What stories should you and your clients know about from 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!
New tax requirements in 2025/26 for directors and sole traders
Self-assessment tax returns will require new mandatory requirements and elements from 5th April 2025 and will apply for tax returns for the financial year 2025/26 and later tax years.
These will apply to taxpayers who start or cease to trade or directors of close companies (companies under the control of five or fewer directors/shareholders).
The government estimates that the measure will impact approximately 1.2 million taxpayers carrying on a trade and 900,000 directors.
If a person starts or ceases to trade during a tax year, they must report the date of the commencement or cessation in the tax return for that year. This will affect personal tax returns, partnership returns and trustee’s returns. This information was voluntary for 2024/25 and earlier years but is now considered mandatory.
For company directors they must now include the name and registered number of the close company; the value of dividends received for the year (declared separately from other UK dividends) and their percentage shareholding in the company during the financial year. If this changes during the year then they should record their highest shareholding.
ICAEW have already registered some concerns with Richard Jones, their Senior Technical Manager of Business Taxation saying: “We’ve previously flagged to HMRC that providing this information won’t always be easy. For example, how do you determine the percentage shareholding where there are different classes of share?
“HMRC needs to publish detailed guidance to help taxpayers provide the information it wants, and it needs to make clear what the consequences are for the taxpayer for not providing the information.”
Companies House ID Changes go live from March 25th 2025
Voluntary changes to identity verification requirements for company directors and individuals with significant control come into effect this month.
Mandatory ID verification comes in for new appointments and incorporations from Autumn 2025 which will also mark the start of a 12-month transition period for existing directors to complete ID verification.
Companies House estimates that approximately 7.4 million existing officers listed on the register will need to undergo this verification under the terms of the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
Companies House must verify the identity of anyone submitting information to the public register including those acting on behalf of a company including accountants. The enhanced powers granted to Companies House intended to improve the accuracy and transparency of the information they hold.
In future all third-party service providers such as accountants, solicitors and company formation agents acting as Trust and Company Service Providers will need to register as an Authorised Corporate Service Provider (ACSP) as a business subject to Money Laundering Regulations before they can submit information and conduct identity verification checks on their clients.
Companies House CEO Louise Smyth said the new ACSP regime is a step towards a more transparent and secure business environment in the UK.
“Requiring third-party agents to register as authorised corporate service providers will provide assurance that identity checks they carry out achieve the same level of assurance as identity verification directly through Companies House.
“We are aware some customers experienced issues after launching. We have improved guidance and have already had 25 successful registrations and a further 90 currently processed with over 155 people successfully verifying their identities through the service.”
HMRC Updates Time To Pay Guidance
For the first time in four years, HMRC has clarified when Time To Pay plans can be set up without contacting them directly.
There is no change to qualifying criteria for self assessment taxpayers with the existing £30,000 limit on debt unchanged since 2020. The ceiling for PAYE and VAT arrears is £100,000 with the option to sign up online as the debt is less than five years old and will be paid off within 12 months.
HMRC usually expects 50% of disposable income after bills and housing costs to be paid into the TTP arrangement.
New TTP plans for self assessment can only be set up if all other HMRC debts have been settled in full, the plan has been arranged within 60 days of the payment deadline and all tax returns filed.
HMRC Increases beneficial loan rate
Directors and employees in receipt of loans from their companies and employers will pay a higher interest rate from April for loans calculated using precise method.
HMRC has increased the actual official rate for beneficial loan arrangements from 2.25% to 3.75% from April 6th 2025 – the highest rate since 2014 when interest is calculated using the precise method.
However, the rate for loans repaid using the averaging method for the 2025/26 tax year has not been confirmed. Currently at 2.25%, the loans are very favourable when compared to the Bank of England base rate of 4.5% and more expensive commercial loans from banks. When a director is also a shareholder, companies can use a loan instead of a dividend, which would be taxed at up to 39.35%, allowing the director to benefit from the low interest rate.
HMRC guidance stresses that “it’s not necessary for a loan to be advantageous to the recipient for a chargeable benefit to arise. It’s sufficient if the cheap or interest-free loan is made by reason of employment.”
Under the rules in section 188(1), Income Tax (Earnings and Pensions) Act 2003 (ITEPA), the director or employee can also benefit if a loan made due to their employment is released or written off. The director or employee is then no longer obliged to repay the amount they were lent. A tax charge will arise irrespective of the terms of the loan which has been released or written off.
The amount chargeable is the cash equivalent of the benefit of the loan. This is the difference between the interest that would have been payable if the borrower needed to pay interest on the loan at the appropriate “official rate” or rates for the tax year concerned and the amount of interest actually paid by the borrower for the same tax year.
Harry Styles wants company accounts to go back as it was
In one of the most sought-after potential insolvency cases, Harry Styles is facing three compulsory strike-off notices after three companies he owns failed to file their accounts on time.
Erskine Records Ltd, HSA Publishing Ltd and Pleased As Holdings Ltd missed the December 2024 deadlines to file accounts for year end December 2023.
The companies have been given a warning to take swift action and only face late filing penalties at this stage.
The sound of silence is not music to many accountant’s ears
A new survey on accountants working habits found that over half are working more than eight hours a day but one in four (27%) say their stress is added to by not being allowed to listen to music while they are working.
10% said they preferred to work that way while more than two-thirds (67%) would prefer to have some music on.
The survey conducted by music licensing company PPL PRS found that while 72% of workplaces played music, a notable one in four operated in silence.
With high stress levels at work, 55% of accountancy respondents said that silence would add to their stress while music would help boost their general mood. 33% said listening to music while working actively boosted their productivity.
A third of accountants said they suffered from fatigue due to the heavy workload and demanding environment while nearly a quarter (24%) said they felt overwhelmed by their workload.
When it came to taste, 60% of accountants preferred listening to pop music followed by RnB while one in five said they liked to listen to chill out or classical music.
Paul Guess, mental wellbeing expert at the accountants’ charity CABA said: “Accountancy is an inherently high pressure profession with accountants facing intense workloads, tight deadlines and demanding clients.
“At times, the office can be a stressful working environment and individuals might be unsure of how to reduce stress when at work.
“Effective stress management is highly personal, and what works for one person won’t necessarily work for another. But we know that the most effective measures to manage stress are often the simplest, with music being one of them.
“The benefits of music are well known, and it can be a vital tool for helping clear the mind and making us feel calmer. Listening to music in the office can contribute to a healthier workplace environment – helping boost our productivity and in the long-run, improve mental wellbeing.”
Overdue invoices are up in Scotland
The number of overdue invoices in Scotland reached a three-year high in January according to new research from R3 in Scotland.
Scottish businesses collectively had a total of 611,753 overdue invoices on their books in January, the highest since the same month in 2022.
Invoices also rose by 44.3% year-on-year from January 2024’s total of 423,836. This was the second largest yearly percentage increase in the UK with only the West Midlands 50.4% increase beating it.
Richard Bathgate, chair of R3 in Scotland said: “The last few years have been incredibly challenging for Scottish businesses.
“While a decline in inflation levels in 2024 provided some relief by slowing the pace of rising costs, it has only slowed them, and this has also been overshadowed by a host of other mounting challenges.
“High and rising energy bills are continuing to squeeze profit margins and the additional burdens introduced in the Autumn Budget, including the increase in Employers’ National Insurance Contributions and the minimum wage, have added further strain.
“These challenges are even harder to overcome for Scotland’s many small businesses, which often lack the financial cushion needed to cope with such shocks. As a result, we’re seeing more businesses delay payments for longer.
“While late payments are a concern across the UK, the figures in Scotland are rising at an unprecedented level.”
The total number of Scottish companies with overdue invoices on their books rose to 38,511 in January, which is also the highest level seen since January 2022. This was a 27.8% increase and the largest percentage increase of all the UK regions and nations.