Author Archives: accounts

Heads up for company directors

As of April 2025, directors of close companies and self-employed taxpayers face new mandatory reporting requirements on their Self-Assessment returns.

Up to 900,000 company directors and 1.2 million taxpayers carrying on a trade will be impacted by new rules that require them to provide more information when filing their 2025-26 self-assessment returns.

Legislation has been enacted that introduces mandatory reporting obligations for certain taxpayers, including those who begin or cease trading and directors of close companies. These measures came into effect on 5 April 2025 and apply for the current 2025-26 tax year and later tax years.

Company directors of close companies will face new reporting requirements. Most small private companies will meet the definition of a close company and there are some specific tax rules that apply to these companies. From 5 April 2025, taxpayers impacted by the change must confirm whether they are directors of a close company and provide further details, including the company’s name and registered number, the value of dividends received and their percentage shareholding in the company. If shareholding changes during the year, the highest percentage held must be reported. Answering these questions will be mandatory when submitting 2025-26 tax returns and beyond.

The new rules also introduce a mandatory requirement to report the start or cessation of a trade that was previously a voluntary requirement. Taxpayers are now required to include the date of commencement or cessation of their business in their tax return, whether for personal tax, partnerships or trustees. This change applies to tax returns for 2025-26 and beyond.

Source:Other | 29-09-2025

Five goals every small business owner should set

Running a small business can feel like juggling endless priorities, but taking time to set clear goals is essential if you want your business to grow and remain sustainable. Here are five goals that every owner should consider.

1. Strengthen cash flow management
Cash is the lifeblood of any business. Aim to forecast your cash flow regularly, monitor debtor days, and build a buffer for unexpected costs. Even profitable businesses can run into trouble if they neglect cash flow.

2. Build customer loyalty
Repeat customers cost less to retain than new ones do to acquire. Set a goal to improve customer service, gather feedback, and introduce loyalty or referral schemes. Strong relationships are a foundation for long-term stability.

3. Embrace digital tools
From accounting software to customer management systems, technology can save time and cut errors. Make it a goal to identify areas of your business that could benefit from automation or more efficient systems.

4. Focus on compliance and risk management
Keeping up with tax, employment, and regulatory responsibilities avoids costly penalties. Set processes for filing returns on time, maintaining accurate records, and regularly reviewing insurance and legal protections.

5. Invest in yourself and your team
Your skills and wellbeing directly influence your business. Set goals around training, mentoring, or simply creating space to recharge. Encourage team development too,  motivated employees often generate new ideas and efficiencies.

By working towards these five goals, small business owners can balance immediate demands with longer-term progress. The key is to revisit and adjust them regularly, so they remain relevant as your business evolves.

Source:Other | 28-09-2025

Bank deposit protection limits set to rise

The UK’s financial regulator has proposed an increase to the level of savings protection available under the Financial Services Compensation Scheme (FSCS). If approved, the changes would take effect from 1 December 2025 and will be welcome news for individuals and businesses holding larger balances in UK banks and building societies.

Currently, the FSCS protects deposits of up to £85,000 per person, per institution. For joint accounts, that protection doubles to £170,000. There is also extra cover of up to £1 million for “Temporary High Balances” linked to certain life events, such as receiving proceeds from a house sale, inheritance, or insurance payout. This temporary cover applies for six months.

Under the proposals:

  • The standard protection limit would rise from £85,000 to £110,000.
  • The Temporary High Balance cover would rise from £1 million to £1.4 million.

The reason for the increase is straightforward: inflation has eroded the real value of the £85,000 cap, which was last set in 2017. Updating the limit to £110,000 would restore much of that lost protection and provide savers with greater confidence that their money is safe, even if their bank were to fail.

For most savers, the current £85,000 ceiling is already sufficient. However, those holding larger deposits, particularly following a major transaction, will welcome the higher limits. The proposal also means businesses holding funds in deposit accounts could benefit from increased protection.

A final decision is expected in November 2025, once the consultation has concluded. If confirmed, financial institutions will update their customer information to reflect the new limits by mid-2026.

Source:Other | 28-09-2025

VAT – Entertainment provided to directors and partners of a business

When considering VAT on entertainment provided solely to directors or partners of a business it is generally not recoverable as VAT Input Tax.

HMRC considers that directors and partners are not in need of entertainment to motivate themselves, so such costs are not for business purposes. However, exceptions apply for subsistence costs (e.g., meals or accommodation during business travel), and no apportionment is needed when directors or partners attend general staff events.

In contrast, VAT incurred on entertainment for employees, such as staff parties, team-building events, or outings, is usually considered by HMRC as a business expense and can be fully recovered.

In cases of mixed entertainment, where both employees and non-employees (e.g., guests) are present, the VAT must be apportioned. Only the portion relating to employees is recoverable. VAT on entertainment for non-employees is generally blocked, unless the guest is an overseas customer, in which case input tax is not blocked, but output tax may apply.

Source:HM Revenue & Customs | 21-09-2025

Exception from VAT registration

Businesses over £90,000 turnover must register for VAT, but HMRC may grant exceptions if the increase is temporary.

A business must register for VAT if either of the following applies:

  1. At the end of any month, its taxable turnover in the previous 12 months has exceeded £90,000; or
  2. At any point, it is reasonable to expect that taxable turnover in the next 30 days alone will exceed £90,000.

If a business temporarily exceeds the VAT registration threshold, they may be able to apply for an exception from VAT registration with HMRC. This applies if their taxable turnover has gone over the threshold in the last 12 months, but the business can show it will not go over the deregistration threshold (£88,000) in the next 12 months. This exception must be applied for by contacting HMRC to request and complete forms VAT1 and VAT5EXC. It’s important to note that this is different from a full VAT exemption.

Once an application is submitted, HMRC will respond within 40 working days to confirm approval or refusal. If approved, the business will not be registered for VAT at that time but will remain required to monitor their turnover monthly in case their circumstances change, and VAT registration is required. If the exception is denied, HMRC will register a business based on the information provided, and the business will be required to account for VAT from the date their liability began.

Source:HM Revenue & Customs | 21-09-2025