As the 2025/26 tax year approaches, there are a couple of significant changes to HM Revenue & Customs’ (HMRC’s) rules that will impact your business operations, financial reporting, and tax management.
New data collection requirements
From the 2025/2026 tax year, HMRC will require additional information via Income Tax Self-Assessment and real-time returns, from employers, owner-managed businesses (OMB’s) and self-employed individuals, including:
Employers
Detailed reporting of employee hours through real-time information Pay As You Earn (PAYE) reporting, which will enable HMRC to more easily identify instances of non-compliance in respect of the national minimum wage (£12.21 for 2025-26), including the national living wage.
The information that should be supplied to HMRC will vary depending on how the employees are paid.
Our specialist payroll team are available to discuss these changes in more detail, should you need further guidance.
OMBs
Separate reporting of dividend income and shareholding for shareholders in owner-managed businesses. This will apply where the taxpayer is a director and holds shares in a close company.
Self-employed
Start and end dates of self-employment on Self-Assessment tax returns.
VAT registration threshold increase
As a reminder, the threshold for VAT registration has risen from £85,000 to £90,000, easing the VAT-related burden on small businesses.
It is also important to note that you must register for VAT if you expect that your annual total taxable turnover is going to go over the £90,000 threshold in the next 30 days.
To navigate these changes with ease, we invite you to speak to our advisers who will be able to assess if and how these changes might impact you specifically.
They will also be able to ensure your accounting software is compatible with Making Tax Digital (MTD) requirements, whilst helping you to reap the wider benefits of digital accounting beyond compliance.
If you would like to discuss any of the above issues, please get in touch with our team of friendly professionals.
