What stories that could impact your clients have happened this month?
Welcome to our latest monthly collection of news and announcements that impact accountants and their clients in 2025.
You’ll already be busy on their behalf ahead of the end of the financial year – which is why our accountants hub exists so you’ll have access to the most important and accurate insolvency information whenever you need it.
But you can’t be everywhere and read everything all at once, so we collect the most interesting and important business and insolvency news stories every week along with regular new blogs on a range of relevant topics for you each and every week.
We’re always keen to hear what you think so email us at ask@businessrescueexpert.co.uk because we really want to write what you really want to read!
Are you feeling richer? Depends where and who you are
Reed have published their annual salary survey and found that accountants are on average, earning £54,300 a year while receiving average pay rises of 5%.
Despite this, the survey reports that a fifth of respondents in the sector (20%) are unhappy with their salaries and 64% of this cohort reported that they were unhappy because their salary had not risen in line with the cost of living.
The survey did flag a significant problem for the sector with a drop in the number of newly-qualified accountants. This was mainly due to the fallout of the Covid-era which saw disruptions in professional training.
This caused a “surplus of senior professionals” and a lack of entry-level candidates which was one of the main causes for entry-level salaries seeing significant increases in the last 12 months.
Alan Myers, regional director and accountancy expert at Reed, said: “Workers are experiencing tricky times. Even with some salaries increasing, largely, they still fall short of inflation and the increasing cost of living.
“With 86% of accountancy and finance professionals open to new job opportunities, the sector needs to look at how best to incentivise and reward its workers. Alongside salary increases, staff would feel more valued if employers offered additional benefits (30%), more recognition for their achievements (30%) and more thanks from leadership (23%).”
Accountants in Scotland saw the largest rise in advertised salaries (7.7%) followed by the South West and North East with 7%. East Anglia saw the lowest average rise of 4.5% across accountancy jobs while the national average salary rose by 6%.
Sales Ledger Clerks saw the highest average increase of 8.8% followed by Payroll Managers at 7% and assistant Accountant salaries up by 6.2%.
Some areas saw declines with Chief Financial Officer (CFO) salaries falling 0.2% and Finance Director salaries falling 0.5% on average.
The gender pay gap was still prevalent with men earning almost £15,000 more than women on average at £32,700. This was reflected in salary satisfaction levels with 60% of men happy with their salary compared to 50% of women.
As part of their methodology Reed analysed more than 21 million job ads and asked 5,000 UK workers a range of questions on their salary and benefits – both current and expected.
HMRC accused of deliberating running down phone service to force users online
Parliament’s influential Public Accounts Committee have deliberately accused HMRC of a “deliberately” poor phone service designed to push callers online.
They found that during 2023/24 the service cut off 44,000 customers who had been waiting 70,000 minutes to speak to an adviser because the system couldn’t cope with demand. Only two-thirds of calls were actually answered and the average wait time for all calls was more than 23 minutes.
Their research showed that since 2010 HMRC has “not sufficiently reduced demand on the phone and have failed to prioritise the resources needed to sustain an appropriate standard of telephone service despite demand being high with 37 million calls in 2023/24”.
Sir Geoffrey Clifton-Brown MP, chair of the Committee, said: “Given that citizens have no choice but to engage with HMRC, it has a responsibility to aspire to the highest standards of service.
“Unfortuntely, what we have instead is a tax authority excavating its way to new lows in service levels every year. Worse, it seems to be degrading its own services as a matter of policy. HMRC is an organization in defensive mode and needs bold and ambitious leadership to begin to chart its recovery.”
Jim Harra, HMRC chief executive denied that there was a deliberate attempt to push customers online calling the charge “completely baseless”. He said they had made “huge improvements” to services noting that call wait times have come down by 17 minutes since last April.
HMRC to cut late payment interest rate to 7%
Following the Bank of England’s 0.25% cut to the base interest rate to 4.5% on February 6th, HMRC will reduce late payment and repayment interest rates from February 25th.
The late payment interest rate will be cut from 7.25% to 7% while the repayment interest rate will be cut from 3.75% to 3.5%. The interest rate changes will be applicable a week earlier for Corporation Tax file filing purposes.
HMRC late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1% with a limit or minimum floor of 0.5%.
It’s important to note that from April 6th that HMRC will be able to charge a higher premium on repayment interest rates, increasing the current 2.5% rate surcharge to 4% over the base rate.
The decision was announced as part of the October Budget when the Chancellor said the move will help with the wider clampdown on tax avoidance and non-payment of taxes. This is expected to raise £255 million a year from 2025/26.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments dropped from 5.75% to 5.5% from February 17th, a week before the main late payment rate change.
Late payment interest rates are now 2.5% above the BoE base rate while HMRC continues to pay lower interest to taxpayers affected by overpayments of tax at 3.5%, down from 3.75%, from February 25th.
HMRC said: “the difference between rates is in line with the policy of other tax authorities worldwide. It compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits.”
The interest paid on overpaid quarterly instalment payments and on early payments of Corporation Tax not due by instalments is down by 0.25% from 4.75% to 4.5% from February 17th.
75% of accountants pulled into business strategy work instead
The role of accountants is being constantly redefined as new research shows that three out of four clients demand advanced financial guidance rather than traditional bookkeeping services.
A survey of accountants found that as well as investment and business strategy advice, 73% of respondents replied that they worked on financial forecasting as a priority while 66% said that traditional accounts payable/receivable were the top client expectation.
46% of respondents said they spent over three hours a week on regulatory requirements such as reconciling accounts and tracking compliance. Nearly half are burdened by manual data entry (45%); client communications about payment statuses and managing payments to HMRC (both 46%).
This reliance on manual processes and fragmented systems creates avoidable delays, errors and compliance risks, burdening accountants additional risk themselves.
Chris Horner, insolvency director with BusinessRescueExpert, said: “It’s clear that the role of accountants is undergoing transformation. What clients are asking for now has grown in the past few years and they seek trusted advisors to guide financial strategy, predict future challenges and pitfalls and help navigate complex business decisions rather than just maintain their records.
“While this might initially be daunting, it’s a real opportunity for accountants to play a more central role in their clients success and cement themselves as valued strategic advisors as well as trusted practitioners.
HMRC increase small employers’ relief rate
HMRC confirmed that the relief rate of compensation for statutory payments like sick pay rose to 8.5% from the new tax year.
From April 6th, the compensation rate will almost treble from 3% to 8.5% meaning eligible businesses will be able to reclaim 108% of the cost.
So employers who paid £45,000 or less in Class 1 National Insurance in the previous tax year, excluding reductions such as the employment allowance, will be able to reclaim 100% of statutory payments such as maternity, paternity and adoption pay, plus an additional 8.5% compensation up from the previous 3%.
The move will provide small businesses with additional financial relief during employee leave periods. It will affect tax years starting from 2025/26.
The compensation relief applies to statutory payments for maternity, paternity, adoption, shared parental, shared parental bereavement and the new neonatal care pay.
Reclaims must be submitted to HMRC through payroll software using the employer payment summary (EPS). Current HMRC guidance states that employers can write to the PAYE Employer Office to ask for a repayment if they cannot set off the payments against the current year’s liabilities. They cannot do this until the start of the next tax year.”
Small business confidence falls in Scotland
New research from the Federation of Small Businesses (FSB) found that confidence among Scotland’s small businesses had fallen to a four-year low, matching the level seen in Q4 in 2020.
The FSB’s confidence measure is its Small Business Index (SBI) which fell to -67.2 in Q4 2024, although this is slightly higher than the -69 seen in the same period in 2020.
This is the third consecutive quarterly reduction with optimism falling from -41.2 in Q3 2024. The growing negative sentiment reflects UK-wide uncertainty surrounding the broader economy with the UK SBI figure only being slightly higher at -64.5.
Andrew McRae, FSB Scotland policy chair, said: “These worrying results underline that we need urgent, concrete government action on the issues that keep small business owners awake at night.
“So many of the pressing issues come down to cost and cashflow. That’s why, for example, the government’s plans to tackle late payments, the scourge of many small businesses in Scotland, cannot come soon enough.”
Six out of ten respondents (59%) cited the performance of the domestic economy as the biggest barrier to the growth of their own business. Three quarters (74%) experienced rising costs in Q4, largely due to increases in utility bills as well as labour and tax costs.
The number of small businesses reporting revenue growth in Scotland fell to -36.7 compared to -13.1 in the previous quarter. Fewer than one in five (17.9%) saw revenues grow, the lowest proportion since Q1 2021.
There was a positive net balance of Scottish firms looking to expand in the next 12 months at 5.4% although this is a fall from the 30.4% reported in the previous quarter and below the UK average for Q4 at 19.2%