[{"id":13561,"date":"2025-03-26T16:34:28","date_gmt":"2025-03-26T16:34:28","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13561"},"modified":"2025-03-27T11:38:28","modified_gmt":"2025-03-27T11:38:28","slug":"spring-statement-2025-our-summary-for-smes","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/spring-statement-2025-our-summary-for-smes\/","title":{"rendered":"Spring Statement 2025: Our summary for SMEs"},"content":{"rendered":"

Chancellor Rachel Reeves delivered the Spring Statement 2025 on 26 March. While it\u2019s not a full Budget, this mid-year update gives a snapshot of the UK\u2019s finances and sets the tone for future tax and government spending decisions.<\/p>\n

With the pressure of low economic growth, the Chancellor outlined spending cuts to fill the \u00a315bn fiscal hole compared to the plans she announced in the Autumn Budget. Reeves emphasised the government is \u201con the side of Britain\u2019s working people, working in their interest\u201d and did not place UK businesses at the core of her speech.<\/p>\n

However, there are still important economic updates to be aware of. Here are the key points covered in the Spring Statement and what they mean for businesses like yours.<\/p>\n

How is the current state of the economy affecting businesses?<\/h3>\n

The point of this Spring Statement, ultimately, was to outline the economy\u2019s health. Real gross domestic product (GDP) growth has fallen short of expectations. It is now forecast at 1% for 2025, down from the 2% initially predicted by the Office for Budget Responsibility (OBR) at last autumn\u2019s government budget.<\/p>\n

\n \n \"Revolut\n \"Revolut\n <\/a>\n <\/div>\n \n

However, inflation measured by the Consumer Prices Index (CPI) fell to 2.8% in February 2025 from 3% in the 12 months to January 2025. Also, real household income will grow this year at twice the rate expected in autumn and household disposable income is expected to grow. After taking into account inflation, the OBR stated today that people will be over \u00a3500 a year better off on average under this Labour government.<\/p>\n

Typically, when the economy is lagging, consumers tend to cut back on spending \u2013 especially on non-essential goods and services. However, with CPI falling and household disposable income growing, business owners can hopefully look forward to consumer confidence improving in 2025.<\/p>\n

How will the future state of the economy affect businesses?<\/h3>\n

The government\u2019s spending changes announced today intend to balance the budget and grow the economy over the coming years. The Chancellor reports:<\/p>\n

“I can confirm to the House that the OBR have [as a result of reforms announced today] upgraded their growth forecast next year and every single year thereafter, with GDP growth of 1.9% in 2026, of 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.”<\/p>\n

Reeves concludes: \u201cThere are no quick fixes, but we have made the right choices to return stability to our economy after years of mismanagement by the party opposite, delivering security for our country and security for working people.\u201d<\/p>\n

If these forecasts are met, it could create a more stable long-term environment for business planning, investment, and sustainable growth.<\/p>\n

Key changes affecting the construction sector<\/h3>\n

The government announced it will support the construction industry by investing \u00a3100 million in 35,000 additional training places in construction-focused Skills Bootcamps. This will benefit trainees, \u2018returners\u2019, and existing employees.<\/p>\n

Important dates for UK business owners in 2025<\/span><\/a>\n Self Assessment – 16 common questions answered\u00a0<\/span><\/a>\n The Worker Protection Act: a brief guide for employers<\/span><\/a>\n <\/p>\n

Additionally, the government will provide a further \u00a340 million to support up to 10,000 more young people to access new construction Foundation Apprenticeships, enabling more young people to enter the industry and address skills shortages.<\/p>\n

Reminder: changes coming in April 2025<\/h3>\n

Though the Chancellor did not mention the new policies and taxes taking effect next week in her speech, they are significant to businesses’ financial outlook. Here are the five key changes to keep in mind:<\/p>\n

    \n
  1. Employer National Insurance contributions (NICs) are increasing from 13.8% to 15%.<\/li>\n
  2. Employment Allowance is rising from \u00a35,000 to \u00a310,500.<\/li>\n
  3. The National Living Wage (NLW) is rising from \u00a311.44 to \u00a312.21 per hour for employees over 21. The National Minimum Wage (NMW) for employees between 18 and 20 will rise from \u00a38.60 to \u00a310.00 per hour. The apprentice wage is also increasing from \u00a36.40 to \u00a37.55 per hour.<\/li>\n
  4. Late payment penalties for VAT and income tax Self Assessment will increase from 2% to 3% at 15 days, 2% to 3% at 30 days, and 4% to 10% from day 31.<\/li>\n
  5. Capital Gains Tax on the sale of shares will increase from 20% to 24%, unless the sale of shares qualifies for Business Asset Disposal Relief. Business Asset Disposal Relief is increasing from 10% to 14% on 6 April 2025, and then again to 18% from 6 April 2026.<\/span><\/li>\n<\/ol>\n

    For more details on what\u2019s changing for the 2025\/26 tax year, read our blog ‘2025-26 tax year \u2013 what UK business owners can expect<\/a>‘.<\/p>\n

    UK businesses\u2019 sentiment on the Spring Statement 2025<\/h3>\n

    Many entrepreneurs had hoped the Chancellor would signal more support towards businesses and put their needs at the core of the country\u2019s economic recovery.<\/p>\n

    SMEs are about to deal with significant rises in costs this April due to employers\u2019 National Insurance contributions rising by 1.2% and increases in statutory wage rates. Dext<\/a> research shows that as a result, a third of business leaders are losing sleep over concerns about affording their payroll costs, and the Companies House register shrank between October and December 2024 for the first time since quarterly records began in 2012.<\/p>\n

    Graeme Donnelly, founder and CEO of 1st Formations, provided his analysis of today\u2019s events.<\/p>\n

    This Spring Statement fell short of what businesses need. Rather than laying the groundwork for growth, it offered little in the way of direct investment. SMEs drive the UK economy, generating over \u00a32.4 trillion in turnover and employing 60% of the private sector workforce. Yet, the government is not prioritising them. Since the Autumn Statement, 24% of small businesses have cancelled hiring plans<\/a>, and 16% have been forced to cut employee hours. If the UK economy is to recover and grow, SMEs need better, more targeted support.<\/p><\/blockquote>\n

    Although businesses were not at the centre of this Spring Statement, we hope a positive economic outlook will benefit the UK business landscape over the longer term.<\/p>\n

    Stay tuned for our coverage of the Autumn Budget in October, as we anticipate there will be more substantial tax and policy changes.<\/p>\n

    \n \n \"Fully\n \"Fully\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"

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tax year \u2013 what UK business owners can expect\u00a0\u00a0"},"content":{"rendered":"<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Whether you\u2019re self-employed or running a limited company, there are several changes to be aware of in the 2025-26 tax year \u2013 from employer National Insurance contributions and minimum wage rates to company size thresholds and Capital Gains Tax.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Here\u2019s a summary of what you can expect as a UK business owner. Most changes will take effect on 6 April 2025, the first day of the new tax year.<\/span><\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/p>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Many UK employers will face higher staffing costs due to increases in the secondary National Insurance contributions (NIC) rate, secondary threshold, minimum wage rates, and statutory payments.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"none\">The Employment Allowance will more than double, from \u00a35,000 to \u00a310,500 per year. This may help smaller employers reduce their secondary NIC liabilities.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"none\">The turnover thresholds for micro, small, and medium-sized companies will increase for accounting periods beginning on or after 6 April 2025. These changes apply to companies and limited liability partnerships.\u00a0<\/span><\/li>\n<\/ul>\n<p> <\/div>\n <\/div>\n \n<h2>1. Employer National Insurance contributions (NICs)<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Many changes in the 2025-26 tax year will directly impact employers, the most notable of which relate to secondary Class 1 NICs. <\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">From 6 April 2025, the following <\/span><a href=\"https:\/\/www.gov.uk\/government\/publications\/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl\/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">changes to employer NICs<\/span><\/a><span data-contrast=\"none\"> will take effect:<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"none\">The rate of employer (secondary) Class 1 NICs on employee\u2019s earnings will increase from 13.8% to 15%<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"none\">The secondary threshold (when employers become liable to pay secondary NICs on an employee\u2019s earnings) will be cut from \u00a39,100 to \u00a35,000 per year<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"none\">Employers\u2019 Class 1A and Class 1B NIC rates on employees’ expenses and benefits will also increase from 13.8% to 15%<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">However, it\u2019s not all doom and gloom. The government will also increase the maximum Employment Allowance by 110%, from \u00a35,000 to \u00a310,500 per year, and remove the \u00a3100,000 eligibility cap. These two measures are designed to help smaller employers by providing more relief on their secondary National Insurance liabilities.\u00a0<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">2. NIC Lower Earnings Limit and Small Profits Threshold<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The NIC Lower Earnings Limit and Small Profits Threshold determine when an employee or self-employed <\/span><span data-contrast=\"none\">individual<\/span><span data-contrast=\"none\"> qualifies for contributory benefits, including the State Pension.<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\"> <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">From 6 April 2025, the following changes will take effect:<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"none\">The Lower Earnings Limit (LEL) for employees will rise from \u00a36,396 to \u00a36,500 per year<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"2\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"none\">The Small Profits Threshold (SPT) for the self-employed will increase from \u00a36,725 to \u00a36,845 per year<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Employees (including company directors) and self-employed individuals must earn at least the LEL or SPT to have their NICs \u2018treated as paid\u2019 and to be eligible for contributory benefits. They don\u2019t need to pay NICs until their earnings exceed \u00a312,570 annually.<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">3. Minimum wage increases<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The annual increase to <\/span><a href=\"https:\/\/www.gov.uk\/government\/news\/national-living-wage-to-increase-to-1221-in-april-2025\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">National Living Wage and National Minimum Wage<\/span><\/a><span data-contrast=\"none\"> rates will take effect from 1 April 2025. The changes to hourly pay rates are as follows:<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"3\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">National Living Wage (21 and over) \u2013 \u00a312.21<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"3\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">National Minimum Wage <\/span><span data-contrast=\"none\">(18 to 20) \u2013 \u00a310.00<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"3\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">National Minimum Wage <\/span><span data-contrast=\"none\">(16 to 17) \u2013 \u00a37.55<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"3\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Apprentice rate <\/span><span data-contrast=\"none\">\u2013 \u00a37.55<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"3\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Accommodation offset – \u00a310.66<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">These changes will benefit many UK workers, but they may present additional challenges to employers at a time of increasing National Insurance liabilities.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<h2>4. Increases to statutory payments for employees<\/h3>\n<p data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Statutory pay rates for employees will also rise at the start of the 2025-26 tax year. The changes <\/span><span data-contrast=\"none\">from 6 April 2025<\/span><span data-contrast=\"none\"> are as follows:<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":195,"335559739":195,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"4\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Statutory Sick Pay \u2013 increasing to \u00a3<\/span><span data-contrast=\"none\">118.75 per week<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"4\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Statutory Maternity, Paternity, Adoption, Shared Parental, and Parental Bereavement Pay \u2013 increasing to \u00a3187.18 per week<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"4\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Maternity Allowance \u2013 increasing to \u00a3187.18 per week<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">From 6 April 2025, employees will also have a \u2018day one right\u2019 to <\/span><a href=\"https:\/\/www.gov.uk\/government\/news\/parents-to-receive-day-one-right-to-neonatal-care-leave-and-pay\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">neonatal care leave and pay<\/span><\/a><span data-contrast=\"none\">. This new measure supports working parents with babies in neonatal care. It will provide eligible employees additional time off and Statutory Neonatal Care Pay of \u00a3187.18 per week. <\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/important-dates-for-uk-business-owners-in-2025\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Important dates for UK business owners in 2025<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/the-worker-protection-act-brief-guide-for-employers\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">The Worker Protection Act: a brief guide for employers<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/tax-efficient-life-insurance-via-limited-company\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Tax-efficient life insurance through a limited company<\/span><\/a>\n <\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The government will also increase Small Employers<\/span><span data-contrast=\"none\">\u2019 <\/span><span data-contrast=\"none\">Relief from 103% to 108.5%. This will enable smaller employers to recover 100% of employees\u2019 Statutory Maternity, Paternity, Adoption, Parental Bereavement, Shared Parental, and Neonatal Pay \u2013 plus an additional 8.5% compensation.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":600,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Employers that are not eligible will be able to reclaim 92% of statutory payments instead.\u00a0<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">5. Annual increase to State Pension<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Due to the government\u2019s <\/span><a href=\"https:\/\/www.moneyhelper.org.uk\/en\/blog\/retirement\/state-pension-triple-lock\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">triple lock system<\/span><\/a><span data-contrast=\"none\">, pensioners will receive a 4.1% increase to their <\/span><a href=\"https:\/\/www.gov.uk\/government\/publications\/benefit-and-pension-rates-2025-to-2026\/benefit-and-pension-rates-2025-to-2026#state-pension\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">State Pensions for the 2025-26 tax year<\/span><\/a><span data-contrast=\"none\">. The rates will change as follows:<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"4\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"none\">The full, new flat-rate State Pension (for those who reached State Pension age <\/span><i><span data-contrast=\"none\">after<\/span><\/i><span data-contrast=\"none\"> April 2016)\u202f\u2013 rising from \u00a3221.20 to \u00a3230.25 per week\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u2022\" data-font=\"\" data-listid=\"4\" data-list-defn-props=\"{"201340374":0,"335552541":1,"335559685":213,"335559991":213,"469769242":[8226],"469777803":"left","469777804":"\u2022","469777815":"hybridMultilevel"}\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span data-contrast=\"none\">The full, old basic State Pension (for those who reached State Pension age <\/span><i><span data-contrast=\"none\">before<\/span><\/i><span data-contrast=\"none\"> April 2016)\u202f\u2013 rising from \u00a3169.50 to \u00a3176.45 a week<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">These increases will provide recipients of the new State Pension with an additional \u00a3470 per year, while recipients of the basic State Pension will receive an extra \u00a3361 per year.<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">6. Changes to company size thresholds<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The turnover thresholds for micro, small, and medium-sized companies will increase from 6 April 2025, per <\/span><a href=\"https:\/\/www.legislation.gov.uk\/uksi\/2024\/1303\/contents\/made\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024<\/span><\/a><span data-contrast=\"none\">. There are no changes to the monetary size thresholds for large companies or the average number of employees for any company size.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The table below shows the thresholds for accounting periods beginning on or after 6 April 2025.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<table data-tablestyle=\"Custom\" data-tablelook=\"0\" aria-rowcount=\"4\">\n<tbody>\n<tr aria-rowindex=\"1\">\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Micro-entity\u00a0<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Small company\u00a0<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Medium company\u00a0<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Large company\u00a0<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<tr aria-rowindex=\"2\">\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Annual turnover<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Not more than \u00a31 million<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Up to \u00a315 million<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Not more than \u00a354 million\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">More than \u00a354 million<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<tr aria-rowindex=\"3\">\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Balance sheet total<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Not more than \u00a3500,000<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Up to \u00a37.5 million <\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Not more than \u00a327 million <\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">More than \u00a327 million<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<tr aria-rowindex=\"4\">\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><b><span data-contrast=\"none\">Average number of employees<\/span><\/b><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Not more than 10<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Up to 50<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Not more than 250<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<td data-celllook=\"69905\">\n<p data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">More than 250<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">These changes will enable more companies and limited liability partnerships (LLPs) to qualify as micro-entities or small companies and benefit from reduced disclosures under the small companies regime.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The new regulations will also remove the requirement for medium-sized and large companies to include certain information in their <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/?_gl=1*uj6olb*_up*MQ..&gclid=Cj0KCQjwytS-BhCKARIsAMGJyzp9_zArgCXIIQFPJZjCI8F6kP0HaL9L8jbDXVgYidyHMQ-bBI_QTL8aAtuUEALw_wcB&gbraid=0AAAAACiO-qU5oiq7AGvf6SJkbgOH1pYZ_\" data-wpel-link=\"internal\"><span data-contrast=\"none\">directors\u2019 reports<\/span><\/a><span data-contrast=\"none\">.\u00a0<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">7. Changes to Capital Gains Tax<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The 10% Capital Gains Tax rate for Business Asset Disposal Relief (BADR) and Investors\u2019 <\/span><span data-contrast=\"none\">Relief (previously Entrepreneurs\u2019 Relief) <\/span><span data-contrast=\"none\">will increase to 14% for qualifying disposals made on or after 6 April 2025.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"> <div class=\"hubspot_shortcode\">\n <a href=\"https:\/\/hubspot.sjv.io\/OrKdGZ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_mobile.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_desktop.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-desktop\">\n <\/a>\n <\/div>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The rate will then increase from 14% to 18% from April 2026. This will bring it in line with the lower main rate of CGT. <\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">This measure is one of several <\/span><a href=\"https:\/\/www.gov.uk\/government\/publications\/changes-to-the-rates-of-capital-gains-tax\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">changes to Capital Gains Tax<\/span><\/a><span data-contrast=\"none\"> announced as part of the Autumn Budget 2024.<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">8. Extension of RHL business rates relief scheme<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The UK government has extended the <\/span><a href=\"https:\/\/www.gov.uk\/guidance\/business-rates-relief-202425-retail-hospitality-and-leisure-scheme\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">business rates relief scheme<\/span><\/a><span data-contrast=\"none\"> for the retail, hospitality, and leisure (RHL) industry for another year, but at a lower rate of 40% (down from 75%). The \u00a3110,000 cash cap limit per business still applies.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">T<\/span><span data-contrast=\"none\">he standard multiplier<\/span><span data-contrast=\"none\"> (the figure used to calculate business rates) for RHL properties will increase from 54.6p to 55.5p, while the small business multiplier remains frozen at 49.9p.\u00a0<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">9. Abolition of furnished holiday lettings (FHL) tax regime<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">The <\/span><a href=\"https:\/\/www.gov.uk\/government\/publications\/furnished-holiday-lettings-tax-regime-abolition\/abolition-of-the-furnished-holiday-lettings-tax-regime\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">furnished holiday lettings<\/span><\/a><span data-contrast=\"none\"> (FHL) tax regime will be scrapped from 6 April 2025, removing the tax advantages and separate reporting requirements for individuals, companies, and trusts that operate or sell FHL accommodation.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":281,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Instead, income and gains from FHL properties will form part of the person<\/span><span data-contrast=\"none\">\u2019<\/span><span data-contrast=\"none\">s UK or overseas property business, aligning with the tax rules for non-furnished holiday let property businesses.\u00a0<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">10. HMRC Interest Rates on late payments to rise<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">As announced at the Autumn Budget 2024, the UK government will increase the late payment interest rate that HMRC charges on unpaid tax liabilities by 1.5 percentage points to the Bank of England base rate (the \u2018Bank Rate\u2019)<\/span><span data-contrast=\"none\"> plus <\/span><span data-contrast=\"none\">4 percentage points. This measure will take effect on<\/span><span data-contrast=\"none\"> 6 April 2025.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<h3 data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\">Thanks for reading<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Please comment below if you have any questions. Should you require help with your business tax and finances, we recommend seeking professional advice from an accountant or financial advisor.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Explore the <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" data-wpel-link=\"internal\"><span data-contrast=\"none\">Quality Company Formations Blog<\/span><\/a><span data-contrast=\"none\"> for more business news, advice, and inspiration, including guidance on setting up a limited company.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0 <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n <\/span><\/p>\n"},"excerpt":{"rendered":"<p>Whether you\u2019re self-employed or running a limited company, there are several changes to be aware of in the 2025-26 tax year \u2013 from employer National Insurance contributions and minimum wage rates to company size thresholds and Capital Gains Tax.\u00a0 Here\u2019s a summary of what you can expect as a UK business owner. Most changes will…<\/p>\n","protected":false},"author":28,"featured_media":13460,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1239],"tags":[],"class_list":["post-13457","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-accounting-finance","category-1239","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>2025-26 Tax Year - What UK Business Owners Can Expect<\/title>\n<meta name=\"description\" content=\"Find out what changes UK business owners need to know about in the 2025-26 tax year, including company size thresholds and Capital Gains Tax.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/2025-26-tax-year-for-uk-business-owners\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2025-26 tax year \u2013 what UK business owners can expect\u00a0\u00a0\" \/>\n<meta property=\"og:description\" content=\"Find out what changes UK business owners need to know about in the 2025-26 tax year, including company size thresholds and Capital Gains Tax.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/2025-26-tax-year-for-uk-business-owners\/\" \/>\n<meta property=\"og:site_name\" content=\"Quality Formations Blog\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-17T19:12:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-22T17:37:49+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2536624879.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1500\" \/>\n\t<meta property=\"og:image:height\" content=\"750\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Amelia French\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Amelia French\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"2025-26 Tax Year - 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She has a Level 5 Diploma in Management and Leadership from the Chartered Management Institute and a Distinction in Company Secretarial Practice and Share Registration Practice from the Corporate Governance Institute.","jobTitle":"Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/amelia-french\/"}]}},"views":347,"x_categories":"Tax, Accounting & Finance","x_tags":"","x_featured_media":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2536624879-128x128.jpg","x_featured_media_medium":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2536624879-600x300.jpg","x_featured_media_large":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2536624879-600x300.jpg","x_featured_media_original":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2536624879.jpg","x_date":"17 Mar 2025","x_author":"Amelia French","x_gravatar":"https:\/\/secure.gravatar.com\/avatar\/2225856d837fbf51b9dea454b7796bce?s=96&d=mm&r=g","x_metadata":{"yarpp_meta":{"yarpp_display_for_this_post":0},"_dt_sidebar_position":"right","_dt_sidebar_widgetarea_id":"sidebar_1","_dt_sidebar_hide_on_mobile":"0","_dt_footer_show":"1","_dt_footer_widgetarea_id":"sidebar_2","_dt_footer_hide_on_mobile":"0","_dt_header_title":"enabled","_dt_header_background":"normal","_dt_header_background_below_slideshow":"disabled","_dt_header_transparent_bg_color_scheme":"light","_dt_header_transparent_top_bar_bg_color":"#ffffff","_dt_header_transparent_top_bar_bg_opacity":"25","_dt_header_transparent_bg_color":"#000000","_dt_header_transparent_bg_opacity":"50","_dt_header_disabled_background":"normal","_dt_header_disabled_transparent_bg_color_scheme":"light","_dt_header_disabled_transparent_top_bar_bg_color":"#ffffff","_dt_header_disabled_transparent_top_bar_bg_opacity":"25","_dt_header_disabled_transparent_bg_color":"#000000","_dt_header_disabled_transparent_bg_opacity":"50","_dt_page_overrides_top_margin":"","_dt_page_overrides_bottom_margin":"","_dt_post_options_back_button":"0","_dt_post_options_hide_thumbnail":"0","_dt_post_options_related_mode":"same","_dt_post_options_preview":"normal","_yoast_wpseo_primary_category":"1239","_yoast_wpseo_content_score":"90","_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_estimated_reading_time_minutes":"6","_yoast_wpseo_focuskw":"2025-26 tax year","_yoast_wpseo_title":"2025-26 Tax Year - What UK Business Owners Can Expect","_yoast_wpseo_metadesc":"Find out what changes UK business owners need to know about in the 2025-26 tax year, including company size thresholds and Capital Gains Tax.","_yoast_wpseo_linkdex":"77","_thumbnail_id":"13460","_yoast_indexnow_last_ping":"1742665070","views":"347"},"_links":{"self":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13457","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=13457"}],"version-history":[{"count":13,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13457\/revisions"}],"predecessor-version":[{"id":13532,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13457\/revisions\/13532"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media\/13460"}],"wp:attachment":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=13457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=13457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=13457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":13314,"date":"2025-03-15T19:26:02","date_gmt":"2025-03-15T19:26:02","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13314"},"modified":"2025-03-18T11:23:27","modified_gmt":"2025-03-18T11:23:27","slug":"reduce-small-business-digital-footprint","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/reduce-small-business-digital-footprint\/","title":{"rendered":"How to reduce your small business\u2019 digital footprint"},"content":{"rendered":"<p><span data-contrast=\"none\">Every click, search, and stored file contributes to your digital footprint. While this might seem insignificant, the environmental impact of our digital activity is growing. For small businesses, reducing their digital footprint isn\u2019t just about sustainability \u2013 it\u2019s about cutting costs, improving efficiency, and enhancing brand reputation.<\/span><\/p>\n<p><span data-contrast=\"none\">In this guide, we\u2019ll discuss practical strategies small and medium-sized enterprises (SMEs) can implement to minimise their digital footprint, including energy efficiency, digital minimalism, green technology, and website optimisation.<\/span><\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/p>\n<ul>\n<li><span data-contrast=\"none\">If your business wants to be more digitally sustainable, start by conducting a digital footprint audit. Assess your website, data storage, and IT infrastructure.<\/span><\/li>\n<li><span data-contrast=\"none\">Explore eco-friendly hosting and sustainable IT solutions. Look for providers committed to renewable energy and efficiency.<\/span><\/li>\n<li><span data-contrast=\"none\">Implement at least 2-3 strategies from this guide. Start with quick wins like optimising your business website and switching to greener IT practices.<\/span><\/li>\n<\/ul>\n<p> <\/div>\n <\/div>\n \n<h2><span class=\"TextRun SCXW121391035 BCX0\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW121391035 BCX0\" data-ccp-parastyle=\"heading 3\">Understanding your digital footprint<\/span><\/span><\/h3>\n<p><span data-contrast=\"none\">Before diving into technical solutions, Keziah Cowan, Associate Director at <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\"><span data-contrast=\"none\">Quality Company Formations<\/span><\/a><span data-contrast=\"none\">, emphasises: “<\/span>Businesses should always be aware of their carbon footprint. Understanding their current impact is the first step to making necessary reductions. They can use environmental consultants for this.”<\/p>\n<div class=\"flourish-embed flourish-number-ticker\" data-src=\"visualisation\/21713739\"><script src=\"https:\/\/public.flourish.studio\/resources\/embed.js\"><\/script><noscript><img decoding=\"async\" src=\"https:\/\/public.flourish.studio\/visualisation\/21713739\/thumbnail\" width=\"100%\" alt=\"number-ticker visualization\" \/><\/noscript><\/div>\n<h4 aria-level=\"4\"><span data-contrast=\"none\">What is a digital footprint?<\/span><\/h4>\n<p><span data-contrast=\"none\">A digital footprint refers to the trail of data and energy consumption created by online activity. It can be classified into two types:<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\"><strong>Active digital footprint<\/strong>: Information intentionally shared online, such as social media posts, emails, and website content.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Passive digital footprint<\/strong>: Data collected without a user\u2019s direct input, such as website visits, cookies, clicks on links, and stored server logs.<\/span><\/li>\n<\/ul>\n<h4 aria-level=\"4\"><span data-contrast=\"none\">The environmental impact of digital growth<\/span><\/h4>\n<p><span data-contrast=\"none\">Digital technologies are responsible for an estimated <\/span><a href=\"https:\/\/www.telefonica.com\/en\/communication-room\/blog\/impact-of-technology-on-energy-efficiency\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">8-10% of global energy consumption<\/span><\/a><span data-contrast=\"none\"> and contribute 2-4% of total greenhouse gas emissions. Livestock directly contributes about 5% of emissions, roughly double the share of the aviation industry. These figures highlight the often-overlooked environmental footprint of our digital world.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-13324 size-full\" src=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Digital-footprint.jpg\" alt=\"Person in the background wearing a bright yellow jumper with green, grass-textured footprints appearing in the forefront, hovering over a tablet placed on the table in front of them\" width=\"1500\" height=\"650\" srcset=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Digital-footprint.jpg 1500w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Digital-footprint-600x260.jpg 600w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Digital-footprint-692x300.jpg 692w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Digital-footprint-768x333.jpg 768w\" sizes=\"auto, (max-width: 1500px) 100vw, 1500px\" \/><\/p>\n<p><span data-contrast=\"none\">The amount of data generated annually has also grown each year since 2010. According to estimates, <\/span><a href=\"https:\/\/explodingtopics.com\/blog\/data-generated-per-day\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">402.74 million terabytes<\/span><\/a><span data-contrast=\"none\"> of data are created each day. In fact, it\u2019s estimated that 90% of the world\u2019s\u00a0data was generated in the last two years.<\/span><\/p>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">How can your business minimise its digital footprint?<\/span><\/h3>\n<p><span data-contrast=\"none\">A hidden cost of digital growth is rising energy consumption and carbon emissions. Our digital habits significantly impact the environment, from the data centres we use to our everyday online activity. The good news? Businesses can take control of their digital footprint and drive meaningful change.<\/span><\/p>\n<p><span data-contrast=\"none\"> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/uk-business-climate-hub\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">UK Business Climate Hub – helping SMEs save money and go green<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/corporate-citizenship\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">What is corporate citizenship?<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/retain-top-people\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">8 tips to retain the top people in your business<\/span><\/a>\n <\/span><\/p>\n<p><span data-contrast=\"none\">By optimising energy efficiency, reducing unnecessary data storage, and making smart IT choices, companies can lower CO2 emissions, cut costs, and improve operational performance. In the following sections, we\u2019ll explore key strategies, such as digital decluttering, eco-friendly hosting, and sustainable hardware practices, which help businesses create a more sustainable digital presence.<\/span><\/p>\n<h4>Virtualisation<\/h4>\n<p>Virtualisation is a smart solution for small businesses looking to reduce their digital footprint and operate more sustainably. By running multiple systems on fewer physical servers, businesses can cut energy use, reduce electronic waste, and utilise their IT resources better. This lowers costs while helping companies meet their sustainability goals. Virtualisation also improves flexibility, disaster recovery, and overall efficiency, making adapting to changing business needs easier.<\/p>\n<p>As Daniel Papachan, IT Systems Engineer at Quality Company Formations, explains:<\/p>\n<blockquote class=\"quote--breakout\"><p>Adopting a sustainable model for legacy applications isn\u2019t always straightforward. In some cases, upgrading them for cloud migration isn\u2019t worth the effort. But by virtualising them, businesses can achieve a quick win until they\u2019re ready to rearchitect with cloud-native technologies.<\/p><\/blockquote>\n<h4 aria-level=\"3\"><span data-contrast=\"none\">Energy efficiency<\/span><\/h4>\n<p aria-level=\"3\"><span data-contrast=\"none\">Data centres, cloud computing, and heavy device usage consume vast amounts of energy. As of October 2024, data centres alone consume approximately <\/span><a href=\"https:\/\/www.iea.org\/commentaries\/what-the-data-centre-and-ai-boom-could-mean-for-the-energy-sector\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">1% of global electricity<\/span><\/a><span data-contrast=\"none\">. Their annual energy use equates to nearly half of the total electricity consumed by household IT devices like computers, phones, and TVs. In the UK, <a href=\"https:\/\/bionic.co.uk\/business-energy\/guides\/wfh-vs-work-from-office\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">Bionic\u2019s research<\/a> revealed that a small business\u2019 average energy consumption is between 15,000 and 25,000 kWh.<\/span><\/p>\n<p aria-level=\"3\"><span data-contrast=\"none\">First, businesses can optimise their energy consumption by using energy-efficient devices and preferring ENERGY STAR\u00ae-certified hardware. ENERGY STAR\u00ae-certified computers and imaging products use <a href=\"https:\/\/www.ladwp.com\/publications\/newsletters\/articles\/smart-energy-saving-solutions-your-office\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">up to 35% less energy<\/a> than standard equipment, meaning your company can enjoy savings on its utility bills while reducing its overall carbon footprint.<\/span><\/p>\n<p aria-level=\"3\"><span data-contrast=\"none\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-13322 size-full\" src=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Energy-star-certified-devices.jpg\" alt=\"Corner of a laptop screen with a blue ENERGY STAR sticker illustrating that it meets energy-efficiency specifications\" width=\"1500\" height=\"650\" srcset=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Energy-star-certified-devices.jpg 1500w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Energy-star-certified-devices-600x260.jpg 600w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Energy-star-certified-devices-692x300.jpg 692w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Energy-star-certified-devices-768x333.jpg 768w\" sizes=\"auto, (max-width: 1500px) 100vw, 1500px\" \/><\/span><\/p>\n<h4 aria-level=\"3\"><span data-contrast=\"none\">Cloud migration to reduce CO2 emissions<\/span><\/h4>\n<p>Data centres are among the most energy-intensive elements of the internet, but cloud migration can make this significantly more efficient.<\/p>\n<p><span data-contrast=\"none\">Explore eco-friendly or green hosting providers powered by renewable energy. To help your search, consider resources like the guide on the \u201c<a href=\"https:\/\/tinyeco.com\/best-green-web-hosting-uk\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">7 Best Green Web Hosting Companies UK<\/a>\u201d by Ben Hardman, founder of Tiny Eco, for recommendations on sustainable website hosting.<\/span><\/p>\n<p><span data-contrast=\"none\">It\u2019s important to recognise that your business can\u2019t\u00a0reduce every emission. For processes that can\u2019t be eliminated entirely, consider offsetting your remaining carbon footprint with services such as <a href=\"https:\/\/carbonneutralbritain.org\/pages\/become-a-carbon-neutral-business\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">Carbon Neutral Britain<\/a>, which we use at Quality Company Formations, or solutions tailored to digital emissions like Cloud Carbon Footprint.<\/span><\/p>\n<p><span data-contrast=\"none\">Optimising cloud storage practices also plays a critical role. Why not switch to a renewable-powered cloud service like Google Cloud, which offers eco-friendly hosting?<\/span><\/p>\n<h4 aria-level=\"4\"><span data-contrast=\"none\">Krystal: A web-hosting provider and UK leader in sustainable digital infrastructure<\/span><\/h4>\n<p><a href=\"https:\/\/krystal.io\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Krystal<\/span><\/a><span data-contrast=\"none\"> is a UK web-hosting provider that\u2019s\u00a0a pioneer in sustainable digital infrastructure. Transparency and long-term sustainability underpin the company\u2019s values, and since 2017, Krystal has powered its entire hosting infrastructure with 100% renewable energy. Krystal works with Ecotricity to source electricity from wind, solar, and marine power and has partnered with Ecologi to ensure its own workforce offsets work-related emissions.<\/span><\/p>\n<p><span data-contrast=\"none\">Krystal\u2019s impact doesn\u2019t stop there. The company funded 38 global carbon avoidance projects, including preserving critical biodiversity in Guatemala and supporting clean hydropower in Uganda. Its latest milestone \u2013 <\/span><a href=\"https:\/\/krystal.io\/blog\/post\/krystal-becomes-a-certified-b-corp\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">achieving B Corp Certification<\/span><\/a><span data-contrast=\"none\"> \u2013 cements its commitment to ethical, sustainable business practices.<\/span><\/p>\n<p><span data-contrast=\"none\">The company has also taken an industry-leading stance in reforestation efforts. With an ambitious pledge to conserve, restore, or grow 1 billion trees by 2030, Krystal demonstrates that digital infrastructure can be innovative and environmentally responsible.<\/span><\/p>\n<h4 aria-level=\"3\"><span data-contrast=\"none\">Digital decluttering<\/span><\/h4>\n<p><span data-contrast=\"none\">Businesses often store more data than needed. This results in increased server loads and energy use. Digital minimalism refers to cutting unnecessary consumption and improving efficiency. In its <\/span><a href=\"https:\/\/www.netapp.com\/media\/83312-data_waste_research_report_final_for_submission.pdf\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Data Waste Index report<\/span><\/a><span data-contrast=\"none\">, NetApp revealed that the average organisation spends \u00a3300,000 per year storing data. However, 41% of the data stored by organisations in the UK is unused or unwanted.<\/span><\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p><span data-contrast=\"none\">The report also highlighted that only a fifth of IT professionals are working to identify unused and unwanted data yearly, despite 74% of IT leaders believing that better data management could reduce carbon emissions.<\/span><\/p>\n<p><span data-contrast=\"none\">If your small business is looking to minimise its digital footprint, we recommend:<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"201341983":0,"335551550":1,"335551620":1,"335559685":0,"335559737":0,"335559738":240,"335559739":240,"335559740":279}\">\u00a0<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\">conducting regular audits of digital storage<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"335559738":240,"335559739":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">deleting redundant emails, old backups, and unused applications<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"335559738":240,"335559739":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">implementing automated deletion policies for temporary files<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"335559738":240,"335559739":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">using lightweight, cloud-based tools instead of resource-heavy software<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"335559738":240,"335559739":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<h4 aria-level=\"3\"><span data-contrast=\"none\">Sustainable IT hardware<\/span><\/h4>\n<p><span data-contrast=\"none\">To reduce your business\u2019 environmental impact and promote responsible resource management, your IT team should implement sustainable hardware practices. These can involve the following strategies:<\/span><\/p>\n<h5 aria-level=\"4\"><strong>1. Sustainable procurement and lifecycle management<\/strong><\/h5>\n<p><span data-contrast=\"none\">Adopting a sustainable procurement strategy ensures environmental, social, and economic factors are considered throughout the equipment lifecycle. Your organisation can take steps to reduce its ecological footprint and align with its corporate social responsibility goals.<\/span><\/p>\n<p><span data-contrast=\"none\">For example, London-based IT solutions company, <\/span><a href=\"https:\/\/ethicalit.net\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Ethical IT<\/span><\/a><span data-contrast=\"none\">, offers sustainable procurement and hardware lifecycle management services, enabling organisations to enhance their environmental responsibility through zero-waste recycling partnerships. It specialises in delivering high-quality, cost-effective, and sustainable IT solutions to charities, social enterprises, community groups, voluntary organisations, and SMEs.<\/span><\/p>\n<p><span data-contrast=\"none\">Sustainability is at the core of everything it does. The company uses these guiding pillars:<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\"><strong>Environmental<\/strong> \u2013 minimising its carbon footprint wherever possible, both within its operations and for clients.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Economic<\/strong> \u2013 ensuring fair pricing and fostering long-term, value-driven client relationships.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Social<\/strong> \u2013 supporting a healthy work-life balance through flexible working and championing networks like <\/span><a href=\"https:\/\/www.onepercentfortheplanet.org\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">1% for the Planet<\/span><\/a><span data-contrast=\"none\">.<\/span><\/li>\n<\/ul>\n<h5 aria-level=\"4\"><strong>2. Refurbished and energy-efficient devices\u00a0<\/strong><\/h5>\n<p><span data-contrast=\"none\">Choosing refurbished IT equipment extends the lifespan of devices, conserves resources, and reduces electronic waste. Companies like <\/span><a href=\"https:\/\/www.techbuyer.com\/uk\/sustainability\/sustainable-it-solutions\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Techbuyer<\/span><\/a><span data-contrast=\"none\"> specialise in providing high-quality refurbished IT hardware, offering a sustainable alternative that meets performance standards and minimises environmental impact.<\/span><\/p>\n<h5 aria-level=\"4\"><strong>3. Responsible e-waste recycling programmes\u00a0<\/strong><\/h5>\n<p><span data-contrast=\"none\">Correctly recycling and disposing of end-of-life IT equipment helps stop hazardous materials from harming the environment. E-waste is the most hazardous part of the waste stream, so businesses should partner with certified e-waste recyclers to ensure devices are disposed of responsibly. Services in the UK like XMA\u2019s<\/span> <a href=\"https:\/\/www.xma.co.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Circular Economy Managed Service (CEMS)<\/span><\/a><span data-contrast=\"none\"> help businesses securely recycle outdated hardware.<\/span><\/p>\n<p><span data-contrast=\"none\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-13328 size-full\" src=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/E-waste-management.jpg\" alt=\"Hand dropping a broken smartphone into a container that is clearly labelled 'e-waste'\" width=\"1500\" height=\"650\" srcset=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/E-waste-management.jpg 1500w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/E-waste-management-600x260.jpg 600w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/E-waste-management-692x300.jpg 692w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/E-waste-management-768x333.jpg 768w\" sizes=\"auto, (max-width: 1500px) 100vw, 1500px\" \/><\/span><\/p>\n<p><span data-contrast=\"none\">As Luke Bennison, Head of Circular Economy at XMA, says, \u201c[It] isn\u2019t just about reducing waste \u2013 it\u2019s about transforming your hardware lifecycle into a strategic asset that supports both your business goals and the planet\u201d.<\/span><\/p>\n<h4 aria-level=\"2\"><span data-contrast=\"none\">Website optimisation<\/span><\/h4>\n<p><span data-contrast=\"none\">Optimising your website is crucial for minimising its digital energy consumption and environmental impact. Poorly optimised websites load slower, consume more data, and increase server demand, leading to higher energy usage.<\/span><\/p>\n <div class=\"hubspot_shortcode\">\n <a href=\"https:\/\/hubspot.sjv.io\/OrKdGZ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_mobile.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_desktop.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<h5><span data-contrast=\"none\">Consider the following best practices to reduce your business\u2019 website energy consumption:<\/span><\/h5>\n<ol>\n<li><span data-contrast=\"none\"><strong>Efficient coding practices<\/strong>: Streamline your website\u2019s\u00a0code by removing unnecessary elements, minimising HTTP requests, and optimising scripts. Cleaner code reduces the processing power required to load pages, decreasing energy consumption.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Optimising media<\/strong>: Compress images and media files to reduce their size. This lowers the amount of data transferred during page loads, leading to faster load times and reduced energy use.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Choosing green hosting providers<\/strong>: These are powered by renewable energy sources, so your website\u2019s\u00a0energy has a lower carbon footprint.<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"335559738":0,"335559739":0}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Implementing caching systems<\/strong>: Use browser and server-side caching to temporarily store frequently accessed data. This reduces repeated data retrieval from servers, decreasing energy usage.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Responsive web design<\/strong>: Your website should adapt to different devices and screen sizes. This enhances user experience and avoids multiple site versions, conserving resources.<\/span><\/li>\n<\/ol>\n<p>Beyond technical website optimisation, consider streamlining your digital communications. Reducing what is sent \u2013 such as by segmenting email campaigns and deploying targeted PPC ads \u2013 helps focus resources and energy on high-conversion audiences only.<\/p>\n<p>Additionally, using cloud-based collaboration tools instead of lengthy email chains can reduce your digital footprint while enhancing team productivity. At Quality Company Formations, we use tools like Trello to manage assignments and collaborate on projects, as these leave a smaller digital footprint compared to long email threads.<\/p>\n<h4 aria-level=\"2\"><span data-contrast=\"none\">Leveraging content delivery networks<\/span><\/h4>\n<p><span data-contrast=\"none\">A content delivery network (CDN) is a smart way to boost website speed and reduce energy use. It serves content from the nearest server instead of continuously requesting data from the primary hosting site. This reduces data travel, lowers energy consumption, and improves performance.<\/span><\/p>\n<p><span data-contrast=\"none\">Benefits for your small business of using a CDN include:<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\"><strong>Faster load times<\/strong>: Content reaches users quicker, improving their experience.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Lower bandwidth use<\/strong>: Less strain on servers means better performance and cost savings.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Stronger security<\/strong>: Many CDNs include built-in Distributed Denial-of-Service (DDoS) protection to keep your website secure.<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">When exploring CDN providers, ensure they prioritise sustainability. Look for services that:<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\"><strong>Use renewable energy:<\/strong> Choose providers that power their data centres with green energy.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Have clear environmental policies:<\/strong> Select partners actively working to reduce their carbon footprint. For example, <\/span><a href=\"https:\/\/www.fastly.com\/blog\/ai-innovation-sustainability-key-takeaways-from-ai-action-summit\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Fastly prioritises sustainability<\/span><\/a><span data-contrast=\"none\"> by optimising data caching and delivery, minimising computational waste, and improving efficiency.<\/span><\/li>\n<li><span data-contrast=\"none\"><strong>Optimise efficiency:<\/strong> Check for a low <\/span><span data-contrast=\"none\">power usage effectiveness (PUE) score<\/span><span data-contrast=\"none\">, meaning the data centres waste less energy.<\/span><\/li>\n<\/ul>\n<p>Switching to a sustainable CDN is good for the planet and your website\u2019s\u00a0speed, safety, and cost-effectiveness.<\/p>\n<h4 aria-level=\"3\"><span data-contrast=\"none\">Take action and minimise your business\u2019 digital footprint<\/span><\/h4>\n<p><span data-contrast=\"none\">Reducing your business\u2019 digital footprint is a smart business move. A more efficient digital infrastructure leads to lower operational costs, faster performance, and a stronger reputation for your business. As more consumers and organisations prioritise sustainability, SMEs that act now will contribute to reducing environmental harm while gaining a competitive edge.<\/span><\/p>\n<p><span data-contrast=\"none\">Small businesses can build a more sustainable digital presence by making thoughtful changes, benefiting both their bottom line and the planet. Looking for expert guidance on building a future-proof, greener business? Check out the <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\"><span data-contrast=\"none\">QCF blog<\/span><\/a><span data-contrast=\"none\"> or comment with any questions you have.<\/span><\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>Every click, search, and stored file contributes to your digital footprint. While this might seem insignificant, the environmental impact of our digital activity is growing. For small businesses, reducing their digital footprint isn\u2019t just about sustainability \u2013 it\u2019s about cutting costs, improving efficiency, and enhancing brand reputation. In this guide, we\u2019ll discuss practical strategies small…<\/p>\n","protected":false},"author":28,"featured_media":13319,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[114],"tags":[],"class_list":["post-13314","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-advice","category-114","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Reduce Your Small Business\u2019 Digital Footprint<\/title>\n<meta name=\"description\" content=\"Find out strategies small businesses can implement to minimise their digital footprint, including energy efficiency and green technology.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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She has a Level 5 Diploma in Management and Leadership from the Chartered Management Institute and a Distinction in Company Secretarial Practice and Share Registration Practice from the Corporate Governance Institute.","jobTitle":"Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/amelia-french\/"}]}},"views":255,"x_categories":"Business 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explained – the benefits, challenges, and how to prepare\u00a0"},"content":{"rendered":"<p><span data-contrast=\"auto\">The UK government is focusing on electronic invoicing, known as e-invoicing, as one potential solution to reducing businesses’ administrative burden. It recently launched a 12-week e-invoicing consultation and actively encourages UK businesses to participate.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">E-invoicing is a system of digitally exchanging invoices between buyers’ and suppliers’ financial systems. If e-invoicing became mainstream or compulsory, it would eliminate the need to manually enter data into both systems, resulting in reduced administrative labour and increased business productivity.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It would also ensure that invoices are accurately and promptly recorded directly in the recipient’s financial system, removing the likelihood of human errors and streamlining tax processes.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-ccp-props=\"{}\"> <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/span><\/p>\n<ol>\n<li><span data-contrast=\"auto\">The UK government has launched a consultation to determine the future of e-invoicing. Potential benefits include reduced administrative burdens, cost savings, improved accuracy, and faster payment processing.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Countries like Italy and Sweden have already successfully implemented e-invoicing mandates.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">UK businesses can prepare for the potential introduction of widespread e-invoicing by researching compatible accounting software, training staff on digital invoicing, and participating in government consultation to help shape future regulations.<\/span><\/li>\n<\/ol>\n<p><span data-ccp-props=\"{}\"> <\/div>\n <\/div>\n \u00a0<\/span><\/p>\n<h2 aria-level=\"3\"><span data-contrast=\"none\">What is the government’s proposal on e-invoicing?<\/span><span data-ccp-props=\"{"134245418":true,"134245529":true,"335559738":160,"335559739":80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">On 13 February 2025, HM Revenue & Customs (HMRC) and the Department for Business and Trade (DBT) jointly published \u2018<\/span><a href=\"https:\/\/www.gov.uk\/government\/consultations\/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Promoting electronic invoicing across UK businesses and the public sector<\/span><\/a><span data-contrast=\"auto\">.\u2019 This consultation seeks to explore various aspects of e-invoicing, including:<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<ul>\n<li><span data-contrast=\"auto\">Which e-invoicing frameworks and technologies will be the most effective for UK businesses<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Whether e-invoicing should be compulsory for all businesses or introduced voluntarily<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Which sectors or sizes of businesses should be included in any potential mandate<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">The benefits of integrating e-invoicing with real-time tax reporting systems to enhance compliance and efficiency<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">The consultation is open until 7th May 2025, and the government encourages businesses of all sizes, industry bodies, and public sector organisations to participate.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This consultation will not result in immediate changes. However, it is an opportunity for businesses to influence policy decisions about the future of e-invoicing.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">Potential benefits of e-invoicing<\/span><span data-ccp-props=\"{"134245418":true,"134245529":true,"335559738":160,"335559739":80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Adopting e-invoicing can offer numerous advantages for businesses:<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">Cost savings<\/h4>\n<p><span data-contrast=\"auto\">By removing the administrative burden of manually inputting invoice information, businesses stand to save a significant amount of time from e-invoicing. This results in cost savings and increased productivity. The government estimates that moving to e-invoicing reduces invoicing costs by 60-80%.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p><span data-contrast=\"auto\">A <\/span><a href=\"https:\/\/www.sage.com\/en-gb\/company\/digital-newsroom\/2024\/06\/06\/sage-finds-small-european-companies-can-unlock-in-annual-savings\/\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-contrast=\"none\">Sage<\/span><\/a><span data-contrast=\"auto\"> report indicates that small European companies could save approximately \u20ac13,500 (around \u00a311,000) annually by implementing e-invoicing. These savings stem from reduced time spent on processing invoices and correcting errors.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">Improved cash flow<\/h4>\n<p><span data-contrast=\"auto\">E-invoicing also has the potential to speed up payment cycles. For instance, an <\/span><a href=\"https:\/\/www.gov.uk\/government\/news\/government-sets-out-plans-for-e-invoicing-overhaul-to-cut-paperwork\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">NHS<\/span><\/a><span data-contrast=\"auto\"> trust reports that e-invoices were ready for processing within 24 hours, compared to 10 days for paper invoices. This efficiency made payments almost twice as quick, with a 15% reduction in supplier queries.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">Enhanced accuracy<\/h4>\n<p><span data-contrast=\"auto\">Automating the invoicing process reduces the likelihood of human errors, ensuring that VAT (Value Added Tax) returns and other financial reports are more accurate.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">Do other countries use e-invoicing?<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"134245418":true,"134245529":true,"201341983":0,"335551550":1,"335551620":1,"335559685":0,"335559737":0,"335559738":160,"335559739":80,"335559740":279}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">The UK’s move towards e-invoicing is part of a global shift towards digital invoicing to improve efficiency in business transactions. Approximately 130 countries have implemented or are in the process of implementing e-invoicing standards.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">For example, in Italy, e-invoicing is mandatory for all business transactions, and in Sweden, public sector entities are required to accept e-invoices.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">What is PEPPOL?<\/h4>\n<p><span data-contrast=\"auto\">PEPPOL (Pan-European Public Procurement On-Line) is an existing secure and standardised infrastructure for e-invoicing and other procurement documents. Originally developed in Europe, PEPPOL is now used in several countries worldwide, including Australia, Singapore, and New Zealand.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If the UK aligns with PEPPOL, it could simplify international trade, making cross-border transactions more efficient and secure for businesses.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">E-invoicing challenges and considerations for businesses<\/span><span data-ccp-props=\"{"134245418":true,"134245529":true,"335559738":160,"335559739":80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">While the benefits are clear, transitioning to e-invoicing comes with certain challenges businesses must be aware of and prepare for.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">Initial setup costs<\/h4>\n<p><span data-contrast=\"auto\">Businesses may need to invest in new software or upgrade existing systems to handle e-invoicing. This is especially relevant for businesses currently using paper-based systems.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">Training requirements<\/h4>\n<p><span data-contrast=\"auto\">Staff will need training to use new systems effectively. Moving to a digital automated system may initially prove challenging for businesses without in-house financial professionals.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">International issues<\/h4>\n<p><span data-contrast=\"auto\">Without a standardised format, businesses might face issues when handling international transactions. Until governments agree on a universally accepted system, businesses may have to rely on traditional invoicing methods when dealing with suppliers or buyers overseas.<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"201341983":0,"335551550":1,"335551620":1,"335559685":0,"335559737":0,"335559738":0,"335559739":160,"335559740":279}\">\u00a0<\/span><\/p>\n<h4 aria-level=\"4\">Data security<\/h4>\n<p><span data-contrast=\"auto\">With the digital nature of e-invoicing, protecting sensitive financial data is a crucial concern for businesses. Businesses will need to implement strict access controls so that only authorised personnel can view or modify financial data. This will ensure businesses adhere to <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/gdpr-will-affect-company\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\"><span data-contrast=\"none\">GDPR<\/span><\/a><span data-contrast=\"auto\">, safeguarding customer and business information.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">How to participate in the consultation<\/span><span data-ccp-props=\"{"134245418":true,"134245529":true,"335559738":160,"335559739":80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Businesses are encouraged to share their views by completing the online form \u2018<\/span><a href=\"https:\/\/forms.office.com\/pages\/responsepage.aspx?id=PPdSrBr9mkqOekokjzE54W-vMbqBhTtLkRnErFDxVlxUMEU3TlcwUjBISExUTzNBSlEzU0dFMzFaVS4u&route=shorturl\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\"><span data-contrast=\"none\">Promoting electronic invoicing across UK businesses and the public sector<\/span><\/a><span data-contrast=\"auto\">\u2019 on the government’s official website. Responses can also be emailed to <\/span><a href=\"mailto:einvoicingconsultation@hmrc.gov.uk\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">einvoicingconsultation@hmrc.gov.uk<\/span><\/a><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-16-common-questions-answered\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Self Assessment – 16 common questions answered\u00a0<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/take-action-on-late-payments-to-small-businesses\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">UK government to take action on late payments to small businesses<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/tax-on-business-expenses\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Do I pay tax on my business expenses?<\/span><\/a>\n <\/p>\n<p><span data-contrast=\"auto\">By participating in the consultation, UK businesses have an opportunity to shape the future of digital invoicing so that any implemented system aligns with their needs.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">How UK businesses can prepare for e-invoicing<\/span><span data-ccp-props=\"{"134245418":true,"134245529":true,"335559738":160,"335559739":80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">Though e-invoicing is not yet mandatory in the UK, businesses can be proactive by preparing now. Here are some steps to get started:<\/span><\/p>\n<ol>\n<li><span data-contrast=\"auto\">Assess current invoicing systems and identify inefficiencies<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Research accounting software that supports e-invoicing, such as Xero, QuickBooks, or Sage<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Engage with the government consultation to share your views on how e-invoicing should be implemented in the UK<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Ensure your team is aware of the potential transition to digital invoicing<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"auto\">Stay informed about any regulatory changes related to e-invoicing. Whatever happens, <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\"><span data-contrast=\"none\">Quality Company Formations<\/span><\/a><span data-contrast=\"auto\"> is here to report what you need to know.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\n<\/ol>\n<h3 aria-level=\"3\"><span data-contrast=\"none\">The future of invoicing in the UK<\/span><span data-ccp-props=\"{"134245418":true,"134245529":true,"335559738":160,"335559739":80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">E-invoicing is a crucial step toward modernising the UK\u2019s financial systems. Adopted widely, it could transform how businesses handle transactions, making processes faster, more efficient, and more cost-effective.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This move towards e-invoicing is part of the UK’s broader strategy to digitise tax and administrative processes and create a more efficient and competitive business environment.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">While we wait for the consultation’s results and the policy changes it influences, business leaders should take advantage of this shift by preparing for digital transformation and engaging with the government\u2019s consultation to shape the future of invoicing.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">We hope you have enjoyed this blog. For information on the accounting and tax aspects of running a UK business, browse our other <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\"><span data-contrast=\"none\">Quality Company Formations articles<\/span><\/a><span data-contrast=\"auto\">. Please comment below if you have any questions on e-invoicing, and we will be happy to respond.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n <div class=\"hubspot_shortcode\">\n <a href=\"https:\/\/hubspot.sjv.io\/OrKdGZ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_mobile.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_desktop.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-desktop\">\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>The UK government is focusing on electronic invoicing, known as e-invoicing, as one potential solution to reducing businesses’ administrative burden. It recently launched a 12-week e-invoicing consultation and actively encourages UK businesses to participate.\u00a0 E-invoicing is a system of digitally exchanging invoices between buyers’ and suppliers’ financial systems. If e-invoicing became mainstream or compulsory, it…<\/p>\n","protected":false},"author":28,"featured_media":13350,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1239],"tags":[],"class_list":["post-13349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-accounting-finance","category-1239","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>E-invoicing Explained - Benefits, Challenges, and How to Prepare<\/title>\n<meta name=\"description\" content=\"Learn about the UK government\u2019s consultation on e-invoicing, plus how it could streamline business operations and reduce costs.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/e-invoicing-explained\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"E-invoicing explained - the benefits, challenges, and how to prepare\u00a0\" \/>\n<meta property=\"og:description\" content=\"Learn about the UK government\u2019s consultation on e-invoicing, plus how it could streamline business operations and reduce costs.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/e-invoicing-explained\/\" \/>\n<meta property=\"og:site_name\" content=\"Quality Formations Blog\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-05T19:56:20+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-26T12:06:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2537984823.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1500\" \/>\n\t<meta property=\"og:image:height\" content=\"750\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Amelia French\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Amelia French\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"E-invoicing Explained - 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She has a Level 5 Diploma in Management and Leadership from the Chartered Management Institute and a Distinction in Company Secretarial Practice and Share Registration Practice from the Corporate Governance Institute.","jobTitle":"Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/amelia-french\/"}]}},"views":410,"x_categories":"Tax, Accounting & Finance","x_tags":"","x_featured_media":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2537984823-128x128.jpg","x_featured_media_medium":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2537984823-600x300.jpg","x_featured_media_large":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2537984823-600x300.jpg","x_featured_media_original":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/03\/Shutterstock_2537984823.jpg","x_date":"5 Mar 2025","x_author":"Amelia French","x_gravatar":"https:\/\/secure.gravatar.com\/avatar\/2225856d837fbf51b9dea454b7796bce?s=96&d=mm&r=g","x_metadata":{"_thumbnail_id":"13350","yarpp_meta":{"yarpp_display_for_this_post":0},"_dt_sidebar_position":"right","_dt_sidebar_widgetarea_id":"sidebar_1","_dt_sidebar_hide_on_mobile":"0","_dt_footer_show":"1","_dt_footer_widgetarea_id":"sidebar_2","_dt_footer_hide_on_mobile":"0","_dt_header_title":"enabled","_dt_header_background":"normal","_dt_header_background_below_slideshow":"disabled","_dt_header_transparent_bg_color_scheme":"light","_dt_header_transparent_top_bar_bg_color":"#ffffff","_dt_header_transparent_top_bar_bg_opacity":"25","_dt_header_transparent_bg_color":"#000000","_dt_header_transparent_bg_opacity":"50","_dt_header_disabled_background":"normal","_dt_header_disabled_transparent_bg_color_scheme":"light","_dt_header_disabled_transparent_top_bar_bg_color":"#ffffff","_dt_header_disabled_transparent_top_bar_bg_opacity":"25","_dt_header_disabled_transparent_bg_color":"#000000","_dt_header_disabled_transparent_bg_opacity":"50","_dt_page_overrides_top_margin":"","_dt_page_overrides_bottom_margin":"","_dt_post_options_back_button":"0","_dt_post_options_hide_thumbnail":"0","_dt_post_options_related_mode":"same","_dt_post_options_preview":"normal","_yoast_wpseo_primary_category":"1239","_yoast_wpseo_focuskw":"e-invoicing UK","_yoast_wpseo_title":"E-invoicing Explained - Benefits, Challenges, and How to Prepare","_yoast_wpseo_metadesc":"Learn about the UK government\u2019s consultation on e-invoicing, plus how it could streamline business operations and reduce costs.","_yoast_wpseo_linkdex":"79","_yoast_wpseo_content_score":"60","_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_estimated_reading_time_minutes":"5","_yoast_indexnow_last_ping":"1742990792","views":"410"},"_links":{"self":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=13349"}],"version-history":[{"count":17,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13349\/revisions"}],"predecessor-version":[{"id":13546,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13349\/revisions\/13546"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media\/13350"}],"wp:attachment":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=13349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=13349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=13349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":13345,"date":"2025-03-01T16:44:14","date_gmt":"2025-03-01T16:44:14","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13345"},"modified":"2025-03-04T11:19:31","modified_gmt":"2025-03-04T11:19:31","slug":"tax-efficient-life-insurance-via-limited-company","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/tax-efficient-life-insurance-via-limited-company\/","title":{"rendered":"Tax-efficient life insurance through a limited company"},"content":{"rendered":"<p>Many limited company directors can achieve substantial tax savings by setting up relevant life insurance rather than personal life insurance. Relevant life cover is a death-in-service benefit arranged and funded by an employer, making it a tax-deductible expense for the business and a tax-free benefit for the individual.<\/p>\n<p>This post provides a brief overview of relevant life insurance for limited company directors and small employers, including the potential tax advantages and eligibility requirements.<\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/p>\n<ul>\n<li>Relevant life insurance is a tax-free life cover solution that directors can obtain through their limited companies.<\/li>\n<li>This type of insurance is also ideal for small businesses with fewer than five employees, high-earning employees with substantial pension funds, and certain members of group life schemes looking to top up their benefits.<\/li>\n<li>To be eligible for relevant life cover, the individual must be a UK-resident employee of a UK-registered business.<\/li>\n<\/ul>\n<p> <\/div>\n <\/div>\n \n<h2>Relevant life insurance for limited company directors<\/h3>\n<p>Relevant life insurance is a tax-efficient way for businesses to provide life cover to their employees (including directors and salaried partners) on an individual life basis. As a death-in-service benefit, it pays out a lump sum to an employee\u2019s family or dependents if the employee passes away or is diagnosed with a terminal illness during the policy term.<\/p>\n<p>Relevant life plans are primarily designed for businesses that are too small to set up <a href=\"https:\/\/www.gov.uk\/hmrc-internal-manuals\/insurance-policyholder-taxation-manual\/iptm7015\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">group life insurance<\/a>, so they are ideal for companies with only one or two directors or fewer than five employees. However, these policies are also useful for larger employers wanting to top up existing group life policies or offer an alternative option to high-earning employees.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/business-insurance\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Business insurance for startups<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/important-dates-for-uk-business-owners-in-2025\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Important dates for UK business owners in 2025<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/tax-on-business-expenses\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Do I pay tax on my business expenses?<\/span><\/a>\n <\/p>\n<p>The business sets up the policy to cover the life of an individual employee, paying the premiums from its business bank account. So, although the plan covers a single person, the business is the policyholder. This differs from a personal life policy, where the individual arranges life insurance on their own behalf and pays the premiums from personal income after tax.<\/p>\n<h2>Tax benefits of relevant life insurance<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>Arranging relevant life insurance through your limited company can result in more favourable tax treatment for you and your business than purchasing personal life cover yourself.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>If you have employees, providing relevant life insurance as part of an overall benefits package can also be a tax-efficient way to attract, reward, and retain key talent. While group life schemes are available for this purpose, they aren\u2019t suitable for every business.<\/p>\n<p>Here are six potential tax benefits of arranging relevant life insurance through your limited company:<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h4>1. Reduce your Corporation Tax bill<\/h4>\n<p>Since the company will own and pay for the life insurance policy, it can claim the cost of the premiums as a business expense and reduce its <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/how-corporation-tax-works\/?_gl=1*1msn9rr*_up*MQ..*_gs*MQ..&gclid=Cj0KCQiA2oW-BhC2ARIsADSIAWqhGlBmQo3Hu6DY7PBWd3trhFdNaHfzYIWE5STat5weUcV2nKRuz6kaAu78EALw_wcB&gbraid=0AAAAACiO-qX2G-uMW-GIhxnvYP1hr-rb4\" data-wpel-link=\"internal\">Corporation Tax<\/a> bill. However, the policy must form part of your <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/pay-yourself-through-limited-company\/?_gl=1*16orwqk*_up*MQ..*_gs*MQ..&gclid=Cj0KCQiA2oW-BhC2ARIsADSIAWqhGlBmQo3Hu6DY7PBWd3trhFdNaHfzYIWE5STat5weUcV2nKRuz6kaAu78EALw_wcB&gbraid=0AAAAACiO-qX2G-uMW-GIhxnvYP1hr-rb4\" data-wpel-link=\"internal\">director remuneration<\/a> package to satisfy HMRC\u2019s \u2018wholly and exclusively\u2019 rules for business expenses.<\/p>\n<h4>2. Not treated as a ‘benefit in kind’ <span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>Generally, HMRC won’t treat relevant life insurance as a \u2018<a href=\"https:\/\/www.gov.uk\/hmrc-internal-manuals\/tax-credits-technical-manual\/tctm04103\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">benefit in kind<\/a>\u2019 if the employer fully funds the premiums. Therefore, neither you nor your company will pay tax or National Insurance contributions on the value of the insurance premium, and you won\u2019t need to declare the payments in a P11D form each year.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>However, this tax treatment won\u2019t apply if the employee pays the premiums indirectly through a salary sacrifice arrangement. In such instances, the company and employee may be liable to taxation under the benefit-in-kind rules.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h4>3. Minimise personal tax liability<\/h4>\n<p>When you take out personal life insurance, you pay for the premiums from your own pocket, using personal funds on which you\u2019ve already paid Income Tax and National Insurance contributions.<\/p>\n<p>In contrast, your company will pay the premiums on relevant life insurance using pre-tax business funds, helping to minimise your personal tax liability. The savings can be substantial if you’re a higher-rate or additional-rate taxpayer.<\/p>\n<h4>4. Not liable to Inheritance Tax<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>In most cases, any cash sum paid to your beneficiaries should not form part of your estate for <a href=\"https:\/\/www.gov.uk\/inheritance-tax\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Inheritance Tax<\/a> purposes. This is because relevant life insurance policies are written into a discretionary trust. Additionally, the payment should be free from UK Income Tax, National Insurance contributions, and Capital Gains Tax.<\/p>\n<h4>5. No impact on pension allowance<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>Any relevant life cover payout won\u2019t count towards your pension <a href=\"https:\/\/www.gov.uk\/tax-on-your-private-pension\/lump-sum-allowance\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">lump sum and death benefit allowance<\/a> because relevant life plans are non-registered (\u2018excepted\u2019) schemes which don\u2019t fall under pension legislation. This is beneficial if you have substantial pension funds.<\/p>\n<h4>6. Can be used to top up group life insurance benefits<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>Some group life policies can be more restrictive by disregarding dividends, bonuses, overtime, and benefits in kind when considering<span class=\"Apple-converted-space\">\u00a0an employee’s total remuneration.<\/span> In certain situations, employers can use relevant life insurance to help members of an established group life scheme top up their existing benefits tax-efficiently.<\/p>\n<h2>Eligibility requirements for relevant life insurance<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>While most commonly used by limited company directors, any employer can arrange relevant life insurance upon satisfying the following legislative requirements:<\/p>\n<ul>\n<li>The employer must be a UK-resident business, whether a limited company, limited liability partnership (LLP), limited or general partnership, or sole trader.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>The insured individual must be a UK-resident employee, salaried director, or salaried partner of the policyholder.<\/li>\n<li><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/shareholder\/?_gl=1*c13dmr*_up*MQ..*_gs*MQ..&gclid=Cj0KCQiA2oW-BhC2ARIsADSIAWqhGlBmQo3Hu6DY7PBWd3trhFdNaHfzYIWE5STat5weUcV2nKRuz6kaAu78EALw_wcB&gbraid=0AAAAACiO-qX2G-uMW-GIhxnvYP1hr-rb4\" data-wpel-link=\"internal\">Limited company shareholders<\/a> are not eligible unless they are also employees.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Non-salaried directors, sole traders, and self-employed partners (equity partners) cannot insure themselves with relevant life cover. However, they can arrange a policy on the life of any employee, salaried director, or salaried partner.<\/li>\n<li>Tax avoidance must not be the sole purpose of arranging relevant life insurance. The policy must be <a href=\"https:\/\/www.gov.uk\/hmrc-internal-manuals\/business-income-manual\/bim37000\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">wholly and exclusively<\/a> for business purposes to qualify as a tax-deductible business expense.<\/li>\n<li>This type of policy only covers an employee up to the age of 75 years.<\/li>\n<li>The policy does not have a surrender value or provide any other benefit.<\/li>\n<\/ul>\n<p>These rules are set out in<span class=\"Apple-converted-space\">\u00a0<a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2003\/1\/section\/393B\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">subsection 393B(4) of the Income Tax (Earnings and Pensions) Act 2003<\/a>. <\/span><\/p>\n<h2>How to find relevant life insurance as a limited company director<\/h3>\n<p>Most life insurance providers in the UK offer relevant life policies, but the premiums and types of cover available will vary considerably between insurers. It\u2019s always worth shopping around to obtain and compare different quotes.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Ideally, you should <a href=\"https:\/\/www.moneyhelper.org.uk\/en\/getting-help-and-advice\/financial-advisers\/choosing-a-financial-adviser\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">speak to an independent financial advisor<\/a> or <a href=\"https:\/\/www.moneyhelper.org.uk\/en\/everyday-money\/insurance\/when-to-use-an-insurance-broker\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">specialist insurance broker<\/a> to help you find the most appropriate and tax-efficient life insurance for your circumstances. Alternatively, you can use comparison websites or research individual insurers online and contact them directly.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>Thanks for reading<\/h3>\n<p>We hope you’ve found this post helpful. Please comment below if you have any questions.<\/p>\n<p>Explore the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" data-wpel-link=\"internal\">Quality Company Formations Blog<\/a> for more limited company guidance and general business advice.<\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>Many limited company directors can achieve substantial tax savings by setting up relevant life insurance rather than personal life insurance. Relevant life cover is a death-in-service benefit arranged and funded by an employer, making it a tax-deductible expense for the business and a tax-free benefit for the individual. This post provides a brief overview of…<\/p>\n","protected":false},"author":28,"featured_media":13356,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1239],"tags":[],"class_list":["post-13345","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-accounting-finance","category-1239","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Tax-Efficient Life Insurance Through a Limited Company<\/title>\n<meta name=\"description\" content=\"We discuss relevant life insurance for company directors and small employers, including tax benefits and eligibility requirements.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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shares explained\u00a0"},"content":{"rendered":"<p><span class=\"TextRun SCXW138055965 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">When a company has multiple shareholders, <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">there<\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">\u2019<\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">s<\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\"> often a need for a tailored ownership structure that allows <\/span><\/span><span class=\"TextRun Highlight SCXW138055965 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">for different rights and privileges between shareholders<\/span><\/span><span class=\"TextRun SCXW138055965 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">. Alphabet shares can offer a solution. <\/span><\/span><span class=\"TextRun Highlight SCXW138055965 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">This flexible <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">yet <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">relatively simple <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">share <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">class\u00a0enables a company to provide different <\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">dividend<\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">, voting, and capital rights to <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">different <\/span><span class=\"NormalTextRun SCXW138055965 BCX4\" data-ccp-parastyle=\"Default\">shareholders.<\/span><\/span><span class=\"EOP SCXW138055965 BCX4\" data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p>This post explains the basics of alphabet shares, the most common reasons for issuing them, and the procedures you must follow to create alphabet shares during or after the company formation process.<\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/p>\n<ul>\n<li>Alphabet shares are ordinary shares structured into different classes, such as ‘A’ shares, ‘B’ shares, and ‘C’ shares.<\/li>\n<li>Companies issue alphabet shares to vary the rights and privileges of different shareholders.<\/li>\n<li>When issuing alphabet shares to family members, companies must be mindful of HMRC’s anti-avoidance settlements legislation.<\/li>\n<\/ul>\n<p> <\/div>\n <\/div>\n \n<h2>What are alphabet shares?<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Alphabet shares are a type of ordinary share that limited companies can issue to shareholders (<\/span><span data-contrast=\"none\">also called the ‘members’<\/span><span data-contrast=\"none\">). They are structured as different classes of ordinary shares and are usually named \u2018A\u2019 ordinary, \u2018B\u2019 ordinary, \u2018C\u2019 ordinary shares<\/span><span data-contrast=\"none\">, and so on (this is where the term ‘alphabet shares’ comes from)<\/span><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Ordinary shares typically provide basic shareholder rights, namely:<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li>Full rights to attend and vote at a general meeting of the company\u2019s shareholders (one vote per share)<\/li>\n<li>Right to receive equal dividends per share (dividends are distributions of company profits)<\/li>\n<li>Right to share in any distributions of surplus capital, including on the winding up of the company<\/li>\n<\/ul>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Most companies only issue ordinary shares, so these basic rights are normally pro-rata based on the number of shares each member holds. For example, a shareholder with 25% of a company\u2019s ordinary shares would have the right to 25% of dividends, voting rights, <\/span><span data-contrast=\"none\">and capital on the winding up of the company<\/span><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">With alphabet shares, companies can assign <\/span><span data-contrast=\"none\">different levels of these<\/span><span data-contrast=\"none\"> rights to each class, resulting in some rights applying to one class of alphabet shares but not another. For example:<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<ul>\n<li>A ordinary shares \u2013 full voting rights, full dividend rights, full capital rights<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>B ordinary shares \u2013 no voting rights, full dividend rights, no capital rights<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>C ordinary shares \u2013 full voting rights, no dividend rights, full capital rights<\/li>\n<\/ul>\n<p><span class=\"TextRun Highlight SCXW188950141 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">Alphabet shares can also provide varying rights, <\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">such a<\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">s variable <\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">dividend rates<\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">, <\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">enhanced voting rights<\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">, or<\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\"> different rights to <\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">capital on winding up<\/span><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">.<\/span><\/span><span class=\"TextRun SCXW188950141 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW188950141 BCX4\" data-ccp-parastyle=\"Default\">\u00a0\u00a0<\/span><\/span><\/p>\n<h2>Why would a company issue them?<\/h3>\n<p>There are various reasons why companies issue alphabet shares. Often, they relate to the degree of each shareholder\u2019s involvement in the business, the risk they take, or the extent to which founding or controlling members wish to provide voting privileges to other shareholders.<\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p><span class=\"TextRun SCXW25693289 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW25693289 BCX4\" data-ccp-parastyle=\"Default\">Tax efficiency is often the main motivator. For example, with alphabet shares, a shareholder could own 10% of issued shares that provide entitlement to 50% of any dividends. <\/span><\/span><span class=\"TextRun Highlight SCXW25693289 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW25693289 BCX4\" data-ccp-parastyle=\"Default\">If<\/span><span class=\"NormalTextRun SCXW25693289 BCX4\" data-ccp-parastyle=\"Default\"> there was only a single class of ordinary shares<\/span><span class=\"NormalTextRun SCXW25693289 BCX4\" data-ccp-parastyle=\"Default\">, the shareholder would only be entitled to 10% of any declared dividends<\/span><span class=\"NormalTextRun SCXW25693289 BCX4\" data-ccp-parastyle=\"Default\">.<\/span><\/span><span class=\"EOP SCXW25693289 BCX4\" data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p>This strategy can be beneficial where some shareholders are basic-rate taxpayers while others are subject to higher or additional tax rates. However, you’ll need to be mindful of HMRC’s ‘settlements’ legislation in this situation (we will discuss this later in the post).<\/p>\n<p>Other common reasons for creating alphabet shares include:<\/p>\n<h4>1. Varying shareholder rights in a family-owned company<\/h4>\n<p>It\u2019s common in <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/starting-family-business-8-tips-for-success\/\" data-wpel-link=\"internal\">family companies<\/a> to distribute shares to various family members, particularly spouses and children. The purpose may be to reflect their different levels of involvement, utilise everyone\u2019s tax-free allowances, create passive income for loved ones, or build generational wealth.<\/p>\n<h4>2. Awarding shares to employees<\/h4>\n<p><span class=\"TextRun SCXW16646504 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">Issuing shares to employees can be <\/span><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">a great way<\/span><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\"> to <\/span><span class=\"NormalTextRun SpellingErrorV2Themed SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">incentivise<\/span><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\"> workers and foster loyalty. When using alphabet shares as part of an <\/span><\/span><a class=\"Hyperlink SCXW16646504 BCX4\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/share-options-and-share-option-schemes\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-wpel-link=\"internal\"><span class=\"FieldRange SCXW16646504 BCX4\"><span class=\"TextRun SCXW16646504 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-charstyle=\"Hyperlink.1\">employee share scheme<\/span><\/span><\/span><\/a><span class=\"TextRun SCXW16646504 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">, companies <\/span><\/span><span class=\"TextRun Highlight SCXW16646504 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">will typically <\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed GrammarErrorHighlight SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">structure<\/span> them <span class=\"NormalTextRun SCXW16646504 BCX4\" data-ccp-parastyle=\"Default\">as having the right to receive dividends, but no rights to vote on any decisions or receive any capital rights.<\/span><\/span><span class=\"EOP SCXW16646504 BCX4\" data-ccp-props=\"{"134233117":false,"134233118":false,"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240,"335572071":0,"335572072":0,"335572073":0,"335572075":0,"335572076":0,"335572077":0,"335572079":0,"335572080":0,"335572081":0,"335572083":0,"335572084":0,"335572085":0,"335572087":0,"335572088":0,"335572089":0,"469789798":"nil","469789802":"nil","469789806":"nil","469789810":"nil","469789814":"nil"}\">\u00a0<\/span><\/p>\n<h4>3. Ensuring majority voting rights remain with the founders<\/h4>\n<p>Founding shareholders or key investors may wish to retain majority decision-making powers while continuing to raise capital and issue dividends to other shareholders. Alphabet shares can be structured to facilitate this.<\/p>\n<h4>4. Facilitating joint ventures<\/h4>\n<p>When two or more companies wish to set up a separate joint venture company, alphabet shares can make it easier to define each party\u2019s varied ownership rights and level of control in the new company.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>Mistakes to avoid<\/h3>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">One of the most common mistakes companies make when issuing alphabet shares is failing to update the articles of association to <\/span><span data-contrast=\"none\">create<\/span><span data-contrast=\"none\"> the new share classes and specify the attached rights. The rights attached to shares are known as the ‘prescribed particulars’. <\/span><span data-contrast=\"none\">Unless specified otherwise,<\/span><span data-contrast=\"none\"> all company shares will <\/span><span data-contrast=\"none\">normally<\/span><span data-contrast=\"none\"> rank equally (pro rata) and provide the same voting, dividend, and capital rights per share.<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"> <div class=\"hubspot_shortcode\">\n <a href=\"https:\/\/hubspot.sjv.io\/OrKdGZ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_mobile.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_desktop.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-desktop\">\n <\/a>\n <\/div>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">This oversight can <\/span><span data-contrast=\"none\">potentially<\/span><span data-contrast=\"none\"> result in the payment of illegal dividends, which can have serious consequences for the company and its directors. It could also lead to shareholder disputes, difficulties when seeking new investors, and potential issues during any future sale of the company.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<h4>Beware of HMRC’s ‘settlements’ legislation<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>Under <a href=\"https:\/\/www.gov.uk\/hmrc-internal-manuals\/trusts-settlements-and-estates-manual\/tsem4015\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">anti-avoidance settlements legislation<\/a>, HMRC may challenge certain dividend arrangements on the basis that an individual shareholder gains a tax advantage by diverting some of their dividend income to another person who is liable to a lower tax rate (or not subject to tax).<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>This legislation is a key consideration when issuing alphabet shares, particularly when gifting shares and <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/issue-dividends\/\" data-wpel-link=\"internal\">distributing dividends<\/a> to spouses, civil partners, and minor children in a family company.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>If HMRC suspects that settlements legislation applies, the diverted dividend income may be deemed to belong to the settlor rather than the recipient shareholder for tax purposes.<\/p>\n<p>Companies should seek professional advice and guidance before creating and issuing alphabet shares to avoid such issues.<\/p>\n<h2>How to issue alphabet shares<\/h3>\n<p><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/issue-multiple-share-classes\/\" data-wpel-link=\"internal\">Issuing multiple share classes<\/a>, including alphabet shares, is always more straightforward during the company formation. However, it\u2019s also possible to create new share classes after incorporation to reflect the evolving needs of a company and its shareholders. We outline both options below:<\/p>\n<h4>Option 1: Creating alphabet shares on incorporation<\/h4>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Generally, you should not use the<\/span><span data-contrast=\"none\"> model articles of association to set up a company with multiple share classes. Therefore, to issue alphabet shares during the <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/set-up-a-limited-company-in-4-easy-steps\/\" data-wpel-link=\"internal\"><span data-contrast=\"none\">company formation process<\/span><\/a><span data-contrast=\"none\">, you must add specialist provisions to the model articles of association or create entirely bespoke articles.\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p data-ccp-border-bottom=\"0px none #000000\" data-ccp-padding-bottom=\"0px\" data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">These provisions outline each <\/span><span data-contrast=\"none\">share class and the rights<\/span><span data-contrast=\"none\"> attached to them. You\u2019ll then summarise the prescribed particulars of each share class on the incorporation application (form IN01).<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n\t\t<div class=\"worldfirst_shortcode\">\n\t\t\t<a href=\"https:\/\/portal.worldfirst.com\/register?region=UK&affiliate_id=10378\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/WFT_BANNER_326x341.png\"\n\t\t\t\t\talt=\"Worldfirst - Pay and get paid in multiple currencies\"\n\t\t\t\t\tclass=\"worldfirst_shortcode-mobile\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/WFT_BANNER_980x150.jpg\"\n alt=\"Worldfirst - Pay and get paid in multiple currencies.\"\n\t\t\t\t\tclass=\"worldfirst_shortcode-desktop\">\n\t\t\t<\/a>\n <\/div>\n \n<p>As part of the incorporation process, you’ll also need to provide details of the individuals or entities holding the initial shares of each share class. These individuals are the subscribers \u2013 the founding shareholders of the company.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p><span class=\"TextRun SCXW189258936 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW189258936 BCX4\" data-ccp-parastyle=\"Default\">At Quality Company Formations, we provide a specialist <\/span><\/span><a class=\"Hyperlink SCXW189258936 BCX4\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/formation-packages\/multiple-share-class\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-wpel-link=\"internal\"><span class=\"FieldRange SCXW189258936 BCX4\"><span class=\"TextRun Underlined SCXW189258936 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW189258936 BCX4\" data-ccp-charstyle=\"Hyperlink.0\">Multiple Share Class Package<\/span><\/span><\/span><\/a> <span class=\"TextRun Highlight SCXW189258936 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW189258936 BCX4\" data-ccp-parastyle=\"Default\">for customers wishing to set up a company with more than one class of shares<\/span><span class=\"NormalTextRun SCXW189258936 BCX4\" data-ccp-parastyle=\"Default\">.<\/span><\/span><span class=\"TextRun SCXW189258936 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW189258936 BCX4\" data-ccp-parastyle=\"Default\"> Our Company Secretarial Team can provide a Drafting Service if you need help creating bespoke articles.<\/span><\/span><span class=\"EOP SCXW189258936 BCX4\" data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<h4>Option 2: Creating alphabet shares after incorporation<\/h4>\n<p><span class=\"TextRun SCXW202117439 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\">To create alphabet shares for an existing company, the shareholders must pass a special resolution to amend the company<\/span><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\">\u2019<\/span><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\">s articles. The amended articles should specify the alphabet <\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\">shares<\/span><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\"> a<\/span><\/span><span class=\"TextRun Highlight SCXW202117439 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\">nd t<\/span><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\">he rights attached<\/span><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\"> to<\/span><\/span><span class=\"TextRun SCXW202117439 BCX4\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW202117439 BCX4\" data-ccp-parastyle=\"Default\"> them.<\/span><\/span><span class=\"EOP SCXW202117439 BCX4\" data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559685":0,"335559731":0,"335559737":0,"335559738":0,"335559739":240,"335559740":240}\">\u00a0<\/span><\/p>\n<p>Next, the shareholders usually need to pass an ordinary resolution authorising the directors to issue the alphabet shares, per <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2006\/46\/section\/551\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Section 551 of the Companies Act 2006<\/a>. This authorisation specifies the number of shares the directors can issue and the permitted timeframe for doing so (maximum period of 5 years).<\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/prescribed-particulars\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Prescribed particulars – the rights attached to company shares<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/how-to-amend-a-companys-articles-of-association\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">How to amend a company\u2019s articles of association<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/company-resolutions-different-types-explained\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Company resolutions – the different types explained<\/span><\/a>\n <\/p>\n<p data-ccp-border-between=\"0px none #000000\" data-ccp-padding-between=\"0px\"><span data-contrast=\"none\">Within 15 days of <\/span><span data-contrast=\"none\">these<\/span><span data-contrast=\"none\"> changes, the directors must send a copy of the resolutions and the new articles as amended to Companies House with the relevant <\/span><span data-contrast=\"none\">statutory form<\/span><span data-contrast=\"none\">. Thereafter, the directors can issue alphabet shares to the relevant shareholders by following the usual <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/issue-of-shares\/\" data-wpel-link=\"internal\"><span data-contrast=\"none\">issue of shares procedure<\/span><\/a><span data-contrast=\"none\">. This <\/span><span data-contrast=\"none\">normally<\/span><span data-contrast=\"none\"> involves:<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\">Passing a board resolution <\/span><span data-contrast=\"none\">to approve the issuance<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">Where applicable, passing a members’ resolution to disapply any pre-emption rights or otherwise deal with other restrictions that may be in place<\/span><span data-ccp-props=\"{"134233117":false,"134233118":false,"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559737":0,"335559738":0,"335559739":0,"335559740":240,"335572071":0,"335572072":0,"335572073":0,"335572075":0,"335572076":0,"335572077":0,"335572079":0,"335572080":0,"335572081":0,"335572083":0,"335572084":0,"335572085":0,"335572087":0,"335572088":0,"335572089":0,"469789798":"nil","469789802":"nil","469789806":"nil","469789810":"nil","469789814":"nil"}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">Completing a return of allotment of shares (form SH01) for Companies House and filing it within 1 month, <\/span><span data-contrast=\"none\">along with the members’ resolution (if applicable)<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">Providing share certificates to the relevant shareholders<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">Updating the company\u2019s <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/register-of-members\/\" data-wpel-link=\"internal\"><span data-contrast=\"none\">register of members<\/span><\/a><span data-contrast=\"none\"> (and the register of people with significant control, if applicable)\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">Updating details of shares and shareholders on the next <\/span><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/confirmation-statement\/\" data-wpel-link=\"internal\"><span data-contrast=\"none\">confirmation statement<\/span><\/a><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{"134245417":true,"134245418":false,"134245529":false,"201341983":0,"335551550":1,"335551620":1,"335557856":4278190080,"335559737":0,"335559738":0,"335559739":0,"335559740":240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p>If pre-emption rights apply, the company may first have to offer the new alphabet shares to existing shareholders. However, there are exceptions to <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2006\/46\/part\/17\/chapter\/3\/crossheading\/existing-shareholders-right-of-preemption\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">statutory pre-emption rights<\/a>, including the allotment of shares to employees. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>The process of issuing new shares can be complex. To ensure any new share structure complies with relevant legislation and aligns with your company\u2019s goals, you should seek advice from an accountant or legal professional.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h4>Updating the articles of association after issuing alphabet shares<\/h4>\n<p>A company must update its articles of association accordingly when issuing any share classes other than ordinary, including alphabet shares.\u00a0<span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">The shareholders must pass a\u00a0<a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/special-resolution\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\">special resolution<\/a> at a general meeting or in writing to do so<\/span>. This type of resolution requires a 75% majority vote in favour of the change.<\/p>\n<p>If a shareholder\u2019s agreement is in place, it should be updated at the same time. When making any such changes, you should ensure there are no discrepancies between the articles and the agreement.<\/p>\n<p>Amending these documents is relatively straightforward, but we recommend consulting a commercial solicitor to ensure the correct procedures are followed and that any changes are appropriate, enforceable, and comply with company law.<\/p>\n<h4>Do I need a shareholders\u2019 agreement?<\/h4>\n<p>A <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-is-a-shareholders-agreement-and-why-do-i-need-one\/\" data-wpel-link=\"internal\">shareholders’ agreement<\/a> is an optional, private contract between the members of a company limited by shares. However, creating a properly drafted agreement is advisable if your company has more than one shareholder and issues multiple share classes.<\/p>\n<h2>Thanks for reading<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>Whether you\u2019re considering giving shares to loved ones, setting up an employee share scheme, or entering a joint venture with other companies, alphabet shares are the ideal share class for varying shareholder rights.<\/p>\n<p>If you have questions or need help setting up a company with alphabet shares, please comment below or <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/contact-us\/\" data-wpel-link=\"internal\">contact our company formation team<\/a>. If your situation is particularly complex, you may also wish to speak to your accountant or a commercial solicitor.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Explore the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" data-wpel-link=\"internal\">Quality Company Formations Blog<\/a> for limited company guidance and business advice.<\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>When a company has multiple shareholders, there\u2019s often a need for a tailored ownership structure that allows for different rights and privileges between shareholders. Alphabet shares can offer a solution. This flexible yet relatively simple share class\u00a0enables a company to provide different dividend, voting, and capital rights to different shareholders.\u00a0 This post explains the basics…<\/p>\n","protected":false},"author":27,"featured_media":13295,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[141],"tags":[],"class_list":["post-13273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shares-shareholders","category-141","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Alphabet Shares Explained<\/title>\n<meta name=\"description\" content=\"Find out about alphabet shares, including the most common reasons for issuing them, and the procedures you must follow to create them.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Alphabet shares explained\u00a0\" \/>\n<meta property=\"og:description\" content=\"Find out about alphabet shares, including the most common reasons for issuing them, and the procedures you must follow to create them.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/\" \/>\n<meta property=\"og:site_name\" content=\"Quality Formations Blog\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-09T13:58:16+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-09T23:12:04+00:00\" \/>\n<meta property=\"og:image\" 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them.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/","og_locale":"en_GB","og_type":"article","og_title":"Alphabet shares explained\u00a0","og_description":"Find out about alphabet shares, including the most common reasons for issuing them, and the procedures you must follow to create them.","og_url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/","og_site_name":"Quality Formations Blog","article_published_time":"2025-02-09T13:58:16+00:00","article_modified_time":"2025-03-09T23:12:04+00:00","og_image":[{"width":1500,"height":750,"url":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271.jpg","type":"image\/jpeg"}],"author":"James Dobran","twitter_misc":{"Written by":"James Dobran","Estimated reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/","name":"Alphabet Shares Explained","isPartOf":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/#primaryimage"},"image":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/#primaryimage"},"thumbnailUrl":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271.jpg","datePublished":"2025-02-09T13:58:16+00:00","dateModified":"2025-03-09T23:12:04+00:00","author":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#\/schema\/person\/942070b85e7e7f92058e94e50b7f725d"},"description":"Find out about alphabet shares, including the most common reasons for issuing them, and the procedures you must follow to create them.","breadcrumb":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/alphabet-shares-explained\/#primaryimage","url":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271.jpg","contentUrl":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271.jpg","width":1500,"height":750,"caption":"A male hand placing 3 wooden blocks on a yellow table, with the letters A, B and C printed on them, illustrating the concept of alphabet 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News","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Person","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#\/schema\/person\/942070b85e7e7f92058e94e50b7f725d","name":"James Dobran","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/8c79471f97f5b42661d7396878a8a49c?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/8c79471f97f5b42661d7396878a8a49c?s=96&d=mm&r=g","caption":"James Dobran"},"description":"James is Deputy Director of Operations at QCF, responsible for managing and optimising the business\u2019 daily operational functions. He greatly values customer-centricity and service standard improvements, bolstered by qualifications in Management and Leadership from the Chartered Management Institute and certifications in Sales Management and Customer Service Excellence.","jobTitle":"Deputy Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/james-dobran\/"}]}},"views":781,"x_categories":"Shares and Shareholders","x_tags":"","x_featured_media":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271-128x128.jpg","x_featured_media_medium":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271-600x300.jpg","x_featured_media_large":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271-600x300.jpg","x_featured_media_original":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/02\/Shutterstock_1916965271.jpg","x_date":"9 Feb 2025","x_author":"James Dobran","x_gravatar":"https:\/\/secure.gravatar.com\/avatar\/8c79471f97f5b42661d7396878a8a49c?s=96&d=mm&r=g","x_metadata":{"yarpp_meta":{"yarpp_display_for_this_post":0},"_dt_sidebar_position":"right","_dt_sidebar_widgetarea_id":"sidebar_1","_dt_sidebar_hide_on_mobile":"0","_dt_footer_show":"1","_dt_footer_widgetarea_id":"sidebar_2","_dt_footer_hide_on_mobile":"0","_dt_header_title":"enabled","_dt_header_background":"normal","_dt_header_background_below_slideshow":"disabled","_dt_header_transparent_bg_color_scheme":"light","_dt_header_transparent_top_bar_bg_color":"#ffffff","_dt_header_transparent_top_bar_bg_opacity":"25","_dt_header_transparent_bg_color":"#000000","_dt_header_transparent_bg_opacity":"50","_dt_header_disabled_background":"normal","_dt_header_disabled_transparent_bg_color_scheme":"light","_dt_header_disabled_transparent_top_bar_bg_color":"#ffffff","_dt_header_disabled_transparent_top_bar_bg_opacity":"25","_dt_header_disabled_transparent_bg_color":"#000000","_dt_header_disabled_transparent_bg_opacity":"50","_dt_page_overrides_top_margin":"","_dt_page_overrides_bottom_margin":"","_dt_post_options_back_button":"0","_dt_post_options_hide_thumbnail":"0","_dt_post_options_related_mode":"same","_dt_post_options_preview":"normal","_yoast_wpseo_primary_category":"141","_yoast_wpseo_focuskw":"alphabet shares","_yoast_wpseo_linkdex":"85","_yoast_wpseo_content_score":"90","_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_estimated_reading_time_minutes":"8","_yoast_wpseo_title":"Alphabet Shares Explained","_yoast_wpseo_metadesc":"Find out about alphabet shares, including the most common reasons for issuing them, and the procedures you must follow to create them.","_thumbnail_id":"13295","_yoast_indexnow_last_ping":"1741561925","views":"781"},"_links":{"self":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=13273"}],"version-history":[{"count":20,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13273\/revisions"}],"predecessor-version":[{"id":13420,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13273\/revisions\/13420"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media\/13295"}],"wp:attachment":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=13273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=13273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=13273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":13225,"date":"2025-01-21T17:48:40","date_gmt":"2025-01-21T17:48:40","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13225"},"modified":"2025-02-06T12:58:05","modified_gmt":"2025-02-06T12:58:05","slug":"directors-report-explained","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/","title":{"rendered":"Directors’ report explained"},"content":{"rendered":"<p>After every financial year, all registered companies are legally obligated to submit annual accounts detailing their financial activities to Companies House. A directors’ report is part of those accounts. If a company is dormant (not trading) or qualifies as a micro-entity, it doesn\u2019t need to file a directors\u2019 report.<\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n<p>In the blog below, we explain more, including what a directors’ report is and what information it contains. We also clarify who is responsible for preparing and filing the report and the benefits of doing so.<\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/p>\n<ul>\n<li>A directors\u2019 report is part of the annual accounts that small, medium, and large companies must prepare each financial year. Micro-entities and dormant companies are exempt.<\/li>\n<li>Directors prepare the report, providing an overview of the company\u2019s performance during the financial year. It includes information such as the recommended dividend, financial risk management objectives, and employee engagement policies. Depending on their size, some companies may be subject to additional requirements.<\/li>\n<li>A company\u2019s first set of annual accounts (along with a directors\u2019 report) is due at Companies House 21 months after incorporation. After that, the filing deadline is no later than 9 months after the accounting reference date (ARD).<\/li>\n<\/ul>\n<p> <\/div>\n <\/div>\n \n<h2>What is a directors’ report?<\/h3>\n<p>A directors\u2019 report is an overview of the company\u2019s performance during the financial year. It\u2019s a supplementary document to the annual accounts, which the directors prepare and file each year with Companies House.<\/p>\n<p>One of the primary purposes of a directors\u2019 report is to maintain good communication between the shareholders (also known as members), who own the company, and the board of directors, who run the company day to day on behalf of the shareholders. The directors\u2019 report helps the shareholders assess whether the board has fulfilled their duty to promote the company\u2019s success and keeps them in the loop about business performance.<\/p>\n<p>Companies House also uses the directors\u2019 report to evaluate the company\u2019s compliance with relevant laws and regulations and corporate transparency.<\/p>\n<h2>Who needs to file one?<\/h3>\n<p>Small, medium, and large companies must prepare and file a directors\u2019 report along with their annual accounts every financial year. Micro-entities and dormant companies are typically exempt.<\/p>\n<p>Directors are personally responsible for ensuring the report is accurate and filed on time. Failure to do so is an offence and could result in fines and convictions.<\/p>\n<p>Below is a comparison of the criteria for micro, small, medium, and large companies.<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"110\"><\/td>\n<td width=\"110\"><strong>Micro company<\/strong><\/td>\n<td width=\"110\"><strong>Small company<\/strong><\/td>\n<td width=\"110\"><strong>Medium companies<\/strong><\/td>\n<td width=\"110\"><strong>Large companies<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"110\"><strong>Annual turnover<\/strong><\/td>\n<td width=\"110\">Under \u00a3632,000<\/td>\n<td width=\"110\">Under \u00a310.2m<\/td>\n<td width=\"110\">Under \u00a336m<\/td>\n<td width=\"110\">More than \u00a336m<\/td>\n<\/tr>\n<tr>\n<td width=\"110\"><strong>Balance sheet total<\/strong><\/td>\n<td width=\"110\">Under \u00a3316,000<\/td>\n<td width=\"110\">Under \u00a35.1m<\/td>\n<td width=\"110\">Under \u00a318m<\/td>\n<td width=\"110\">More than \u00a318m<\/td>\n<\/tr>\n<tr>\n<td width=\"110\"><strong>Average number of employees<\/strong><\/td>\n<td width=\"110\">Under 10<\/td>\n<td width=\"110\">Under 50<\/td>\n<td width=\"110\">Under 250<\/td>\n<td width=\"110\">More than 250<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p> <\/p>\n<h2>What should a directors’ report include?<\/h3>\n<p>The contents of a directors\u2019 report are set out across multiple pieces of legislation, including the <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2006\/46\/contents\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">Companies Act 2006<\/a>, the <a href=\"https:\/\/www.legislation.gov.uk\/uksi\/2008\/409\/contents\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">Small Companies and Groups (Accounts and Directors\u2019 Report) Regulations 2008<\/a>, and the <a href=\"https:\/\/www.legislation.gov.uk\/uksi\/2008\/410\/contents\/made\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">Large and Medium-sized Companies and Groups (Accounts and Directors\u2019 Reports) Regulations 2008<\/a>.<\/p>\n<p>As a minimum, most qualifying companies must include the following in their directors\u2019 report:<\/p>\n<ul>\n<li>The names of all the directors during the financial year<\/li>\n<li>Details of any political donations over \u00a32,000 made during the financial year<\/li>\n<li>Disclosure of any third-party indemnity provisions<\/li>\n<li>Disclosure of any pension scheme indemnity provisions<\/li>\n<\/ul>\n<p>Additional information may be required depending on the company size.<\/p>\n<h4>Medium and large companies<\/h4>\n<p>In addition to the above requirements, medium and large companies must also disclose a dividend recommended by the directors and a description of the actions the company has taken to:<\/p>\n<ul>\n<li>Regularly consult employees and provide them with financial and economic information that may affect them<\/li>\n<li>Encourage employee engagement via share schemes or other means<\/li>\n<li>Make employees aware of the financial and economic factors affecting the company\u2019s performance<\/li>\n<\/ul>\n<p>They must also confirm:<\/p>\n<ul>\n<li>Whether the company has any branches outside the UK<\/li>\n<li>That auditors and directors have been made aware of all relevant information<\/li>\n<li>The company\u2019s financial risk management objectives and policies<\/li>\n<li>Any price, credit, liquidity, or cash flow risks<\/li>\n<li>The details of any significant events affecting the company since the end of the financial year<\/li>\n<li>The likely future business developments<\/li>\n<li>The company\u2019s research and development plans (if any)<\/li>\n<\/ul>\n<h4>Large companies only<\/h4>\n<p>Large companies must also report:<\/p>\n<ul>\n<li>How they\u2019ve maintained good business relationships with key stakeholders, such as suppliers and customers, during the financial year<\/li>\n<li>Environmental matters, including greenhouse gas emissions, energy consumption, and energy efficiency (other companies, including public companies, have different and much more comprehensive rules on this)<\/li>\n<\/ul>\n<h4>Example:<\/h4>\n<p>To see an example of a directors\u2019 report, simply search for a company on the <a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"external\">Companies House register<\/a>. Click on their name, go to the \u2018Filing History\u2019 tab, and tick the \u2018Accounts\u2019 category. You\u2019ll then see the company\u2019s historic annual accounts, which contain the directors’ report (if they qualify to prepare one).<\/p>\n<h2>How does a directors’ report differ from a strategic report?<\/h3>\n<p>Both reports supplement annual accounts and include similar information. However, they have some key differences.<\/p>\n<p>A directors\u2019 report is more compliance-focused. It allows the board to demonstrate statutory compliance whilst outlining the company\u2019s operational details, commercial health, and performance.<\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/preparing-annual-accounts-limited-company\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Preparing annual accounts for your limited company<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/how-many-directors-does-a-company-need\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">How many directors does a company need?<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/annual-filings-what-your-company-needs-to-file\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Annual filings \u2013 what your company needs to file<\/span><\/a>\n <\/p>\n<p>Meanwhile, a strategic report focuses on the company\u2019s strategy (including non-financial performance), future outlook, and potential risks to achieving its goals. Put simply, a directors\u2019 report assesses business performance from the previous financial year, and the strategic report looks ahead to what the company wants to achieve next.<\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>A directors\u2019 report is also primarily for the shareholders, while a strategic report is designed for the shareholders and other stakeholders, such as employees, customers, and regulators.<\/p>\n<p>Here is some of the key information you\u2019d find in a strategic report:<\/p>\n<ul>\n<li>A balanced and comprehensive overview of the business model and strategy<\/li>\n<li>A description of the risks the company may be facing and any trends or factors that could impact its future development<\/li>\n<li>The company\u2019s position during the financial year in relation to its key performance indicators (KPIs), financial and non-financial<\/li>\n<\/ul>\n<p>That said, both reports overlap in certain areas, so they can contain the same information if deemed relevant.<\/p>\n<h2>Filing and circulating a directors’ report<\/h3>\n<p>We explained earlier that a directors\u2019 report is filed with the annual accounts. How and when you need to deliver those to Companies House depends on your company type and age.<\/p>\n<p>If you\u2019ve just formed a private limited company, your first set of annual accounts is due within 21 months of incorporation. This should cover the 12-month period between your incorporation and <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/accounting-reference-date\/\" data-wpel-link=\"internal\">accounting reference dates<\/a> (ARD). All subsequent filings must be within 9 months of the ARD.<\/p>\n<p>Meanwhile, <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/formation-packages\/plc\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\">public limited companies<\/a> (PLCs) must file their annual accounts within 6 months of the relevant ARD.<\/p>\n<h2>Benefits of filing a directors’ report<\/h3>\n<p>While filing a directors\u2019 report is mandatory for qualifying companies, it shouldn\u2019t be seen purely as a legal requirement. Some of the main advantages of writing a directors’ report are:<\/p>\n<ul>\n<li><strong>Communication: <\/strong>It\u2019s crucial that the board of directors communicates clearly and effectively with the shareholders. The directors\u2019 report is integral to successful communication, as it provides the shareholders with a regular update on the company\u2019s performance and what the board is doing to keep the business on a positive path.<\/li>\n<li><strong>Transparency: <\/strong>A directors\u2019 report helps maintain strong corporate transparency. This is essential for legal compliance and open and honest communication with shareholders.<\/li>\n<li><strong>Planning: <\/strong>Identifying potential risks and challenges that could impact the company\u2019s future performance is vital for planning how the directors intend to overcome them.<\/li>\n<li><strong>Information: <\/strong>A directors\u2019 report may include important information not available elsewhere in the annual accounts. This ensures that shareholders are always kept up to date and never miss any business updates.<\/li>\n<\/ul>\n<h2>Wrapping up<\/h3>\n<p>Running a UK-registered company involves certain legal obligations, such as preparing a directors\u2019 report and your annual accounts. Hopefully, you\u2019ve found this blog helpful in understanding what a directors\u2019 report is, what it involves, and how to file one.<\/p>\n<p>If you have any questions about this report or any other filing requirements for limited companies, please leave us a comment below. Alternatively, take a look at the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\">Quality Company Formations Blog<\/a>\u00a0for more articles like this.<\/p>\n<p>If you\u2019re a future director and need support with setting up your limited company, visit <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/\" target=\"_blank\" rel=\"noopener\" data-wpel-link=\"internal\">Quality Company Formations<\/a>.<\/p>\n <div class=\"hubspot_shortcode\">\n <a href=\"https:\/\/hubspot.sjv.io\/OrKdGZ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_mobile.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_desktop.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-desktop\">\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>After every financial year, all registered companies are legally obligated to submit annual accounts detailing their financial activities to Companies House. A directors’ report is part of those accounts. If a company is dormant (not trading) or qualifies as a micro-entity, it doesn\u2019t need to file a directors\u2019 report. In the blog below, we explain…<\/p>\n","protected":false},"author":28,"featured_media":13291,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1234],"tags":[],"class_list":["post-13225","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-compliance-legal-filings","category-1234","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Directors' Report Explained<\/title>\n<meta name=\"description\" content=\"Learn about the components of a directors' report and who needs to file one. Find out the benefits this report can bring to your business.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Directors' report explained\" \/>\n<meta property=\"og:description\" content=\"Learn about the components of a directors' report and who needs to file one. 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Find out the benefits this report can bring to your business.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/","og_locale":"en_GB","og_type":"article","og_title":"Directors' report explained","og_description":"Learn about the components of a directors' report and who needs to file one. Find out the benefits this report can bring to your business.","og_url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/","og_site_name":"Quality Formations Blog","article_published_time":"2025-01-21T17:48:40+00:00","article_modified_time":"2025-02-06T12:58:05+00:00","og_image":[{"width":1500,"height":650,"url":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7.png","type":"image\/png"}],"author":"Amelia French","twitter_misc":{"Written by":"Amelia French","Estimated reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/","name":"Directors' Report Explained","isPartOf":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/#primaryimage"},"image":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/#primaryimage"},"thumbnailUrl":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7.png","datePublished":"2025-01-21T17:48:40+00:00","dateModified":"2025-02-06T12:58:05+00:00","author":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#\/schema\/person\/bed73883ca11839634a1e75d9c8ed8d0"},"description":"Learn about the components of a directors' report and who needs to file one. Find out the benefits this report can bring to your business.","breadcrumb":{"@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/#primaryimage","url":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7.png","contentUrl":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7.png","width":1500,"height":650,"caption":"A Director's Report form on a wooden table with a pen next to it"},{"@type":"BreadcrumbList","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-report-explained\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/"},{"@type":"ListItem","position":2,"name":"Directors’ report explained"}]},{"@type":"WebSite","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#website","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/","name":"Quality Formations Blog","description":"Company Formation and Company Registration Information and News","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Person","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#\/schema\/person\/bed73883ca11839634a1e75d9c8ed8d0","name":"Amelia French","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/2225856d837fbf51b9dea454b7796bce?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/2225856d837fbf51b9dea454b7796bce?s=96&d=mm&r=g","caption":"Amelia French"},"description":"Amelia is Director of Operations at QCF, responsible for managing and developing the operations of all our customer-facing departments. She has a Level 5 Diploma in Management and Leadership from the Chartered Management Institute and a Distinction in Company Secretarial Practice and Share Registration Practice from the Corporate Governance Institute.","jobTitle":"Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/amelia-french\/"}]}},"views":920,"x_categories":"Compliance, Legal & Filings","x_tags":"","x_featured_media":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7-128x128.png","x_featured_media_medium":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7-600x260.png","x_featured_media_large":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7-692x300.png","x_featured_media_original":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Ionos-7.png","x_date":"21 Jan 2025","x_author":"Amelia French","x_gravatar":"https:\/\/secure.gravatar.com\/avatar\/2225856d837fbf51b9dea454b7796bce?s=96&d=mm&r=g","x_metadata":{"_thumbnail_id":"13291","_yoast_indexnow_last_ping":"1738846686","views":"920","yarpp_meta":{"yarpp_display_for_this_post":0},"_dt_sidebar_position":"right","_dt_sidebar_widgetarea_id":"sidebar_1","_dt_sidebar_hide_on_mobile":"0","_dt_footer_show":"1","_dt_footer_widgetarea_id":"sidebar_2","_dt_footer_hide_on_mobile":"0","_dt_header_title":"enabled","_dt_header_background":"normal","_dt_header_background_below_slideshow":"disabled","_dt_header_transparent_bg_color_scheme":"light","_dt_header_transparent_top_bar_bg_color":"#ffffff","_dt_header_transparent_top_bar_bg_opacity":"25","_dt_header_transparent_bg_color":"#000000","_dt_header_transparent_bg_opacity":"50","_dt_header_disabled_background":"normal","_dt_header_disabled_transparent_bg_color_scheme":"light","_dt_header_disabled_transparent_top_bar_bg_color":"#ffffff","_dt_header_disabled_transparent_top_bar_bg_opacity":"25","_dt_header_disabled_transparent_bg_color":"#000000","_dt_header_disabled_transparent_bg_opacity":"50","_dt_page_overrides_top_margin":"","_dt_page_overrides_bottom_margin":"","_dt_post_options_back_button":"0","_dt_post_options_hide_thumbnail":"0","_dt_post_options_related_mode":"same","_dt_post_options_preview":"normal","_yoast_wpseo_primary_category":"1234","_yoast_wpseo_focuskw":"directors' report","_yoast_wpseo_title":"Directors' Report Explained","_yoast_wpseo_metadesc":"Learn about the components of a directors' report and who needs to file one. Find out the benefits this report can bring to your business.","_yoast_wpseo_linkdex":"85","_yoast_wpseo_content_score":"90","_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_estimated_reading_time_minutes":"7"},"_links":{"self":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=13225"}],"version-history":[{"count":26,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13225\/revisions"}],"predecessor-version":[{"id":13269,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13225\/revisions\/13269"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media\/13291"}],"wp:attachment":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=13225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=13225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=13225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":13166,"date":"2025-01-07T15:31:59","date_gmt":"2025-01-07T15:31:59","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13166"},"modified":"2025-02-06T11:18:46","modified_gmt":"2025-02-06T11:18:46","slug":"rp07-form","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/rp07-form\/","title":{"rendered":"What is an RP07 form and when is it used?"},"content":{"rendered":"<p>An <strong>RP07<\/strong> form can be used to apply to Companies House to change a company\u2019s or LLP\u2019s registered office or a person\u2019s service address\/principal office when there is a dispute over the address.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Address disputes may arise for various reasons, such as fraudulent or unauthorised use of an address or when a company\u2019s registered office is not an \u2018appropriate address\u2019.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>In this post, we discuss the RP07 form in detail, including why someone may dispute an address, how to complete and file the form at Companies House, and what happens after submission. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n <\/p>\n<ul>\n<li>Use an RP07 form to complain about a company\u2019s or individual\u2019s address and ask Companies House to change it.<\/li>\n<li>Applicants must provide detailed information on the disputed address, including evidence of unauthorised use and supporting documents.<\/li>\n<li>Upon receiving the application, Companies House notifies the disputed party, who has 28 days to provide evidence of their right to use the address.<\/li>\n<\/ul>\n<p> <\/div>\n <\/div>\n \n<h2>The purpose of an RP07 form<\/h3>\n<p>Companies House (the Registrar) requires official address details from companies, limited liability partnerships (LLPs), and certain persons associated with companies and LLPs. This information is disclosed on the public register.<\/p>\n<p>Any address supplied to Companies House must be accurate and genuine. The company (or LLP) or person providing the address must also have authorisation to use it.<\/p>\n<p>Where there is a dispute over any such address, an RP07 form can be used to apply to Companies House to change the address. Specifically, any person may use this form to complain about a:<\/p>\n<ul>\n<li>Registered office address of a company or LLP<\/li>\n<li>Service address (correspondence address) of a company director, company secretary, person with significant control (PSC), or an LLP member<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li><a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2006\/46\/section\/1097C\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Principal office address of a ‘relevant person’<\/a><span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p>However, a company or LLP <b>cannot<\/b> use this form to change their own registered office address or the service address\/principal office of one of their directors, secretaries, PSCs, or LLP members.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>Why would someone dispute an address?<\/h3>\n<p>There are many reasons why someone may dispute a registered office address, service address, or principal office address, including:<\/p>\n<ul>\n<li>The fraudulent use of an incorrect address by a company or an individual (e.g. to set up a company, apply fraudulently for credit, or <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/director-appointment-resignation\/?_gl=1*tpx9fm*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">appoint a director<\/a>)<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Using a residential or commercial address without the knowledge or authorisation of the owner<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>When a company\u2019s registered office is not an \u2018<a href=\"https:\/\/www.gov.uk\/limited-company-formation\/company-address\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">appropriate address<\/a>\u2019<\/li>\n<li>Continuing to use the address of a third-party provider (e.g. a registered office service from a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/?_gl=1*1ht09bi*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">company formation agent<\/a>) after renewal failure, unsuccessful payments, missing ID checks, or abusing the service<\/li>\n<\/ul>\n<p>When providing any address details to Companies House, you must ensure you have the owner\u2019s permission to use the address for such purposes.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>How to complete an RP07 form<\/h3>\n<p>The <a href=\"https:\/\/www.gov.uk\/government\/publications\/apply-to-change-a-companys-disputed-registered-office-address-rp07\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">RP07 form<\/a> is available from Companies House. You can complete and file it online using the <a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/efs-submission\/start\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Upload a document to Companies House<\/a> service. Alternatively, you can download the form to print and send by post.<\/p>\n<p>When filling in an RP07 form, the following information is required:<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<ul>\n<li>Applicant\u2019s title, full forename(s), and surname\u2014or the company\/firm name if the applicant is a corporate body or firm<\/li>\n<li>Applicant\u2019s contact address and email address<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Name and registration number of the company that is the subject of the application<\/li>\n<li>The address you\u2019re complaining about<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>How the address is being used\u2014i.e. as a registered office address, a person\u2019s correspondence (service) address, or a person\u2019s principal office address<\/li>\n<li>Reason for applying for a change of address:<span class=\"Apple-converted-space\">\u00a0<\/span>\n<ul>\n<li>Provide the name of any person or company shown on the records at Companies House as using the address in dispute (i.e. on what forms does it appear on the <a href=\"https:\/\/find-and-update.company-information.service.gov.uk\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Companies House register<\/a>)<\/li>\n<li>Provide as much detail as possible about where the address can be found on the records at Companies House<\/li>\n<li>Explain why the company and\/or person named is not entitled to use the address<\/li>\n<\/ul>\n<\/li>\n<li>Signature of the applicant<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>The applicant must also include supporting evidence (original documents or copies) with form RP07, such as:<\/p>\n<ul>\n<li>A utility bill sent to the applicant at the address in dispute\u2014this must be dated within the last 6 months<\/li>\n<li>A land registry deed dated within the last 12 months<\/li>\n<li>A written agreement allowing the applicant to use the address<\/li>\n<li>Documents proving the applicant\u2019s proprietary rights in the address, including freehold or leasehold<\/li>\n<li>Written evidence of the start and end of a contract (if the RP07 applicant is a service provider)<\/li>\n<\/ul>\n<p>Companies House will consider any other relevant supporting documents or information on a case-by-case basis.<\/p>\n<h2>What happens after submitting form RP07<\/h3>\n<p>Upon filing an RP07 form, Companies House will send confirmation to the applicant, review the application, and notify the individual or company that is the subject of the application. They will have 28 days to provide evidence of their right to use the address.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>If the company or individual cannot provide evidence, or if Companies House is not satisfied with the evidence provided, the Registrar will remove the disputed address from the register and change it to the Companies House default address.<\/p>\n<p>However, before the expiration of the 28-day notice period, the company or individual may avoid the application of the default address by changing their registered office or service\/principal office address to another location instead.<\/p>\n<h4>What is the Companies House default address?<\/h4>\n<p>A Companies House default address is an address held and maintained at Companies House.<span class=\"Apple-converted-space\">\u00a0<\/span>The Registrar will change a company\u2019s or LLP\u2019s registered office to a default address if the existing registered office address is being used without permission.<\/p>\n<p>A default address will also apply if an individual\u2019s existing service\/principal office address is being used without authorisation.<\/p>\n<p>There are three <a href=\"https:\/\/resources.companieshouse.gov.uk\/about\/policyDocuments\/registrarsRules\/registrars-nomination-of-default-address-rules-volume-6-of-the-registrars-rules-2024.pdf\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Companies House default addresses<\/a>. The one used will depend on the company\u2019s or LLP\u2019s jurisdiction of incorporation:<\/p>\n<h5><strong>England and Wales<span class=\"Apple-converted-space\">\u00a0<\/span><\/strong><\/h5>\n<p>Companies House Default Address, PO Box 4385, Companies House, Crown Way, Cardiff, CF14 3UZ<\/p>\n<h5><strong>Scotland<span class=\"Apple-converted-space\">\u00a0<\/span><\/strong><\/h5>\n<p>Companies House Default Address, PO Box 24238, Edinburgh, EH7 9HR<\/p>\n<h5><strong>Northern Ireland<span class=\"Apple-converted-space\">\u00a0<\/span><\/strong><\/h5>\n<p>Companies House Default Address, PO Box 2381, Belfast, BT1 9DY<\/p>\n<h2>Statutory address services from Quality Company Formations<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>At Quality Company Formations, we offer a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/registered-office-address\/?_gl=1*1oabw2c*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">London Registered Office Address Service<\/a> for companies and LLPs incorporated in England and Wales. Available to buy online for only \u00a339.00 +VAT per year, our address will appear on public record as your company’s registered office, ensuring adherence to corporate transparency rules while enhancing your brand image and keeping your home address private.<\/p>\n<p>Your registered office address will be:<\/p>\n<p class=\"margin-bot-th pd-left-30\">Your Company Name<br \/>\n71-75 Shelton Street<br \/>\nCovent Garden<br \/>\nLondon<br \/>\nWC2H 9JQ<\/p>\n<p>All official government mail (e.g. from Companies House and HMRC) will be sent to your company at this address. Our team will then scan and email any registered office mail to you free of charge on the day it arrives.<\/p>\n\t\t<div class=\"worldfirst_shortcode\">\n\t\t\t<a href=\"https:\/\/portal.worldfirst.com\/register?region=UK&affiliate_id=10378\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/WFT_BANNER_326x341.png\"\n\t\t\t\t\talt=\"Worldfirst - Pay and get paid in multiple currencies\"\n\t\t\t\t\tclass=\"worldfirst_shortcode-mobile\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/WFT_BANNER_980x150.jpg\"\n alt=\"Worldfirst - Pay and get paid in multiple currencies.\"\n\t\t\t\t\tclass=\"worldfirst_shortcode-desktop\">\n\t\t\t<\/a>\n <\/div>\n \n<p>The same prestigious address is also available as a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/directors-service-address\/?_gl=1*1oabw2c*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">London Service Address<\/a> for directors, company secretaries, subscribers (the first shareholders or guarantors in a company), PSCs, and LLP members. Available for \u00a326.00 +VAT per year, this address will serve as your statutory correspondence address for official government mail.<\/p>\n<p>Since these address details are also publicly disclosed on the Companies House register, many people avoid using their home address for such purposes. Our London Service Address provides a solution, enabling you to protect your privacy while also boosting your professional image.<\/p>\n<p>You can renew these address services on an annual basis for however long you require them.<\/p>\n<h4>Does Quality Company Formations use RP07 forms?<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>We will file an RP07 form immediately if we discover that a company or person is using our London address without our knowledge and authorisation.<\/p>\n<p>Where a client continues using our London address after failing to renew and pay for their address service(s), we will only file an RP07 form with Companies House as a last resort. Our team will always attempt to contact the client by email or phone before initiating this process.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/registered-office-i-need-one\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">What is a registered office and why do I need one?<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-is-a-directors-service-address\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">What is a director’s service address?<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/how-can-you-change-your-address-at-companies-house\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">How can you change your address at Companies House?<\/span><\/a>\n <\/p>\n<p>Should you receive notification from Companies House that we have filed an RP07 form disputing your use of our address, please <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/contact-us\/?_gl=1*1rvwkey*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">contact us<\/a> as soon as possible. If you genuinely forgot to renew your address service, we may be able to withdraw the application within 28 days of its submission.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>Thanks for reading<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>We hope you\u2019ve found this post informative and helpful. If you have any questions, please comment below. You can also contact our London-based team if you’d like to speak to us about <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/set-up-a-limited-company-in-4-easy-steps\/?_gl=1*1fi6kzg*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">setting up a company<\/a> or using our address services. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Explore the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?_gl=1*1e6a6iy*_up*MQ..*_gs*MQ..&gclid=CjwKCAiAm-67BhBlEiwAEVftNkqA4IxTmwRepfNnOzGAknCU7H2kosVghMqtDTMHqUe_RgmeAgPIyBoCkaEQAvD_BwE&gbraid=0AAAAACiO-qUuRzMeVxXQCyFGCbVov7uZp\" data-wpel-link=\"internal\">Quality Company Formations Blog<\/a> for more business advice and limited company guidance.<\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>An RP07 form can be used to apply to Companies House to change a company\u2019s or LLP\u2019s registered office or a person\u2019s service address\/principal office when there is a dispute over the address.\u00a0 Address disputes may arise for various reasons, such as fraudulent or unauthorised use of an address or when a company\u2019s registered office…<\/p>\n","protected":false},"author":27,"featured_media":13290,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1230],"tags":[],"class_list":["post-13166","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-addresses","category-1230","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is an RP07 Form and When Is It Used?<\/title>\n<meta name=\"description\" content=\"Learn everything about the RP07 form and its applications. Our comprehensive guide explains its purpose, including when and how to use it.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/rp07-form\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is an RP07 form and when is it used?\" \/>\n<meta property=\"og:description\" content=\"Learn everything about the RP07 form and its applications. Our comprehensive guide explains its purpose, including when and how to use it.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/rp07-form\/\" \/>\n<meta property=\"og:site_name\" content=\"Quality Formations Blog\" \/>\n<meta property=\"article:published_time\" content=\"2025-01-07T15:31:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-06T11:18:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Shutterstock_2223351521.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1500\" \/>\n\t<meta property=\"og:image:height\" content=\"750\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"James Dobran\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"James Dobran\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What is an RP07 Form and When Is It Used?","description":"Learn everything about the RP07 form and its applications. 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He greatly values customer-centricity and service standard improvements, bolstered by qualifications in Management and Leadership from the Chartered Management Institute and certifications in Sales Management and Customer Service Excellence.","jobTitle":"Deputy Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/james-dobran\/"}]}},"views":915,"x_categories":"Company Addresses","x_tags":"","x_featured_media":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Shutterstock_2223351521-128x128.jpg","x_featured_media_medium":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Shutterstock_2223351521-600x300.jpg","x_featured_media_large":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Shutterstock_2223351521-600x300.jpg","x_featured_media_original":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2025\/01\/Shutterstock_2223351521.jpg","x_date":"7 Jan 2025","x_author":"James Dobran","x_gravatar":"https:\/\/secure.gravatar.com\/avatar\/8c79471f97f5b42661d7396878a8a49c?s=96&d=mm&r=g","x_metadata":{"yarpp_meta":{"yarpp_display_for_this_post":0},"_dt_sidebar_position":"right","_dt_sidebar_widgetarea_id":"sidebar_1","_dt_sidebar_hide_on_mobile":"0","_dt_footer_show":"1","_dt_footer_widgetarea_id":"sidebar_2","_dt_footer_hide_on_mobile":"0","_dt_header_title":"enabled","_dt_header_background":"normal","_dt_header_background_below_slideshow":"disabled","_dt_header_transparent_bg_color_scheme":"light","_dt_header_transparent_top_bar_bg_color":"#ffffff","_dt_header_transparent_top_bar_bg_opacity":"25","_dt_header_transparent_bg_color":"#000000","_dt_header_transparent_bg_opacity":"50","_dt_header_disabled_background":"normal","_dt_header_disabled_transparent_bg_color_scheme":"light","_dt_header_disabled_transparent_top_bar_bg_color":"#ffffff","_dt_header_disabled_transparent_top_bar_bg_opacity":"25","_dt_header_disabled_transparent_bg_color":"#000000","_dt_header_disabled_transparent_bg_opacity":"50","_dt_page_overrides_top_margin":"","_dt_page_overrides_bottom_margin":"","_dt_post_options_back_button":"0","_dt_post_options_hide_thumbnail":"0","_dt_post_options_related_mode":"same","_dt_post_options_preview":"normal","_yoast_wpseo_primary_category":"1230","_yoast_wpseo_focuskw":"RP07 form","_yoast_wpseo_linkdex":"84","_yoast_wpseo_content_score":"60","_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_estimated_reading_time_minutes":"7","_yoast_indexnow_last_ping":"1738840727","views":"915","_thumbnail_id":"13290","_yoast_wpseo_title":"What is an RP07 Form and When Is It Used?","_yoast_wpseo_metadesc":"Learn everything about the RP07 form and its applications. Our comprehensive guide explains its purpose, including when and how to use it."},"_links":{"self":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=13166"}],"version-history":[{"count":33,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13166\/revisions"}],"predecessor-version":[{"id":13235,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13166\/revisions\/13235"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media\/13290"}],"wp:attachment":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=13166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=13166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=13166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":13091,"date":"2025-01-01T15:47:33","date_gmt":"2025-01-01T15:47:33","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13091"},"modified":"2025-01-06T10:52:47","modified_gmt":"2025-01-06T10:52:47","slug":"important-dates-for-uk-business-owners-in-2025","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/important-dates-for-uk-business-owners-in-2025\/","title":{"rendered":"Important dates for UK business owners in 2025"},"content":{"rendered":"<p>Running a successful business relies on preparation, planning, and anticipating what’s around the corner. To help you stay organised throughout 2025, we outline some important dates that may be relevant to you as a UK business owner, including tax and filing deadlines, new tax year measures, changes to company law, and key obligations for limited companies.<\/p>\n<p><span class=\"Apple-converted-space\">Under each date, you\u2019ll find an \u2018Add to Calendar\u2019 button, allowing you to add it straight to your Apple or Google calendar.<\/span><\/p>\n <div class=\"key-takeaways-shortcode\" role=\"alert\">\n <h3>\n <span>Key Takeaways<\/span>\n <\/h3>\n <div class=\"key-takeaways-shortcode__content\">\n \n<ul>\n<li><span style=\"color: #333333;\">Many individuals will have a busy start to 2025, with several Self Assessment tasks to complete by 31 January\u2014filing an online tax return, paying tax for the 2023-24 tax year, and making a first ‘payment on account’ for the 2024-25 tax year.<\/span><\/li>\n<li><span style=\"color: #333333;\">The start of the 2025-26 tax year brings certain changes, most notably an increase in employer National Insurance from 13.8% to 15%, a reduction in the Secondary Threshold from \u00a39,100 to \u00a35,000 per year, and an increase in the Employment Allowance from \u00a35,000 to \u00a310,500 per year.<\/span><\/li>\n<li><span style=\"color: #333333;\">Various changes to UK company law will take effect throughout 2025, including a new identity verification process for company incorporations, directors, and people with significant control.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\"> <\/div>\n <\/div>\n <\/span><\/p>\n<h2>31 January: Self Assessment deadlines<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<add-to-calendar-button name=\"Self Assessment deadlines\" options=\"'Apple','Google'\" startdate=\"2025-01-31\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>The end of January is a crucial time for any UK business owners who file through Self Assessment. Whether you\u2019re a sole trader, a partner in a business partnership, or a limited <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/the-role-and-responsibilities-of-a-company-director\/?_gl=1*inmhdb*_up*MQ..&gclid=Cj0KCQiAyc67BhDSARIsAM95QzvoWQZsZ3NoqApFf5TsSzK4S6OwRJQserO6lsjMwzjVommHnKDEaBcaAmO1EALw_wcB&gbraid=0AAAAACiO-qVCZUqbKU5ElaSvsshWbxJnI\" data-wpel-link=\"internal\">company director<\/a> and shareholder, make sure you fulfil the following Self Assessment obligations by this deadline (where applicable):<\/p>\n<h4>File an online Self Assessment tax return<\/h4>\n<p>If you need to complete a Self Assessment tax return for the 2023-24 tax year (6 April 2023 to 5 April 2024), you must deliver it to HMRC online by midnight on 31 January 2025.<span class=\"Apple-converted-space\"> \u00a0<\/span><\/p>\n<p>HMRC will impose an automatic late filing penalty of \u00a3100 if you submit your return after the deadline. Additional penalties will apply if your tax return remains outstanding after 3, 6, and 12 months.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h4>Pay your 2023-24 Self Assessment bill<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<p>If you owe any Self Assessment tax for income received in the 2023-24 tax year, you must pay your bill in full by midnight on 31 January 2025. Depending on your income and deductions, your bill may include:<\/p>\n<ul>\n<li>Income Tax<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Class 4 National Insurance contributions (NICs)<\/li>\n<li>Voluntary Class 2 NICs<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-are-the-dividend-tax-rates-in-the-uk\/\" data-wpel-link=\"internal\">Tax on dividends<\/a><\/li>\n<li>Capital Gains Tax (CGT)<\/li>\n<li>Student Loan repayments<\/li>\n<\/ul>\n<p>However, only a balancing payment will be due by 31 January if you\u2019ve already made \u2018payments on account\u2019 in 2024. Most self-employed people make two payments on account (advance payments) towards their next Self Assessment tax bill, then a balancing payment (any remaining amount due) by the 31 January deadline.<\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/remember-to-file-your-self-assessment-tax-return-by-31st-january\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Remember to file your Self Assessment tax return by 31 January<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-guidance-for-company-directors-and-shareholders\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Self Assessment guidance for company directors and shareholders<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-16-common-questions-answered\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Self Assessment – 16 common questions answered\u00a0<\/span><\/a>\n <\/p>\n<p>Many individuals report and pay Capital Gains Tax through Self Assessment or HMRC\u2019s \u2018real time\u2019 CGT service. However, if your capital gain is from a UK residential property, you must report and pay within 60 days of selling the property. You do this online using a ‘Capital Gains Tax on UK property’ account.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h4>First payment on account for the 2024-25 tax year<\/h4>\n<add-to-calendar-button name=\"First payment on account due for 2024\/25 tax year\" options=\"'Apple','Google'\" startdate=\"2025-01-31\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>In addition to paying your Self Assessment bill for the 2023-24 tax year, you\u2019ll need to make your first payment on account for your 2024-25 tax bill by 31 January 2025 unless:<\/p>\n<ul>\n<li>your previous Self Assessment tax bill (for 2023-24) is less than \u00a31,000 or<\/li>\n<li>in the 2023-24 tax year, you paid more than 80% of the tax you owed outside of Self Assessment (e.g. through your PAYE tax code or because your bank already deducted interest on your savings)<\/li>\n<\/ul>\n<p>HMRC will estimate your <a href=\"https:\/\/www.gov.uk\/understand-self-assessment-bill\/payments-on-account\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">payments on account<\/a> based on your previous year\u2019s tax bill. Therefore, your first payment on account will be 50% of your 2023-24 tax bill.<\/p>\n<h4><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-11377\" src=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/01\/Shutterstock_1862633668-1.jpg\" alt=\"HM Revenue and Customs (HMRC) brown envelope placed on top of Self Assessment tax return notice letter.\" width=\"1500\" height=\"750\" srcset=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/01\/Shutterstock_1862633668-1.jpg 1500w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/01\/Shutterstock_1862633668-1-600x300.jpg 600w, https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/01\/Shutterstock_1862633668-1-768x384.jpg 768w\" sizes=\"auto, (max-width: 1500px) 100vw, 1500px\" \/><\/h4>\n<h2>1 February: Changes to Alcohol Duty rates<\/h3>\n<add-to-calendar-button name=\"Changes to Alcohol Duty rates\" options=\"'Apple','Google'\" startdate=\"2025-02-01\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>On 1 February 2025, <a href=\"https:\/\/www.gov.uk\/government\/publications\/changes-to-the-rates-of-alcohol-duty\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Alcohol Duty rates<\/a> on non-draft products will increase in line with the forecast Retail Price Index (RPI) inflation figure of 3.65%. This process is known as \u2018uprating\u2019. Non-draught alcohol includes wine, spirits, and bottled or canned beer and cider.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>The following changes will also take effect from the same date:<\/p>\n<ul>\n<li>A 1.7% cut (in cash terms) to Alcohol Duty rates on qualifying draught products, including qualifying beer and cider, wine, other fermented products, and spirits<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>An end to the current temporary wine easement<\/li>\n<li>An increase in the cash discount provided to small producers for non-draught products (Small Producer Relief)<\/li>\n<\/ul>\n<p>These changes mean that the price of still and sparkling wine will increase by an average of 15p per bottle, while the cost of an average-strength pint will be 1p cheaper.<\/p>\n<h2>26 March: Spring Forecast<\/h3>\n<add-to-calendar-button name=\"Spring forecast\" options=\"'Apple','Google'\" startdate=\"2025-03-26\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>In line with the Budget Responsibility and National Audit Act 2011, the Office for Budget Responsibility (OBR) must produce two economic and fiscal forecasts each financial year.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>The Chancellor of the Exchequer, Rachel Reeves, has confirmed that the Spring Forecast will take place on Wednesday, 26 March 2025. This will provide an update on the UK economy and the government’s progress since the 2024 Autumn Budget.<\/p>\n<h2>1 April: National Minimum Wage increases<\/h3>\n<add-to-calendar-button name=\"National Minimum Wage increases\" options=\"'Apple','Google'\" startdate=\"2025-04-01\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>If you employ staff, you are legally required to pay them at least the National Living or Minimum Wage. The applicable rate depends on the person\u2019s age and whether they are an apprentice.<\/p>\n<p>Per the recommendations of the Low Pay Commission, the following National Living Wage and National Minimum Wage rates take effect from 1 April 2025:<\/p>\n<table width=\"643\">\n<thead>\n<tr>\n<td width=\"238\"><\/td>\n<td width=\"135\"><b>New hourly rate<\/b><\/td>\n<td width=\"135\"><b>Increase (\u00a3)<\/b><\/td>\n<td width=\"135\"><b>Increase (%)<\/b><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"246\"><span style=\"font-weight: 400;\">National Living Wage (for those aged 21 and over)<\/span><\/td>\n<td width=\"95\">\u00a312.21<\/td>\n<td width=\"152\">\u00a30.77<\/td>\n<td width=\"150\">6.7%<\/td>\n<\/tr>\n<tr>\n<td width=\"246\">18-20 year olds<\/td>\n<td width=\"95\">\u00a310.00<\/td>\n<td width=\"152\">\u00a31.40<\/td>\n<td width=\"150\">16.3%<\/td>\n<\/tr>\n<tr>\n<td width=\"246\">16-17 year olds<\/td>\n<td width=\"95\">\u00a37.55<\/td>\n<td width=\"152\">\u00a31.15<\/td>\n<td width=\"150\">18.0%<\/td>\n<\/tr>\n<tr>\n<td width=\"246\">Apprentice rate<\/td>\n<td width=\"95\">\u00a37.55<\/td>\n<td width=\"152\">\u00a31.15<\/td>\n<td width=\"150\">18.0%<\/td>\n<\/tr>\n<tr>\n<td width=\"246\"><span style=\"font-weight: 400;\">Accommodation offset<\/span><\/td>\n<td width=\"95\">\u00a310.66<\/td>\n<td width=\"152\">\u00a30.67<\/td>\n<td width=\"150\">6.7%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #ffffff;\">gap<\/span><\/p>\n<h2>5 April: End of the 2024-25 tax year<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<add-to-calendar-button name=\"End of the 2024\/25 tax year\" options=\"'Apple','Google'\" startdate=\"2025-04-05\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>The current tax year ends on 5 April 2025. If you file through Self Assessment or prepare <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/preparing-annual-accounts-limited-company\/\" data-wpel-link=\"internal\">annual accounts<\/a> in line with the financial year, 5 April marks the last day of your 2024-25 accounting period.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"tip-callout-shortcode\" role=\"alert\">\n <h3>\n <i class=\"fa fa-solid fa-star\"><\/i>\n <span>Author's Tip<\/span>\n <\/h3>\n <div class=\"tip-callout-shortcode__content\">\n <\/p>\n<p><span style=\"color: #333333;\">Prepare your Self Assessment tax return as soon as possible after the end of the tax year. By doing so, you can budget accordingly and pay your bill in instalments, avoid late filing penalties, and keep your stress levels to a minimum.<\/span><\/p>\n<p> <\/div>\n <\/div>\n \n<p>This date is also the deadline for registering for HMRC\u2019s <a href=\"https:\/\/www.gov.uk\/guidance\/paying-your-employees-expenses-and-benefits-through-your-payroll\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">payrolling benefits and expenses online service<\/a>. If you\u2019re an employer, you can tax employees\u2019 benefits and expenses through your payroll and then report to HMRC online rather than using form P11D.<\/p>\n<h2>6 April: Start of the 2025-26 tax year<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<add-to-calendar-button name=\"Start of the 2025\/26 tax year\" options=\"'Apple','Google'\" startdate=\"2025-04-06\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>The 2025-26 tax year begins on 6 April 2025 and runs until 5 April 2026.<\/p>\n<p>If you need to file a Self Assessment tax return for the 2024-25 tax year, you can submit it online or by post from 6 April onwards.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Several changes will also take effect from this date, some of which may affect you as a UK business owner or employer.<\/p>\n<h4>Changes to employer National Insurance and the Employment Allowance<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<add-to-calendar-button name=\"Changes to employer National Insurance and the Employment Allowance\" options=\"'Apple','Google'\" startdate=\"2025-04-06\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>As announced at the 2024 Autumn Budget, the rate of employer (secondary) Class 1 <a href=\"https:\/\/www.gov.uk\/government\/publications\/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl\/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">National Insurance contributions<\/a> will increase from 13.8% to 15% from 6 April 2025.<\/p>\n<p>Additionally, the Secondary Threshold (the point at which employers start paying NICs on employees\u2019 wages) will decrease from \u00a39,100 per year to \u00a35,000 per year. This measure will be in effect from 6 April 2025 until 5 April 2028.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>However, it\u2019s not all bad news. The Employment Allowance will increase from \u00a35,000 to \u00a310,500 per year, and the \u00a3100,000 eligibility threshold will be removed. These changes mean that the Employment Allowance will extend to more employers and provide a greater reduction in their NIC liability.<\/p>\n<h4>Statutory pay increases<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<add-to-calendar-button name=\"Statutory pay increases\" options=\"'Apple','Google'\" startdate=\"2025-04-06\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>New rates of statutory pay will take effect from 6 April 2025. These changes are as follows:<\/p>\n<ul>\n<li>Statutory Sick Pay (SSP) will increase from \u00a3116.75 to \u00a3118.75 per week<\/li>\n<li>Statutory Maternity, Paternity, Adoption, Shared Parental, and Parental Bereavement Pay will increase from \u00a3184.03 to \u00a3187.18 per week<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Maternity Allowance will also rise to \u00a3187.18 per week<\/li>\n<\/ul>\n<p>The earnings threshold to qualify for SSP or family payments will increase from \u00a3123 to \u00a3125 per week. However, the threshold for Maternity Allowance will remain at \u00a330 per week.<\/p>\n<h4>Changes to Scottish Income Tax<span class=\"Apple-converted-space\">\u00a0<\/span><\/h4>\n<add-to-calendar-button name=\"Changes to Scottish Income Tax\" options=\"'Apple','Google'\" startdate=\"2025-04-06\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>There are no changes to UK Income Tax or the annual Personal Allowance in 2025. However, as announced at the Scottish Budget on 4 December 2024, some minor inflationary adjustments have been made to Scottish Income Tax thresholds for 2025-26. These are shown in the table below, alongside the 2024-25 thresholds for comparison.<\/p>\n<table width=\"643\">\n<thead>\n<tr>\n<td width=\"145\"><b>Tax band<\/b><\/td>\n<td width=\"194\"><b>2024-25 taxable income thresholds\u00a0<\/b><\/td>\n<td width=\"194\"><b>2025-26 taxable income threshold<\/b><\/td>\n<td width=\"110\"><b>Tax rate\u00a0<\/b><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"145\">Starter rate<\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a312,571 to \u00a314,876<\/span><\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a312,571 to \u00a315,397<\/span><\/td>\n<td width=\"110\">19%<\/td>\n<\/tr>\n<tr>\n<td width=\"145\">Basic rate<\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a314,877 to \u00a326,561<\/span><\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a315,398 to \u00a327,491<\/span><\/td>\n<td width=\"110\">20%<\/td>\n<\/tr>\n<tr>\n<td width=\"145\">Intermediate rate<\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a326,562 to \u00a343,662<\/span><\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a327,492 to \u00a343,662<\/span><\/td>\n<td width=\"110\">21%<\/td>\n<\/tr>\n<tr>\n<td width=\"145\">Higher rate<\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a343,663 to \u00a375,000<\/span><\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a343,663 to \u00a375,000<\/span><\/td>\n<td width=\"110\">42%<\/td>\n<\/tr>\n<tr>\n<td width=\"145\">Advanced rate<\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a375,001 to \u00a3125,140<\/span><\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">\u00a375,001 to \u00a3125,140<\/span><\/td>\n<td width=\"110\">45%<\/td>\n<\/tr>\n<tr>\n<td width=\"145\">Top rate<\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">Above \u00a3125,140<\/span><\/td>\n<td width=\"194\"><span style=\"font-weight: 400;\">Above \u00a3125,140<\/span><\/td>\n<td width=\"110\">48%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #ffffff;\">gap<\/span><\/p>\n<h4>Business Asset Disposal Relief and Investors\u2019 Relief – rate increase<\/h4>\n<add-to-calendar-button name=\"Business Asset Disposal Relief and Investors' Relief\" options=\"'Apple','Google'\" startdate=\"2025-04-06\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>The rate of Capital Gains Tax applying to Business Asset Disposal Relief (previously known as Entrepreneurs’ Relief) and Investors\u2019 Relief will increase from 10% to 14% for disposals of certain business assets or <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/limited-company-shares\/\" data-wpel-link=\"internal\">company shares<\/a> made on or after 6 April 2025. The rate will increase again from 14% to 18% for disposals made on or after 6 April 2026.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>1 May: End of the Alcohol Duty Stamps Scheme<\/h3>\n<add-to-calendar-button name=\"End of the Alcohol Duty Stamps Scheme\" options=\"'Apple','Google'\" startdate=\"2025-05-01\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>Following a review by HMRC, the government announced that the Alcohol Duty Stamps Scheme will end on 1 May 2025. This measure will impact businesses manufacturing or importing high-strength alcoholic spirits, wine, and other fermented products in the UK.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n\t\t<div class=\"worldfirst_shortcode\">\n\t\t\t<a href=\"https:\/\/portal.worldfirst.com\/register?region=UK&affiliate_id=10378\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/WFT_BANNER_326x341.png\"\n\t\t\t\t\talt=\"Worldfirst - Pay and get paid in multiple currencies\"\n\t\t\t\t\tclass=\"worldfirst_shortcode-mobile\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/WFT_BANNER_980x150.jpg\"\n alt=\"Worldfirst - Pay and get paid in multiple currencies.\"\n\t\t\t\t\tclass=\"worldfirst_shortcode-desktop\">\n\t\t\t<\/a>\n <\/div>\n \n<p>It will also affect businesses currently registered (or required to register) for the scheme and those supplying alcoholic products that carry duty stamps.<\/p>\n<h2>31 May: P60 deadline<\/h3>\n<add-to-calendar-button name=\"P60 deadline\" options=\"'Apple','Google'\" startdate=\"2025-05-31\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>If you\u2019re an employer, you must provide a P60 to every person who is on your payroll and working for your business on 5 April 2025 (the last day of the 2024-25 tax year). The deadline for issuing them is 31 May 2025, so you only have a short window in which to do so.<\/p>\n<p>A P60 shows an employee\u2019s total pay and deductions for the previous tax year. You can produce them using your payroll software. Alternatively, if you cannot do this or are exempt from filing your payroll online, you can <a href=\"https:\/\/www.gov.uk\/get-paye-forms-p45-p60\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">order P60 forms from HMRC<\/a>.<\/p>\n<p>You\u2019ll also need to issue a P60 to yourself if you\u2019re a company director and <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/taking-money-out-of-a-limited-company\/\" data-wpel-link=\"internal\">pay yourself a director’s salary<\/a>. However, you don\u2019t need to do this if you\u2019re a sole trader or self-employed partner in a business partnership.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>6 July: Report employee expenses and benefits<\/h3>\n<add-to-calendar-button name=\"Report employee expenses and benefits\" options=\"'Apple','Google'\" startdate=\"2025-07-06\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>If you provide any employees (or directors) with taxable expenses and benefits that aren\u2019t taxed through your payroll, you must submit P11D forms to HMRC by 6 July 2025.<\/p>\n<p>You must also file an online P11D(b) form to HMRC by 6 July 2025 to report any Class 1A National Insurance you owe on employee expenses and benefits for the 2024-25 tax year.<\/p>\n<h2>22 July: Pay Class 1A National Insurance<\/h3>\n<add-to-calendar-button name=\"Pay Class 1A National Insurance\" options=\"'Apple','Google'\" startdate=\"2025-07-22\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>The deadline for paying Class 1A National Insurance on employee expenses and benefits for the 2024-25 tax year is 22 July 2025 (or 19 July if you’re paying by cheque).<\/p>\n<h2>31 July: Second \u2018payment on account\u2019 for Self Assessment<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<add-to-calendar-button name=\"Second payment on account due\" options=\"'Apple','Google'\" startdate=\"2025-07-31\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>If you\u2019re required to make advance payments through Self Assessment, your second payment on account will be due by midnight on 31 July 2025. This will go towards your 2024-25 tax bill.<\/p>\n<h2>5 October: Self Assessment registration deadline<\/h3>\n<add-to-calendar-button name=\"Self Assessment registration deadline\" options=\"'Apple','Google'\" startdate=\"2025-10-05\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>Individuals and partnerships must register for Self Assessment before sending their first tax return to HMRC.<\/p>\n<p>If you need to file a Self Assessment tax return for the 2024-25 tax year, you must register by 5 October 2025. Online registration is the quickest and easiest option, but you can also register by post if required.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Use HMRC\u2019s online tool to <a href=\"https:\/\/www.gov.uk\/register-for-self-assessment\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">check how to register for Self Assessment<\/a>.<\/p>\n<h2>31 October: Deadline for paper Self Assessment tax returns<\/h3>\n<add-to-calendar-button name=\"Deadline for paper Self Assessment tax returns\" options=\"'Apple','Google'\" startdate=\"2025-10-31\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>While approximately 97% of Self Assessment customers file their tax returns online, some send paper returns by post. The deadline for sending a paper Self Assessment tax return for the 2024-25 tax year is midnight on 31 October 2025.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>However, if you\u2019re a trustee of a registered pension scheme or a non-resident company, you have until midnight on 31 January 2026 to send a return using a paper form.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>31 December: Reporting via \u2018real time\u2019 Capital Gains Tax service<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<add-to-calendar-button name=\"Reporting via 'real time' Capital Gains Tax service\" options=\"'Apple','Google'\" startdate=\"2025-12-31\" description=\"Description with {b}bold{\/b} text.\"><\/add-to-calendar-button>\n<p>If you use HMRC\u2019s \u2018real time\u2019 Capital Gains Tax service, the deadline for reporting gains on assets sold during the 2024-25 tax year is 31 December 2025. You must pay any tax you owe by 31 January 2026.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>Changes to UK company law in 2025<\/h3>\n<p>Following the introduction of the Economic Crime and Corporate Transparency Act 2023 (ECCT Act), several <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/changes-to-uk-company-law\/\" data-wpel-link=\"internal\">changes to UK company law<\/a> came into effect in 2024. Further measures from the ECCT Act will be implemented throughout 2025. We outlined these below:<\/p>\n<p><strong>January 2025:<span class=\"Apple-converted-space\">\u00a0<\/span><\/strong><\/p>\n<ul>\n<li>Individuals can apply to Companies House to <a href=\"https:\/\/changestoukcompanylaw.campaign.gov.uk\/protecting-your-information\/\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">suppress home address details<\/a> from historical documents on the public register where the address has been used as a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/registered-office-address\/\" data-wpel-link=\"internal\">registered office<\/a>.<\/li>\n<\/ul>\n<p><strong>Spring 2025:<\/strong><\/p>\n<ul>\n<li>Individuals will be able to apply to Companies House to suppress the following information from historical documents on the public register:\n<ul>\n<li>residential addresses (in most instances) where the details appear elsewhere on the register<\/li>\n<li>day of birth for documents registered before 10 October 2015 (since this date, only the month and year elements of DOBs have been publicly displayed)<\/li>\n<li>signatures<\/li>\n<li>business occupation<\/li>\n<\/ul>\n<\/li>\n<li>Organisations and sole traders undertaking anti-money laundering (AML) supervised activity in the UK can apply to register as <a href=\"https:\/\/changestoukcompanylaw.campaign.gov.uk\/authorised-corporate-service-providers\/\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Authorised Corporate Service Providers<\/a> (ACSPs). Doing so will authorise them to carry out\u202fverification services and submit information to Companies House on behalf of clients.<\/li>\n<\/ul>\n<p><strong>Summer 2025:<\/strong><\/p>\n<ul>\n<li>Companies House will allow access on request to certain trust information that it holds on the Register of Overseas Entities (ROE).<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p><strong>Autumn 2025:<\/strong><\/p>\n<ul>\n<li>Companies House will introduce a new identity verification process for company formations and appointments of new directors, <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/people-with-significant-control\/\" data-wpel-link=\"internal\">people with significant control<\/a> (PSCs), and members of limited liability partnerships (LLPs).<\/li>\n<li>A 12-month transition phase will begin for existing company directors, PSCs, and LLP members to verify their identity. This new identity verification requirement will be incorporated into the annual confirmation statement filing.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p>You can keep up to date with the implementation of these changes by signing up to <a href=\"https:\/\/changestoukcompanylaw.campaign.gov.uk\/more-information\/\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">receive emails and newsletters from Companies House<\/a>.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>Important dates for limited companies<\/h3>\n<p>UK <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/about-limited-companies\/\" data-wpel-link=\"internal\">limited companies<\/a> have various reporting and filing obligations for Companies House and HMRC. If you\u2019re a company director, the key duties and deadlines to know about are as follows:<\/p>\n<p><strong>Requirements for HMRC<\/strong><\/p>\n<ul>\n<li>Register for Corporation Tax with HMRC\u2014no later than 3 months after starting to do business.<\/li>\n<li>Paying <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/how-corporation-tax-works\/\" data-wpel-link=\"internal\">Corporation Tax<\/a>\u2014no later than 9 months and 1 day after the end of your company\u2019s Corporation Tax accounting period.<\/li>\n<li>File a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/preparing-a-company-tax-return\/\" data-wpel-link=\"internal\">Company Tax Return<\/a> with full annual accounts\u2014deliver to HMRC no later than 12 months after the end of the accounting period.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/when-should-i-register-for-vat\/\" data-wpel-link=\"internal\">Register for VAT<\/a> with HMRC\u2014when your total taxable turnover exceeds \u00a390,000 (VAT\u202fthreshold) in any 12-month period, or you expect to exceed the threshold in the next 30 days. Voluntary VAT registration is available when turnover is below the threshold.<\/li>\n<li>Send a VAT Return\u2014no later than 1 month and 7 days after the end of every 3-month VAT accounting period.<\/li>\n<li>Pay your VAT bill\u2014no later than 1 month and 7 days after the end of the relevant VAT accounting period.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Register as an employer\u2014before the first payday but not more than 2 months in advance.<\/li>\n<li>Complete regular PAYE tasks if your company is registered as an employer.<\/li>\n<\/ul>\n<p><strong>Requirements for Companies House<\/strong><\/p>\n<ul>\n<li>File an <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/services\/confirmation-statement\/\" data-wpel-link=\"internal\">annual confirmation statement<\/a>\u2014at least once every 12 months, no later than 14 days after the first anniversary of incorporation or the date you filed the last statement.<\/li>\n<li>Prepare and file annual accounts\u2014first accounts due within 21 months of incorporation, then 9 months after the company\u2019s <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/accounting-reference-date\/\" data-wpel-link=\"internal\">accounting reference date<\/a> (ARD).<\/li>\n<li>Report any <a href=\"https:\/\/www.gov.uk\/running-a-limited-company\/company-changes-you-must-report\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">change of company details<\/a>\u2014on the next confirmation statement or within a limited timeframe for certain changes.<\/li>\n<\/ul>\n<p>Understanding and adhering to these important duties and deadlines will ensure your limited company remains legally compliant.<\/p>\n<h2>Thanks for reading<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>We hope you\u2019ve found this post informative and helpful as a UK business owner, company director, or employer. If you have any questions, please comment below.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>For more business advice and limited company guidance, explore the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" data-wpel-link=\"internal\">Quality Company Formations Blog<\/a>.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"<p>Running a successful business relies on preparation, planning, and anticipating what’s around the corner. To help you stay organised throughout 2025, we outline some important dates that may be relevant to you as a UK business owner, including tax and filing deadlines, new tax year measures, changes to company law, and key obligations for limited…<\/p>\n","protected":false},"author":28,"featured_media":13095,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1234],"tags":[],"class_list":["post-13091","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-compliance-legal-filings","category-1234","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Important Dates for UK Business Owners in 2025<\/title>\n<meta name=\"description\" content=\"Key dates for UK business owners in 2025, including Self Assessment, new tax year measures, changes to company law, and company deadlines.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/important-dates-for-uk-business-owners-in-2025\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Important dates for UK business owners in 2025\" \/>\n<meta property=\"og:description\" content=\"Key dates for UK business owners in 2025, including Self Assessment, new tax year measures, changes to company law, and company deadlines.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/important-dates-for-uk-business-owners-in-2025\/\" \/>\n<meta property=\"og:site_name\" content=\"Quality Formations Blog\" \/>\n<meta property=\"article:published_time\" content=\"2025-01-01T15:47:33+00:00\" 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She has a Level 5 Diploma in Management and Leadership from the Chartered Management Institute and a Distinction in Company Secretarial Practice and Share Registration Practice from the Corporate Governance Institute.","jobTitle":"Director of Operations","url":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/author\/amelia-french\/"}]}},"views":2664,"x_categories":"Compliance, Legal & Filings","x_tags":"","x_featured_media":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/12\/shutterstock_2525430131-128x128.jpg","x_featured_media_medium":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/12\/shutterstock_2525430131-450x300.jpg","x_featured_media_large":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/12\/shutterstock_2525430131-450x300.jpg","x_featured_media_original":"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/12\/shutterstock_2525430131.jpg","x_date":"1 Jan 2025","x_author":"Amelia 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dates for uk business","_yoast_wpseo_title":"Important Dates for UK Business Owners in 2025","_yoast_wpseo_metadesc":"Key dates for UK business owners in 2025, including Self Assessment, new tax year measures, changes to company law, and company deadlines.","_yoast_wpseo_linkdex":"76","_yoast_wpseo_content_score":"90","_yoast_wpseo_focuskeywords":"","_yoast_wpseo_keywordsynonyms":"","_yoast_wpseo_estimated_reading_time_minutes":"14","_thumbnail_id":"13095","_yoast_indexnow_last_ping":"1736160768","views":"2664","_wp_old_date":"2024-12-31"},"_links":{"self":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=13091"}],"version-history":[{"count":40,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13091\/revisions"}],"predecessor-version":[{"id":13147,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/posts\/13091\/revisions\/13147"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media\/13095"}],"wp:attachment":[{"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=13091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=13091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=13091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}},{"id":13013,"date":"2024-12-01T16:56:52","date_gmt":"2024-12-01T16:56:52","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13013"},"modified":"2024-12-17T17:11:45","modified_gmt":"2024-12-17T17:11:45","slug":"self-assessment-16-common-questions-answered","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-16-common-questions-answered\/","title":{"rendered":"Self Assessment – 16 common questions answered\u00a0"},"content":{"rendered":"<p>Self Assessment is an HMRC system that individuals must use to declare and pay tax on certain types of income, including self-employed profits, shareholder dividends, and capital gains. To do so, they must file a Self Assessment tax return and pay what they owe to HMRC. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>We answer 16 common questions about Self Assessment, including how to register, who needs to file a tax return, and how to pay your tax bill.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>1. Do I need to send a Self Assessment tax return?<\/h3>\n<p>Generally, any individual who receives income that isn\u2019t taxed ‘at source\u2019 through Pay As You Earn (PAYE) must send a Self Assessment tax return to HMRC. This includes anyone who:<\/p>\n<ul>\n<li>is self-employed as a sole trader with annual income above \u00a31,000 (before expenses and reliefs)<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>is a partner in a business partnership<\/li>\n<li>has to pay\u00a0Capital Gains Tax\u00a0on the sale or disposal of something that has increased in value<\/li>\n<li>receives untaxed tips or commission of \u00a32,500 or more<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>earns money from renting out property<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>receives more than \u00a310,000 from dividends, investments, or savings<\/li>\n<li>gets annual income from a trust or settlement<\/li>\n<li>receives foreign income (including from pensions)<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>needs to report certain pension payments or charges<\/li>\n<\/ul>\n<p>You may also need to file a tax return if you:<\/p>\n<ul>\n<li>receive more than \u00a3150,000 through PAYE as an employee or <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/the-role-and-responsibilities-of-a-company-director\/\" data-wpel-link=\"internal\">company director<\/a><\/li>\n<li>want to pay\u00a0voluntary National Insurance contributions (NIC)<\/li>\n<li>want to claim certain <a href=\"https:\/\/www.gov.uk\/income-tax-reliefs\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Income Tax reliefs<\/a> (e.g. on maintenance payments)<\/li>\n<li>are required to pay the\u00a0High Income Child Benefit Charge<\/li>\n<\/ul>\n<p>Use HMRC\u2019s online tool to <a href=\"https:\/\/www.gov.uk\/check-if-you-need-tax-return\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">check if you need to send a Self Assessment tax return<\/a>.<\/p>\n<h2>2. How do I register for Self Assessment?<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>You must <a href=\"https:\/\/www.gov.uk\/register-for-self-assessment\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">register for Self Assessment<\/a> before sending a tax return for the first time. Most people can register online. You can do this by creating an HMRC online tax account (or signing in to your existing one) and providing the following details:<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<ul>\n<li>full name and postal address<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>date of birth<\/li>\n<li>daytime telephone number<\/li>\n<li>UK National Insurance number (if you have one)<\/li>\n<li>the date you began self-employment or received the income you need to report<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>reason for registering for Self Assessment<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p>It can take HMRC up to 10 working days (21 if you\u2019re abroad) to confirm your Self Assessment registration and issue a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-is-a-utr-number\/\" data-wpel-link=\"internal\">Unique Taxpayer Reference (UTR)<\/a>. You\u2019ll also receive a 12-digit activation code in the post within 7 working days (21 if you\u2019re abroad). Sign in to your tax account to activate the Self Assessment service when it arrives.<\/p>\n <div class=\"names_shortcode\">\n <a href=\"https:\/\/acn.ionos.co.uk\/aff_c?offer_id=3&aff_id=8964&url_id=309\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/242634_Domains_Banner-Cooperation_QCF_325x340_UK.png\"\n alt=\"FREE .co.uk Domain Name.\"\n class=\"names_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/242634_Domains_Banner-Cooperation_QCF_980x150_UK.png\"\n alt=\"FREE .co.uk Domain Name.\"\n class=\"names_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>If you can\u2019t register online, you can fill out <a href=\"https:\/\/public-online.hmrc.gov.uk\/lc\/content\/xfaforms\/profiles\/forms.html?contentRoot=repository:\/\/\/Applications\/Test\/1.0\/SA1&template=SA1.xdp\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">form SA1<\/a>, then print and post it to HMRC. The postal address is shown on the form.<\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-guidance-for-company-directors-and-shareholders\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Self Assessment guidance for company directors and shareholders<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-requirements-for-limited-liability-partnerships\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Self Assessment requirements for limited liability partnerships (LLPs)<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/find-government-gateway-user-id\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Where can I find my Government Gateway user ID?<\/span><\/a>\n <\/p>\n<p>You must reactivate your tax account if you\u2019ve registered before but didn\u2019t send a tax return last year. You\u2019ll need your Government Gateway sign-in details and UTR to do so. Alternatively, if you can\u2019t use the online form, fill in <a href=\"https:\/\/public-online.hmrc.gov.uk\/lc\/content\/xfaforms\/profiles\/forms.html?contentRoot=repository:\/\/\/Applications\/NICs_iForms\/1.0&template=CWF1_en_1.0.xdp\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">form CWF1<\/a> instead to reactivate your account.<\/p>\n<h2>3. Do I need to register for Self Assessment after setting up a company?<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>When you <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/set-up-a-limited-company-in-4-easy-steps\/\" data-wpel-link=\"internal\">set up a limited company<\/a>, you will need to register for Self Assessment if you receive:<\/p>\n<ul>\n<li><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-are-dividends\/\" data-wpel-link=\"internal\">dividends from shares<\/a><\/li>\n<li>a reimbursement of business expenses from the company<\/li>\n<li>a <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/directors-loan\/\" data-wpel-link=\"internal\">director\u2019s loan<\/a><\/li>\n<li>any other income not taxed through PAYE <span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p>If you\u2019re a company director with income taxed at source (through PAYE) and no further tax to pay, you don\u2019t need to register or complete a tax return\u2014unless your <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/pay-yourself-through-limited-company\/\" data-wpel-link=\"internal\">director\u2019s salary<\/a> is more than \u00a3150,000 a year.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>4. What tax can I pay through Self Assessment?<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>The type of tax you pay through Self Assessment depends on the type of income you report on your tax return. You may have to pay one or more of the following:<\/p>\n<ul>\n<li>Income Tax and Class 4 National Insurance contributions\u2014if you\u2019re self-employed, a landlord, or receive untaxed income from certain other sources<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li><a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/what-are-the-dividend-tax-rates-in-the-uk\/\" data-wpel-link=\"internal\">Dividend Tax<\/a>\u2014if you receive dividend income from shares<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Capital Gains Tax\u2014if you make a profit (\u2018gain\u2019) from selling or disposing of an asset that has increased in value<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li><a href=\"https:\/\/www.gov.uk\/voluntary-national-insurance-contributions\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Voluntary National Insurance contributions<\/a> (Class 2 or Class 3)\u2014if you need to fill any gaps in your NI record<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li><a href=\"https:\/\/www.gov.uk\/repaying-your-student-loan\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Student loan repayments<\/a>\u2014if your annual income exceeds the threshold for your repayment plan<\/li>\n<\/ul>\n<p>From 6 April 2024, Class 2 National Insurance is no longer payable by self-employed individuals. However, they\u2019ll still receive access to contributory benefits (including the State Pension) if their profits are above \u00a36,725 a year (the NIC Lower Profits Limit).<\/p>\n<p>If you\u2019re self-employed and your annual profits are under \u00a36,725, you can pay voluntary Class 2 contributions to avoid gaps in your record and protect your entitlement to benefits.<\/p>\n<h2>5. How do I send a Self Assessment tax return?<\/h3>\n<p>Once you’ve registered for Self Assessment and activated the service in your online account, you can send a tax return (form SA100) to HMRC online or by post. The online option is quicker and simpler. You also get an additional three months to file, and it\u2019s much easier to make changes if you need to fix a mistake.<\/p>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-tax-return-mistakes\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">6 common Self Assessment tax return mistakes and how to avoid them<\/span><\/a>\n \n<p>To complete and file a tax return online, follow these steps:<\/p>\n<ol>\n<li>Sign in to your HMRC account\u2014you’ll need your Government Gateway user ID and password<\/li>\n<li>Enter your personal information\u2014name, date of birth, Unique Taxpayer Reference, National Insurance number, and contact details<\/li>\n<li>Select your taxpayer residency status\u2014English and Northern Irish, Scottish, or Welsh<\/li>\n<li>Tailor your tax return by answering ‘Yes’ or No’ to a series of questions\u2014this will ensure you only fill in the supplementary sections of the return that apply to you<\/li>\n<li>Follow the instructions on-screen to complete the main section of the return and any supplementary pages provided<\/li>\n<li>Once complete, check that you’ve answered all of the questions and entered the correct information\u2014you can go back if you need to correct anything<\/li>\n<li>View your calculation to see how much you owe (if anything)\u2014save a copy for your records<\/li>\n<li>Submit your tax return to HMRC\u2014you’ll need to re-enter your user ID and password<\/li>\n<\/ol>\n<p>You will get an online message to confirm that HMRC has received it. Approximately 72 hours after submission, you should be able to view your return in your online account. If you need to correct anything, you can make changes to your tax return at this point.<\/p>\n<h4>When you can’t send a return online<\/h4>\n<p>You can’t use HMRC’s online service to file your tax return if you:<\/p>\n<ul>\n<li>live abroad as a non-UK resident<\/li>\n<li>are submitting a return for a partnership, a trust, or an estate<\/li>\n<li>need to report <a href=\"https:\/\/www.gov.uk\/government\/publications\/gains-on-uk-life-insurance-policies-hs320-self-assessment-helpsheet\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">multiple chargeable gains<\/a> from life insurance policies<\/li>\n<li>receive income from a trust, or you’re a religious minister or Lloyd\u2019s underwriter<\/li>\n<\/ul>\n<p>In these situations, you must use commercial software or download\/request the relevant forms instead.<\/p>\n<h4>Sending your tax return by post<\/h4>\n<p>If you need to <a href=\"https:\/\/www.gov.uk\/self-assessment-tax-returns\/sending-return\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">send your Self Assessment tax return by post<\/a>, you can download the SA100 tax return form or call HMRC to request a copy. You can also download any supplementary pages you require.<\/p>\n<p>If you need to send a Self Assessment tax return for trustees of a registered pension, you must download form SA970.<\/p>\n<h2>6. What information do I need to include in my tax return?<\/h3>\n<p>Before you get started, make sure you have all the information you need, including:<\/p>\n<ul>\n<li>your Unique Taxpayer Reference<\/li>\n<li>your National Insurance number<\/li>\n<li>Invoices, bank statements, or other documents detailing any untaxed income earned in the tax year (e.g. from self-employment, dividends, or interest)<\/li>\n<li>records of business expenses<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>details of <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/can-my-own-company-make-contributions-towards-my-pension\/\" data-wpel-link=\"internal\">pension contributions<\/a> or charitable donations that may be eligible for tax relief<\/li>\n<li>your payslips, P60 (End of Year Certificate), form P11D (Expenses and Benefits), form P2 (Tax Coding Notice), and other records that show any employment income you\u2019ve received and the tax already paid in the year<\/li>\n<\/ul>\n<p>Your Self Assessment tax return comprises the main section (SA100) and certain supplementary pages based on the type of income you need to declare.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"hubspot_shortcode\">\n <a href=\"https:\/\/hubspot.sjv.io\/OrKdGZ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_mobile.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/hubspot_desktop.png\"\n alt=\"Get Started With HubSpot's Free Tools.\"\n class=\"hubspot_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>In the main section, you will provide the following information:<\/p>\n<ul>\n<li>dividends and other distributions from UK companies<\/li>\n<li>interest from UK bank, building society, and other savings accounts<\/li>\n<li>UK pensions, annuities and other state benefits received<\/li>\n<li>Tax reliefs on pension contributions, charitable giving, and specific allowances<\/li>\n<\/ul>\n<p>In the <a href=\"https:\/\/www.gov.uk\/self-assessment-tax-return-forms\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Self Assessment supplementary pages<\/a>, you can provide information relating to (where relevant):<\/p>\n<ul>\n<li>income and expenses relating to self-employment\u2014if you work for yourself or were a subcontractor working in the construction industry<\/li>\n<li>employment income\u2014if you\u2019re an employee, agency worker, company director, or office holder<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>partnership income\u2014if you\u2019re a partner in a general business partnership, LLP, or limited partnership<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>income from UK property<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>foreign income\u2014e.g. from savings, dividends, pensions, or property<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>capital gains on the disposal of assets<\/li>\n<\/ul>\n<p>The online tax return form provides explanations and instructions throughout. You should also read HMRC\u2019s detailed <a href=\"https:\/\/www.gov.uk\/government\/publications\/self-assessment-tax-return-sa100\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">guidance on completing your tax return<\/a> for Self Assessment.<\/p>\n<h2>7. What happens if I make a mistake on my Self Assessment tax return?<\/h3>\n<p>If you file online, you can easily change your tax return after submission\u2014for example, if you make a mistake or forget to include something.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>You can <a href=\"https:\/\/www.gov.uk\/self-assessment-tax-returns\/corrections\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">amend a Self Assessment tax return<\/a> within 12 months of the filing deadline, either online through your account or by sending another paper return by post.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p> <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/landlord-tax-guide-buying-selling-letting-property\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Landlord tax guide – including buying, selling, and letting property<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/side-hustle-tax\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Side hustle tax – what you need to know<\/span><\/a>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/7-types-of-business-taxes\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">7 types of business taxes you need to know about<\/span><\/a>\n <\/p>\n<p>For example, if you file a tax return for the 2024-25 tax year by the online filing deadline of 31 January 2026, you have until 31 January 2027 to update the return.<\/p>\n<p>HMRC will update your bill based on the changes you report. Depending on the update, you may have to pay more tax or claim a tax refund.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>If you need to make changes after 12 months or to a tax return from an earlier year, you must write to HMRC.<\/p>\n<h4>How to amend an online tax return<\/h4>\n<p>If you filed online, follow these steps to make changes to your tax return:<\/p>\n<ol>\n<li>Sign in to your tax account<\/li>\n<li>Click on the \u2018Self Assessment\u2019 box<\/li>\n<li>Scroll down the page and select \u2018More Self Assessment details\u2019<\/li>\n<li>Click on \u2018At a glance\u2019 from the left-hand menu<\/li>\n<li>Scroll down and select \u2018Tax return options\u2019<\/li>\n<li>Select the tax year you want to amend, then click \u2018Go\u2019<\/li>\n<li>Scroll down and choose \u2018Amend return\u2019 to make the corrections and file it again<\/li>\n<\/ol>\n<p>You’ll need to wait at least 3 days (72 hours) after the initial submission before you can update your tax return.<\/p>\n<h4>How to amend a paper tax return<\/h4>\n<p>If you submitted your tax return on paper, you can amend it by:<\/p>\n<ul>\n<li>downloading the SA100 tax return form<\/li>\n<li>calling HMRC and asking for the SA100 tax return form<\/li>\n<li>downloading any other forms and supplementary pages you require<\/li>\n<\/ul>\n<p>You must write \u2018amendment\u2019 on each page, include your name and UTR, and send the updated pages to the address on your Self Assessment paperwork.<\/p>\n<p>If you can\u2019t find the address, send your amended forms to: Self Assessment, HM Revenue and Customs, BX9 1AS.<\/p>\n<h2>8. Do I need an accountant to prepare my tax return?<\/h3>\n<p>You don\u2019t need an accountant or tax advisor to prepare and file your Self Assessment tax return. If your affairs are simple and you can do so, you can complete the tax return yourself.<\/p>\n<p>However, if you\u2019re running a business, claiming lots of expenses, or your requirements are complex, it\u2019s worthwhile seeking expert help and advice from a professional. Doing so can save you time and money in the long run.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<h2>9. Where can I find my Unique Taxpayer Reference?<\/h3>\n<p>You\u2019ll receive your 10-digit Unique Taxpayer Reference (UTR) from HMRC when you register for Self Assessment. HMRC uses this number to identify you for Self Assessment purposes.<\/p>\n<p>Your UTR should arrive by post within 15 days of registration, or slightly longer if you live overseas. It will be printed on the top right-hand side of the letter and may be called a \u2018tax reference\u2019.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n <div class=\"complete_package__shortcode\">\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/fully-inclusive-package\/\" data-wpel-link=\"internal\">\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_sidebar.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__mobile\"\n \/>\n <img decoding=\"async\"\n src=\"https:\/\/cdn-quality.s3.eu-central-1.amazonaws.com\/assets\/custom\/images\/blog\/qcf-blog_banner.png?v=4\"\n alt=\"Fully Inclusive Package\"\n class=\"complete_package__desktop\"\n \/>\n <\/a>\n <\/div>\n \n<p>However, you should be able to find your Unique Taxpayer Reference sooner in your <a href=\"https:\/\/www.gov.uk\/personal-tax-account\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">personal tax account<\/a> or the <a href=\"https:\/\/www.gov.uk\/guidance\/download-the-hmrc-app\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">HMRC app<\/a>.<\/p>\n<p>You will use your UTR on many occasions, including when sending or amending Self Assessment tax returns, paying your personal tax bills, claiming refunds, and contacting HMRC about anything else relating to Self Assessment.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>It will be included on previous tax returns and other correspondence from HMRC, such as notices to file a tax return, payment reminders, and late filing notices.<\/p>\n<h2>10. What are the Self Assessment deadlines?<\/h3>\n<p>There are several Self Assessment deadlines you need to know. They fall after the end of the tax year that you’re reporting in your tax return.<\/p>\n<ul>\n<li>5 October – register for Self Assessment if you haven’t sent a tax return before<\/li>\n<li>31 October – submitting a paper return by post<\/li>\n<li>31 January – file an online tax return<\/li>\n<li>31 January – pay any tax you owe and make your first payment on account towards your next bill (if applicable)<\/li>\n<li>31 July – make your second payment on account towards your next tax bill (if applicable)<\/li>\n<\/ul>\n<p>For example, if you need to send a tax return for the 2024-25 tax year, you must send your return by 31 October 2025 (by post) or 31 January 2026 (online).<span class=\"Apple-converted-space\"> If you owe any tax, payment will also be due by 31 January 2026.\u00a0<\/span><\/p>\n<h4>When the deadlines may be different<\/h4>\n<p>The Self Assessment deadlines may be different if:<\/p>\n<ul>\n<li>you want HMRC to automatically collect any tax you owe from your wages and pension – submit an online return by 30 December<\/li>\n<li>you\u2019re a trustee of a registered pension scheme or non-resident company – send a\u00a0paper tax return by 31 January (you can’t file an online return in these circumstances)<\/li>\n<li>your partnership\u2019s accounting date is between 1 February and 5 April, and one of the partners is a limited company – file a paper return no later than 9 months after the accounting date, or an online return no later than 12 months after the accounting date<\/li>\n<\/ul>\n<p>If you miss any of these deadlines, you can still submit your return and pay your bill. However, you will incur penalties.<\/p>\n<h2>11. How do I pay my Self Assessment bill?<\/h3>\n<p>You’re responsible for <a href=\"https:\/\/www.gov.uk\/pay-self-assessment-tax-bill\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">paying your Self Assessment tax bill<\/a> to HMRC by the deadline. You can use one of the following payment methods:<\/p>\n<ul>\n<li>through your online bank account<\/li>\n<li>using online or telephone banking (Faster Payments)<\/li>\n<li>using the <a href=\"https:\/\/www.gov.uk\/guidance\/download-the-hmrc-app\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">HMRC app<\/a> to pay through your bank\u2019s app or online banking<\/li>\n<li>by CHAPS or Bacs<\/li>\n<li>online by debit or corporate credit card<\/li>\n<li>at your bank or building society (you’ll need a paying-in slip from HMRC<abbr title=\"HM Revenue and Customs\">)<\/abbr><\/li>\n<li>by Direct Debit<\/li>\n<li>by cheque through the post<\/li>\n<li><a href=\"https:\/\/www.gov.uk\/pay-self-assessment-tax-bill\/through-your-tax-code\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">through your PAYE tax code<\/a><\/li>\n<\/ul>\n<p>Alternatively, you can <a href=\"https:\/\/www.gov.uk\/pay-self-assessment-tax-bill\/pay-weekly-monthly\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">set up a Budget Payment<\/a> plan to pay in instalments. This will allow you to make weekly or monthly Direct Debit payments towards your next bill, which may help you manage your finances better.<\/p>\n<h2>12. I can\u2019t pay my tax bill on time\u2014what should I do?<\/h3>\n<p>You must contact HMRC as soon as possible if you <a href=\"https:\/\/www.gov.uk\/difficulties-paying-hmrc\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">can’t afford to pay your Self Assessment tax bill<\/a> or you’re unable to pay on time for any other reason.<\/p>\n<p>If you can’t pay it in full, you can set up a payment plan, known as a ‘Time to Pay’ arrangement. This will enable you to pay in instalments over months.<\/p>\n<p>If you don’t contact HMRC or can’t agree on an instalment plan, HMRC may:<\/p>\n<ul>\n<li>instruct a debt collection agency to collect the money<\/li>\n<li>collect what you owe directly from your wages or monthly pension payments<\/li>\n<li>seize certain personal assets and sell them (if you live in England, Wales, or Northern Ireland)<\/li>\n<li>take money directly from your bank account or building society savings (if you live in England, Wales, or Northern Ireland)<\/li>\n<li>take you to court<\/li>\n<li>apply to the court to make you bankrupt<\/li>\n<\/ul>\n<p>Any costs HMRC incurs (e.g. auction fees) may be added to your debt. However, before taking any debt recovery actions, HMRC will notify you and explain your rights, options, and the associated costs.<\/p>\n<h2>13. What happens if I miss a Self Assessment deadline?<\/h3>\n<p>HMRC will impose the following penalties if you miss the deadline for filing your Self Assessment tax return:<\/p>\n<ul>\n<li>automatic \u00a3100 fine – up to 3 months late (even if you miss the deadline by only 1 day)<\/li>\n<li>\u00a310 per day up to a maximum of \u00a3900 – more than 3 months late<\/li>\n<li>5% of the tax bill, or \u00a3300 (whichever is greater) – more than 6 months late<\/li>\n<li>additional 5% of outstanding tax, or \u00a3300 (whichever is greater) – more than 12 months late<\/li>\n<\/ul>\n<p>If you fail to pay the tax you owe by the relevant deadline, there should be no late payment penalties if you settle your bill within 30 days of the due date. After that, HMRC will impose the following penalties:<\/p>\n<ul>\n<li>5% of tax due – unpaid after 30 days<\/li>\n<li>additional 5% of outstanding tax – unpaid after 6 months<\/li>\n<li>another 5% of outstanding tax – unpaid after 12 months<\/li>\n<\/ul>\n<p>You\u2019ll also be charged interest on late payments until you pay your bill in full.<\/p>\n<h2>14. Can I claim a Self Assessment tax refund?<\/h3>\n<p>You may be able to claim a refund (rebate) from HMRC if you’ve paid too much tax. However, if more tax is due in the next 45 days (e.g. for a payment on account), the overpaid amount will be deducted from that balance.<\/p>\n <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/tax-on-business-expenses\/\" class=\"related\" data-wpel-link=\"internal\"><span class=\"related-title\">Do I pay tax on my business expenses?<\/span><\/a>\n \n<p>There are different ways to claim, depending on what you’ve paid too much tax on. For example, if the overpayment relates to a Self Assessment tax return or bill, you must claim a refund through your online account.<\/p>\n<p>HMRC provides an online tool that you can use to <a href=\"https:\/\/www.gov.uk\/claim-tax-refund\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">check how to claim a tax refund<\/a>.<\/p>\n<h2>15. What records do I need to keep for Self Assessment?<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>You must keep all records of the income and expenditure you report on your Self Assessment tax returns. These <a href=\"https:\/\/www.gov.uk\/keeping-your-pay-tax-records\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">pay and tax records<\/a> should be kept for at least:<\/p>\n<ul>\n<li>5 years after the 31 January filing deadline of the relevant tax year – if the records relate to your self-employed business income and costs<\/li>\n<li>at least 22 months after the end of the tax year covered in the tax return – if you send the tax return on or before the filing deadline<\/li>\n<li>at least 15 months after you send the tax return – if you file a late tax return after the deadline<\/li>\n<\/ul>\n<p>You don’t need to include copies of your records with your tax returns. However, HMRC may ask to check them to ensure you\u2019re paying the correct amount of tax. If your records are found to be inaccurate, incomplete, or unreadable, HMRC may charge you a penalty.<\/p>\n <div class=\"revolut_shortcode\">\n <a href=\"https:\/\/revolutbusiness.ngih.net\/daV2kQ\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_mobile.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-mobile\">\n <img decoding=\"async\" src=\"https:\/\/cdn-brand.s3.eu-west-1.amazonaws.com\/assets\/images\/revolut_desktop.png\"\n alt=\"Revolut Business & Affiliates.\"\n class=\"revolut_shortcode-desktop\">\n <\/a>\n <\/div>\n \n<p>Currently, you can keep your Self Assessment records on paper, digitally, or as part of a software program (e.g. bookkeeping software). However, through <a href=\"https:\/\/www.gov.uk\/government\/publications\/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords\/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">Making Tax Digital for Income Tax Self Assessment<\/a> (MTD for ITSA), businesses and landlords with qualifying income will be required by law to maintain digital records. These changes will be introduced from April 2026.<\/p>\n<p>You must tell HMRC if you’re no longer self-employed as a sole trader or a partner in a business partnership. You can do this through your business tax account.<\/p>\n<p>If you no longer need to send a Self Assessment tax return for any other reason (e.g. your PAYE income is below \u00a3150,000 or you’ve stopped being a landlord), you can notify HMRC in the following ways:<\/p>\n<ul>\n<li>by filling in an online form in your tax account<\/li>\n<li>online using\u00a0HMRC\u2019s digital assistant<\/li>\n<li>by phone or post<\/li>\n<\/ul>\n<p>If HMRC agrees to <a href=\"https:\/\/www.gov.uk\/self-assessment-tax-returns\/no-longer-need-to-send-a-tax-return\" data-wpel-link=\"external\" target=\"_blank\" rel=\"noopener noreferrer\">cancel your Self Assessment registration<\/a>, you will receive a letter to confirm that you don’t need to send a tax return.<\/p>\n<h2>Thanks for reading<span class=\"Apple-converted-space\">\u00a0<\/span><\/h3>\n<p>Please comment below if you have any questions about Self Assessment you’d like us to answer.<\/p>\n<p>Explore the <a href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/\" data-wpel-link=\"internal\">Quality Company Formations Blog<\/a> for business advice, insights, and limited company guidance.<\/p>\n"},"excerpt":{"rendered":"<p>Self Assessment is an HMRC system that individuals must use to declare and pay tax on certain types of income, including self-employed profits, shareholder dividends, and capital gains. To do so, they must file a Self Assessment tax return and pay what they owe to HMRC. \u00a0 We answer 16 common questions about Self Assessment,…<\/p>\n","protected":false},"author":28,"featured_media":13023,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1239],"tags":[],"class_list":["post-13013","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-accounting-finance","category-1239","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Self Assessment - 16 Common Questions Answered<\/title>\n<meta name=\"description\" content=\"We answer common questions about Self Assessment, including how to register, who needs to file a tax return, and how to pay your tax bill.\u00a0\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-16-common-questions-answered\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Self Assessment - 16 common questions answered\u00a0\" \/>\n<meta property=\"og:description\" content=\"We answer common questions about Self Assessment, including how to register, who needs to file a tax return, and how to pay your tax bill.\u00a0\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-16-common-questions-answered\/\" \/>\n<meta property=\"og:site_name\" content=\"Quality Formations Blog\" \/>\n<meta property=\"article:published_time\" content=\"2024-12-01T16:56:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-12-17T17:11:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.qualityformationsblog.co.uk\/wp-content\/uploads\/2024\/12\/Shutterstock_2390724773.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1500\" \/>\n\t<meta property=\"og:image:height\" content=\"750\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Amelia French\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Amelia French\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"15 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Self Assessment - 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