What to Expect from Autumn Budget 2025

The Chancellor is set to deliver the Autumn Budget 2025 on 26 November, and this one is shaping up to be significant. With the government facing ongoing fiscal challenges, we may see further tax rises aimed at tackling the public finance deficit.

Before we look ahead, it’s worth remembering that several measures announced in the Autumn Budget 2024 haven’t yet taken full effect — and they’ll continue to shape the financial landscape for individuals and businesses alike.

Key Measures Still to Come from Autumn Budget 2024

Capital Gains Tax (CGT)

We’ve already seen increases to CGT rates from 30 October 2024 and 6 April 2025, but there’s more on the horizon.
From 6 April 2026, the CGT rate under Business Asset Disposal Relief (BADR) is set to rise from 14% to 18%, further increasing the tax burden for business owners selling qualifying assets.

Inheritance Tax (IHT)

The previous Budget also outlined major changes to IHT, including:

• Restrictions on 100% relief for business and agricultural property from 6 April 2026.

• Inclusion of unused pension funds and death benefits within IHT estates from 6 April 2027.

These changes mean estate and succession planning will become even more important over the next few years.

What’s Unlikely to Change

Labour’s 2024 manifesto promised no rises in National Insurance, Income Tax, or VAT rates — and for now, that commitment still stands.

The Corporate Tax Roadmap (October 2024) also confirmed:

• The 25% main rate of Corporation Tax will remain.

• The small profits rate and marginal relief will be retained.

• The £1 million annual investment allowance and permanent full expensing will continue.

However, despite earlier promises to unfreeze thresholds, it now looks like Income Tax and IHT thresholds will stay frozen until 5 April 2030, extending the period of ‘fiscal drag’ for taxpayers.

What Could Change

While the government has made some clear commitments, there are several areas where we could see new announcements or reforms.

• National Insurance Contributions (NICs): The scope could be widened to include landlords, bringing parity with those running trading businesses.

• Pension tax relief: Currently given at the saver’s marginal rate (20%, 40%, or 45%), this could be capped at a flat rate — potentially around 30%.

• Salary sacrifice schemes: Employer pension contributions made via salary sacrifice may lose their exemption from Benefit in Kind rules, making them subject to NICs and Income Tax.

• Capital Gains Tax alignment: CGT rates (18% or 24%) could be aligned with Income Tax bands, meaning rates could reach as high as 45%.

• Inheritance Tax: Further restrictions to IHT reliefs or limits on lifetime gifting exemptions may be introduced.

• VAT registration threshold: Currently £90,000, this could be lowered or even abolished, bringing more small businesses into the VAT system.

• VAT on domestic fuel: There are rumours this could be reduced to 0% from its current 5% rate to ease cost-of-living pressures.

What This Means for You

While no one can predict the exact contents of the Autumn Budget 2025, the direction of travel is clear — the tax landscape is tightening, and preparation is key.

At A&C Chartered Accountants, we’re already working with clients to plan ahead, assess potential impacts, and identify strategies to remain tax-efficient and compliant.

If you’d like to discuss how any of these potential changes might affect your business or personal finances, get in touch — we’d be happy to help you stay one step ahead.

A recent First Tier Tribunal case, Charlotte MacDonald v HMRC, has highlighted the importance of demonstrating that a trade is carried on with a genuine intention to make a profit. The taxpayer was denied sideways loss relief for losses arising from the organisation of an annual ‘woodland shoot’ on an estate.

Background to the case

The taxpayer had been running an annual shoot for several years and sought to offset trading losses against her general income under the sideways loss relief rules. HMRC challenged the claim on the grounds that the activity was not being carried on with a view to the realisation of profits.

What the rules say

A taxpayer can claim sideways loss relief to offset trading losses against their general income in the year of the loss, the previous year, or both. However, the relief is only available if the loss arises from a trade that is carried on:

• on a commercial basis, and

• with a view to the realisation of profits.

Both conditions must be satisfied for the claim to succeed.

The Tribunal’s findings

The Tribunal agreed with the taxpayer that the shoot was operated on a commercial basis. It was not merely a hobby, and there was clear evidence that the activity was run with some level of commercial intent.

However, the Tribunal also found that the shoot had made losses in almost every year since it began, with only one year of minimal profit over a 15-year period. There was no reasonable prospect that the trade would ever become profitable.

Because the activity was not carried on with a view to the realisation of profits, the conditions for sideways loss relief were not met, and the appeal was dismissed.

What this means for taxpayers

This case is a useful reminder that HMRC will closely scrutinise any sideways loss relief claims. It’s not enough for an activity to be commercial in nature — there must also be a realistic expectation of profit.

If you operate a small trade or side venture that has been making losses, it’s important to keep detailed records and ensure there is a clear plan to make the business profitable.

At A&C Chartered Accountants, we can review your trading position and help determine whether a sideways loss relief claim is appropriate. If you’re unsure about your eligibility or want to avoid the risk of a dispute with HMRC, get in touch with our team for tailored advice.

HMRC withdrew Form VAT652 (Error Correction) on 8 September 2025. This form was previously used to notify HMRC of VAT return errors that could not be corrected on the next VAT return.

There is now a new procedure in place for correcting VAT errors, and it’s important for businesses to understand how to handle any mistakes to avoid unnecessary penalties.

Correcting errors on your next VAT return

If you discover an error on a VAT return, the first step is to check whether it can be corrected on your next VAT return. You can amend the next return if:

• The total net errors (output VAT less input VAT errors) are less than £10,000; or

• The net errors are between £10,000 and £50,000 and also less than 1% of the Box 6 figure on the VAT return in which the correction is being made.

HMRC has published an online tool that allows businesses to check whether they need to notify HMRC of VAT return errors. This service can be found on the HMRC website.

When to use the online error correction service

If the error cannot be corrected on the next VAT return, it must be disclosed using HMRC’s new online error correction service. The service can be accessed through the HMRC website and requires a Government Gateway user ID and password.

For those unable to use the online service, disclosures can still be sent to HMRC’s Error Correction Team either by post or by email:

• Post: BT VAT, HMRC, BX9 1WR

• Email: inbox.btcnevaterrorcorrection@hmrc.gov.uk

Penalties for careless errors

If an error arises as a result of careless behaviour, HMRC may still charge penalties even if the adjustment has been made on the VAT return. HMRC makes it clear that including the correction on the return does not count as a formal disclosure.

This means that without notifying HMRC separately through the online error correction service, businesses could still face unprompted penalties if the error is later identified by HMRC.

How A&C Chartered Accountants can help

If you’ve found a VAT error and are unsure how to correct it, or whether you need to notify HMRC, we can help guide you through the process. Our team can review your VAT returns, assess the nature of the error, and ensure that the correction is handled correctly to minimise the risk of penalties.

If you’d like to discuss a VAT correction or need help using HMRC’s new service, get in touch with our team at A&C Chartered Accountants today.

The Department for Business and Trade (DBT) has confirmed that major reforms to Statutory Sick Pay (SSP) will take effect from April 2026. These changes are designed to improve employee rights but will also increase costs for many employers.

Key changes to SSP from April 2026

• SSP will be payable from the first day of sickness absence, rather than from the fourth day as at present.

• The £125 per week earnings threshold will be removed, meaning more employees will qualify for SSP.

• For employees earning less than £125 per week, SSP will be the lower of:

  • 80% of their normal weekly earnings, or

  • The standard SSP rate (currently £118.75 per week).

What this means for employers

The reforms are likely to increase payroll costs, particularly for businesses with higher levels of staff absence. This comes on top of recent increases to the National Minimum Wage and Employers’ National Insurance.

It is also worth noting that, unlike statutory maternity or paternity pay, SSP cannot be reclaimed from HMRC. Businesses will therefore need to plan ahead and factor these additional costs into their budgets.

Preparing for the changes

Employers should take the following steps ahead of April 2026:

• Forecast potential increases in payroll costs.

• Review sickness absence policies.

• Ensure payroll systems are updated to handle the new rules.

• Train payroll and HR teams to manage compliance.

Planning now will help employers manage the impact of these reforms and ensure employees are paid correctly.

HMRC will be running a digital campaign aimed at encouraging accurate private use adjustments of business expenses that are reported via Self Assessment returns.

MRC have announced that they’ll be stepping up checks on private use adjustments made to business expenses claimed through Self Assessment.

The rules in simple terms

• To be allowable for tax, expenses must be “wholly and exclusively” for business purposes.

• If an expense has a mixed business and personal use, you can only claim the business proportion.

• You must make a reasonable apportionment based on the actual use in that tax year.

What prompted this?

• In 2024, HMRC ran a digital trial with 600,000 taxpayers, encouraging them to adjust for private use.

• The results showed widespread errors – many claims still included personal use elements.

• As a result, HMRC have confirmed they will now be opening more enquiries into private use claims.

Examples of where this applies

• Motor expenses – petrol, insurance, repairs where the vehicle is also used personally.

• Telephone & broadband – only the business portion is allowable.

• Home office costs – claims must be based on the actual business use of space and time.

• Subscriptions / memberships – personal elements should be excluded.

What this means for you

HMRC are clearly making this an area of focus. If your Self Assessment includes business expenses with a private element, it’s important you:
✅ Keep clear records (e.g. mileage logs, usage breakdowns).
✅ Make sensible and fair apportionments.
✅ Be prepared to evidence how you worked out the business vs private use split.

In July 2025, HMRC launched its Transformation Roadmap – an ambitious plan to become a digital-first organisation by 2030, with 90% of customer interactions taking place online. Right now, that figure sits at around 76%, so the next few years will see a big push to move services online.

The focus is on automating tax processes wherever possible and offering more self-serve digital options across different tax regimes.

What this means in practice

HMRC estimates the shift will save £50 million a year, largely by moving customer letters and reminders online and reducing paper correspondence by 2028/29. Paper post will still be available for critical communications and for those who are digitally excluded.

The roadmap includes set timescales and HMRC will report regularly on progress. Some of the changes are already in motion this tax year, including:

• Improving the Self Assessment registration service and making it easier for customers to exit the system if they no longer need to file.

• A new option for employed parents who become liable for the High Income Child Benefit Charge to pay it directly via their tax code instead of registering for Self Assessment.

• An enhanced reward scheme for informants, aimed at uncovering serious non-compliance in large corporates, wealthy individuals, offshore cases, and avoidance schemes.

Looking further ahead

Planned improvements over the next few years include:

• From April 2026 – pre-populating Self Assessment tax returns with Child Benefit data.

• From 2027/28 – digitising the inheritance tax service.

• Simplifying payments and refunds, including direct bank repayments and easier National Insurance contribution refunds.

• Creating a Single Customer Account to give taxpayers one unified view of their income and tax position.

One final announcement…

For many businesses, this will be the most welcome news from the update: HMRC has confirmed that Making Tax Digital for Corporation Tax will not be implemented.

At A&C Chartered Accountants, we’ll be keeping a close eye on HMRC’s progress and what each change will mean for our clients. As more services move online, we can help you set up the right digital systems, guide you through new processes, and ensure you’re making the most of the digital tax tools available.

If you’d like to discuss how these changes could affect you or your business, get in touch with our team today.

HMRC is pressing ahead with Making Tax Digital (MTD) for Income Tax – and the clock is ticking. From 6 April 2026, the first wave of taxpayers will be brought into the new system, and while a few tweaks have been announced, the core rules remain the same.

The recent changes in a nutshell

Following the publication of draft legislation, here’s what’s new:

• More exemptions – Ministers of religion, Lloyd’s underwriters, recipients of the Blind Person’s Allowance and donors of a Power of Attorney will not be required to comply.

• Certain incomes excluded – Qualifying Care Income (such as foster care payments) and UK earnings of non-resident entertainers and sportspeople are outside the scope.

• Year-end filing still required via software – You’ll need MTD-compatible software to submit your annual tax return.

• A new ‘latency’ rule – If you start a new trade or property business, MTD won’t apply immediately. Instead, you’ll join the scheme from the 6 April following the tax year in which your filing obligation arises.

  • Example: You’re mandated into MTD in 2026/27 because of your property income. If you start a new trade in December 2026, MTD rules for that trade would apply from 6 April 2028.

Who will be affected first?

If your total self-employment and property income (‘qualifying income’) was over £50,000 in the 2024/25 tax year, you’ll be in the first group to join MTD from 6 April 2026.
Those earning over £30,000 will follow from 2027, and those above £20,000 will be brought in at a later stage.

What MTD means for you

When you’re mandated into MTD for Income Tax, you’ll need to:

1. Keep records digitally in MTD-compatible software

2. Send quarterly updates to HMRC

3. Submit your year-end return through the same software

These steps are designed to make tax reporting more accurate and efficient – but they will require changes to how you keep your books.

How to prepare now

The changes announced are relatively minor – the core requirements haven’t shifted. If you’re likely to be caught by MTD, now is the time to:

• Review your record-keeping process

• Choose MTD-compatible software (we recommend Xero, which we’re Platinum Partners for)

• Plan ahead for quarterly reporting so deadlines don’t creep up on you.

If you’re unsure whether you’ll be affected or when you’ll be mandated, get in touch with our team – we’ll review your situation and create a plan so you’re ready well before April 2026.

Every year, HM Treasury uses ‘Legislation Day’ to outline changes that could shape the financial future of UK businesses. This year, on 21 July 2025, the announcements focused on three main areas: closing tax loopholes, modernising systems, and making tax policy “fairer.”

For small business owners and start-up founders already juggling enough – this kind of update can feel overwhelming. That’s exactly why we’ve pulled out the key changes that could impact your business or personal finances – and what you can do about them.

At A&C Chartered Accountants, we believe knowledge is power – and a solid plan beats a last-minute scramble every time.

1. Crackdown on avoidance: a push for transparency

HMRC wants to reduce the ‘tax gap’ – the difference between what’s owed and what’s actually collected. Here’s how:

• Tax agents must register with HMRC
  Anyone who deals with HMRC on your behalf (like us) will soon need to be officially registered. It’s all part of a wider effort to improve standards and accountability across the industry.

• Making Tax Digital (MTD) continues
  HMRC is pressing ahead with MTD for Income Tax, which means more businesses will need to file and report digitally – even sole traders and landlords.

If you’re unsure whether MTD will apply to you – or when – we’ll walk you through it, step by step.

2. Big shifts in inheritance and benefits

Several changes are aimed at levelling the playing field – but could create new tax burdens:

• Inheritance tax relief cutbacks from April 2026
  Relief for agricultural and business property is being scaled back, which could hit family-run firms or farms planning for succession.

• Pension pots could now be taxed from April 2027
  Inherited pensions may be treated as part of the estate for inheritance tax – this is a big change and one to plan around.

• Employee car ownership schemes to be taxed as benefits
  These schemes will now fall under the Benefit in Kind (BiK) rules – if you run a company car scheme, it’s time to double-check your setup.

3. Small print that matters

A couple of more technical — but still relevant — proposals:

• Plug-in hybrids (PHEVs) and BiK changes
  If the new Euro 6e emissions standard is introduced in Great Britain, BiK costs for PHEVs would soar — but the government plans an easement to soften the blow.

• New PISCES share market
  A draft tax framework was released for PISCES, a new platform that would allow private companies to trade shares on an intermittent basis. If you’re scaling or raising capital, this could be worth keeping on your radar.

HMRC has flagged an issue affecting some Self Assessment taxpayers for the 2024/25 tax year in relation to Class 2 National Insurance contributions (NICs).

Some self-employed taxpayers with profits above £12,570 have incorrectly had a Class 2 NICs charge of £358.80 added to their accounts — in some cases, the incorrect amount may be lower.

What HMRC is doing about it

• HMRC says it has already corrected the figures where its records allow and has notified affected taxpayers directly.

• For others, corrections will be made once the issue is fully resolved, with taxpayers receiving confirmation and a new SA302 tax calculation.

Why it’s happened

This problem appears to stem from the NICs reforms introduced in 2024/25. From this tax year:

• Self-employed taxpayers and partnership members no longer have to physically pay Class 2 NICs.

• If profits are over the small profits threshold (£6,725 for 2024/25), Class 2 NIC is treated as “paid” automatically for benefit entitlement purposes.

What you should do

If you think you’ve been charged Class 2 NICs incorrectly, keep an eye out for communication from HMRC. If you’ve already filed your 2024/25 return and spotted this issue, you may wish to flag it to your accountant so it can be monitored.

At A&C Chartered Accountants, we’re tracking these HMRC updates and will ensure any affected clients have their tax records corrected promptly.

If you’re unsure whether this applies to you, get in touch and we can check your Self Assessment account for you.

One of the most common questions we’re asked at A&C Chartered Accountants is:

“What’s the most tax-efficient way to take money out of my limited company?”

For directors and owners of small businesses, understanding how to extract profits from your company without paying more tax than necessary is essential. While the classic advice used to be “take a small salary and the rest as dividends”, the truth is – it’s no longer that simple.

Why is profit extraction more complicated now?

Due to changes in tax legislation and individual circumstances, there’s no longer a one-size-fits-all strategy. What works for one business owner may not work for another.

The most accurate answer we can give – without running the numbers – is:

It depends.

To work out the best approach, you’ll need to consider your company’s financial position and your personal tax situation.

Key Factors That Affect Profit Extraction Strategy

Here are the main things to think about when deciding how to take money out of your limited company:

1. Company Profit Levels and Corporation Tax

How much profit your company makes will determine its corporation tax rate. Higher profits may mean a higher tax rate, which affects how much you can take out and how best to structure it.

2. Number of Director/Shareholders

If you’re not the only person involved, your extraction strategy needs to account for others – and how dividends or salaries are shared between director/shareholders.

3. Distributable Reserves

You can only pay dividends from distributable profits – so checking your company’s retained earnings is essential.

4. Other Personal Income

Your personal tax band is affected by any other income you receive (e.g. rental income, part-time work, investments). This will influence how much you can take out without pushing yourself into a higher tax bracket.

5. Your Age

If you’re aged 66 or over, you no longer pay Employees’ National Insurance on salary – which can affect the optimal mix of salary and dividends.

6. Employment Allowance (EA)

Some companies can claim up to £10,500 per year to offset Employer’s National Insurance. But your company might not qualify, or the allowance might already be used by other employees’ wages.

7. National Minimum Wage and Living Wage Rules

If you’re taking a salary through PAYE, you may need to comply with National Minimum or Living Wage requirements, particularly if you have employment contracts in place.

How Much Should I Take Out of My Company?

It might be tempting to extract all available profits, but this could lead to a higher tax bill than necessary.

Instead, consider what you actually need for your personal expenses and leave the rest in the company if you don’t need it immediately. This can be more tax-efficient in the long term.

Some directors also choose to retain funds with a view to:

• Investing back into the business

• Selling or winding up the company in the future

In these cases, profits may be subject to Capital Gains Tax (CGT) rather than income tax, and could qualify for Business Asset Disposal Relief (BADR) – formerly Entrepreneurs’ Relief – which offers a 14% tax rate on qualifying gains.

Typical Strategy: Salary + Dividends

Many small business owners still benefit from the classic method of:

• Taking a salary up to the personal allowance (£12,570)

• Topping up with dividends to meet living costs

This works well in many cases, but it’s not guaranteed to be the best option for everyone – especially if you’re applying for a mortgage, making pension contributions, or planning to sell the business soon.

Get Personalised Advice from A&C Chartered Accountants

At A&C Chartered Accountants, we work with hundreds of owner-managed businesses across the UK. We know how important it is to get this right.

Whether you’re a sole director or part of a larger shareholder group, our team can help you:
✅ Maximise tax efficiency
✅ Avoid unexpected liabilities
✅ Plan for the future with confidence

📞 Ready to optimise your profit extraction strategy?

Get in touch today to speak to one of our experienced advisors.

If you offer private tuition as a sole trader or small business, you might assume it’s VAT-exempt – but the rules are more specific than many people realise.

A recent First Tier Tribunal case (Rushby Dance & Fitness Centre v HMRC) has provided a helpful reminder of how the exemption works and why not all tuition qualifies.

What the legislation says

Under the Value Added Tax Act 1994 (Schedule 9, Group 6, Item 2), private tuition is exempt from VAT if two key conditions are met:

1. The tuition is provided by an individual teacher acting independently of an employer; and

2. The subject being taught is one that is ordinarily taught in a school or university.

While the first point is relatively straightforward, the second is where many cases become less clear.

What happened in the tribunal?

In this case, the tutors were providing classes in ballroom dancing, Latin dancing, sequence dancing, and a hybrid of dance and aerobics referred to as ‘dancercise’. They argued that these activities should qualify as VAT-exempt private tuition. However, the tribunal disagreed, ruling that these subjects are not ordinarily taught in schools or universities and therefore do not qualify for the exemption.

Examples of subjects that may or may not qualify

There have been a number of previous tribunal decisions on this issue. For example:

• Subjects that have been accepted as ordinarily taught include horse riding and golf.

• Subjects that have not qualified include yoga, belly dancing, and transcendental meditation.

The distinction depends not on whether a subject can be taught in a school or university, but whether it is commonly part of the mainstream curriculum.

Business structure also matters

It’s important to note that even if a subject qualifies, the VAT exemption only applies when the tuition is provided by an individual, such as a sole trader or partner in a partnership. If the tuition is delivered by an employee or through a limited company, the exemption does not apply.

Why it matters

Incorrectly treating tuition as VAT-exempt could result in backdated VAT liabilities and penalties. If you’re unsure whether your tuition services qualify for the exemption, or how your business structure affects VAT, it’s best to seek professional advice.

At A&C Chartered Accountants, we work with tutors, education providers, and small business owners to ensure VAT is handled correctly and efficiently. If you have any questions about this area, we’re here to help.

If you’re a landlord or sole trader earning over £50,000 from your trade and property combined, Making Tax Digital for Income Tax (MTD ITSA) is heading your way — with mandatory reporting starting from 6 April 2026.

While we’ve covered the general MTD rules in previous updates, this time we’re focusing on how it applies to income from jointly held property, which can have a few unique quirks.

🧾 What does MTD mean for joint property owners?

Under MTD, you’ll need to keep digital records and submit Quarterly Updates to HMRC. For landlords with jointly owned property, that means your software or spreadsheet needs to:

• Track each income and expense item using HMRC’s prescribed categories

• Submit year-to-date totals for each category, every quarter

✅ Two helpful easements for simpler reporting

HMRC has introduced a couple of easements that can really simplify things for landlords with jointly held property income:

1. Turnover under £90,000?
   You don’t need to break things down into detailed categories — it’s enough to record each item as either ‘income’ or ‘expense’.

2. Jointly held property?
   You can submit just one income total per quarter, and one annual total expense figure (submitted in Quarter 4).

💡 And yes — if you qualify for both, you can combine them. That means just one quarterly income figure and one yearly expense figure. Much simpler!

What should you do next?

• Review your income for 2024/25 to see if you’ll hit the £50,000 threshold

• Check whether your property is jointly owned and how income is recorded

• Start looking into MTD-compatible software that suits your needs

• Ask us to review your current setup and help you prepare in good time

At A&C Chartered Accountants, we’re already supporting landlords and small businesses to get MTD-ready — without the overwhelm. If you’ve got questions about how these rules apply to you or want help choosing the right software, just get in touch.

📞 Let’s make MTD simple.

Looking for a smart way to boost pension contributions while cutting National Insurance costs? A salary sacrifice scheme might be the answer – but it’s not without its complexities.

How it works

When an employee joins a salary sacrifice scheme for pension contributions, they agree to reduce their gross salary. In return, their employer increases its pension contributions by the same amount. The overall pension pot stays the same — but here’s the clever bit:
✔️ Both the employee and employer save on National Insurance Contributions (NICs)
✔️ The pension contributions made by the employer are exempt from NICs and not caught by salary sacrifice restrictions

This can result in significant savings, particularly for employers, who may choose to pass on some (or all) of their NIC savings by boosting staff pension contributions even further.

Things to consider before setting up a scheme

While the tax and NI savings are attractive, there are a few important considerations:

• Minimum Wage compliance – You’ll need to make sure the employee’s reduced salary doesn’t dip below the National Minimum Wage

• Auto Enrolment rules – Salary sacrifice must be carefully structured to avoid falling foul of pension auto enrolment obligations

• Extra admin – There will be contractual changes and ongoing payroll implications to manage

• Impact on staff benefits – A lower gross salary may affect entitlement to statutory payments (like sick pay or maternity) and even bonuses or mortgage applications

Communication is key

To make a salary sacrifice scheme successful, it’s essential to communicate clearly with your team. Employees need to understand how it affects their take-home pay, pensions, and any pay-related entitlements.

Thinking of setting up a pension salary sacrifice scheme for your business?
At A&C Chartered Accountants, we can walk you through the pros, cons, and practical steps to help you implement it smoothly — and compliantly.

👉 Get in touch to find out if it’s the right fit for your business.

If you’re an employer providing benefits in kind or reimbursing expenses to employees or directors, there’s an important deadline fast approaching. P11D forms for the 2024/25 tax year need to be submitted by 6 July 2025, and there are a few key changes and reminders to be aware of this year.

What Is a P11D?

A P11D is a form used to report benefits in kind – anything extra you give your employees or directors that isn’t part of their salary but still has value. Think company cars, private medical insurance, or reimbursed expenses.

These forms help HMRC understand what additional taxable benefits your team has received – and it’s your responsibility as an employer to report them correctly.

What’s Changed This Year?

1. No More Paper Forms
   HMRC now requires all P11Ds to be submitted online. You can file them through your PAYE Online account or via compatible commercial payroll software.

2. Reimbursed Expenses Don’t Always Need Reporting
   If an expense was wholly, exclusively and necessarily incurred in the course of the employee’s duties, it usually doesn’t need to be included on a P11D. There’s also no need to apply for a dispensation anymore.

   However, HMRC expects you to have robust internal controls in place. So it’s worth reviewing your expense policies and processes before filing.

3. Trivial Benefits – Keep It Simple
   Small non-cash benefits that cost £50 or less don’t need to be reported – as long as they’re not:

   • A reward for services

   • Part of a contractual agreement

   • Cash or a cash voucher

   Think birthday gifts, festive bottles of wine, or lunch out with the team – they’re all fine under the trivial benefits rule. Just keep a record of what was given and why.

What Should You Do Now?

✅ Review your benefits and expense records
✅ Check your reporting requirements
✅ Ensure you’re set up to file online
✅ Keep documentation for trivial benefits

HMRC has published its latest advisory fuel rates for company cars, which apply from 1 June 2025. These rates are used to calculate mileage reimbursements for employees using a company car for business journeys – and help ensure that those payments remain tax-free.

Here’s what’s changed and what you need to know.

Advisory Fuel Rates: Company Cars

If your business provides company cars but doesn’t pay for fuel, these are the new suggested reimbursement rates for business mileage.

Previous rates are shown in brackets. You can continue to use the old rates for up to one month from the date the new ones take effect.

Electric and Hybrid Cars

For fully electric vehicles, the reimbursement rate remains at 7p per mile.
If your company car is a hybrid, you’ll need to use the petrol or diesel rate, depending on how the car is fuelled.

Own Vehicle Use: Mileage Allowance Payments (AMAP)

If your employees use their own car for work, the tax-free mileage rate remains:

• 45p per mile for the first 10,000 business miles

• 25p per mile thereafter

• Plus 5p per mile for each passenger also travelling for work

For National Insurance purposes, employers can continue to reimburse at 45p per mile without applying the 10,000-mile threshold.

VAT on Fuel Reimbursements

If you’re reimbursing fuel costs for company car use, you may be able to reclaim input VAT on the fuel portion. For example, if you’re reimbursing an employee at 23p per mile for a 2500cc petrol car, 3.83p per mile can be reclaimed as VAT (23p × 1/6), as long as you have a VAT receipt from the filling station.

Need Help with Mileage Policies or VAT Claims?

Mileage reimbursements might seem small, but they can add up — and getting them wrong can lead to tax headaches. If you need help putting clear policies in place or working out your VAT recovery on fuel, just get in touch.

At A&C Chartered Accountants, we make sure your business travel expenses are managed efficiently and compliantly.

If your business has issued shares, share options or other securities to employees or directors during the 2024/25 tax year, don’t forget — you’ll need to report these to HMRC by 6 July 2025.

This deadline applies whether the shares were part of a tax-advantaged scheme or not, and it’s the same date as the deadline for submitting P11D forms for employee benefits.

What needs to be reported?

If you’ve given or transferred shares, securities or options to employees or directors — including under any formal employee share schemes — you’ll need to complete an Employment-Related Securities (ERS) return.

You’ll also need to report any relevant events such as:

• Granting share options

• Share acquisitions or disposals

• Exercises of share options

• Restricted or convertible shares

Which schemes are included?

There are specific HMRC spreadsheet templates for each of the four tax-advantaged employee share schemes:

• Company Share Option Plan (CSOP)

• Enterprise Management Incentives (EMI)

• Save As You Earn (SAYE)

• Share Incentive Plans (SIP)

You’ll also need to use a separate template to report any non-tax-advantaged arrangements, such as one-off share awards or bespoke schemes.

Templates must be completed and submitted online via the HMRC ERS service. If nothing has happened during the year, a nil return may still be required for registered schemes.

How we can help

At A&C Chartered Accountants, we can support you with:

• Preparing and submitting your ERS annual return

• Understanding your reporting obligations

• Valuing the securities issued, where needed

• Ensuring compliance with HMRC guidelines

We know this area can be complex — especially for start-ups or growing businesses using share schemes to reward and retain talent. We’re here to make the process straightforward and stress-free.

Don’t leave it to the last minute

The deadline might seem a while away, but getting your ERS reporting sorted early helps avoid errors and penalties — and gives you peace of mind.

If you’d like help pulling your return together, just get in touch with your client manager or drop us a message.

Let’s get it done right, on time.