WELCOME TO HARBOUR KEY’S JULY NEWSLETTER, WHICH IS ALL ABOUT CHANGES, SOME WELCOME, SOME WHICH ARE NOT SO WELCOME!
Firstly, we would like to introduce you to Ayra, who has joined the HK team as a trainee accountant, supporting Deborah and other members of the team in accounts and corporate tax preparation initially. Ayra is part qualified and will continue her study and professional exams with HK, with the aim of becoming a qualified accountant later this year.
Secondly, and not so welcome, we have had to make the decision to increase our fees. The decision has not been taken lightly, and is our first fee increase since April 2023, mainly driven by recent Government changes in employment law and the increase in Employers National Insurance contributions. We trust you will understand that this decision has been made only after careful consideration, and as a people business, to enable us to continue the high level of client service and support. All clients should have received an email informing of the change, but if you have not, or wish to discuss, please do not hesitate to contact us.
COMPANIES HOUSE CHANGES
Third change, tougher rules for company directors will start to bite from Autumn 2025 onwards with radical reforms in respect of Companies House filing and reporting requirements. The question is will they be implemented fully?
We have reported previously following the passing of the legislation in November 2023, of the phasing in of The Economic Crime & Corporate Transparency Act, see our blog HERE.
Recently Companies House released the dates of the next and final stages of the Acts implementation, including the controversial part for all businesses to file a profit and loss in the public domain (currently only large businesses are required to do so).
More details of the announcement can be found in our article below.
However, following the announcement, the government announced it is considering scrapping some of the measures after protests from small business owners. Jonathan Reynolds, the Business Secretary, announced that he is reviewing some of the changes, in particular, the requirement for small and micro businesses to file a profit and loss as part of their annual accounts.
Despite the Government reviewing some of the changes, the majority will still be implemented, and Companies House have been contacting company directors advising of the changes, and the need to set up an online portal (similar to HMRC’s), to enable the verification of director/shareholders as part the changes.
We would recommend that all our client directors review their Companies House records, hold up to date identification documents, and have a Companies House online account.
COMPANIES HOUSE CHANGES - READ OUR FULL BLOG HERE!
CRYPTO INVESTMENTS
Another unwelcome change for some, will be the introduction of tough new rules for crypto investors. HMRC will have access to detailed information on crypto transactions from investment platforms from 1 January 2026. To date HMRC have had to request the information, the change means unlimited access. The regulations introduced in the UK are part of the OECD Crypto Asset Reporting Framework (CARF) and requires crypto platforms to share detailed information with tax authorities of clients’ crypto transactions. UK crypto holders will have to provide personal details to crypto service providers in a bid to crack down on tax evasion or face penalties of up to £300 from HMRC.
HMRC is already requiring full disclosure on self-assessment forms for the 2024-25 tax year, with its own section in the capital gain pages. In addition, HMRC is sending out nudge letters to taxpayers suspected of failing to reporting and paying tax on crypto transactions.
HMRC said the ‘new rules will help unmask anyone evading tax due on their crypto profits. Those who don’t comply risk a £300 fine from HMRC’. The latest figures from the Financial Conduct Authority (FCA) found that seven million people - 12% of the UK population - own some form of digital currency, up from 10% in 2023.
The CARF is being adopted by 52 countries so far with the UK one of the first countries to roll out the new rules, with the EU, Jersey, Guernsey, Isle of Man, South Africa and Uganda set to implement by 2027, and the US, Bahamas, British Virgin Islands, St Vincent, Seychelles, Singapore, Thailand, Turkey, Hong Kong and UAE all set to start information exchange by 2028. So far, Australia, Argentina, El Salvador, India, Panama and Vietnam, which have been identified by the OECD as crypto hubs, have not yet signed up to the CARF.
BUSINESS SALE POSTPONEMENT
4% of business owners have postponed the plans they had to sell their businesses due to tax changes. The Business Owners Sentiment Survey, conducted by S&W has found many business leaders have put their plans on hold, while 40% of business leaders have fast tracked their plans before more tax changes at this year’s Autumn Budget. Snap shot for the report’s findings:
- 28% said it is solely because of the changes to Business Relief (formerly Business Property Relief "BPR") that take effect from April 2026. See our article on the changes HERE.
- 39% said they were considering moving their businesses abroad because of the Business Relief (formerly Business Property Relief "BPR") changes.
- 20% advised they were bringing forward their plans to sell their business due to concerns that capital gains tax may rise again, or look at going non-UK tax residency.
Just 15% of those surveyed said they have not changed their plans in regard to the timescale of their exit strategies.
NATIONAL MINIMUM WAGE
Following the increase in the national minimum wage in April, HMRC has started reviews and enforcement actions. The latest list published by the Government shows 518 businesses which hadn't correctly paid minimum wages totalling underpayments of £7.4m. Some of these are large high-profile businesses, including one at the top of the list being a major listed business which underpaid wages exceeding £1.1m. National minimum wage is complicated, and easy to get wrong accidentally, for example salary sacrifice arrangements impacting the amount the employee is paid. Apart from additional costs and penalties arising, the PR impact and reputational damage also needs to be considered. Don’t get caught out.
DATES
- Please note our offices are closed Wednesday 16 July for staff training.
- 31 July 2025- Second payment on accounts for income tax.
- Key Tax dates for the period 1 July 2025 to 31 December 2025.
Should you wish to speak with us about a specific matter, or just to be a sounding board or for a chat, please do not hesitate to give us a call on 01452 713277.
