Welcome to our regular monthly collection of news and announcements that impact accountants and their clients. 

With less than six weeks until Christmas, you’ll continue to be busy on their behalf – which is why we created our accountants hub so you’ll have access to the most important and accurate insolvency information whenever you need it. 

But you can’t read everything and be everywhere at once, so we collect the most interesting and important business and insolvency news stories every month along with new blogs on a range of topics 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 want to read!

FCA labelled “incompetent at best, dishonest at worst” by MPs and peers

A devastating report into the Financial Conduct Authority (FCA) by a cross-party group has been published after a three-year inquiry. 

The All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Financial Services received testimony from 175 individuals highlighting the FCA’s failure to protect consumers and small businesses from financial misconduct. 

They found the FCA to be slow and inadequate in its response to financial scandals, often doing “too little, too late – or nothing” to prevent or punish alleged wrongdoing. 

Bob Blackman MP, co-chair of the APPG, said the group has heard “tragic tales of regulatory failure” causing significant financial and emotional distress. 

He said: “The FCA responded to the excoriating criticism it received about its poor performance by launching a Transformation Programme. Unfortunately, the testimony received by the APPG in response to its Call for Evidence indicates that this programme has been a failure. 

“The FCA’s deep-rooted cultural problems, described so forensically by the series of external reports, are still there; if they weren’t then the FCA’s handling of recent issues such as the Woodford, WealthTec and Philips Trust Corporation scandals would have been satisfactory.

“The government has reasons for concern in that the trust deficit in financial services is acting as a brake on growth, the opposite of what any administration wants for the economy.”

The FCA responded with a statement: “We sympathise with those who have lost out as a result of wrongdoing in financial services. However, we strongly reject the characterisation of the organisation. 

“We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy.” 

New rules for Directors’ loans to target avoidance

New anti-tax avoidance rules have been rolled out to ensure that shareholders cannot extract untaxed funds from close companies.

The new measure was announced in the Budget Red Book and came into force with immediate effect on October 30th. 

It amends section 455 loans to participators anti-avoidance legislation within the Corporation Tax Act 2010 to prevent close companies recycling loans through two or more companies to avoid tax.

HMRC say the changes will affect participators in close companies that undertake tax avoidance arrangements and removes opportunities for avoidance of the s455 tax charge on loans and benefits for participators that exploit the current mechanics of the anti-avoidance rule. 

This also brings the targeted anti-avoidance rule (TAAR) within the loans to participators regime in line with other TAARS. 

HMRC said: “We’ve become aware of arrangements using a grouper of companies or amongst associated companies so that new loans are made then repaid in a chain such that no s455 charge arises on the increasing amounts extracted. The current legislation cannot catch this behaviour”.

HMRC Cuts late payments interest rate

Following the decision of the Bank of England’s Monetary Policy Committee to cut the base rate to 4.75%, HMRC has also reduced late payment and repayment interest rates.

From November 18th, the late payment interest rate was cut from 7.5% to 7.25% and the repayment interest rate was cut from 3.75% to 3.5%.

HMRC’s late payment interest is set at base rate plus 2.5% while repayment interest is set at base rate minus 1% with a minimum floor of 0.5%.

However, from April 6th 2025, HMRC will be able to charge a higher premium on repayment interest rates with the current 2.5% surcharge rising to 4% over the base rate. 

The Treasury said it had made his decision in order to 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 also reduced from 6% to 5.75%.

Interest paid to taxpayers affected by overpayments drops to 4.5% from 4.75% while interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments also fell to 4.5% from 4.75%.

Upcoming company law changes

We reported last month on the increase in company size thresholds that are the main company law change unveiled by the government to ease businesses non-financial reporting. 

There are also several others that are important to be aware of:-

Directors’ report

There are several changes aimed at removing several obsolete or overlapping requirements. These include removing information requirements related to:-

  • Employment of disabled people
  • Financial instruments
  • Branches
  • Employee engagement
  • Engagement with suppliers, customers and others
  • Important events, future developments, R&D

Medium-sized companies

The previous Conservative government announced plans to consult on redefining a “medium-sized” business that would have involved doubling the headcount from 250 to 500 and potentially providing an exemption for these companies having to include a strategic report in their annual report.

The Labour government has confirmed that they will not be taking these proposals forward.

Future of corporate reporting

A new consultation will be launched in 2025 aimed at simplifying and modernising non-financial reporting in order to better meet the needs of investors and business. 

ID Verification

Companies House are implementing new measures to ensure that all directors, members of limited liability partnerships (LLPs), PSCs and even individuals delivering documents to the building verify their identity. 

ID Verification is expected to be a one-off requirement so an individual who has several directorships will only need to have their identity verified once. 

A number of methods to verify the ID will be accepted including the gov.uk ID check application, the One Login web journey or in person at the Post Office. Additionally authorised corporate service providers (ACSPs) will be able to provide ID verification services if they wish. 

Verification will be voluntary until Autumn 2025 when Companies House aims for incorporation and the appointment of new directors and new registrations of PScs to be compulsory. 

As there are currently seven million existing directors and PSCs, a 12-month transition phase is expected to last between Autumn 2025 and 2026.

Three quarters of accountants report feeling “burnt out”

The festive break can’t come soon enough for many of us and this seems to be particularly acute for accountants. 

New research published by Caba, the accountants charity, indicates that nearly three in four (74%) of accountants said they felt burnt out in the previous 12 months with the effects seeping into their job performance. 

This is a 20% increase on the same response from last year with several mentioning high levels of stress and long working hours. 

Additionally a third of respondents out of 400 surveyed said they had been diagnosed with depression while a similar amount said they were affected by insomnia and had experienced panic attacks. 

Dr Christian Holmes, Chief Executive of Caba, said: “Cases of burnout have spiked across large parts of the UK workforce in recent years. So much so, that Mental Health UK is now warning that the country is on the verge of becoming a “burnt-out nation”. 

“As a sector, accountancy has proven to be especially vulnerable.

“Being a chartered accountant is a highly respected and rewarding career choice, and there are a great many people who are incredibly happy in their role.

“However, for some, long working hours and tight deadlines can make for a high pressure environment, which can sometimes lead to severe physical, emotional and behavioural symptoms we often associate with burnout.”

Real-time Benefits In Kind (BIK) reporting coming in 2026

HMRC have confirmed that there will be a phased introduction of new compulsory reporting requirements of Benefits In Kind (BIK) expenses through payroll software from April 2026.

Employers will be required to report all BIK expenses in real time except payroll loans and accommodation. HMRC said they had made no decision on when they would make those mandatory, noting that “careful consideration will be given to make sure sufficient notice of any change will be provided.”

An end-of-year process will be introduced to amend the taxable values of any BIKs that can’t be determined during the tax year but all need to be reported as accurately as possible. Additionally the requirement to submit P46 (Car) forms will also be removed as functionality will be provided to report the data required in real-time.

Overdue Invoices increase

New findings from R3 show that overdue invoices grew by 42.8% compared to the same period last year – equating to over 600,000 unpaid invoices.

This is the highest monthly total of 2024 so far and an increase of more than 180,000 from October 2023. 

The West Midlands was the area which saw the largest growth in their area with an increase of 49.5%.