Rachel Richardson knows Nyman Libson Paul from more than one perspective. Having started her career here as a trainee, she’s worked her way up to Audit Manager. She now supports a varied portfolio of charities, arts organisations and small businesses, as well as the next generation coming through the firm.

We caught up with Rachel to talk about life in audit, what she’s learned along the way and what being an ally looks like to her.

Tell us a little about what you do at NLP and the clients you typically work with.

I’m an Audit Manager at NLP, specialising in charities, particularly arts-based organisations and theatres, as well as a range of small businesses. I manage audit teams, review files, help clients navigate technical accounting issues and make sure audits run smoothly from planning through to completion. I also spend a lot of time supporting and training more junior members of the team. Having started my own career at NLP as a trainee accountant and gained my ACA qualification here, it’s important to me to pay that experience forward and help others develop in the same way. 

What does a typical day look like for you?

One of the things I enjoy most about my role is that no two days are ever the same. A typical day might involve balancing project management with technical accounting work, reviewing audit files, supporting and training team members, and keeping clients updated on progress. The nature of my work also changes throughout the year depending on the seasonality of our clients and where we are in the audit cycle, which keeps things interesting and means there’s always a new challenge around the corner. 

What does being an ‘ally’ to your clients mean to you?

Being an ally means becoming a trusted partner rather than simply providing a service once a year. Many of the charities and arts organisations I work with are focused on making a positive impact and often have limited resources, so it’s important that they know they can pick up the phone and ask for support whenever they need it. For me, being an ally is about understanding their mission, providing practical guidance, and helping them focus on achieving their objectives while knowing they have someone in their corner who understands their challenges. 

What’s something your NLP colleagues would immediately associate with you?

Probably charities and the arts! A large part of my client portfolio is made up of arts organisations and charities, so I spend a lot of time immersed in that sector. Beyond work, I’ve always had a passion for the arts, particularly music, so I think my colleagues would associate me with both the charity sector and a genuine enthusiasm for the organisations we support. 

What’s something people would be surprised to learn about you?

Outside of work, music has always been a huge part of my life. Before becoming an accountant, I was a classical musician and performed recitals at venues including the Barbican, Cadogan Hall and St Martin-in-the-Fields, playing both the piano and oboe. I still play regularly in my spare time and enjoy reviewing and writing about music, so although my day job is numbers and audits, my creative side never really went away!

Receiving a letter from HMRC can be unsettling. But an enquiry doesn’t automatically mean you’ve done anything wrong.

Many people assume HMRC only investigates businesses or individuals it believes have made mistakes or deliberately avoided tax. The reality is very different. HMRC has the authority to open an enquiry into almost anyone’s tax affairs, even where tax returns have been submitted correctly.

If you’re contacted, you’ll still need to respond, provide information and deal with the enquiry. Understanding why investigations happen, what they involve and how to prepare for them can make the process far less daunting.

Can HMRC investigate anyone?

In short, yes.

HMRC can open an enquiry into the tax affairs of:

• Limited companies
• Sole traders
• Landlords
• Company directors
• Anyone required to submit a Self Assessment tax return

An enquiry isn’t, by itself, evidence of wrongdoing.

The important thing to remember is that an investigation is not the same as an accusation.

Why does HMRC open tax investigations?

HMRC’s role is to ensure the correct amount of tax is collected. To do that, it compares information from a wide range of sources, including tax returns, payroll data, Companies House records, banks, employers and other third parties.

An enquiry may open because:

• Information differs from HMRC’s records.
• Income appears to be missing.
• Figures differ significantly from previous years.
• Certain transactions require clarification.
• A return has been selected as part of a compliance programme.

In many cases, HMRC is simply seeking additional information before it can confirm everything is in order.

Does an investigation mean you’ve made a mistake?

Not necessarily.

Many enquiries ultimately identify nothing more than an innocent error or a misunderstanding of what can often be a complex tax system. Others conclude that everything has been reported correctly.

Some investigations are also selected at random.

Whatever the reason, it’s important to respond carefully. HMRC may ask for supporting records, explanations of how figures were calculated or further evidence relating to your return. Having accurate records and professional support can make the process significantly easier.

What can a tax investigation cost?

Many people assume that the only financial impact comes from additional tax. In reality, the professional time required to deal with an enquiry is often one of the largest costs.

Depending on the nature of the investigation, your accountant may need to:

• Review several years of financial records.
• Prepare detailed responses to HMRC.
• Correspond directly with tax officers.
• Attend meetings.
• Gather and present supporting documentation.
• Challenge HMRC’s conclusions where appropriate.

While some enquiries are resolved relatively quickly, others can continue for many months. As the work increases, professional fees can also grow, sometimes reaching several thousand pounds depending on the complexity of the case.

Can you protect yourself against these costs?

Although nobody can prevent HMRC from opening an enquiry, you can prepare for the possibility.

At NLP, we offer Tax Investigation Fee Protection to help cover the professional fees associated with representing clients during an HMRC enquiry, subject to the terms of the service.

Rather than worrying about mounting professional costs while responding to HMRC, you’ll have experienced advisers on hand to manage correspondence with HMRC, prepare responses and guide you through every stage of the enquiry.

Whether you’re a business owner, landlord, company director or individual taxpayer, our aim is to minimise disruption and provide practical, expert support so you can focus on what matters most while we handle the enquiry.

Who should consider Tax Investigation Fee Protection?

Tax investigations aren’t limited to large organisations or businesses with complex structures.

They may be relevant if you are:

• A company director
• A business owner
• Self-employed
• A landlord
• Required to complete a Self Assessment tax return
• Receiving income from multiple sources

Good record keeping is always essential, but it doesn’t remove the possibility of being selected for an enquiry.

Why do many people choose Tax Investigation Fee Protection?

Few people expect a letter from HMRC.

When one arrives, the questions are often immediate:

• Why have I been contacted?
• What happens next?
• How long will this take?
• Who will deal with HMRC?
• What could this end up costing?

These concerns are understandable.

Having professional representation can reduce much of that uncertainty. Experienced advisers manage discussions with HMRC, guide clients through each stage of the process and help minimise disruption, providing reassurance from start to finish.

Is Tax Investigation Fee Protection worth considering?

Whether Tax Investigation Fee Protection is appropriate depends on your individual circumstances.

Many people value the reassurance of knowing that, should HMRC ever open an enquiry, they have experienced professionals ready to manage the process and help cover the associated professional fees.

While the hope is that you’ll never need to use the service, having support available can save considerable time, stress and unexpected cost if HMRC does get in touch.

What should you do if HMRC contacts you?

If you receive a letter from HMRC:

1. Read it carefully and don’t ignore it.
2. Respond within any stated deadlines.
3. Gather the records requested.
4. Avoid guessing if you’re unsure of an answer.
5. Speak to your accountant as soon as possible.

Early advice can help ensure the enquiry is handled efficiently and accurately.

How we can support you

Receiving a letter from HMRC can feel overwhelming, particularly if you’ve never experienced a tax enquiry before. Our tax specialists can explain what’s happening, communicate with HMRC on your behalf and guide you through each stage of the process. Whether you need advice on responding to an enquiry or would like to discuss Tax Investigation Fee Protection before any issues arise, we’re here to help.

In the latest instalment of our Meet the Ally series, we sit down with Advisory Partner Laurence Fishman.

Working predominantly with entrepreneurs and founders of fast-growing businesses, Laurence brings experience from across almost every stage of the business lifecycle. But for him, being a trusted adviser goes far beyond the numbers.

We caught up with Laurence Fishman to find out more about his approach to working with clients, what has shaped the way he thinks about business, and what he’s learned from a career spent helping businesses grow, adapt and navigate some of their biggest challenges.

Tell us a little about what you do at NLP and the clients you typically work with.

I’m an advisory Partner at NLP. The majority of the people I advise are entrepreneurs and founders who are scaling quickly.

What’s one question you find yourself being asked by clients again and again?

“How’s everyone else in our industry doing?” My answer tends to be the same every time.

What’s something you wish more clients knew about your area of expertise?

Most of my clients will already know exactly who I am – an open book. Right out the gate, I want clients to understand how I think, make decisions and navigate challenges just as much as I want to understand them, their ambitions and what drives them. That said, if that question is asked of those watching on from the shadows, it’s this… I’ve been fortunate to have built a career that has spanned almost every stage of the business lifecycle.

From helping launch a successful start-up straight out of University (not accountancy!), to managing and growing relationships with large and complex international audit clients. I’ve restructured groups, worked on the turnarounds of household-name businesses, supported teams on high-profile administrations. I have consulted and advised leadership teams on corporate strategy, and helped clients exit for more money than I will ever see!

I’ve seen first-hand how businesses grow, struggle, adapt, transform and create value under pressure. And that means I have developed an instinct that many in my arena won’t have. I don’t see myself as just an accountant… I’m a corporate wingman. A “fixer”. The kind of person my clients seem to want in the room with them when the stakes get high!

What’s something your NLP colleagues would immediately associate with you?

What’s something people would be surprised to learn about you Laurence?

I’m fascinated by, and have spent years studying, the psychology of business. Motivations, decision-making, behaviours, relationships, strategy, influence, and performance. From EVERY angle I could find. It began as an interest in my 20’s but became something of an obsession, leading me to explore ideas and disciplines far beyond traditional business thinking (…think ancient China and the art of warfare!). That breadth and depth of study has shaped how I see the world. It honed the way I lead, build teams, and influence outcomes. More than any qualification or technical skill, it’s probably been the biggest contributor to both my personal growth and the success I’ve achieved throughout my career.

Businesses impacted by change to the main financial reporting standard, FRS 102, should be alert to the potential for repercussions for their tax position as a result.

Changes to FRS102 are significant for companies, as the change to FRS 102 takes effect for accounting periods starting on or after 1 January 2026, with a new five-step model for revenue recognition, and change to the way that leases are accounted for. The distinction between operating and finance leases for lessees is axed, so that most leases will be brought onto the balance sheet.

The impact of these developments, however, can be unexpectedly far-reaching. The ripples can extend to the tax liability, and its timing, as well as wider compliance issues. The basis for the Corporation Tax calculation being the accounting profit before tax, any timing changes in accounting profit can change the timing of taxable profits. Change to revenue recognition may accelerate or defer taxable income. Transitional adjustments will typically impact the tax liability in the first accounting period to which the new standard applies. Where leasing arrangements are substantial, the balance sheet is likely to show significantly higher levels of assets and liabilities. Change to figures for gross assets and turnover can have other consequences. Examples include entry into compliance regimes like off-payroll working; or eligibility for tax reliefs, such as the Enterprise Investment Scheme and Seed Investment Scheme.

As the change beds in, early discussion is recommended. We are here to help.

Good advice starts with understanding the person behind the question.

For Lindsay, Director of Client Services at NLP, being an accountant isn’t simply about supplying the technically correct answer. It’s about understanding what a client is trying to achieve, seeing the bigger picture and bringing together the right expertise to help them make decisions with confidence.

In Part 2 of our Meet Your Ally series, Lindsay Bowler shares why she believes an accountant should be more than someone you speak to once a year, where professional judgement still matters in an age of AI, and what being a true ally to her clients means in practice.

Tell us a little about what you do at NLP and the clients you typically work with. 

As Director of Client Services, I combine technical accounting and audit expertise with a collaborative approach, bringing together specialists across accounts, audit, tax and advisory here at NLP to provide clients with the right advice at the right time. I work predominantly with ambitious businesses and individuals mainly in the creative sectors, helping them navigate complex financial and commercial challenges, make informed decisions and achieve their goals. For me, it’s about understanding the bigger picture rather than looking at an individual accounting or tax issue in isolation.

What’s one question you find yourself being asked by clients again and again?

What do you enjoy most about working closely with clients?

For me, this is what the job is all about. I genuinely enjoy getting to know my clients, not just what they want to achieve in business, but what they want from life as well.  Understanding the bigger picture and the story behind a business means I can give advice that actually works for that individual. It’s not always about saving a little tax in one particular area if doing so creates a bigger problem somewhere else or affects another important decision.

What does being an ‘ally’ to your clients mean to you?

To me, being an ally means being there for our clients in whatever capacity they need. Sometimes that means answering questions such as, “Does this make financial sense?”, “What can I do to manage my tax?”, “Should I go ahead with this deal as proposed?” or “Are my systems working efficiently, or could they be improved?” But sometimes our heroes simply need an ally to be a sounding board, someone who understands the business well enough to talk through a difficult decision and challenge their thinking when necessary. I want to be that person for my clients. Whether they need technical expertise, commercial advice or simply someone to talk a decision through with, I want to help them overcome the hurdle in front of them and move forward with confidence.

What’s something people might not realise goes on behind the scenes when you’re helping a client?

The heart and passion that goes into it. My LinkedIn tagline is “The accountant that cares”, and I chose that because I genuinely care about my clients and the businesses they have built.

Starting your career is a big step, and choosing the right place to do it can make all the difference.

In our Graduate Spotlight series, we’re handing things over to the people who know the NLP graduate experience best: our graduates themselves.

We caught up with one of our current Graduate Audit Trainees, Riya Johny, to hear about life at NLP so far, from working with a varied mix of clients and studying towards a professional qualification to the support, responsibility and opportunities that come with being part of the team.

Here’s what she had to say.

What made you choose NLP for your graduate career?

I chose NLP because I really liked the variety of clients they work with, particularly theatres and charities.When I researched about the company, I found lots of positive reviews including a great LinkedIn platform where I learned about all the opportunities they have to offer. I also found lots of positive feedback, and speaking to some of the grads during my visit gave me even more reassurance that it was a friendly and supportive place to work.

What does a typical day look like for you as a graduate, if there is such a thing?

I find that a typical day is never the same. I work with a variety of clients and carry out a range of different tasks, from preparing accounts and conducting audit testing to preparing for meetings with clients.

How have you found balancing studying for your professional qualification alongside your day-to-day work?

I have found that balancing studying for my professional qualification alongside my day-to-day work can be challenging at times, but it is also very rewarding. The structure of the graduate programme helps me manage both, as I am able to apply what I learn through studying directly to my work. This makes the content easier to understand and helps reinforce my knowledge.

Time management is important, particularly when preparing for exams alongside busy periods at work. I have found that planning my time effectively and keeping on top of my studies helps me maintain a good balance. Although it can be demanding, I enjoy the combination of studying and practical experience, as both complement each other and allow me to continue developing professionally.

What’s the team culture really like from a graduate’s perspective?

From a graduate’s perspective, I have found the team culture to be very supportive and welcoming. Everyone is approachable and willing to help, which makes it easier to ask questions and learn from those around you.

There is also a strong sense of teamwork, particularly during busy periods, where everyone works together to meet deadlines and support one another. I have found that people are encouraged to take responsibility for their own work while still having the support of the wider team when needed. Overall, I think the culture provides a good balance between being professional and having a friendly and enjoyable working environment.

If someone was considering applying for NLP’s Graduate Audit Trainee Programme, what would you say to them?

I would definitely recommend applying if you are interested in pursuing a career in audit. The Graduate Audit Trainee Programme provides a great opportunity to gain practical experience while working towards your professional qualification. You are given responsibility from an early stage, but there is always support available from colleagues when you need it.

The role is varied, so every day is different, and you get the opportunity to work with a range of clients and develop a broad set of skills. It can be challenging at times, particularly when balancing work with studying, but it is a rewarding experience and provides a strong foundation for your career. If you are willing to learn, take on new challenges and make the most of the opportunities available, I would highly recommend it.

At NLP, being a good adviser is about more than knowing the numbers. It’s about understanding the people behind them, being there when challenges arise and building relationships that last.

That’s what our Meet the Ally series is all about: introducing the people who work alongside our clients and getting their perspective on what great advice and support really look like.

First up is Richard Paul, Partner at NLP, who works with a wide variety of clients across both their business and personal finances.

We sat down with Richard to talk about the challenges businesses are facing, why he believes advisers should be accessible when it matters, and the value of having someone in your corner when things get difficult.

Tell us a little about what you do at NLP and the clients you typically work with.

I am a general practice partner at NLP with a huge variety of clients but the common thread amongst all my clients is the private client style service we provide each of them.This means we take very personally defending  and supporting their business and personal finances throughout their lives.

What are some of the biggest challenges you’re helping clients with at the moment?

Clients are being squeezed by low cost competition, material extra taxes, red tape and macro events. Many business are finding themselves under attack and are having difficulty surviving. As their ‘financial bodyguards’ we are to help navigate them through these choppy waters.

What do you enjoy most about working closely with clients?

To be so closely involved in peoples personal and business lives is a priviledge. There are few other occupations which afford this level of access and in turn makes us all better advisors.

What does being a good adviser mean to you?

Being accessible, responsive, remaining calm and clear thinking in difficult situations is for me the key support clients need when they are going through troubles and challenges.

When should someone come and speak to you rather than trying to deal with something themselves?

Earlier rather than later please! I have found that most business owners have a lonely existence and rarely have anyone to share their troubles with. We enjoy constant contact with our clients and so we are in a better position to influence the outcome when problems do arise. A problem shared is a problem halved!

HMRC has recently partnered with British-based data analytics and AI leaders, Quantexa, in a £175 million deal.

Quantexa works with public sector organisations globally on fraud, risk, compliance and data modernisation initiatives. The aim in this case is to support the modernisation of HMRC’s core data infrastructure, giving it a clearer, connected view of its data. This should:

• improve performance
• identify tax at risk
• strengthen control.

According to HMRC, ‘Modern data and AI tools help us reduce duplication, better link customer information across systems and support right-first-time outcomes, improving the service we provide to customers while continuing to tackle fraud and non-compliance.’

The new tools at its disposal should give HMRC a bird’s eye view not just of its own internal data, but data from other sources as well. This will enable it to spot patterns and relationships suggesting fraud more rapidly and accurately than ever before.

The programme will also lay the groundwork for advanced AI capabilities, and support wider transformation efforts. These include work to close the tax gap, and the delivery of faster, more seamless customer service.

Even where headline income tax rates remain unchanged, your tax bill may not.

That’s because tax thresholds remain frozen, meaning more of your income can become taxable over time or fall into a higher tax band as earnings increase – a process often referred to as fiscal drag.

The current GOV.UK income tax guidance confirms that for the 2026/27 tax year:

• The Personal Allowance remains £12,570
• Basic rate tax applies from £12,571 to £50,270
• Higher rate tax applies from £50,271 to £125,140
• Additional rate tax applies above £125,140 in England, Wales and Northern Ireland.

Finance Act 2026 has legislated for the freeze to continue until 5 April 2031.

The Personal Allowance will remain £12,570, the basic rate limit £37,700, and the higher-rate threshold £50,270 throughout that period.

What this means for you

A pay rise doesn’t always mean you’ll take home significantly more.
Employees, pensioners and anyone receiving savings or rental income should remember that unchanged tax rates do not necessarily mean an unchanged tax bill.
It’s also important to be aware that the Personal Allowance reduces by £1 for every £2 of adjusted net income above £100,000, before reducing to nil once adjusted net income reaches £125,140.

Planning ahead

Reviewing your tax position regularly can help avoid unexpected surprises.

It may be worth checking your tax code and reviewing pension contributions or Gift Aid payments where appropriate. If your income is approaching the £100,000–£125,140 range, understanding how the Personal Allowance taper works can become particularly valuable.

Fiscal drag is often described simply as the tax rise that happens when thresholds don’t move. Over time, it can have a noticeable impact on your overall tax position.

If you receive income from dividends, savings or rental property, it’s worth understanding what has already changed from 6 April 2026 and what is due to change from 6 April 2027. These changes affect three of the most common sources of personal income, so reviewing your position now could help you plan with greater confidence.

HMRC’s technical note confirms that from 6 April 2026, dividend tax rates will increase to 10.75% at the ordinary rate and 35.75% at the upper rate, while the additional rate remains 39.35%. The dividend allowance will remain £500.

From 6 April 2027, taxable savings income above any available 0% savings allowances will be taxed at 22%, 42% and 47%, while taxable property income will also be subject to separate rates of 22%, 42% and 47% in England, Wales and Northern Ireland.

What this means for you

If you receive dividend income outside ISAs or pensions, now is a good time to review your position. Savers should check whether their interest is likely to exceed the Personal Savings Allowance, while landlords should consider how the new 2027/28 property rates could affect future taxable rental profits.

HMRC has also confirmed that the starting rate for savings and the Personal Savings Allowance remain unchanged. The Rent a Room Scheme and property allowance are also unchanged.

Planning ahead

Where appropriate, consider making full use of your ISA allowances and keep accurate records of dividend vouchers and bank interest. If you own rental property, review your expected taxable profit after allowable deductions and reliefs rather than simply focusing on rental income received.

The new rules also change the income tax calculation so that allowances and reliefs are applied first against non-property, non-savings and non-dividend income where possible. From 2027/28, this means the order in which different types of income are taxed may become more significant.

Starting a career in audit might not be quite what you expect. There’s much more to it than numbers and spreadsheets, from working directly with clients and understanding how businesses operate to building relationships and developing skills that can shape your entire career.

With applications for our Graduate Audit Trainee Programme now open, we sat down with Hetal Mistry, Audit Partner at Nyman Libson Paul, to talk about what a career in audit really looks like at NLP.

From what he looks for in graduate applications to the experience trainees can expect in their first year, Hetal shares his insight into starting out in audit, the culture of the team and what graduates can gain from beginning their career at an independent firm like NLP.

What do you look for in a graduate beyond their degree and academic results?

Academic results are important, but they only tell part of the story. I look for personality, attitude and a genuine willingness to learn.

At NLP, we have a fantastic team culture, so it’s important that new joiners are people who will fit in well, work collaboratively and contribute positively to the environment around them. I also look for individuals who are proactive, curious and willing to take ownership of their development.

The graduates who tend to do really well are often the go-getters. They’re entrepreneurial in their thinking, keen to build relationships and prepared to get involved rather than waiting to be told what to do. That mindset aligns well with the type of firm we are.

A lot more than they might expect.

What can someone expect to be doing in their first year?

From day one, graduates are working towards their professional qualification while gaining practical experience through real client work. They’ll receive structured training, support with their exams and exposure to a variety of businesses and sectors.

Some days they’ll be working alongside colleagues in the office, and on others they’ll be out at client premises gaining first-hand experience. They’ll be interacting with clients, building technical knowledge and developing the professional skills needed to become a trusted adviser.

Every week brings something different, which is one of the reasons the role is so rewarding.

How would you describe the culture of the Audit team to someone who has never stepped inside the office?

I’d describe it as supportive, ambitious and genuinely friendly.

We’re a team that works hard, but we also enjoy spending time together. People know each other well, collaborate openly and are always willing to help when someone needs support. It’s not uncommon to see colleagues socialising outside of work or celebrating each other’s successes.

One of the things I’m most proud of is our staff retention. Many of our people build long-term careers with us, helped by initiatives such as our Manager Pathway programme, which provides a clear route for progression and development.

Most importantly, they’re simply good people to be around. Graduates quickly become part of the team and have a strong support network around them from day one.

What do you think NLP offers a graduate that they might not experience at a much larger firm?

One of the biggest differences is breadth of experience.

At NLP, graduates don’t spend months working on just one section of an audit or a single type of assignment. Instead, they gain exposure to the entire audit process while also developing skills in accounts preparation, corporation tax and even advisory work across a wide range of sectors.

This gives them a much broader understanding of how businesses operate and helps them develop into well-rounded accountants much earlier in their careers.

The other difference is the people. In a larger organisation, it’s easy to feel like one person among thousands. At NLP, everyone knows your name. You’ll work closely with managers, directors and partners, your contribution will be recognised, and you’ll have real opportunities to make an impact from the outset.

What would you say to someone who is considering applying but isn’t quite sure whether audit is for them?

I’d say don’t rule it out based on what you think audit is.

Many people assume audit is simply about numbers and spreadsheets, but in reality it’s a people-focused profession. Every day involves meeting business owners, finance teams and senior leaders, understanding how their organisations operate and helping build trust in financial information.

Audit gives you a unique opportunity to learn how different businesses work, from entrepreneurial start-ups to established organisations across a wide range of sectors. Few careers provide such a broad commercial education at such an early stage.

If you’re curious, enjoy solving problems, like working with people and want a career that offers continuous learning and development, audit could be a much better fit than you realise. Even if you don’t spend your entire career in audit, the business, commercial and interpersonal skills you develop will benefit you wherever your future career takes you

Changes to inheritance tax (IHT) mean pension wealth could soon form part of your estate in circumstances. Many people previously expected it to remain outside the IHT calculation.

From 6 April 2027, most unused pension funds and pension death benefits will be included in the value of a deceased person’s estate. This is for IHT purposes, subject to any available exemptions and excluded benefits.

HMRC has confirmed that from 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of a deceased person’s estate for inheritance tax purposes.

What this means for you

This change could affect existing estate planning arrangements.

Finance Act 2026 received Royal Assent on 18 March 2026, and the new rules will apply where the pension scheme member dies on or after 6 April 2027. If death occurs before that date, the current rules will continue to apply. Even if benefits are paid later.

Planning ahead

With these changes on the horizon, now is a good opportunity to review your wider estate planning arrangements.

That could include reviewing your will, checking pension expression-of-wish forms, considering estate liquidity and understanding who will administer your estate.

HMRC has also confirmed that personal representatives will generally be responsible for reporting and paying any inheritance tax due on “notional pension property”, although beneficiaries may become jointly and severally liable in certain circumstances once benefits vest in them. Further HMRC guidance, support tools and secondary legislation are expected before April 2027.

Family fun with temporary summer VAT rate. But for the hospitality businesses impacted, another set of rules to get right.

To make family days out more affordable and support businesses, the government has announced the Great British Summer Savings scheme. It means a temporary, reduced VAT rate of 5% will apply over the summer holidays. This will apply to selected activities and services for families with children. The government expects businesses to pass the VAT saving on to customers.

The temporary rate has effect for the period from 25 June 2026 to 1 September 2026 (inclusive). It applies to:

• certain supplies of children’s meals (eaten on the premises, not take-aways)

• children’s admission to theatres, cinemas, concerts, exhibitions and shows

• all admission tickets to attractions suitable for families with children, such as amusement parks, fairs, adventure parks and soft play attractions. Sports facilities will not be included.

The reduced 5% rate replaces the standard rate of VAT of 20% for supplies within scope during this period. It does not apply to activities where no VAT is charged, for instance where there is already an exemption, or where supplies are zero-rated.

Small print

It goes without saying that any business impacted will need to check the detail of the rules, and further information can be found in HMRC’s newly published ‘Revenue and Customs Brief 5 (2026): Temporary reduced rate of VAT for children’s meals, tickets and family attractions’.

Children’s meals

For the reduced rate to apply, the meal must be supplied for consumption on the premises; served from a dedicated children’s menu; and marketed, priced and presented as intended for children. It is important to be clear on what does, and does not qualify under this heading. A smaller or cheaper portion of an adult meal that is not presented as part of a children’s menu, for example, is not eligible.

The Brief also deals with how to treat a child’s meal supplied for a single inclusive price. For example, including a drink or additional courses – here the entire package can qualify for the reduced rate. Optional items, add-ons or upgrades priced separately, that do not form part of the children’s meal, are still subject to their normal VAT liability.

Bundles and mixed supplies

Where admission, meals or tickets are supplied together with other goods or services for a single price, normal VAT rules should be used to determine VAT liability. Only the part of the supply that falls within the parameters set out in the Brief is eligible for the 5% rate. Other elements fall to be treated according to their normal VAT liability.

Practical problems

Businesses will need to pivot rapidly. Updating systems and briefing staff to put the change into practice, and also to revert to normal rules when the scheme ends.

We are here to help in any way we can. Do please contact us for help with this, or any other VAT issue.

New legislation to tackle late payments is currently going through parliament.

The Bill will introduce:

• a new 60-day cap on payment terms for larger firms paying smaller suppliers

• new mandatory interest on late payments, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate

• a time limit for raising disputes on payments

• action to ban the practice of withholding retention payments under construction contracts, to prevent small firms losing retentions to insolvency or non-payment

• significant new powers for the Small Business Commissioner to investigate poor payment practices; adjudicate disputes outside the courts; and fine the worst offenders.

Provisions are intended to apply UK-wide, though this will require regulatory alignment in Scotland, Wales and Northern Ireland.

Payment issues are always disruptive, and we can advise on cash and debtor management if this is relevant to you. Please contact us for an in-depth discussion.

With the extension of Inheritance Tax (IHT) to most unused pension funds and pension death benefits from April 2027, IHT is very much in the public eye.

With timely advance planning, however, it is still possible to take advantage of valuable IHT exemptions. These include the annual exemption of £3,000; and the exemption for small gifts made to individuals not exceeding £250 per tax year, per recipient. And, of course, it should be remembered that gifts from one spouse or registered civil partner to another are generally fully exempt. But it is always important to get the rules right, and we look here at a recent decision from the First-tier Tax Tribunal where things did not go to plan.

Normal expenditure out of income

The exemption for normal expenditure out of income is perhaps one of the less well known exemptions from IHT. It can be available where someone makes a gift:

• that is part of their normal expenditure and

• taking one year with another, it is made out of their income, and

• after allowing for all transfers of value forming part of their normal expenditure, the giver is left with sufficient income to maintain their usual standard of living.

This was the exemption that donor, Mr Hosking, hoped would cover extensive giving to political causes he supported. Failing that, there were other arguments in his armoury. In the end, though, the gifts being challenged, totalling over £1.7 million, left him with an IHT bill of nearly £350,000.

What went wrong?

Mr Hosking ticked two of the boxes. There was no doubt that he had income significantly in excess of his personal living needs and those of his family. His donations were substantial. In addition to the gifts under discussion at the Tribunal, there were contributions to rescue Crystal Palace Football Club, gifts to heritage railways, and other gifts to charities and political causes in excess of £20 million. HMRC agreed that these gifts were made out of income, and did not impact Mr Hosking’s standard of living.

That left the question of whether gifts to various pro-Brexit causes between 2011 and 2016 were part of Mr Hosking’s ‘normal expenditure’. Had the Tribunal been given clear evidence that the giving was part of a settled pattern of expenditure, Mr Hosking might have won the day. The Tribunal was looking for signs of definite predictability or regularity in the donations over a period of time; or a prior commitment to make gifts out of future expenditure, backed up by documentary evidence. But it didn’t find them.

The Tribunal decided that though the gifts made by Mr Hosking were not ‘out of character or abnormal and in that sense were “normal expenditure”’, amounts donated varied tremendously year on year, and there appeared no settled prior commitment. For these reasons, the gifts did not fall within the meaning of normal expenditure as set out in the legislation. On this, and on other grounds, Mr Hosking’s case failed.

We can help

To benefit from this particular exemption, it is essential to be able to demonstrate a settled pattern of expenditure, measurable over a period of time or by a definite commitment to future expenditure. Do please contact us for further advice on this, or any other aspect of IHT.

Fly-by-night ‘experts’ land wholesale beer business with tax bill of over £500,000.

A company undertaking an innovative research and development (R&D) project may be able to take advantage of significant tax breaks. Unfortunately, the availability of tax relief can also attract fraudsters. A typical fraud sees rogue firms posing as specialist advisers, submitting R&D claims for their clients, and creaming off the proceeds – leaving behind a claim that may later fail HMRC scrutiny. This was what taxpayer business, Beer Express Ltd, found to its cost at the First-tier Tax Tribunal, recently.

Tax relief

R&D tax relief comes via two schemes. The new merged R&D scheme offers a 20% above-the-line taxable credit: and the enhanced R&D intensive support scheme (ERIS), available to loss-making, R&D-intensive, small and medium-sized enterprises, provides an enhanced deduction of 86%, and a potential repayable tax credit. Financially, the stakes can be high and unscrupulous so-called advisers know this.

Rogue advice

Beer Express, though primarily a wholesaler, also owns a pub, the Penny Gill, and markets products of its own, such as Penny Gill Lager and Beer. In 2020, it started two new projects, one using forecasting software to optimise its inventory, and the other to develop a new, uniquely-flavoured pale lager. Two further projects followed, one a software development project, and the other to develop its brewing offering.

The business was approached by a firm holding itself out as an R&D specialist. It suggested that the work being done would qualify for tax incentives under the R&D Guidelines. The firm was duly appointed and obtained a tax refund, paying this to Beer Express after deduction of fees.

In 2023, HMRC rejected the R&D claim in full, and asked for repayment of the refund. When Beer Express attempted to contact their ‘advisers’, the firm appeared to have disappeared.

Rules matter

Broadly speaking, to qualify as R&D for tax purposes, a project must involve the resolution of uncertainty to achieve an advance in science or technology, and fit within the rules set out in ‘Guidelines on the meaning of research and development for tax purposes’ on GOV.UK. Further specific requirements also apply, such as the need for a project to be overseen by a competent professional or person with relevant expertise. The Tribunal decided that Beer Express failed to qualify in these areas.

The Tribunal found that the company owner, although truthful and credible, did not have any in-depth knowledge of the projects: ‘Although he may have overseen the projects or had a vision for the future . . . he had not been responsible for the design, creation, planning and implementation such that he satisfied the Guidelines as a competent professional’. The company had thus failed to provide clear and cogent evidence of the advance being sought; the technical uncertainty involved; or the reason that additional research was needed. It lost its case.

Eligibility requirements for R&D for tax purposes are complex. Do please contact us for further advice.

HMRC is currently looking at claims to Business Asset Disposal Relief (BADR) made in the 2024/25 Self Assessment tax return.

What is BADR?

BADR (formerly known as Entrepreneurs’ Relief) is an important Capital Gains Tax (CGT) relief. It can be available where someone disposes of qualifying business assets, such as shares in a company. In recent years, the value of the relief has been reduced, but where conditions are met, CGT on qualifying gains is charged at a reduced rate of:

• 10% for 2024/25

• 14% for 2025/26

• 18% from 2026/27

What is HMRC doing?

HMRC has been writing to taxpayers who claimed BADR in their 2024/25 Self Assessment tax return where its data suggests that they might have exceeded the £1 million BADR lifetime limit. This could happen if someone had exceeded the lifetime limit before the claim in the return, or because the claim in the return had taken them over the limit. It is, of course, possible that the claim for BADR is correct, and does not need amendment.

Receiving a letter

HMRC routinely uses letters like these to nudge taxpayers to check their tax position, and they do not necessarily mean there is a problem. It is important, though, that letters of this type are not ignored. They do need a response within the deadline given, whatever the circumstances. Failure to act can mean that HMRC will amend a return or open an enquiry. There is also the potential for interest and penalties.

Your agents, we should receive a copy of any such letter, and will deal with it on your behalf. Please bear in mind, however, that HMRC systems are not foolproof, so if you get a letter and have any concerns, do contact us.

The proposals stand to impact profit extraction, recording and financial management for many owner-managed businesses.

Hard on the heels of the requirement for directors of close companies to report additional information on the Self Assessment tax return from 2025/26. The government is now considering further change. It is widely expected that this will mean a requirement to report transactions between close companies and their participators to HMRC.

Would this impact you?

Close companies, broadly speaking, are companies controlled by five or fewer participators. Or by any number of participators who are directors. Participators are those who have an interest in the capital or income of a company, such as a shareholder. Most small and medium-sized companies are close companies.

Why the possible change?

The small business Corporation Tax gap makes up a significant slice of the tax gap.HMRC is concerned that in close companies, the boundary between company monies, and the monies of those involved in the company is not always tightly drawn. Increased reporting requirements would give HMRC more information and help it check that transactions are taxed appropriately.

What are the proposals? 

The main risks HMRC sees are:

• under-reported income and over-claimed expenses

• error and evasion in transactions between a company and its owners.

It therefore suggests that close companies report details of transactions between the company and its participators including: cash withdrawals; loans; debts; dividends; and other distributions, and transfers of assets to and from the company. This would mean reporting the recipient; amount; and date of each transaction; and possibly also the National Insurance numbers of participators. Rules would also extend to corporate participators.

Is there anything to do now?

Company financial housekeeping, such as the operation of directors’ loan accounts, is very much a focus for HMRC at present. The current consultation highlights HMRC’s push for companies to keep records of monies passing between the company and its owners, with ‘a more structured framework’ around those records and ‘good habits around tracking the company’s money’.

Change along the lines indicated therefore seems inevitable, and will mean more demanding compliance. We can help you assess possible impact now, looking at areas such as profit extraction strategy; use of directors’ loan accounts; and the correct issue and documentation of dividends. Please contact us for further advice.

Businesses donating goods to charities may now benefit from new rules.

Latest position

With effect from 1 April 2026, businesses donating goods to registered charities for onward distribution to people in need; to another charity or organisation; or for use in the charity’s non-business activities will no longer be required to account for VAT on those items.

Prior to this, such donations were usually subject to VAT at 20%, as deemed supplies. This was rather the odd man out, given the existence of VAT relief for business donations of goods to a charity for sale.

The idea is to make it easier and more cost-effective for businesses to donate surplus goods to charities like foodbanks or shelters. This allows surplus items to be put to good use rather than being scrapped, or going to landfill.

Complexities

Is it good news? Yes, but not an unqualified yes. There are still a number of complexities that donor businesses must keep in mind. HMRC has recently updated VAT Notice 701/1, where section 5.5 sets out the latest guidance. In outline, goods can be donated without incurring a VAT charge when:

• goods are eligible

• they are donated for an eligible use

• they’re donated to a charity registered with the Charity Commission; or corresponding regulator (where required); or with HMRC for charity tax purposes

• the donor has evidence that eligible goods have been donated to an eligible charity.

Check the value of goods

There are per item value limits under the new rules. The cap is £200 per item for a limited range of specified items: household appliances (including cookers and fridges); furniture (including mattresses); flooring (including carpets and rugs); computers, tablets and mobile phones: and £100 in any other case. Some goods subject to excise duty (such as alcohol, tobacco and vaping products) are excluded from the scope of the relief.

Check the recipient carefully

The new relief does not apply to donations to community interest companies (CICs), social enterprises, or small charities not required to be registered with HMRC.

Get the paperwork right

Donor businesses need an appropriate audit trail. This will include written evidence from the recipient setting out its status as an eligible charity; and a signed statement from one of its officials confirming how the donation will be used. Donor businesses will also need to carry out checks and maintain records to help guard against breach of the rules. Such records are likely to include a description of goods donated and their quantity; original purchase price or value at donation; date of donation; and proof that they were dispatched to, or collected by the eligible charity.

We are on hand to help with all your VAT questions. Please don’t hesitate to get in touch.

Pensions can be one of the most valuable assets you own. The Money and Pensions Service recently highlighted that only four in ten UK adults realised a pension could form part of a divorce settlement.

When a marriage/civil partnership ends, pensions need consideration like other financial assets. It is particularly important with the gender pay gap, meaning women may have less generous pension provision.

Pension funds can be dealt with in various ways. A pension sharing order transfers part of one person’s pension to the other. Offsetting allows one party to keep their pension fund. The other takes a bigger share of other assets, like the home. With pension attachment or earmarking, each party gets an agreed share of income in due course. Couples who are not married or in a civil partnership, have fewer legal rights. We can provide further advice here. Please note also that the law in Scotland can differ from the rest of the UK.

Specialist advice is recommended when it comes to assessing what a pension is worth. This involves looking at more than just the cash equivalent transfer value. It is important to appraise the income likely to be produced in retirement; and the position on tax-free lump sum benefits, for example.

Contact us below for advice.

Changes include new identity verification requirements from Companies House, under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). 

Identity verification

The ECCTA makes it a legal requirement for company directors, people with significant control (PSCs), and some others to verify their identity with Companies House. Requirements are being phased in over time. At a later date, those filing for a company (such as company secretaries); limited partnerships; corporate directors of companies; and officers of corporate PSCs will also need to verify their identity. The rules will also impact limited liability partnerships (LLPs), and both individual members and corporate members. We can advise further here.

For directors and PSCs, the requirement to verify kicks in over the 12 months from 18 November 2025. It will not be possible to file the confirmation statement unless all directors have verified their identity. Continuing to act as a director or PSC without verification will constitute an offence. The company could also be in breach of the law.

Verification can be carried out online on GOV.UK One Login, or through an Authorised Corporate Service Provider. You should receive a Companies House personal code as a unique identifier when it is completed. The code is personal to you (rather than the company) and should be kept securely.

Filing accounts: latest position

Under the ECCTA, the requirement for all accounts to be filed with Companies House via commercial software was due to take effect from April 2027. So, too, were new filing requirements for micro entities and small companies, and the removal of the option to file abridged accounts.

However, change will not now take place on this timescale, and the reforms are being kept under review. A final decision is expected shortly, and companies will be given at least 21 months’ notice to get ready.

Late filing

Penalties for late filing of Corporation Tax returns have increased sharply for returns with filing dates from 1 April 2026 onwards. The size of penalty depends on how late a return is, and whether there are repeated failures to file on time. But, effectively, penalties have doubled across the board. Where a return was filed late previously, the penalty was £100: now it is £200. Where it was more than three months late previously, the penalty was £200: now it is £400.

With a consultation now underway on the introduction of prescribed formats for Corporation Tax returns, change to company admin is very much the order of the day. Get in touch below for further advice.

Creative industries are built on movement and fluidity that’s often borderless. A shoot may shift location at short notice. A tour schedule might add additional stops and air miles to the calendar. A festival run often follows a press circuit. For many creative professionals and everyone working within the industry, international travel isn’t the exception but the operating model. 

Tax residency, however, doesn’t move with the same fluidity. Tax residency rules still recognise borders and take seriously whether visits are for work or leisure. And layered on top of this: increasingly data-driven tax systems, automatic exchange of financial information between jurisdictions, and tax residency rules that rely on detailed factual patterns.

So Richard Paul sat down with Daysium, a tax compliance platform that automates day counting and record-keeping for high net worth individuals, to understand how globally mobile creatives can navigate these two worlds and stay compliant. At Nyman Libson Paul, we have spent decades advising clients across film, television, theatre and music. And Richard’s central observation is simple:

Creatives are uniquely exposed to the risks of getting travel records wrong because their lives are both global and fast-moving. But the solutions are there, and they can be simple. 

Continue reading the full interview here.

HMRC is now providing the option to pay High Income Child Benefit Charge (HICBC) through PAYE, by having your tax code adjusted, instead of needing to file a self assessment tax return.

If you are liable to pay HICBC, and there’s no other reason for you to send in a tax return, the new service will probably be the easiest way to do this. Be aware that time limits apply, and you need to act on or before 31 January in the year after the tax year for which you need to pay the charge. So, for example, if you need to pay High Income Child Benefit Charge for the tax year starting 6 April 2025, and it’s on or before 31 January 2027, you can pay through PAYE. To start the process off, you need to notify HMRC online that you want to pay through PAYE. Do this via the HMRC app, or by searching ‘Child Benefit tax charge pay charge PAYE’ on gov.uk. This then takes you to your Government Gateway login.

The process is slightly different if you already file self assessment returns, but only do so in order to pay HICBC. Here you contact HMRC by phone, and ask to leave self assessment and then register to pay
HICBC through PAYE. Both processes require you to provide specific information listed on the gov.uk page referenced above.

We are always on hand to help you steer a way through.

New process for notifying HMRC of VAT return errors.

Errors on the VAT return will now be notified online to HMRC in most cases. The old VAT652 form, previously used for this, has been withdrawn.

How to notify HMRC

The online notification process is done via your Government Gateway log-in. The form needed can be found by searching ‘Check how to tell HMRC about VAT Return errors’ on gov.uk. You will need to have the net value of the error, and total value of sales to hand.

Businesses exempt from MTD VAT will continue to notify in writing. Note, also, that taxpayers can choose to notify HMRC in writing, instead of using the online facility, if desired.

What the rules say

It’s only the notification process that’s changed. The rules on how to correct errors remain the same.
The correction process depends on the size of the error. For errors with a net value of up to £10,000; or errors between £10,000 and £50,000 and representing less than 1% of the box 6 (net outputs) in the return period in which you find the errors, you can simply correct the next VAT return. This is known as Method 1. Other errors should be notified to HMRC directly (Method 2). You can use Method 2 for errors of any size, if you prefer. Method 2 should always be used for deliberate errors.

There is a four-year time limit from the end of the accounting period to make corrections, though this does not apply to deliberate errors.

Why getting this right matters

The importance of VAT compliance cannot be overstated. It’s not just about good practice – important though that is – it can impact your business financially, too. Interest can be charged for underdeclared VAT, and there can be penalties for errors in VAT returns that result in tax being underpaid, if HMRC considers that the error was careless or deliberate.

Careless errors can attract penalties of up to 30%. Deliberate errors can attract penalties of up to 70%. Penalties for deliberate and concealed errors can be as much as 100%. HMRC has considerable discretion over what is charged, and reductions can be made for errors disclosed without HMRC prompting; and also for the amount of cooperation given by the taxpayer when a disclosure is made.

For penalty reduction purposes, note that any error that HMRC considers careless or deliberate, regardless of size, must be formally notified to HMRC: in these circumstances, correction on the VAT return alone is not enough. If you are in any doubt as to how HMRC would categorise an error, please get in touch to discuss this with us, and we can provide further details.

A note on reasonable care

What does taking reasonable care mean? HMRC defines it as taking the ‘care and attention that could be expected from a reasonable person in the circumstances’. It’s also worth noting that as far as HMRC is concerned, the opposite is also true: not taking reasonable care amounts to being ‘careless’.

Taking reasonable care will look different for each taxpayer, depending on individual circumstances and abilities, but it includes basics like keeping sufficient records to form the basis of accurate tax returns; keeping your records safe; and taking advice if there’s something you’re not sure about.

Support when it matters

Recent research by HMRC suggests that VAT can be particularly difficult for many businesses.
We can help with a VAT compliance health check to give you confidence that you are taking reasonable care, should HMRC ever come knocking.

Please don’t hesitate to get in touch below.

Changes to the availability of agricultural property relief (APR) and business property relief (BPR) are expected from 6 April 2026. This was first announced at the Autumn Budget 2024.

Original proposals and inheritance tax impact

As originally planned, the change would have significantly increased the IHT payable on the transfer of many farms and businesses. Two recent major developments, however, now look set to considerably soften the impact.

Allowance under the original proposals

Under the original proposals, the allowance for the 100% rate of relief was set at £1 million for qualifying business and agricultural assets, with 50% relief available for assets in excess of this. This was a per person limit, and not intended to be transferable between spouses and civil partners.

Revised allowance and transferability between spouses

The position has now changed significantly, with the allowance for the 100% rate of relief increasing to £2.5 million and becoming transferable between spouses and civil partners. Any unused £2.5 million allowance on the death of a spouse or civil partner will be transferable to a surviving spouse or civil partner.

What this means in practice

This means that overall, a couple will be able to pass on up to £5 million of qualifying agricultural or business assets between them, without paying IHT, on top of the existing allowances, such as the nil rate band.

Next steps

Our team can review your circumstances and explain how the revised APR and BPR changes may apply to you. Click below to get in touch with us.

MTD IT is a new obligation for some taxpayers to report income and expenses to HMRC digitally every three months. And it’s now only weeks away.

When MTD IT applies to you

Making Tax Digital for Income Tax (MTD IT) is being phased in from 6 April 2026 for sole traders and landlords with qualifying income over particular thresholds. From April 2026, sole traders and landlords with qualifying income more than £50,000 for the 2024/25 tax year will have to join MTD IT. On HMRC’s figures, that means some 864,000 taxpayers will need to get to grips with the new rules.

From April 2027, sole traders and landlords with qualifying income over £30,000 for the tax year 2025/26 will be expected to join MTD IT. From April 2028, it’s the turn of sole traders and landlords with qualifying income over £20,000 for the tax year 2026/27.

What you’ll need to do differently

Under the new rules, taxpayers must keep digital records of income and expenses. MTD-compatible software is then used to send updates of income and expenses to HMRC every three months. In addition to these quarterly updates, there is an end-of-year tax return, also filed via MTD software.

HMRC letters and what to do next

If you are affected in 2026, HMRC should have written to you confirming that you must join MTD IT. If not, you should expect to receive one in the coming weeks. The letter includes a QR code, which you can scan to access further information. You can also find out more simply by visiting here.

Concerned about what an upcoming HMRC letter on MTD IT could mean for you? We’ll explain the requirements and guide you through the steps you need to take.

Software, systems and support

MTD IT represents a major change in the way you interact with HMRC. It is important that you have the right software in place, and are confident using it. Alternatively, you will need to arrange for a competent third party to maintain the records and make the submissions on your behalf. The need to send updates to HMRC each quarter is something that moves record keeping and reporting very much closer to real time.

How we can help

We are here to help support you through your entry to MTD IT. Click below to get in touch with us.

We’re delighted to announce the promotion of Steve Foskett from Director of Client Services to Partner.

Steve joined Nyman Libson Paul in 2013 as an Audit Senior, after qualifying at a medium-sized firm in Stockport. He has since become a familiar and trusted presence across the firm.

Today, Steve splits his time between entertainment and general practice clients, supporting a broad and varied portfolio. Having spent many years working closely with Anthony, Steve has gained a front-row view of the industry and the relationships that underpin it.

As Partner, Steve Foskett is the first point of contact for many long-standing clients. A steady hand who combines approachability with assurance.

The new Fundraising Code of Practice came into effect from 1 November 2025, following a six month transitional period and sees some significant changes with the revised code adopting a principles-based approach, rather than the previous prescriptive format. This more flexible approach is intended to support organisations in applying the code more proportionately. Rather than prescribing how activities must be carried out, the Code now expects charities to make decisions guided by key values, in a similar manner to the Charity Governance Code.

The new Code is also notably shorter (approximately 45% shorter) and more streamlined making it easier to navigate and is focused on a set of core principles – fundraising must be legal, open, honest and respectful.

The code places greater emphasis on ethical behaviour, including avoiding intrusive or persistent fundraising tactics and ensuring donor protection, especially for vulnerable individuals. Oversight of third-party fundraisers has also been strengthened, with clearer expectations around due diligence, written agreements and ongoing monitoring.

Importantly, the code now requires charities to take reasonable steps to protect fundraisers from harm or harassment.

While the legal framework remains unchanged, the new Code increases accountability and encourages better governance, with Trustees reminded of their overarching responsibility to oversee fundraising practices. Charities therefore must ensure their internal policies reflect the new Code and ensure staff and volunteers are trained to meet the updated standards and any fundraising complaints are addressed in line with the new Standards.

A series of support guides accompanies the revised Code, providing further detail on key areas.

Further information: Click here

The 2025 Charity Digital Skills Report was published recently, and its findings highlight the challenge many charitable organisations are experiencing in balancing significant financial pressures alongside a need to adapt to accelerating technological change with 69% of the surveyed charities noting that strained finances remain the biggest barrier to digital progress.

Financial concerns are also impacting bandwidth, with just 44% of charities operating with a digital strategy in place compared to 50% in the 2024 survey, although the number of surveyed charities making digital progress in the year and prioritising digital in their organisations remains positive. There is also a substantial growth in AI adoption, with 76% of surveyed charities now using AI tools, up from 61% in 2024, although many also reported their AI governance is lacking, an area that may improve going forward, with 48% of charities (68% large charities) currently developing an AI policy.

However, there remains a clear digital divide between large and small charities, with 68% of surveyed smaller charities noting that they are still at early stages with digital. Given the resources available to some of these organisations, this raises questions around digital equity, particularly with the developments in AI and their adoption by larger charities, which is likely to see the gap widen further.

The survey’s findings provide much for both charities and their funders and advisors to reflect on, concluding:

Further information: Click here

On 1 October 2025, the Department for Culture, Media and Sport (DCMS) announced the following changes to Charity reporting thresholds for England and Wales:

• Independent examination threshold: Raised from £25,000 to £40,000 income

• Receipts and Payments accounts option (non-company charities): Increased from £250,000 to £500,000 income

• Audit threshold: Increased from £1 million to £1.5 million income

• Asset threshold for audit: Increased from £3.26 million to £5 million (associated income threshold increased from £250,000 to £500,000)

• Group accounts preparation threshold: Increased from £1 million to £1.5 million income

These changes are expected to come into force for accounting periods ending on or after 30
September 2026.

The thresholds had remained unchanged for a number of years. The audit thresholds for corporate entities had increased significantly within the same timeframe. The planned changes will therefore help to ease the regulatory burden on smaller charities. Many had been drawn into audit requirements that felt disproportionate to their size and complexity.

However, some organisations which may now fall outside the regulatory requirement for an audit may still need an audit if it is a requirement of their governing document or requested by donors or funders. Where this may apply, trustees and management are advised to start having conversations now as to whether these arrangements continue to be
appropriate and of benefit to the Charity or whether changes need to be made.

Several thresholds related to transparency and regulatory permissions will remain unchanged, including:

• Registration threshold: £5,000

• Annual return threshold: £10,000

Filing accounts with the Charity Commission: £25,000

Overall, the proposals seek to balance regulatory efficiency with public trust, ensuring that financial scrutiny remains appropriate to charity size and resources.

Further information: Click here

The Finance Bill 2025-26 has now been published, with the following changes to Charity Compliance rules.

Previously, legacies received by Charities or CASCs were not treated as ‘attributable income’ and therefore benefited from generous inheritance tax relief without associated spending restrictions. Under the new legislation, legacies will be classified within the ‘attributable income definition’, meaning that the funds must be spent on the Charity’s charitable purposes. Failure to do so may result in a tax charge.

There are 12 investment types that the government recognises for charitable tax reliefs. Previously, one category was subject to a statutory anti-avoidance requirement (that the investment must not be made for anti-avoidance purposes). The requirements will now apply to all 12 investment categories.

The revised tainted donations rules previously considered solely the motivation or intent of the donor when determining whether a donation was tainted. The rules have now broadened to also consider the outcome of the transaction, has the donor received a financial benefit regardless of their stated or subjective motivation. The bar for establishing whether a transaction is tainted has also been lowered, with the test of ‘financial advantage’ being replaced by ‘financial assistance.’

HMRC is also updating its guidance to bolster its enforcement powers. Whilst the majority of charities meet their tax obligations, there is a minority that persistently fail to comply but still claim tax relief, such as Gift Aid. HMRC are working on changes to guidance that will improve HMRC’s powers to compel compliance through sanctioning trustees and charity managers.

The new measures will take effect for transactions that occur on or after 6 April 2026.

Further information: Legislation to introduce changes to charity tax rules – GOV.UK

Following the Upper Tribunal ruling on the Yorkshire Agricultural Society case, HMRC has broadened the scope of VAT relief for fundraising events. Whilst fundraising still needs to be a ‘primary purpose,’ it no longer needs to be just the ‘primary purpose.’ Where an organisation has two primary purposes that cannot be separated in importance, the exemption can still apply. This is provided that one of those purposes is fundraising, as in the case of the Yorkshire Agricultural Society, where the aims were to fundraise and to educate.

Looking forward, this will provide charities with greater flexibility when planning events. In particular where events may also look to serve other goals of the charity. However, charities should note HMRC’s comments on the primary purpose following the ruling:

The event must still therefore be promoted as a fundraising event. HMRC acknowledge this may not be its sole purpose.

Following the ruling, there may be scope to claim a refund for events held in the last 4 years. Where applicable, charities should apply the court decision. Then review HMRC’s guidance to determine if there have been any overpayments of VAT.

Further information: Click here and here

The Charity Commission has published its first-ever Charity Sector Risk Assessment. Designed to provide an overview of potential risks to the sector, the survey is based on information drawn from accounts and annual returns, compliance concern investigations, serious incident reports and related casework. The survey found two key risks to the sector: financial resilience and risks to public benefit.

The survey noted over 42% of charities reporting expenditure exceeding income, with challenges around securing sustainable public funding, increased employment costs, an increased tax burden (particularly the recent changes in employers’ national insurance) and increased demand for charity services. It is important that Trustees understand and provide effective financial stewardship and look to plan and act on any ‘early warning indicators.’ Key actions highlighted by the report to help Trustees mitigate risk include:

• Taking time to plan ahead to ensure income forecasts align with operating costs

• Ensuring financial reporting is fit for purpose, regular and sufficiently detailed to inform trustee decision making

• Regularly review financial forecasting to allow for early intervention in cost or revenue variations

• Consider opportunities to deliver your charitable purpose more efficiently – e.g. collaborative bids, combining back office functions with other charities

Charities must act for the public benefit. The survey noted that compliance cases opened by the Commission based on alleged abuse of charities for private benefit had risen 23% over the last financial year, though they still represent a very small percentage of charities. The Commission’s work noted three broad areas in which concerns about private benefit can arise:

• Deliberate abuse of charitable status, such as by criminal enterprises, to diversify and legitimise other activities

• A dominant individual in a charity can affect proper oversight or challenge from the trustee board and leave the charity vulnerable to the dominant individual seeking to derive some personal benefit

• A lack of knowledge or understanding of the rules by charity personnel can leave them open to abuse, particularly for those operating in a complex regulatory framework

Key actions trustees can take to mitigate the risk include:

• Certify financial controls are fit for purpose, and no single individual can access charity funds or assets without appropriate checks and oversight

• Regular review of financial and asset transactions and remain vigilant to protect and safeguard your charity’s assets

• Confirm any payments to trustees are lawful and that any decision has been made following Commission guidance on conflicts of interest

• Make sure you are aware of your key duties and responsibilities as a trustee and follow the Commission’s guidance on good practice

• Ensure you know your charity’s purposes and understand how each purpose is for the public benefit

• Report issues or concerns to the Commission using their serious incident reporting and whistleblowing systems

The report also examines further risks associated with poor governance, safeguarding, fraud, social tensions, emerging technologies and overseas
influences.

Further information: Click here

The new Charity SORP was released on 31 October 2025. This will apply for financial periods beginning on or after 1 January 2026. The SORP introduces a number of changes aimed at improving transparency, proportionality and relevance in charity financial reporting. When drafting the new SORP, the SORP Committee also sought to think small first. They have taken into consideration the additional burden some reporting requirements can bring for smaller charities.

This thinking is visible in the new three tier structure for reporting, which looks to ensure that reporting requirements are proportionate to a charity’s size.

• Tier 1: Income up to £500,000
• Tier 2: Income between £500,000 and £15 million
• Tier 3: Income over £15 million

Charities must comply with the requirements of their own tier and all tiers below. Each SORP module clearly states which tiers it applies to. Combined with the modular layout, this should make the SORP easier for users to navigate. The tiered approach will also help ensure smaller charities are not overburdened while larger organisations provide the level of transparency stakeholders expect.

In other changes, the trustees’ annual report has been refreshed to place greater emphasis on:

• Impact reporting (within the ‘Achievements and Performance’ section)
• Sustainability (a new section required for Tier 3 charities; encouraged for others)
• Future plans, now required for all tiers

Within the Trustees’ Report, the SORP also encourages charities to explain the long-term effect of their work on beneficiaries and society.

Additional guidance is provided on reporting reserves. Where a charity is not holding reserves or has a negative net assets on its balance sheet, it must explain why it is still operating as a going concern. Charities must also explain further details of the role of volunteers within the organisation.

The changes introduced by FRS102 are also reflected in the new SORP with the modules on revenue and lease accounting. For income, there is a distinction between exchange transactions were there is an exchange of good and services (contract income) and non-exchange income (voluntary income). Exchange transactions being subject in line with FRS102 to the new 5 step revenue model for recognising income. Recognition of voluntary income is also modified, with charities needing to assess the conditions attached to determine the correct recognition basis. Income will be recognised either on receipt or when it is receivable. unless there are future performance-related conditions, in which case the income is recognised once these performance related conditions have been met. The module also clarifies treatment for subscriptions, dividends, and legacy income.

For lease accounting, there is a new module which introduces right-of-use asset accounting for operating leases. This means most leases will now appear on the balance sheet, increasing both assets and liabilities, with exemptions applying for low-value or short term leases. The SORP also provides guidance on peppercorn rents, which do not meet the definition of a lease under FRS102.

In other changes, the requirement to produce a cashflow statement will now only apply to Tier 3 charities. Those charities that do not qualify as small under FRS102, exempting the majority of charities with income below £15m from needing to produce a cashflow statement.

There is also a new module covering provisions, contingent liabilities and assets. This includes
accounting for funding commitments, clarified guidance on measuring the value of donated heritage assets and the simplification of social investments into one new category where previously such investments were split between programme related investments and mixed motive investments.

It is important that all charities review the new SORP requirements to understand how the changes will impact their organisations, Particularly the changes to accounting for income and leases, to determine any action they need to take now, including consulting with their accountant/auditor. Similarly, the changes to the Trustees Report provide an opportunity to refresh how the information is presented, what message you want to convey with the narrative reporting, and thinking about the impact of your work and how this can be best reflected in your report. This will likely require additional time to plan and collate the required information.

Further information – Home – SORP

Businesses have been given more time to prepare for the change to compulsory Payrolling Benefits in Kind. The start date has been moved from April 2026 to April 2027.

What Employers Need to Know

From April 2027, most benefits in kind must be reported under Real Time Information (RTI) and employers will also need to pay Income Tax and Class 1A National Insurance contributions (NICs) during the tax year.

To make this possible, HMRC will expand the number of RTI data fields. These extra fields will hold data that is currently reported in forms P11D and P11D(b).

Some benefits are not yet included in mandatory payrolling. Employment-related loans and accommodation remain outside the rules for now. For these, the P11D and P11D(b) process will continue temporarily, however, employers can choose to payroll them voluntarily.

To payroll benefits voluntarily for the 2026/27 tax year, you must register in advance. For the tax year starting 6 April 2027, registration will be open from November 2026 to 5 April 2027.

How Benefits Will Be Calculated

The taxable value of a benefit in kind will be calculated as follows:
• Take the annual cash equivalent of the benefit.
• Divide it by the number of relevant pay periods for each employee.
• The resulting figure will be liable to Income Tax and Class 1A NICs each pay period.
• Employers must report this figure alongside employee earnings in each period.
If the value of a benefit is not known at the start of the year, employers must use a reasonable estimate.

HMRC’s Further Guidance

HMRC has highlighted specific situations:
• Globally mobile employees within modified PAYE arrangements: HMRC is considering keeping the P11D and P11D(b) processes for these cases.
• Employees and directors receiving no income: Employers will still need to provide details of benefits in kind and expenses via an FPS. Class 1A NICs will be due in the same way as for employees with income. The FPS will show no payments of earnings and no tax paid. Any uncollected tax will be recovered through the P800 reconciliation process, simple assessment, or self assessment.

What Employees Should Expect

For employees, the change means tax on benefits will move into real time. Employers will need to explain this clearly to staff. In the first year of mandation, some employees could face a cash flow impact if they are already paying tax on benefits from a previous year.

Next Steps for Employers

More information is expected from Autumn 2025 onwards. In the meantime, it may be worth considering voluntary payrolling of benefits in 2026/27. This would give businesses a chance to test the system before it becomes compulsory. Advance registration is required for voluntary payrolling.

We are happy to advise on voluntary payrolling or any other steps you need to take to prepare for the change.

The government is extending Right to Work Checks to the gig economy and zero-hours workers. The change will form part of the Border Security, Asylum and Immigration Bill.

Although the Bill is not yet law, businesses should prepare now. The introduction of right to work checks for gig workers and zero-hours staff represents a major shift. Government figures suggest that between 2.5 million and five million additional working arrangements will fall within scope.

What’s Changing

Until now, right to work checks have applied to traditional employment contracts only. Flexible arrangements were not covered. The new rules will affect sectors that rely heavily on non-traditional working models, such as:

• Construction
• Food delivery
• Beauty salons
• Courier services

Some companies, including Deliveroo, already run right to work checks and other verification procedures.

Why the Change Matters

Right to work checks are carried out by employers. They prove a person’s immigration status and confirm they can legally work in the UK.

Penalties for Non-Compliance

The new rules are backed by strict enforcement. Businesses that fail to comply could face:

• Civil penalties of up to £60,000 per worker
• Business closures
• Director disqualification
• Prison sentences of up to five years for knowingly employing someone without the right to work

Beyond legal risks, reputational damage can also be severe.

Preparing for New Responsibilities

Employment legislation is already complex. A recent Home Office survey showed that 80% of employers got at least one question wrong when asked about right to work checks. The new rules will add yet another compliance layer for businesses to manage.

We are here to help you prepare. Please contact us if you have any questions about right to work checks or your responsibilities under the upcoming rules.