone. Yields have been climbing in Germany, France, the Netherlands and the US. Several factors appear to be driving the change.

The World Trade Organisation has said the world is currently “experiencing the largest disruption to global trade rules” in 80 years, with the impacts from the US tariffs perhaps not likely to be fully felt until next year.

It also appears that investors may be selling off UK government debt due to concerns over the government’s financial plans, and this increases the rates that need to be offered to attract investors.

What this means for the Autumn Budget
One economist has estimated that Reeves may need to find between £18bn and £28bn in extra revenue at the Budget to avoid breaking her own fiscal rules. That raises the likelihood of tax rises.

The government has so far stuck to its manifesto pledge not to raise income tax, VAT, or national insurance for “working people”. Assuming this continues, that limits the options available for raising taxes, but several possibilities are being speculated on. These include:

• Extending the freeze on income tax thresholds – this so-called “stealth tax” drags more people into higher tax bands as wages rise.
  
• Reforming property taxes and stamp duty. 
• The introduction of National Insurance for landlords.

At this stage, these remain as speculation but they indicate that the Autumn Budget could be a challenging one. For the Chancellor, the challenge is not only meeting her fiscal rules but doing so in a way that maintains confidence in the UK economy.

What this could mean for your business
For business owners, the headlines about bond yields and borrowing costs might seem distant, but the consequences could well be felt over the coming weeks:

• Potential tax changes – measures could be introduced to raise revenue.
  
• Economic headwinds – higher borrowing costs for the government may translate into higher financing costs across the economy, including for businesses seeking loans or investment. 
• Policy uncertainty – until the Budget is delivered, businesses may find it harder to plan for tax and cost pressures.

Looking ahead
For businesses, the best approach for the next few months may be to plan cautiously. For instance, it would be worth stress-testing your business finances to see how they would cope with possible tax rises or higher borrowing costs.

The Budget later this year will set the direction for government finances and, by extension, the business environment. Rising borrowing costs have narrowed the Chancellor’s options, meaning that decisions in the autumn could well have direct consequences for businesses across the UK.

We will continue to keep you posted on the Budget news, but in the meantime, if you would like any help looking at how your business finances may be affected, please give us a call. We would be happy to help you!

See: https://www.bbc.co.uk/news/articles/cy989njnq2wo
  
ICO Launches Consultations on New Data Protection Rules
The Information Commissioner’s Office (ICO) has begun consultations on two important changes coming into force under the new Data (Use and Access) Act 2025 (DUAA).

The consultations focus on:

• Recognised legitimate interest – a brand new lawful basis for handling personal information.
• Data protection complaints – new requirements for all organisations to have a process in place for handling complaints.

Recognised legitimate interest
This new lawful basis is separate from the existing “legitimate interests” ground and allows organisations to use personal information more confidently for certain pre-approved situations. These include:

• Crime prevention and public security.
• Safeguarding and emergencies.
• Sharing information to help another organisation carry out its public tasks.

The ICO will be providing detailed guidance and examples to help organisations apply this new lawful basis correctly. Public authorities, however, are expected to continue using the existing “public task” lawful basis.

The consultation on this area closes on 30 October 2025.

Data protection complaints
By June 2026, every organisation must have a process in place for handling data protection complaints. Complaints could come from anyone unhappy with how their personal information has been used.

The new Act requires organisations to:

• Give people a way of making data protection complaints to them.
• Acknowledge they have received a complaint within 30 days of receipt.
• Take appropriate steps to respond to a complaint, including making appropriate enquiries and keeping people informed, without undue delay.
• Telling people the outcome of their complaints, also without undue delay.

The ICO’s draft guidance explains the new requirements and what organisations must, should and could do to comply. Helpful tips and practical advice are included.

The consultation on this guidance is open until 19 October 2025.
 
What next?
Deputy Commissioner Emily Keaney emphasised the importance of these consultations: “These consultations provide us with a real opportunity to listen, learn and lead with clarity and we encourage all interested parties to engage with our consultations and help shape our final guidance to ensure it is robust and fit for purpose.”

Whether you plan to respond or not, reviewing the draft guidance could help you plan ahead for the June 2026 deadline as you assess whether you already have a clear process for handling complaints and, if not, what changes are needed.

See: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/08/ico-launches-consultations-for-data-use-and-access-act-2025-amendments/
 
Aldi Leads the Way on Pay: Is High Pay a Good Approach?
Aldi introduced a pay boost last week for its store assistants that will see their pay rise to at least £13.02 per hour nationwide, making it the first UK supermarket to pass the £13 mark. Within the M25, rates will start at £14.35, rising to £14.66 with length of service. All staff, regardless of age, will receive the same minimum rate – well above the new National Living Wage of £12.21.

This move follows Aldi’s policy of paid breaks, worth around £1,425 per year to the average store colleague, further strengthening its reputation as a leader on pay and conditions.

What are the benefits of Aldi’s approach? Are there downsides?

The benefits of Aldi’s approach
Higher pay can certainly deliver some clear business advantages. These include:

• Attracting and keeping staff – competitive pay helps reduce staff turnover, which saves on recruitment and training costs. 
• Boosting productivity – well-rewarded employees are more motivated, which can translate into better customer service and improved store performance. 
• Positive brand image – standing out as an employer that values its workforce helps Aldi with recruitment, customer loyalty, and wider reputation. 
• Consistency for staff – paying the same rate regardless of age supports fairness and can create a stronger workplace culture.

The potential downsides
However, not every business can match Aldi’s scale and financial muscle. Many businesses do not have sufficient buying power or margins to be able to absorb increased pay rates.

As large employers raise pay, staff in smaller businesses may expect similar increases, putting those businesses under pressure to follow suit and increase wages.

What can you do?
Aldi’s move shows how pay can be used strategically, not just as a cost but as an investment in people and performance.

For smaller businesses, the lesson may be less about matching Aldi pound-for-pound and more about finding sustainable ways to reward staff – whether through competitive pay, fair contracts, or other benefits that support recruitment and retention.

See: https://www.gov.uk/government/news/supermarket-staff-receive-industry-leading-pay-rise-as-minister-celebrates-businesses-going-above-and-beyond-to-support-their-workers
 
Business Finance Week Coming This Autumn
From 30 September to 9 October, the British Business Bank will host Business Finance Week – a nationwide programme of free events designed to help smaller businesses get to grips with their funding options.

The programme includes in-person events across the UK as well as online webinars, making it accessible whether you prefer to attend locally or join from your desk.

For many small and growing businesses, finance can be one of the toughest areas to navigate. With so many options available – from loans and grants to equity and alternative finance – it’s not always easy to know which is the right fit. Business Finance Week aims to cut through the complexity.

For a full list of upcoming events, see: https://www.british-business-bank.co.uk/news-and-events/events/business-finance-week
 
Government Brings in Productivity Expert to Drive Growth
The government has announced that Professor John Van Reenen, a leading economist from the London School of Economics, will be advising the Chancellor directly on how to improve the UK’s productivity.

His appointment is part of the government’s Plan for Change, aimed at boosting economic growth and raising living standards across the country.

Professor Van Reenen is an academic who has focused on productivity, innovation, and how businesses perform. He previously served as Chair of the Chancellor’s Council of Economic Advisers. In this new role, he will spend one day a week without pay for 12 months working with the Treasury, starting in September.

What this could mean for businesses
Productivity – how much value is created for the time and resources put in – is still a concern for the government. Low productivity growth can be a drag on wages and business competitiveness.

Rachel Reeves, the Chancellor of the Exchequer, said: “We still have work to do to build an economy that works for working people.” She believes that Professor Van Reenan’s appointment will help to bring that about.

For businesses, the appointment may indicate what future policies may appear over the coming year, such as:

• Supporting investment in new technology and processes.
• Encouraging training and skills development.
• Making it easier to scale and grow operations.
• Creating a more stable environment for long-term planning.

This appointment on its own won’t transform the economy, but it highlights that productivity is on the agenda for the next year.

See: https://www.gov.uk/government/news/chancellor-appoints-growth-adviser
 
Business Property Revaluations – Be Ready for 2026
The Valuation Office Agency (VOA) is encouraging businesses to sign up for a business rates valuation account so they can find out their new commercial property valuation.

Every three years the VOA updates the rateable values of all business properties in England and Wales. The next revaluation will take effect on 1 April 2026, based on open-market rental values as at 1 April 2024.

Business rates are calculated from your property’s rateable value. This is not the same as your final bill, but it is the starting point. Local councils apply a multiplier and any relevant reliefs to arrive at what you actually pay.

The new valuations will be published a few months before next April. Signing up for a business rates valuation account will give you access to your property’s details and allow you to find out what your future rateable value will be as early as possible.
 
Your account will also allow you to:

• Check that the VOA has the right details for your property.
• Let the VOA know if something’s wrong.
• Understand how your property’s valuation was worked out.
• Tell the VOA if you believe your current property valuation is incorrect.

Having information as early as possible will give you extra time to plan for any changes to your business rates bill rather than having to react when it arrives.

See: https://www.gov.uk/government/news/stay-informed-about-your-business-rates

29th 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

Why Systemising Your Business Could Be the Key to More Freedom
Many business owners we work with feel caught up in the day-to-day drudge. They’re handling customer queries, fixing problems, chasing invoices - and wondering how they’ll ever find the time to step back and think about where the business is heading.

The truth is, if your business relies heavily on you, it can feel impossible to take time out to work on strategy, growth plans, or even a long-term exit. That’s where systemising your business comes in.

What Do We Mean by “Systemising”?
Systemising simply means creating repeatable processes that don’t rely on your constant oversight. It’s about making sure the “how” of your business is written down, consistent, and easy for others to follow.

The benefits?

• More time for you – fewer fires to fight each day. 
• Better customer experience – clients get the same high standards every time. 
• A more valuable business – buyers pay more for a company that runs smoothly without the owner.

Here are a few areas where systemising can make a big difference:

• Onboarding new staff: Instead of spending hours explaining the same things, create a checklist or training video library. It saves time and ensures consistency.
  
• Sales process: Document the steps from first enquiry through to closing a sale. This helps staff handle leads in a consistent, professional way. 
• Customer service: Use standard responses for common queries and a simple escalation process for problems. This reduces mistakes and keeps clients happy. 
• Finance: Automate invoice reminders and set up clear procedures for credit control, so cash flow doesn’t depend on your memory. 
• Marketing: Have a content calendar or email template bank so your marketing doesn’t stop when you’re busy.

Linking Systems to Your Exit Plan
If you’re thinking about selling your business in the next three to five years, systemisation is even more important. A potential buyer will ask: “Does this business depend on the owner?”, “Can it run without them?” or “Are there written processes that staff can follow?”

The more “yes” answers you can provide, the more attractive your business becomes. A buyer isn’t just buying your products or customer list - they’re buying a machine that runs smoothly without you.

First Steps to Get Started
Of course, to systemise your entire business all in one go would likely be overwhelming. So, why not pick just one repetitive task you’re always involved in and write down the process?

Other ideas you could think about include:

• Asking your team where the “bottlenecks” are - often they already know which areas could run more smoothly and could help you put together a system to overcome the problem. 
• Consider using simple tools (e.g. Trello, Asana, or even shared spreadsheets) to keep processes clear and visible. 
• Try to block out some time in your diary each month to work on the business, not just in it.

In short, systemising your business isn’t about bureaucracy - it’s about buying yourself time, reducing stress, and building a business that’s worth more when you eventually step away.

If you would like personalised advice on areas in your business that would benefit from systemising, or you are looking to maximise the value of your business, please feel free to get in touch. We would be happy to help you!
 
Companies House WebFiling to Switch to GOV.UK One Login
From 13 October 2025, Companies House will require all businesses to use GOV.UK One Login to access WebFiling. This change is part of a wider government move to introduce a single, more secure login system across all online services.
 
What’s Changing?
From 13 October 2025, you’ll need to connect your WebFiling account to GOV.UK One Login before you can continue filing.

If you share your WebFiling account with others, only one person will be able to connect each WebFiling account to their GOV.UK Login. Anyone who shares access will need to create their own GOV.UK One Login, using a different email address.

This is part of a wider move as the government intends for GOV.UK One Login to be increasingly used for accessing online services.

What You Can Do to Get Ready
To avoid last-minute issues, here are a few simple steps to take before October 2025:

• Check your email addresses – make sure the email you use for WebFiling is current and accessible. If you also use “Find and update company information,” use the same email address for both. 
• If you don’t already have one, you could set up a GOV.UK One Login in advance, using the same email as your Companies House accounts. This will make connecting smoother.
  
• Check that you have the authentication code handy for each company you file for. You may need to enter it when you connect your WebFiling account to GOV.UK One Login. 
• Review who has access – if your team shares a WebFiling login, each person will need their own account going forward. Start planning how to manage this. 
• Think about identity verification – while not compulsory until November 2025, directors and People with Significant Control (PSCs) can verify their identity early using GOV.UK One Login.

If you try to sign into WebFiling after 13 October 2025, you’ll be redirected to connect your account with GOV.UK One Login.
See: https://www.gov.uk/government/news/access-to-companies-house-webfiling-accounts-to-move-to-govuk-one-login
 
Additional Support for Government Schemes to Help Young People into Work and Training
The Government has announced an extra £45 million to expand support for young people who are not currently in education, employment or training (known as NEETs).

This extends the Youth Guarantee trailblazer scheme for another year and is part of working towards rolling out a national Youth Guarantee that will help all 18–21-year-olds have the chance to “earn or learn”.

The Challenge
Recent figures from the Office for National Statistics show 948,000 young people across the UK are NEET.
Reasons for the worsening problem in recent years are thought to include:

• Pandemic disruption to learning.
• Limited access to mental health support.
• A lack of jobs and skills support.

Young people who are NEET often face additional challenges such as health conditions, a lack of qualifications, or being from disadvantaged backgrounds. The long-term impact can include lower pay, higher unemployment, and poorer mental health.

The Trailblazer Schemes
To tackle this, eight local “trailblazer” projects launched in Spring 2024. They’re trialling new ways of identifying young people most at risk of becoming NEET and matching them to local training, apprenticeships or job opportunities.

What is learned from these local schemes will shape the full Youth Guarantee roll-out across the country.

Why It Matters for Businesses
While these schemes are aimed at supporting young people, they could also represent an opportunity for employers:

• The schemes may help employers connect with motivated young people looking for a start. 
• Apprenticeships may be reformed in a way that makes them more accessible and useful for businesses. 
• Employers who engage with trailblazer programmes may receive support with recruitment, training, and ongoing mentoring.

If your business could benefit from young, enthusiastic recruits, it would be worth keeping an eye on local schemes. You might also want to look at any entry-level roles you have. Could an apprenticeship or training placement be a good fit?

For small and medium-sized businesses, this may create new opportunities to recruit and train young people while receiving government support.

See: https://www.gov.uk/government/news/thousands-more-young-people-to-get-training-and-work-support-as-government-extends-45m-scheme

How to Spot Phishing Attempts Before It’s Too Late
HM Revenue and Customs have reported that 170,000 scam referrals were made to them in the year to July 2025. Encouragingly, this is a 12% reduction on the previous year, however HMRC are warning taxpayers to take care.

Whether it’s emails pretending to be from HMRC, your bank or someone else, phishing scams are becoming harder to spot. They’re no longer just poorly worded emails full of spelling mistakes. Many now look professional, use company logos, and even include QR codes to try to trick you into clicking links or handing over details.

For small business owners, falling for a phishing attempt can mean more than inconvenience - it could lead to stolen funds, lost data, or serious reputational damage. The good news is that the National Cyber Security Centre (NCSC) provides some clear guidance on the signs to look out for.

The Common Red Flags
Scam messages (whether email, text or phone call) usually try to make you act quickly without thinking. Watch out for these tell-tale tactics:

• Authority: The message pretends to come from someone official (bank, HMRC, solicitor, or even your IT provider). Criminals pretend to be authority figures to pressure you into doing what they want. 
• Urgency: “Act now or your account will be closed!” If you’re told to respond immediately or are threatened with fines or other negative consequences, it’s often a scam. 
• Emotion: Fear (“you owe money”), excitement (“you’ve won a prize”), or curiosity (“see your confidential report”). Emotional triggers make you click without pausing. 
• Scarcity: Offers of something “in short supply” - cheap tickets, limited-time tax refunds, or medical “cures”. 
• Current events: Criminals exploit tax season, major sporting events, or big news stories to make scams look more believable.

How to Check If a Message Is Genuine
If something about a message doesn’t feel right to you, stop and don’t click any links or open attachments.

Check the contact details in the message against the organisation’s official website (not the ones given in the suspicious message).

It’s also good to remember that your bank or HMRC will never ask you to confirm account details or passwords over email or text.

If it’s a phone call purporting to be from your bank, simply hang up and use the official number from your bank statement or credit card.

Make Yourself a Hard Target
With a few simple steps you can significantly reduce your risk and make it more difficult for scammers. You can:

• Think about what personal information is posted about you online, as criminals may use this to make their messages seem more convincing. Check your privacy settings within your social media accounts so that you’re not sharing information more widely than you intended. 
• Train your staff on how to recognise scam messages. 
• Use multi-factor authentication (e.g. login codes sent to your phone) for all your online accounts. 
• Keep devices updated with the latest security patches.

Final Thought
Phishing scams rely on speed and pressure. If you stop, take a breath, and double-check, you greatly reduce the chance of falling victim. Building awareness across your business can save you a lot of time, stress and money in the long run.

See: https://www.ncsc.gov.uk/collection/phishing-scams/spot-scams
 
Hospitality Sector Faces Heavy Job Losses as Costs Bite
The UK’s hospitality industry - covering restaurants, pubs, bars and hotels - has seen the sharpest rise in job losses since last autumn, according to new analysis.
Industry body UKHospitality says that around 89,000 jobs have been lost since October 2024. They have said that hospitality has accounted for more than half of all job losses in the UK. The group warns that the total could reach 100,000 by the next Budget.

Why Is Hospitality Being Hit So Hard?
Reports suggest that a mix of rising costs and slowing demand is squeezing businesses from both sides:

• Higher wage costs: April’s increase in the National Minimum Wage has raised payroll costs, particularly in a sector where part-time and flexible jobs are common. 
• National Insurance: Employers are now paying higher NI contributions. 
• Other overheads: Energy bills, food and drink prices and rent have all increased. 
• Weaker demand: With the cost of living still high, many households are eating out less often to save money.

Kate Nicholls, Chair of UKHospitality, described the job loss figures as “staggering,” and said that they are seeing a third of businesses cutting their opening hours, one in eight saying they are closing sites and 60% saying they are cutting staff numbers.

Some operators, like Manchester bar owner Mark Wrigley, have even stopped paying themselves to keep their businesses afloat.

Wider Job Market Trends
The Office for National Statistics (ONS) notes that overall job vacancies are down, with employers across industries being more cautious about recruiting or replacing staff. The number of employees on payroll has fallen in 10 of the last 12 months, with hospitality and retail taking the biggest hits.

What Can Business Owners Do?
If you’re in hospitality or another consumer-facing sector, here are some practical steps to consider:

• Make sure you’re accessing any tax reliefs you’re eligible for – for instance, are you receiving the business rates relief you’re entitled to? 
• Manage your cash flow closely – prepare good forecasts that allow you to see what your payroll, energy and supplier costs are likely to be over the coming months. That will allow you to make early decisions if pressures start to mount. 
• Diversify your revenue – offering takeaway, delivery, events, or private hire could help offset dips in walk-in trade. 
• Keep communication open with any lenders and landlords – early discussions may help ease short-term pressures.

While the headlines are challenging, there are opportunities too. Finding creative ways to adapt can make it possible not only to weather the storm but to come out stronger.

If you’d like to explore strategies to protect your profitability, get in touch. We’re here to help you.

See: https://www.bbc.co.uk/news/articles/c05ey2ypp92o

22nd 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 bank holiday weekend.

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

Seven Things Every Company Director Needs to Know
Becoming a company director comes with a fair bit of responsibility - and not just when things are going well. Whether you're the hands-on type, more of a silent partner, or even directing behind the scenes, all company directors have legal duties under the Companies Act 2006.

Here’s a straightforward look at seven key duties every director should be aware of:

1. Follow the company’s constitution
Your first duty is to stick to the rules set out in the company’s constitution and articles of association. These documents outline how the company should be run and what powers you have as a director. If you go outside those powers, you could be held personally responsible.

2. Promote the success of the company
You’re expected to act in the company’s best interests and promote its success. But that doesn’t just mean chasing profits. You also need to think about:

• Long-term consequences of decisions.
• The interests of employees.
• Relationships with suppliers and customers.
• The community and environment.
• The company’s reputation.
• Fairness to all shareholders or members.

And if the company becomes insolvent? Your focus legally shifts to protecting the interests of creditors.

3. Use your own independent judgment
It’s fine to take advice, but at the end of the day, you’re responsible for the decisions you make. You must use your own judgment and avoid simply doing what someone else tells you - even if they’re another director or major shareholder.

4. Exercise reasonable care, skill and diligence
You’re expected to do the job to the best of your ability. The law takes into account your personal knowledge and experience. So, if you’re a qualified professional (like an accountant or engineer), you’ll be expected to apply the skill and experience you have in your role as a director.

5. Avoid conflicts of interest
You need to steer clear of situations where your personal interests (or those of family members) might clash with your responsibilities to the company. This includes things like:

• Personal financial interests.
• Competing businesses.
• Inside knowledge you gained as a director.

If there’s even a chance of a conflict, it should be declared to the board - and any process set out in the company’s articles of association should be followed. This duty even continues after you’ve stepped down as a director.

6. Don’t accept benefits from third parties
You mustn’t accept perks or gifts from others that could influence your decisions as a director. The only exception might be something like reasonable corporate hospitality, and even then, only if there’s clearly no conflict of interest.

7. Declare any interest in company transactions
If there’s a chance you could personally benefit from something the company is doing (say, awarding a contract to a business owned by a relative), you must declare it. Letting the board know is essential, and in some cases, you may need to step back from decisions altogether.

Anything else?
There are other general duties to keep in mind besides those listed above. Maintaining confidentiality, not misusing company property, and always acting in good faith would be some further examples.

Being a director isn’t just about a title - it carries real legal responsibilities. If you’re ever unsure about your role or what’s expected of you, please feel free to speak to us at any time. A quick check now could save a big headache later.
 
Making Tax Digital for Income Tax – Are You Ready?
The government is pressing ahead with Making Tax Digital (MTD) for Income Tax - and it will affect many sole traders and landlords over the next few years.

Here’s what’s changing, when it’s changing, and how to get ready.

What is MTD for Income Tax?
Under MTD, sole traders and landlords whose “qualifying income” is above a certain level will need to:

• Keep digital business records.
• Use HMRC-approved software to send quarterly updates.
• Submit an annual final declaration.

“Qualifying income” basically refers to your total gross income from self-employment and property in a tax year, before expenses.

Who Will Be Affected and When?
HMRC have released statistics showing how many will be impacted by the introduction of MTD. Their figures are based on the 2023 to 2024 tax year.

The rollout is happening in stages, as follows:

Qualifying Income: Over £50,000

When MTD Becomes Mandatory: 6 April 2026

Number of People Affected: Around 864,000

Qualifying Income: £30,000 – £50,000

When MTD Becomes Mandatory: 6 April 2027

Number of People Affected: Around 1,077,000

Qualifying Income: £20,000 – £30,000

When MTD Becomes Mandatory: 6 April 2028

Number of People Affected: Around 975,000

 

In total, about 2.9 million individuals will eventually need to follow the MTD rules.

Are You Ready?
The requirement to send quarterly updates means that you will need to keep up to date with your bookkeeping. Doing it all after the year-end will no longer be an option.

The need to use software will also mean that keeping paper records of your income and expenses will no longer be sufficient.
HMRC’s latest figures show that software use is common but not universal:

• Over £50,000 income: 63% already use commercial software.
• £30,000–£50,000 income: 49% use software.
• £20,000–£30,000 income: 48% use software.

What You Need to Do Now

1. Check your qualifying income - add up your total gross self-employment and property income for the year.
2. Review your record-keeping - paper records won’t be allowed.
3. Consider software options - cloud accounting tools make quarterly submissions easier and keep you compliant.

Don’t wait until the deadline. Switching to digital record-keeping now means you can get comfortable with the software and avoid last-minute headaches.

If you’d like some personalised advice, please get in touch with us. We can help you choose the right software and show you how to use it.  If you’d prefer to stay away from software altogether, we can also provide a bookkeeping service.

Whatever the case, we’ll work with you to make the transition smooth and stress-free so when MTD arrives, you’re already ahead of the game.

See: https://www.gov.uk/government/statistics/making-tax-digital-for-income-tax-business-population-statistics/making-tax-digital-for-income-tax-business-population-statistics-commentary
 
UK Labour Market Shows Gradual Cooling
The latest figures from the Office for National Statistics (ONS) indicate that the UK labour market is continuing to ease, although the slowdown remains measured rather than abrupt.

Vacancies fell by 5.8% to 718,000 in the three months to July 2025, the lowest level since April 2021 when the economy was still affected by the Covid-19 pandemic. Outside of the pandemic period, vacancy numbers have not been this low since early 2015.

The fall was broad-based across sectors, with hospitality and retail seeing the largest reductions.

Payroll data showed 8,000 fewer people in employment between June and July. However, the unemployment rate remained unchanged at 4.7% and redundancy notifications in July were relatively subdued, suggesting a gradual cooling rather than a sharp deterioration.

Former Bank of England policymaker Andrew Sentence noted that with more than 30 million people currently on payrolls, recent changes represent a modest proportion of the workforce. Ashley Webb, UK economist at Capital Economics, suggested that the modest fall in payrolls indicates that the impact of recent increases in employers’ national insurance and the minimum wage is beginning to settle.

Political reactions to the data were divided. Chancellor Rachel Reeves described elements of the figures as positive but acknowledged the need to further reduce unemployment, which remains at a four-year high. Opposition parties criticised the government’s approach, citing higher taxes and increased regulation as barriers to job creation.

Looking ahead, analysts suggest that the decline in vacancies could contribute to slower wage growth, currently steady at 5%. This is one of the indicators the Bank of England considers as it assesses inflationary pressures when setting the Bank’s base rate.

Therefore, wage growth slowing could lead to further interest rate cuts.

In summary, the data suggests that there’s a measured cooling of the labour market, with employers showing greater caution in recruitment.

See: https://www.bbc.co.uk/news/articles/cpdjjp681p7o
 
PackUK Confirms 2025 Packaging Fees and Sets Out Three-Year Recyclability Plan
If your business sells goods in packaging - whether that’s cardboard boxes, bottles, jars or plastic wrap - there’s an important update you should know about.

PackUK (the body running the UK’s Extended Producer Responsibility for packaging, or pEPR scheme) has confirmed the 2025 base fees for the scheme. It has also set out a new three-year plan for how fees will change from 2026, depending on how recyclable your packaging is.

Let’s break down what this means.

What is pEPR?
pEPR is a government scheme where the businesses that make or use packaging (called “producers”) help pay for the cost of collecting and recycling it. The more packaging you put on the market, and the harder it is to recycle, the more you pay.

2025 Fees Confirmed
The 2025 fees published by PackUK will be used for the first invoices in October 2025.

The good news is that most fees are less than was indicated last December. For example, glass is down by about 20%.

How Fees Are Worked Out
For 2025, fees are based on:

• The packaging tonnage reported by producers for 2024’
• Local authority waste management costs.

What’s Changing From 2026?
From the 2026–27 year onwards, fees will be adjusted depending on how recyclable your packaging is.

In short:

• Green-rated (highly recyclable) packaging = steadily decreasing fees.
• Red-rated (poorly recyclable) packaging = progressively higher fees.
• Medical packaging gets some exceptions due to safety rules.

The difference isn’t small - red-rated packaging could cost you double by 2028–29 compared to now. This gives businesses a financial reason to switch to greener options.

 Why This Matters
Even if you’re not producing huge amounts of packaging, these rules may still affect your costs - and your customers may ask more questions about your sustainability practices. So, it may be a good time to:

1. Review what packaging you use.
2. Check how recyclable it is.
3. Start planning any changes before the higher fees kick in.

For more details, see: https://www.gov.uk/government/news/extended-producer-responsibility-for-packaging-announcements#full-publication-update-history
 
Online Marketplaces Will Now Contribute to Electrical Waste Recycling
New regulations have come into force that require online marketplaces - such as those hosting overseas sellers - to bear their share of the costs for managing and recycling waste electrical items like washing machines, radios and vacuum cleaners. Until now, UK-based firms had carried the financial burden of disposal and recycling, putting them at a disadvantage compared to foreign competitors operating on these platforms.

Under the new system, these platforms must register with the Environment Agency and report data on sales made by their overseas sellers in the UK to determine their financial contributions. The resulting funds are intended to support local waste collection services, recycling infrastructure, and the broader shift toward a circular economy.

A noteworthy element of the new requirements is the introduction of a dedicated electrical waste category for vapes, recognising their unique waste profile and ensuring that producers cover disposal and recycling costs.

See: https://www.gov.uk/government/news/uk-businesses-to-benefit-as-online-platforms-pay-their-fair-share-to-recycle-electrical-waste
 
Electric Car Grant Expanded: More Car Models Now Included
The government’s Electric Car Grant (ECG) is now up and running, with more vehicle models eligible for discounts. Initially launched in July, the £650 million scheme offers savings on new electric cars priced at or below £37,000. The discount is either £3,750 or £1,500, depending on the vehicle’s sustainability and is applied directly at the point of sale, with no paperwork required from customers.

The grant aims to make electric vehicles (EVs) more affordable by reducing the upfront purchase price and narrowing the cost gap with petrol and diesel models. This is part of the government’s broader commitment to phase out the sale of new petrol and diesel cars by 2030.

From 9 August 2025, the scheme was expanded to include thirteen more EVs, bringing the total to seventeen models. Brands now on the list include Nissan, Renault, Vauxhall and Citroën, with more expected in the coming weeks as manufacturers’ applications are approved.

Alongside the £650 million in grant funding, the government is investing £4.5 billion to accelerate EV adoption, with Britain already the largest EV market in Europe in 2024 and sales up by almost a third this year.

Tax Advantages of Electric Company Cars
Despite the grant, electric cars are still generally more expensive than petrol or diesel cars. However, for businesses and employees, EVs can also be worth considering because of the tax savings they bring when provided as a company car.

• Benefit-In-Kind (BIK) rates for fully electric company cars are currently much lower than for petrol or diesel vehicles. For 2025/26, the BIK rate for zero-emission cars is 3% of the car’s list price, compared to rates often exceeding 20% for conventional vehicles.
• Employers may also benefit from capital allowances - in some cases, qualifying new zero-emission cars can attract a 100% first-year allowance, meaning the full cost of the vehicle can be written off against taxable profits in the year of purchase.
• There are further potential savings on Class 1A National Insurance contributions for employers, as these are based on the BIK value.

If you would like help assessing whether an electric car purchase would benefit you or your business, please give us a call. We would be happy to help you!

See: https://www.gov.uk/government/news/electric-car-prices-slashed-as-grant-scheme-expands-to-13-more-models

15th 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

MAKING TAX DIGITAL - WHAT’S NEW?
HMRC are pushing ahead with the implementation of Making Tax Digital (MTD) for Income Tax, set to commence from 6 April 2026. Legislation Day saw the publication of draft MTD legislation, which makes the following recently-announced changes to the planned regime: 

• More individuals will be exempt from MTD – Ministers of religion, Lloyds underwriters, recipients of Blind Persons’ Allowance and donors of Power of Attorney.
• Certain kinds of income will be outside the scope of the MTD rules, namely Qualifying Care Income (e.g. foster care income) and the UK earnings of non-resident entertainers and sportspeople who have no other sources of income caught by the MTD rules.
• The requirement to use MTD-compatible software to file the individual’s year end tax return.
• A new concept introduced in the draft MTD Regulations is ‘latency’, which is the term being used for the concept of a newly-commenced trade or property business not being subject to the MTD rules until 6 April following the tax year in which a filing obligation arose for the tax year of commencement. As an example, if a trader is mandated into MTD in 2026/27 because of her property income, then starts a new trade in December 2026, 2027/28 is the year in which the filing obligation (31 January 2028) arises for the year of commencement and she will need to start complying with MTD rules for the new trade from 6 April 2028.

If you are an individual who receives income from a trade or property business, you are likely to be mandated at some point over the next few years if your combined sales from property businesses and self employment (‘qualifying income’) exceeds £20,000. The first group of individuals to be mandated, from 6 April 2026, will be those who had qualifying income in excess of £50,000 in the 2024/25 tax year.
 
Being mandated into MTD for Income Tax will mean that you need to keep your trade and property business records in MTD-compatible software and use the software to send quarterly summaries to HMRC. The changes mentioned above are relatively minor - the key requirements of MTD for Income Tax have not changed.
 
PROPOSED CHANGES TO INHERITANCE TAX
As announced at Autumn Budget 2024, the government has published draft legislation to reform Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026 to make them “fairer and more sustainable”
 
In addition to existing nil-rate bands and exemptions, APR and BPR will continue, but a cap will be introduced that will restrict the 100% relief to the first £1 million of combined agricultural and business property. The rate of relief will be 50% thereafter.
Relief will also be reduced to 50% (with no £1m allowance) for quoted shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM. The changes will take effect from April 2026.
 
In inevitable disappointment to business owners and farming communities, no significant changes have been made to these plans since the Autumn Budget 2024 announcement.
 
The government has, however, announced that it will not proceed with the proposed extension of the related property rules for qualifying property settled into multiple trusts. 
 
It has also been announced that:

• the option to pay IHT by equal annual instalments over 10 years interest-free will be extended to all property which is eligible for agricultural property relief or business property relief.
• the £1 million allowance for agricultural property relief and business property relief will be indexed in line with CPI, but will remain fixed up to and including tax year 2029/30 in line with maintaining the IHT nil rate bands at current thresholds.

CLASS 2 NICs - 2024/25 ERRORS
HMRC have identified an issue affecting some Self Assessment taxpayers in relation to Class 2 National Insurance contributions (NICs) for 2024/25. Some self-employed taxpayers with profits above £12,570 have seen a Class 2 NICs charge of £358.80 added to their accounts when they shouldn’t have been. In some circumstances it will be less.
 
HMRC say that they have taken action to correct the Class 2 NICs figure where the information they hold has allowed. If this applies to you, you will have received a message to let you know.
 
HMRC will correct the records of other taxpayers after the issue has been resolved and will notify them once this has been done. Taxpayers will be issued with a new SA302 tax calculation after their record has been corrected.
 
The issue seems to have been caused by reforms to NICs that took effect from 2024/25. Self employed taxpayers and partnership members no longer have to pay Class 2 NICs - if their profits are over the small profits threshold (£6,725 for 2024/25), Class 2 NIC is treated as having being paid.

8th 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

Interest Rate Cut to 4%: 4 Things to Think About
The Monetary Policy Committee (MPC) of the Bank of England have reduced the Bank Rate to 4% (previously 4.25%).

The decision was made by a narrow 5-4 majority and required 2 votes. This perhaps highlights the uncertainty that continues in the economy.

What Factors Led to the Reduction?
The MPC’s report shows that they are predicting that inflation will peak at 4.0% in September and then fall back towards their 2% target. Because of the progress made in controlling inflation, the MPC felt that a further reduction was appropriate.

While UK GDP shrank by 0.3% in April and 0.1% in May, the MPC felt that this was because some of the stronger growth earlier in the year may have been boosted by businesses rushing to act before new tariffs or tax changes came into effect. As this timing effect washes out, Bank staff are predicting that growth will pick up to 0.3% in the autumn. Recent trade agreements may also provide more certainty to global trade.

However, despite these positive indications, the wider picture remains unclear. When interviewed, the Bank of England Governor, Andrew Bailey, commented that he believes interest rates will continue to reduce, but there is “genuine uncertainty about the course of the direction of rates and the path has become more uncertain.”

What Should Your Business Be Thinking About Now?

1. Cheaper borrowing, better investment opportunities: With the cost of borrowing now lower, you may have a fresh opportunity to finance growth at a reduced cost. Even previously marginal projects might now become financially viable.
   
2. Impact on cash reserves: On the flip side, if you’re holding large cash reserves, you’re likely to see lower returns on bank deposits. Could some of that capital be better deployed into higher-yield investments or strategic projects? 
3. Potential boost in consumer spending: Lower interest rates often lead to increased consumer confidence and spending. If your business is in retail, hospitality or services, this could translate into a short-term lift in demand. Now could be a good time to consider whether a new promotional plan might help you capitalise.
4. Exchange rates: A rate cut can put downward pressure on the pound. If you export goods or services, that may make you more competitive abroad. However, it can also increase the cost of imports, which may mean revisiting where you source goods and materials from.

If you’d like to chat about what the interest rate cut means for your business, please call us anytime. Whether you’re planning to grow, manage risk, or adapt to everchanging market conditions, we’re here to provide you with clear, practical advice when you need it.

See: https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2025/august-2025

Will Taxes Rise in the Autumn?
As the UK heads into the Budget this autumn, speculation is mounting over whether Chancellor Rachel Reeves will be forced to raise taxes to plug a growing gap in the nation’s finances.

According to the National Institute of Economic and Social Research (Niesr), the government is on course to miss its own borrowing targets by £41.2 billion, unless action is taken. Niesr warns that a “moderate but sustained increase in taxes” may be the only realistic route for the government, particularly under the borrowing rules the chancellor has described as “non-negotiable.”

A “Trilemma” for Reeves
When Reeves became Chancellor, she set out two strict fiscal rules:

1. Day-to-day government spending must be funded by tax revenues, not borrowing.
2. Public debt must fall as a share of national income within five years.

These rules were intended to reassure investors and signal economic credibility. However, meeting them is becoming increasingly difficult as weaker-than-expected economic growth and the reversal of welfare cuts are expected to deliver less than previously forecast. The ongoing effect of US trade tariff policies on global trade is also a challenge.

Niesr says the chancellor faces a “trilemma” between:

• Fulfilling Labour’s spending commitments.
• Sticking to the manifesto promise not to raise taxes on working people.
• Meeting the self-imposed borrowing rules.

The deputy director for macroeconomics at Niesr, Stephen Millard, said that if the chancellor is going to be able to raise £40 billion, “I think one of the big taxes is going to have to be raised.”
 
Where Might Tax Increases Come From?
NIESR has suggested the government could raise revenue by:

• Extending the freeze on income tax thresholds beyond 2028 (a stealth tax that raises more as wages rise).
• Reforming council tax, or even replacing it with a land value tax.
• Changing the scope of VAT.
• Reforming pensions allowances.

A Difficult Autumn Ahead
With all these pressures converging, the upcoming Autumn Budget could be a significant one. However, whether it will include tax rises, stealth tax extensions, or reforms to the tax system, remains to be seen.

As always, we’ll be keeping a close eye on the Autumn Budget and any announcements that could affect you or your business. Once the details are confirmed, we’ll provide a clear summary highlighting what matters most - whether that’s changes to tax rates, allowances, or other measures.

If you have any questions about the effect of tax on your business or personal situation, please give us a call, we’ll be happy to help you.

See: https://www.bbc.co.uk/news/articles/cn85vyd1epzo
 
New Legal Requirement: Directors and PSCs Must Verify Their Identity from November 2025
From 18 November 2025, identity verification will become a legal requirement for all company directors and people with significant control (PSCs). This is part of a wider reform under the Economic Crime and Corporate Transparency Act 2023, and it’s set to impact millions of individuals connected to UK companies.

If you're a company director or PSC, this change will affect you, and it’s important to understand what’s required - and when.

What’s Changing?
From 18 November 2025:

• New directors will need to verify their identity when incorporating a company or being appointed to an existing one.
• Existing directors will be required to confirm they’ve verified their identity when filing their company’s next confirmation statement - this forms part of a 12-month transition period.
• Existing PSCs will also need to verify their identity within a specific 12-month period, depending on their role and date of birth. 

Why Is This Happening?
The aim is to make the companies register more transparent and trustworthy, and to help tackle fraud and economic crime. With identity verification in place, it will be harder for individuals to hide behind fake names or false company appointments.

What Does It Mean for Your Business?
This is a one-off process for most people, and Companies House says it will be quick and simple - taking just a few minutes in most cases.
The verification process can be completed via your GOV.UK One Login. Or, you can verify through us, as we are an Authorised Corporate Service Provider (ACSP).

Once the new rules come into effect, it will be an offence to act as a director without being verified.

When Do You Need to Act?

• If you’re appointed as a new director or PSC from 18 November 2025, you must verify within 14 days of being registered. 
• If you’re an existing PSC, your deadline depends on your circumstances: 
• If you’re also a director, you must confirm that you have verified your identity within 14 days of the company’s confirmation statement date.
• If you’re not a director, your 14-day deadline starts on the 1st day of your birth month in 2026 (as shown on the Companies House register).

What If You’re Unsure?
Companies House is contacting all companies via their registered email addresses with details and guidance. You’ll also be able to log into Companies House after 18 November to check identity verification due dates for all roles you hold.

If you have any questions or need help, please just get in touch with us. We’ll be happy to help guide you or your company through the new requirements.

See: https://www.gov.uk/government/news/companies-house-confirms-identity-verification-rollout-from-18-november-2025
 
Government Unveils Small Business Plan
The government has launched its Small Business Plan which it believes will help small businesses to grow and encourage entrepreneurs to start businesses.
The plan recognises that small businesses make a vital contribution to the economy, employing 60% of the UK’s workforce and generating £2.8 trillion in turnover.

Here is a breakdown of some of the key measures and how they may impact your business.

Could This Be the End of Late Payments?
Likely not, however the government is promising the toughest late payment legislation in the G7.

They plan to introduce:

• A legal requirement for large businesses to pay within 60 days, moving to 45 days over time.
• Mandatory interest charges on late payments.
• Greater powers for the Small Business Commissioner, including the ability to fine persistent offenders and carry out spot checks.
• Audit committees to be legally obliged to scrutinise payment practices.

These reforms could ease cashflow pressures for you and reduce the amount of time spent chasing invoice payment.

Better Access to Finance
The plan includes several measures that could increase access to finance, including:

• 69,000 Start-Up Loans, paired with business mentoring.
• A £3 billion boost to the British Business Bank to help more lenders offer loans.
• £340 million in regional equity investment to help entrepreneurs across the UK.
• A new Code of Conduct on personal guarantees for government-backed loans.

These changes could mean that there will be more routes to affordable finance.

Cutting Red Tape
The plan promises to make a 25% cut in regulatory admin costs, and to make reforms to the tax and customs system to make things simpler and quicker.
Any time saved on compliance and admin means more time for growing your business.

Other Measures
Other measures included in the plan include targeted support for high street businesses, education and training for the next generation of entrepreneurs, and helping businesses to take advantage of additional opportunities at home and abroad.

To review the Small Business Plan in full, see: https://www.gov.uk/government/publications/backing-your-business-our-plan-for-small-and-medium-sized-businesses
 
Minimum Wage Hourly Rates: Potential Increases in 2026
The Government has published the official remit for the Low Pay Commission (LPC) to begin its work on setting the National Minimum Wage (NMW) and National Living Wage (NLW) rates that will apply from April 2026.

While the final figures won’t be confirmed until later in 2025, the direction of travel is already clear. Employers should be prepared for further increases in wage costs in April 2026.

National Living Wage likely to rise again
The Government has reiterated its commitment to ensuring the National Living Wage doesn’t fall below two-thirds of UK median earnings - a benchmark that defines the level of low hourly pay. Based on current forecasts, that means we could be looking at a NLW rate of £12.71 from April 2026, a 4.1% increase.
To put that into context, the current NLW rate for workers aged 21 and over is £12.21, up 6.7% from the previous year.

Narrowing the gap for younger workers
As part of its remit this year, the LPC will be consulting on narrowing the gap between the full NLW rate and the rate that applies to workers aged between 18 and 20 years old. The LPC will be putting forward recommendations on how to achieve a single adult rate in the years ahead.

What should employers do now?
Although the final rates won’t be known until October, these latest estimates are a strong indication of where things are headed. Here are a few things to consider:

• Factor these increases in when reviewing your payroll budgets for 2026. 
• Consider the knock-on effect. If the NLW rises, pay for other roles may need to be adjusted to maintain structure and morale. 
• Remember employer NICs and pensions. Increases in wages can also affect National Insurance contributions and pension auto-enrolment costs.

Final thoughts
The Government is clear in its aim to raise living standards through wage growth - and the LPC’s remit is designed to support that. For employers, this means keeping a close eye on wage forecasts and planning ahead for higher employment costs.

We’ll keep you updated as more information becomes available. In the meantime, if you’d like help reviewing your payroll plans or budgeting for potential increases, we’re happy to help.

See: https://www.gov.uk/government/news/national-living-wage-estimate-update
 
SDLT Repayment Scams: Court Ruling Confirms Properties Needing Repair Still Count as Residential
If you’ve bought a property that needed work doing before you could move in, you may have seen ads claiming you could reclaim some of the Stamp Duty Land Tax (SDLT) you paid if the property was in a poor state of repair.

These offers often sound appealing especially when made on a “no win, no fee” basis. However, a recent Court of Appeal decision has confirmed that homes needing repair still attract residential rates of SDLT.

As a result of the court decision, HM Revenue and Customs is warning homebuyers about rogue tax agents offering to claim SDLT refunds on the basis that a property was “uninhabitable” or “non-residential” at the time of purchase. But in most cases, renovations such as needing a new boiler, rewiring, or even having damp problems does not mean the property counts as non-residential.

What does this mean in practice?
The question to consider is whether the defects to the property have resulted in the building no longer having the characteristics of a dwelling.

That means:

• Claims based purely on a property needing repair are unlikely to succeed.
• If the property has previously been used as a dwelling, this will be an important factor.
• A property doesn’t need to be ready for immediate occupation to be “suitable for use as a dwelling” for SDLT purposes.

What can go wrong?
If a claim is made for repayment for SDLT paid and HMRC later decide that the claim is invalid, it can get expensive.

Interest and penalties will be added to the SDLT due but also, unscrupulous agents may not return the fee that was deducted from the refund.

Now that the Court’s decision has been confirmed, HMRC are actively cracking down on spurious claims and are using both civil and criminal powers to target agents making misleading submissions.

What should you do?

• Be sceptical of unsolicited offers promising SDLT refunds based on property condition 
• Don’t be rushed into letting a third party file a claim for you - especially if they charge high fees 
• Understand the risk - you, not the agent, are liable if HMRC later challenges the claim

This case serves as a firm reminder that if it looks too good to be true, it probably is. While repairs and renovations are part and parcel of buying older properties, they don’t change the fundamental tax treatment of the home.

If you’re ever unsure about SDLT rules, or whether a refund might apply, please don’t hesitate to give us a call. We would be happy to help you.

See: https://www.gov.uk/government/news/homebuyers-warning-as-hmrc-gets-tough-on-bogus-stamp-duty-claims
 
Lessons From a Director Ban: Getting Help Before It’s Too Late
If your business ever runs into financial difficulties, how you handle the situation can have serious and lasting consequences. That’s the message behind a recent case involving a Staffordshire director who’s just been banned from running a company until 2031.

Kulbarg Singh, director of Aldridge Construction Engineering Ltd, has been disqualified for six years after selling off over £1.5 million worth of company assets to another company he also controlled - for under £500,000.

In one part of the sale, Singh transferred seven historic vehicles - including two Jaguars and three Rolls Royces - for just £1. The cars alone were worth more than £100,000. In total, the company was left more than £1 million worse off from the under-priced sales.

The company went into liquidation the following year, owing over £1.5 million to HM Revenue and Customs and other creditors. The Insolvency Service described Singh’s actions as deliberately putting the company’s assets out of reach of those creditors - and they’re now looking at ways to recover what they can.

What to do if your company is struggling
The case serves as a strong reminder that there’s a need to take care if your company is in difficulty.

If your business starts to show signs of insolvency (such as struggling to pay debts, or liabilities outweighing assets), it’s crucial to get advice early. The sooner you act, the more options you’re likely to have.

While the temptation may be to protect shareholders, it’s important to remember that if the company becomes insolvent, your responsibilities as director will apply towards those the company owes money to, instead of the company.

If you’re concerned about your company’s financial position or unsure about how to handle a specific situation, don’t leave it too late. A quick chat with us can save a world of stress later on - and help keep your business (and your reputation) intact.

See: https://www.gov.uk/government/news/six-year-directorship-ban-for-construction-boss-who-sold-100000-of-classic-cars-for-just-1