Laura Howes

Starting 18 November 2025, you’ll need to prove who you are before you can run a UK company.🔐 Big changes are coming under the Economic Crime and Corporate Transparency Act 2023 and mandatory identity verification is at the heart of it. ✅ Who must verify? 1. Directors & PSCs of UK companies 2. LLP members 3. Directors of overseas companies with UK establishments ⏳ Timeline: • Transition period: 12 months from 18 Nov 2025 • New directors/PSCs must verify before appointment is accepted • Existing ones must verify by their next confirmation statement (or other filing deadline) 🆔 How to verify: • Free via GOV.UK One Login • Or through an Authorised Corporate Service Provider (ACSP) ⚠️ What happens if you don’t? • Your appointment or filings could be rejected • You may lose the ability to act as a director/PSC • Companies can face penalties 📢 Action point: Get your ID ready and make sure your company records (e.g. date of birth, PSC details) are up to date well before the deadline.

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"Cash-out" transactions are becoming increasingly common across the UK mid-market — and for good reason. Many founders are exploring ways to take some money off the table without fully exiting. In a climate where running a business is relentless, tax rules are shifting, and markets remain unpredictable, de-risking makes a lot of sense. But the right deal is about more than just valuation. The type of capital being used — whether private equity, debt-funded, or strategic investment — has major implications for cash flow, control, and long-term outcomes. Structuring the transaction in a way that protects your position, your team, and your upside is essential. At Azets, we advise owner-managers across the UK on how to approach these decisions with clarity and confidence — from understanding your value to identifying the right capital partner and negotiating terms that work for you. If you're thinking about de-risking, succession planning or growth through investment, it's worth having an early conversation. #MergersAndAcquisitions #CorporateFinance #CashOut #SuccessionPlanning #UKBusiness #PrivateEquity #Azets

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MTD IT IS COMING 😱 Making Tax Digital for Income Tax (MTD IT) is the biggest change to the UK tax system in decades 🤒 From April 2026, sole traders and landlords earning over £50,000 must keep digital records and submit quarterly updates to HMRC using compliant software ✅ (PS Dext have one of those compliant softwares called Dext Solo 😂 ) As an accountant or bookkeeper, MTD IT is going to change how you price services, engage clients and manage workflows, its a lot! 🤯 But MTD IT is also about opportunities, not just obligations 🫡 The MTD Oracle (AKA Paul L.) has produced a top tier guide for free for you to use to get your head around whats to come 🤩 Interested? Link in comments! 🥳 PS Nick Charnley my good pal also works in tax and is my pal in the picture 🥸 #mtd #mtdit #hmrc

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As expected, the high court have now appointed an administrator to the R&D advisor Counting King. As seems to be normal, those behind Counting King started another R&D advisory company earlier this year, called Orbit Tax Incentives Limited, and now appear to be trading via this. It's unknown if Counting King will be providing support to clients during their administration, but if not any with an open compliance check may need to seek assistance from a different advisor.

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Your Tax Return Says One Thing. Your Instagram Says Another. Guess Who Notices? Your accounts show £14,000 of profit. Your Instagram shows a £75k Audi, a week in Dubai, and dinner at The Ivy. Spot the problem? So does HMRC. HMRC now uses AI to cross-check lifestyle against declared income. Social media, online ads, even tagged photos - it’s all data. If the maths doesn’t add up, the algorithm flags it. Sometimes it’s innocent - the Rolex was borrowed, the car was leased, the trip was business. But AI doesn’t care about context. It just kicks off an enquiry. So what should you do? • Make sure your declared income matches reality • Remember: social media is public and permanent • Be ready to explain if the lifestyle looks bigger than the numbers Tax isn’t just about receipts anymore. It’s about the story your digital footprint tells. ⸻ If you’d like a free copy of my full 89 Tax Tips guide, just send me a PM and I’ll get it over to you. #TaxTips #HMRC #DigitalTax

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What is Balancing charge and balancing allowance in UK When a business sells or disposes of an asset that it has been claiming capital allowances on, the tax position may need to be adjusted. This is where balancing charge and balancing allowance come in. They ensure that the tax relief a business has already received through capital allowances reflects the true value of the asset when it is sold. 1. Balancing Charge A balancing charge occurs when a business disposes of an asset, and the sale proceeds are greater than the asset’s remaining written-down value (i.e., the value of the asset for tax purposes after claiming capital allowances). In other words, a balancing charge happens if the business has claimed more capital allowances than the actual depreciation of the asset, and the sale price is higher than the tax value of the asset. How it works: The business has been claiming capital allowances on an asset, which reduces the taxable profits over time. If the asset is later sold for a higher price than the remaining tax value (written-down value), a balancing charge is applied. The amount of the sale price above the written-down value is added back to the business's taxable income. Example: A business buys a machine for £10,000. It claims capital allowances of £6,000 over several years. The written-down value (tax value) is now £4,000. If the machine is sold for £6,000, there is a £2,000 excess over the written-down value. The £2,000 difference is treated as a balancing charge, which means the business will need to pay tax on this amount, as it has effectively "recovered" some of the allowances previously claimed. 2. Balancing Allowance A balancing allowance occurs when a business disposes of an asset for less than its written-down value (the amount left after capital allowances have been claimed). This is essentially an additional tax relief granted to the business because the sale price was less than expected. How it works: The business has claimed capital allowances on an asset over time. If the asset is sold for less than its written-down value, the business can claim a balancing allowance for the difference. This allows the business to receive further tax relief for the shortfall. Example: A business buys a machine for £10,000. It claims capital allowances of £6,000 over several years, so the written-down value is £4,000. If the machine is sold for £2,000, this is £2,000 less than the written-down value. The business can claim a balancing allowance of £2,000 to make up for the loss in value, which provides additional tax relief. Key Points: Balancing charge: Occurs when the sale price of an asset is greater than its written-down value. The business has to pay back some of the tax relief previously claimed. Balancing allowance: Occurs when the sale price of an asset is less than its written-down value. The business can claim extra tax relief for the shortfall.

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🚨 Heads up for company directors – new HMRC reporting rules on the way From the 2025–26 tax year (returns filed after 6 April 2026) directors of most small and family-run companies will need to give HMRC more detail on their self assessment returns. If you’re a director of a UK close company – broadly a company controlled by five or fewer people – you’ll need to report: • 🏢 Company name and registered number • 💷 Total dividends received from that company (shown separately from other UK dividends) • 📊 Highest percentage shareholding you held at any point in the year There’s also a new requirement to show 📅 start and end dates if a business starts or ceases during the tax year. ⚠️ Penalty alert: HMRC has introduced a new £60 penalty for each piece of missing or incorrect information. These disclosures don’t change your tax bill, but you can still be fined if they’re incomplete. ✅ Tip: Start keeping clear records of dividends and shareholdings now so you’re not scrambling when 2025–26 returns are due. We’re waiting on more detailed HMRC guidance, but a bit of preparation now will save headaches later. #UKTax #SelfAssessment #Directors #CloseCompanies #HMRC

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𝗠𝗶𝘀𝘁𝗮𝗸𝗲𝘀 𝗶𝗻 “𝗧𝗮𝘅 𝗔𝘂𝗱𝗶𝘁 𝗥𝗲𝗽𝗼𝗿𝘁𝘀" TAR / Form 3CD is prescribed u/s 44AB of Income-Tax Act 1961 On occasions, errors can creep into TAR Recent Rulings of Tax Tribunal highlight some real-life mistakes: 1️⃣ 𝗞𝗼𝗽𝗿𝗮𝗻 𝘃𝘀 𝗗𝗖𝗜𝗧   • Clause 14(b) —->”Increase in Purchase Cost on account of inclusion of GST”   • A data-entry error occurred—>Instead of reporting ₹26,01,46,197, Form 3CD showed ₹2,60,14,197 (👉CAREFULLY OBSERVE: The digit “6” was missed between “4” and “1”) 2️⃣ 𝗦𝗮𝗶 𝗖𝗼𝗺𝗽𝘂𝘁𝗲𝗿𝘀 𝘃𝘀 𝗔𝗗𝗜𝗧   • Clause 33 —->"Deductions admissible under Chapter VIA"   • Deduction u/s 80JJAA was missed to be reported 3️⃣ 𝗜𝗧𝗢 𝘃𝘀 𝗦𝗮𝗺𝗯𝗵𝗮𝘃 𝗦𝗵𝗲𝗹𝘁𝗲𝗿   • Clause 40 —> "Total Turnover of the Assessee for the Year of Reporting"   • Per facts, Turnover of "Prior Year" was ZERO, while the Turnover in the "Year of Reporting" was ₹25,52,69,395  • But, by oversight, “Turnover for the Year of Reporting" was typed as ZERO 4️⃣ 𝗦𝗣𝗦 𝗔𝘂𝘁𝗼𝗺𝗼𝗯𝗶𝗹𝗲𝘀 𝘃𝘀 𝗜𝗧𝗢   • Clause 16(d) —> “Amounts not credited to the Profit and Loss Account”-->"Any other Item of Income"   • Income of ₹54,17,993 was wrongly reported in Clause 16(d)—->even though it was already reflected in P&L A/C (👉Correct reporting should have been ZERO) 5️⃣ 𝗔𝗖𝗜𝗧 𝘃𝘀 𝗙𝗶𝘁𝗿𝗶𝘁𝗲 𝗣𝗮𝗰𝗸𝗲𝗿𝘀   • Clause 21(g) —> "Details of amounts debited to the Profit and Loss Account” —> "Particulars of any Liability of a Contingent Nature"   • Contingent Liability of ₹4.10 crore was not debited to P&L A/C (nor any tax deduction was sought to be claimed in ITR)   • Yet, ₹4.10 crore was reported in Clause 21(g) (👉Correct reporting should have been ZERO) ⚠️𝗪𝗛𝗬 𝗔𝗥𝗘 𝗠𝗜𝗦𝗧𝗔𝗞𝗘𝗦 𝗖𝗢𝗦𝗧𝗟𝗬?   • Due to errors in TAR, Taxpayer can suffer 𝘛𝘢𝘹 𝘈𝘥𝘫𝘶𝘴𝘵𝘮𝘦𝘯𝘵𝘴 (like in the above rulings) - even if TAR has been revised to rectify error   • Although such 𝘢𝘥𝘥𝘪𝘵𝘪𝘰𝘯𝘴 are eventually deleted in Appeal, Taxpayer is unnecessarily dragged into long & needless litigation ✅ 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆   • Form 3CD forms the backbone of ITR processing (CPC) & Scrutiny Assessments   • Hence, accuracy in TAR is imperative ✌️𝗕𝗲𝘀𝘁 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀 𝗳𝗼𝗿 𝗙𝗬 𝟮𝟬𝟮𝟰-𝟮𝟱 (𝗗𝘂𝗲 𝗗𝗮𝘁𝗲 𝗼𝗳 𝗙𝘂𝗿𝗻𝗶𝘀𝗵𝗶𝗻𝗴 𝗧𝗔𝗥: 𝟯𝟭 𝗢𝗰𝘁 𝟮𝟬𝟮𝟱)   • Diligently follow Guidance Note of The Institute of Chartered Accountants of India: 👉https://lnkd.in/dEMN3XwD   • Double-check every entry in Form 3CD   • Ensure alignment between Financials, TAR & ITR   • Reduce or eliminate 𝘔𝘢𝘯𝘶𝘢𝘭 𝘞𝘰𝘳𝘬 —> Wherever possible, Automate TAR filling —> Use Tax Technology —> Build a ‘bridge’ between Accounting System & TAR 👇𝗢𝘃𝗲𝗿 𝘁𝗼 𝘆𝗼𝘂 Have you seen ‘TAR errors’ cause tax trouble? What are the best practices adopted by you? Share in the Comments - Learning from experiences benefits all (ITAT rulings can be viewed at Taxmann 👉https://lnkd.in/dYYuAsNd. Citations are mentioned in Comments) #TaxAudit #Form3CD

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