Tougher ID Checks for Gig Workers: Businesses Face £60,000 Fines per Illegal Hire

Businesses employing gig workers will soon be required to carry out right-to-work ID checks or risk fines of up to £60,000 per illegal worker.

The new rules, aimed at tightening immigration enforcement, will apply to sectors such as construction, beauty, food delivery, and courier services—bringing them in line with standard employer obligations, according to the Home Office.

The government stated that completing the necessary status forms will take only a few minutes. Non-compliance may lead to severe penalties, including hefty fines, director disqualifications, business closures, and even prison sentences of up to five years.

Chip Shop Owner Partially Wins Tax Appeal Due to Out-of-Time HMRC Assessments

Owner of The Happy Chippy in Newcastle, has partially won an income tax appeal after the tribunal ruled that HMRC assessed some years too late, despite finding his behaviour to be deliberate and fraudulent.

Originally facing a £2.1m tax bill and penalties, owner’s liability was reduced to £1.2m after settlement discussions in 2017. The First Tier Tribunal (FTT) found he had knowingly submitted inaccurate tax returns over 15 years, failed to cooperate with investigations, and attempted to shift blame to his brother and former adviser. He operated 21 bank accounts.

Although the tribunal agreed with HMRC that his actions were fraudulent and penalties were justified, it ruled that tax years before 2005-06 were out of time, limiting HMRC’s recovery. The remainder of the appeal was dismissed.

Starmer Warns Trump’s Tariffs Will Hit UK and Global Economy

Prime Minister Sir Keir Starmer has warned business leaders that Donald Trump’s newly announced tariffs will “clearly” affect both the UK and global economies.

The US president revealed plans to impose a 10% tax on all UK imports and 20% on goods from the EU. Speaking at Downing Street, Starmer said the world is entering a “new era” in trade and economics, much like in defence and security.

While the UK still aims to negotiate a trade deal with the US, Starmer made it clear that “nothing is off the table” in terms of the UK’s potential response.

Late Payment Penalties to Rise Sharply from April, Chancellor Confirms

In her first Spring Statement, the Chancellor announced a significant increase in late payment penalties starting from the 2025–26 tax year.

From 1 April, self assessment income tax and VAT late payments will face tougher penalties, with a 10% charge applied to unpaid tax after 30 days—more than double the current rate. The changes are part of broader efforts to reduce the tax gap and will leave late payers with little time to adjust.

School fee VAT appeal kicks off at High Court

A group of parents is taking legal action to challenge the introduction of 20% VAT on private school fees from 1 January, arguing that taxing education may violate human rights. The case will be heard in the High Court on 1 April, where Chancellor Rachel Reeves will be represented by four King’s Counsel (KCs) as the parents and schools present their appeal.

What you need to know: changes to company size thresholds

The threshold changes will take effect for financial years starting on or after 6 April 2025. The dates on which the financial statements are approved by the board or when any audit or accountant’s report is signed are not relevant for this purpose.

Due to the significant increases, it is expected that approximately 113,000 small companies will now qualify as micro-sized, and around 14,000 medium-sized companies will be reclassified as small.

Bank deposit protection limit set to rise to £110k

The Prudential Regulation Authority (PRA) has put forward proposals to increase the Financial Services Compensation Scheme (FSCS) deposit protection limit from £85,000 to £110,000.

This limit — which defines the maximum amount the FSCS usually protects if a bank, building society, or credit union fails — has remained at £85,000 since 2017.

Charity SORP Under Review: Major Changes Proposed

Charity standard setters have launched a 12-week consultation on significant updates to the Charity SORP, prompted by recent amendments to UK GAAP (FRS 102). Key proposals include revised accounting treatments for leases, revenue recognition, and enhanced ESG reporting.

Under the proposed SORP 2026, charities will need to recognise most operating leases on the balance sheet, leading to increased reported assets and liabilities. Changes will also affect how lease-related expenses are presented in the statement of financial activities.

In terms of revenue, a new five-step model for recognising income from exchange contracts is being introduced, aligning with the updated FRS 102 framework.

The consultation document spans 304 pages and invites sector feedback.

High income child benefit to be collected via PAYE

Starting August 2025, employees earning over £60,000 and subject to the High Income Child Benefit Charge (HICBC) will no longer need to file a self assessment tax return. Instead, they can use a new HMRC online service to report child benefit details and have the charge deducted directly through PAYE.

MTD: Quarterly Reporting for Self-Employed and Landlords Earning Over £20,000 from 2028

From 2028, all self-employed individuals and landlords with income over £20,000 will be required to submit quarterly tax returns under Making Tax Digital (MTD) for Income Tax.

The government is also considering extending MTD to those earning below the £20,000 threshold, which would require them to report quarterly and purchase compatible software. As part of the ongoing rollout, HMRC said it will continue exploring ways to expand digitalisation to the wider pool of four million affected taxpayers.

HMRC Loses Appeal as Tribunal Backs Bolt in VAT Case

HMRC has lost a key appeal after the Upper Tribunal ruled in favour of ride-hailing app Bolt, confirming that its services fall under the Tour Operators’ Margin Scheme (TOMS) and are not subject to standard VAT rules.

The case, part of ongoing legal battles involving gig economy platforms, saw HMRC challenge an earlier decision by the First Tier Tribunal. However, the Upper Tribunal dismissed the appeal, stating that any legal errors identified were insignificant and did not affect the outcome.

The ruling confirms Bolt can continue using TOMS, which reduces its VAT liability in the UK.

Government Plans Overhaul of R&D Tax Credit Advance Clearance Process

The government is set to reform the R&D tax credit system by making the advanced clearance process a required step before companies can claim R&D credits.

Announced in the Spring Statement, a consultation will be launched “in due course” to explore expanding the use of advance clearances. While no timeline was given, the goal is to reduce fraud and errors, while giving businesses greater certainty about the eligibility of their R&D claims.