skip to navigationskip to main content
Business Companion Newsletter August 2025
                                               View this email in your browser    
Home |  About Us |  Software |  Services |  Resources |  News |  Contact

Welcome to our Newsletter for August 2025.

Working in the USA during September

  • Just to let you know we will be working from Los Angeles from 28th August until 21st September. 
  • Please email us as usual at admin@simpleaccounting.co.uk   
  • If you need to ring us please ring Mark’s mobile 0795 7176355 after 4PM UK time. 

August 2025

• Employment Rights Legal Changes

• Identity Verification for Companies House

• Tax Briefings on the Simple Accounting Website

• Comparing the most tax effective payments from a company

Employment Rights Legal Changes


The Employment Rights Bill aims to strengthen employee rights and protections, but it will add to your compliance duties.

The government roadmap describes the measures in the Bill and when these will take effect. Most other changes will take place in April or October next year. According to the roadmap, the timetable for the introduction of key changes is:

Immediately after Royal Assent (Sept 2025?)
  • Repeal of Minimum Service Levels in strikes
  • Repeal of ballot minimums for strikes
  • Removing the ballot requirement for trade union political funds
  • Simplifying industrial action/ballot notices
  • Protection against dismissal for taking industrial action 

April 2026
  • Day one entitlement to paternity leave and unpaid parental leave
  • No three-day waiting period for statutory sick pay
  • A new Fair Work Agency to enforce employment law rights, the National Minimum Wage, holiday pay and statutory sick pay.
October 2026
  • Ban on employer dismissing and rehiring employees under weaker terms (“fire and rehire”)
  • Employers to be held liable if employees suffer harassment from customers. 
2027
  • Day One right for employees not to be unfairly dismissed
  • Guaranteed hours for zero- and low-hours employees and agency workers
  • Rights to flexible working
  • Restriction on dismissal of pregnant women
  • Right to bereavement leave.
ACTION: If there was a time to review your staff contracts it is probably now.  Make changes before you, as employer, lose the right to impose a change in terms where you cannot negotiate it.  Insert a ‘flexibility’ or ‘variation’ clause into your employment agreement to give yourself the right to make some conditions in the future.

Identity Verification for Companies House 


Companies House are introducing a new identity verification process to help deter those wishing to use companies for illegal purposes.  Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity to prove they are who they claim to be. 

Who needs to verify their identity  
From 18 November 2025, identity verification will be required for webfiling at Companies House for: 
•    new directors and people with significant control (PSCs)  
•    existing directors and PSCs
•    members of a limited liability partnership (LLP)

Despite the November deadline, you will not actually need to verify your identity until you (or we) submit the next confirmation statement (after November 18th) or make changes to officers ‘details at Companies House. 

How do you Verify your Identity? 
You can use GOV.UK One Login online to verify your identity using ID documents, such as a passport.

If you are unable to carry out the process online you will be able to take your photo id to a Participating Post Office for them to verify your identity for you.

Your Companies House personal code
When you have successfully verified, you’ll get a unique identifier known as a Companies House personal code. The code is personal to you, not your company or a company you work for. 

Simple Accounting Ltd will need this code to file your next confirmation statement at Companies House. 

Tax Briefings on the Simple Accounting Website


We keep a series of briefings on our website.  Do have a browse.  As a taster consider looking at the following:
 
CGT Business asset disposal relief explained:
https://simpleaccounting.co.uk/resources/tax-helpsheets/?hs=28
 
Minimising Tax on Company Cars:
https://simpleaccounting.co.uk/resources/tax-helpsheets/?hs=22
 
All the tax briefings can be found at:
https://simpleaccounting.co.uk/resources/tax-helpsheets/
 
Other tax resources include:
Tax Calculators: https://simpleaccounting.co.uk/resources/tax-calculators/
Tax rates:           https://simpleaccounting.co.uk/resources/tax-rates-allowances/
Administration centre: https://simpleaccounting.co.uk/resources/administration_centre/
 

Comparing the most tax effective payments from a company


Say you want to take more money out of the company you own.  Or you want to put some money into your employee’s pockets.  How do you do this without incurring excessive taxes?  We compare the employee’s gain (net of employee taxes) relative to the true cost to their employing company including employer taxes and after Corp Tax relief.   
 
The top method of recovering money from your company is to reclaim expenses on which vat can be claimed.
VATable Expenses (VAT recovery, CT recovery,  free from personal tax and NI) [this will provide the employee with value of £120/it will cost the company £81]
 
You can find out more about tax free benefits on our website.
 
Beyond this you will have to think of a form of remuneration.  Here are a variety of taxes that you face, and they are cumulative.  I am assuming a vat – registered business, paying 19% Corporation Tax (CT), with a payroll.  I assume that any pensions are taxed at 20% when eventually received.  The payroll could either be paying full Employer National Insurance (NI), or qualify for Employment Allowance (if the payroll is less than £80k).  After each possibility is the money your employee takes home post-tax for each £100 of cost (pre tax) to the employing company.  This is compared to the post tax cost to the company (post tax). In each case Money you take for each £100 pre tax taken out / paid to employee or owner.
 
So the most positive option is repayment of a Vat able expense.  The next obvious methods are untaxed on the recipient:
 
  • Interest of up to £1000 paid on a Director loan paid to business owners who is on Basic Rate each (CT recovery, free from personal tax and NI) [£100/£81]
  • Wages to the NI employer threshold of £5k pa (CT recovery, free from personal tax and NI) [£100/£81]
  • VAT-free Expenses incl refund of home as office. (CT recovery, free from personal tax and NI) [£100/£81]
  • Staff Suggestion Scheme [£100/£81]
  • Interest of up to £5000 on a Director loan paid to a lender who is earning less than £13.5k (CT recovery, personal tax, no NI) [£100/£81]
  • Wages set between the NI employer threshold of £5k and employee threshold of £12.6k (CT recovery free from personal tax.  Employer NI offset by Employment Allowance) [£100/£81]
  • Dividends of less than £500 each shareholder (No CT recovery but free from personal tax and NI) [£100/£100]
 
Next the partly taxable ones:
 
  • Interest on a Director loan paid to business owners after the first £1k (CT recovery, personal tax, no NI) [£80/£81]
  • Wages set between the NI employer threshold of £5k and employee threshold of £12.6k (CT recovery free from personal tax.  Employer NI 15% only) [£100/£92]
  • Dividends of more than £500 each shareholder to no more than £37.5k (No CT recovery, but free from personal tax, 8.75% Dividend tax in place of NI) [£91/£100]
 
More exotic:
 
  • Employer Pension contributions  (CT recovery free from short term personal tax, no NI, but you don’t get the money until you retire) [£80/£81]
  • P11d benefits (CT recovery.  20% personal tax.  Employer NI 15% applies  This route will close from 2026 as benefits are payrolled) [£80/£97]
  • Payrolled benefits (CT recovery.  20% personal tax.  Employer NI 15% applies/8% Employee NI – compulsory from 2026 as benefits are payrolled) [£72/£93]
 
I don’t recommend:
 
  • Employee Pension contributions  (free of personal tax only in the short term, subject to Employer NI, and you don’t get the money until you retire, CT recovery) [£80/£93]
  • Wages above personal allowance £12.6k (20% personal tax.  NI applies, 15% Er and 8% Ee, CT recovery. ) [£72/£93]
  • Dividends beyond £37.5k each shareholder (free from personal tax but 33.75% Dividend tax in place of NI, No CT recovery) [£66/£100]
  • P11d benefits (CT recovery.  40% personal tax.  Employer NI 15% applies  This route will close from 2026 as benefits are payrolled) [£60/£97]
  • Payrolled benefits (CT recovery.  40% personal tax.  Employer NI 15% applies/8% Employee NI – compulsory from 2026 as benefits are payrolled) [£58/£93]
  • Wages above basic rate band £50.3k (40% personal tax.  NI applies, 15% Er and 2% Ee, CT recovery) [£58/£93]
  • Wages above band £100k (60% personal tax.  NI applies, 15% Er and 2% Ee, CT recovery) [£38/£93]
 
And now the best of all options
 
This is a receipt under Business Asset Disposal relief (BADR).  The qualifying conditions for BADR are that:
  • the company must be the individuals ‘personal company’ – broadly this means holding at least 5% of the ordinary share capital and have ability to exercise at least 5% of the voting rights/ or these must be EMI shares/options. 
  • the individual must be an officer or employee of the company
  • the company must be a trading company (ie not property).
 
An example of a BADR receipt is a capital payment on dissolution of a company
 
If the capital payment is:
  • up to £1m/BADR or investor relief/14% 25/26 [£86/£100]
  • up to £1m/BADR or investor relief/18% 2026 [£82/£100]
  • above to £1m/No BADR/18% Basic rate [£82/£100]
  • above to £1m/No BADR/24% Higher rate [£76/£100]
 Summary
Other, more exotic tactics include borrowing from your company and splitting income with other family members working in the same business.  But first nail the most obvious route.  The most tax–effective option is for an employee/director to get repayment of a Vat able expense. 

Need Help?


Please contact us if we can help you with these or any other tax or accounts matters.

In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.

New Clients Welcome


If you are not already a client and are interested in becoming one, we would love to discuss how we can help and provide you with a competitive quote for our services.

See details of our Business Companion Service.

About Us


Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Solar Accounts, Quickbooks or Xero.

‘All clients using these software packages can benefit from our support. Visit our website www.simpleaccounting.co.uk for a look at the resources on offer.’
If the images contained within this email do not show correctly please add this email to your safe senders list.

Legal Disclaimer


Click here for legal info
Copyright © 2025 Simple Accounting Ltd, All rights reserved.

Our mailing address is:
admin@simpleaccounting.co.uk

Want to change how you receive these emails?
You can unsubscribe from this list.