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
Free ICO training helps SMEs strengthen data protection
The Information Commissioner's Office (ICO), the UK's data protection regulator, has launched a free online training programme called ‘Data Protection Essentials’, aimed at small and medium-sized organisations and sole traders across the UK.
The course is designed to help organisations and their staff understand data protection requirements and apply them confidently in day-to-day operations. It includes real-world examples tailored to different sectors and addresses common activities such as sharing information, managing records securely, marketing and customer engagement, and reducing the risk of data breaches.
According to the regulator, the programme was developed in response to research showing many smaller organisations want more clarity on what data protection means in practice and how to apply it day-to-day, especially where there's no dedicated data protection expertise.
Key benefits for businesses taking part include:
- Improving how they manage and protect people's information.
- Using personal data confidently while reducing risk.
- Involving colleagues to build shared knowledge across the organisation.
- Understanding legal responsibilities more clearly.
- Demonstrating a commitment to protecting personal information and building trust.
Faye Spencer, the ICO's Head of Business Services, said the programme was designed “to be flexible, self-paced and easy to fit around busy working days. It breaks data protection into achievable steps that help build confidence over time. Our aim is to give organisations the confidence to use personal information responsibly and effectively, helping them build trust, reduce risk and achieve their goals”.
If your business handles personal data but does not have dedicated compliance expertise, this free training could be a cost-effective way to improve staff awareness and reduce risk. The ICO’s Data Protection Essentials page can be found here.
Making Tax Digital for Income Tax first quarter statistics published
Under Making Tax Digital (MTD) for Income Tax, sole traders and landlords with income of more than £50,000 have been required to keep digital records and send quarterly updates to HMRC since 6 April 2026.
The first quarterly submission deadline, covering the first three months of the 2026-27 tax year, passed on 7 August 2026. HMRC have since issued a press release confirming that 436,000 taxpayers filed their first quarterly tax update by the deadline and reminding those who have not submitted their update to do so using HMRC-recognised software.
Slow uptake
HMRC’s press release reveals that as of 12 August 2026, over 570,000 taxpayers had signed up for MTD for Income Tax.
In August 2025, based on 2023-24 figures, HMRC estimated that some 864,000 taxpayers would need to sign up from April 2026, meaning that around one third of taxpayers who should have registered for MTD for Income Tax from April 2026 had not signed up.
HMRC’s response
From September, HMRC will sign up taxpayers who are required to use MTD for Income Tax for 2026-27, but who have not yet registered for the service themselves.
- Taxpayers can avoid being signed up by HMRC by signing themselves up now, ensuring their MTD details are correct at the outset.
- HMRC will publish guidance in late August to explain what taxpayers need to do if they receive a letter from HMRC about being signed up.
Taxpayers are also reminded that from April 2027, those earning more than £30,000 from self-employment and property will be required to comply.
Penalties
While HMRC have confirmed that there will be no penalty points for late quarterly updates in 2026-27, penalties will still apply for late tax returns and late payments.
Quarterly updates do not replace the Self Assessment tax return. Those within scope of MTD for Income Tax must submit their quarterly updates in order to file their tax returns by 31 January.
A points-based penalty system will be introduced from 6 April 2027. Taxpayers will receive one point for each missed quarterly deadline and a £200 fixed penalty once four points have accumulated.
If you have not yet registered for MTD for Income Tax and are concerned that it may apply to you, contact us as soon as possible so we can help you assess your obligations.
See 436,000 sole traders and landlords make their tax digital - GOV.UK
UK vacancies fall to lowest level since 2014 as hiring slows
The UK jobs market showed fresh signs of strain in the latest labour market figures, published by the Office for National Statistics on 18 August 2026.
Job vacancies fell to an estimated 707,000 in the three months to July, down 6,000 (0.8%) on the previous quarter. Outside the pandemic period, that's the lowest vacancy count since September to November 2014. The ONS said feedback from its Vacancy Survey pointed to smaller firms holding back on recruitment because of rising labour and operating costs.
Despite the weaker hiring picture, the headline unemployment rate held at 4.9% for people aged 16 and over in the April to June quarter, up 0.2 percentage points on the year, but down 0.1 points on the previous quarter. The employment rate for 16- to 64-year-olds stood at 75.1%, while economic inactivity was largely unchanged at 20.9%.
On pay, annual growth in regular earnings (excluding bonuses) in Great Britain was 3.5% in April to June, with total earnings (including bonuses) up 4.1%. The gap between sectors was stark: public sector regular pay grew 6.1%, reflecting the timing of NHS pay awards, while private sector growth slowed to 2.8%. Adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH), regular pay rose just 0.5% in real terms.
Separately, payrolled employee numbers continued their two-year downward trend, falling 78,000 (0.3%) year-on-year to 30.3 million by June, with an early estimate suggesting a similar picture into July.
Taken together, the data points to a labour market that remains subdued rather than in freefall; steady unemployment but weakening demand for new hires and softer private sector wage growth.
See Labour market overview, UK - Office for National Statistics
What should your employment law reform priorities be?
Acas's Julie Dennis has set out how HR teams should approach the Employment Rights Act 2025, one of the most significant changes to UK employment law in recent years, which became law on 18 December 2025 and is being phased in through 2026–2027.
Several changes are already in force, including:
- Statutory sick pay from day one (with the lower earnings limit removed).
- Day-one paternity and unpaid parental leave rights.
- A new bereaved partner's paternity leave.
- Stronger whistleblowing protection for those reporting sexual harassment.
Further reforms are still to come, covering unfair dismissal, harassment, flexible working, and zero-hours contracts, meaning businesses need a staged plan rather than treating this as a single change with one start date. This should not be a single compliance project; regular policy reviews will be essential, and businesses should not wait for the remaining reforms to take effect.
The compliance environment is also tightening. The new Fair Work Agency will consolidate enforcement powers, and employers must keep compliance records for six years, including holiday pay and annual leave records.
Acas recommends businesses:
- Know the timeline: separate what has already changed from what is expected later.
- Prioritise policy and contract review, especially sickness, family leave, flexible working, harassment, dismissal and records.
- Train line managers. They need to understand the processes they are expected to follow and feel confident having early, fair and consistent conversations.
- Strengthen compliance systems. Review how decisions are recorded, how evidence is kept and how employees are told about their rights.
Cost of business crisis for British SMEs
UK businesses are facing a “cost of business crisis”, according to the British Chambers of Commerce (BCC). Its new cost-stack calculator shows government policy alone has pushed up an average firm's expenses by 70% over the past decade, adding roughly £827,000 a year in costs for a typical mid-sized business. About a quarter of the rise stems from the increase in employer National Insurance contributions, with the higher minimum wage and mandatory pension auto-enrolment also major contributors.
The BCC warns this cost burden is pushing firms into a “risk-aversion cycle”, denting SME investment and confidence. The 70% figure excludes tariffs, inflation, and Brexit effects, meaning real cost increases are likely higher.
While businesses cannot control policy costs, they can review pricing, supplier contracts and operating efficiencies. Benchmarking your position against similar businesses may also help identify where cost increases can be recovered or reduced.
You can use the BCC’s cost-stack calculator to see how your business compares and submit your figures anonymously to help demonstrate the true scale of cost pressures facing British businesses.
Contact us if you would like assistance with cashflow forecasting, margin and pricing review or client profitability analysis.
See Government policies push business costs up by 70 per cent in a decade and Cost Stack Calculator - British Chambers of Commerce
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