Author: Glenn

The government has scrapped plans for detailed PAYE reporting of employee hours from April 2026, citing concerns over cost, complexity, and practicality. Employers will stick with current rules.

As part of the Spring 2025 Tax Update: Simplification, Administration and Reform summary, the government confirmed that it will no longer proceed with the previous governments plans to mandate more detailed reporting of employee working hours through Pay As You Earn (PAYE) Real Time Information (RTI) submissions. 

Under the original proposals, employers would have been required to submit significantly more detailed employee hours data on the hours worked by each employee via RTI returns from 6 April 2026. These proposals were reflected in the draft Income Tax (Pay As You Earn) (Amendment) Regulations 2025, which were expected to formalise the changes in law. However, the government has now announced that it will not take these draft regulations forward, effectively shelving the proposed reforms.

The enhanced reporting requirements would have meant employers providing detailed data on actual hours worked per pay period, as opposed to the current obligation to report an employee’s normal working hours. Significant concerns were raised by employers, payroll providers, and representative bodies regarding the complexity, cost, and practicality of these changes. 

Employers will therefore continue to report normal hours worked using the existing RTI framework, without the need to supply more detailed information. 
 

Gross profit is one of the clearest indicators of how well your business is performing. It’s the money left after deducting the direct costs of producing goods or services from your turnover. If your gross profit margins are tight, your business will struggle to cover overheads, let alone make a net profit. So, here are a few practical tips to help boost your gross profit returns.

Review Your Pricing Strategy

One of the quickest ways to increase gross profit is to charge more. That sounds simple, but many small business owners hesitate to raise prices out of fear of losing customers. If you’ve not reviewed your prices in the last year, you’re probably overdue. Inflation, supplier costs and market demand all change – and your pricing should reflect that. Even a modest price increase can make a noticeable difference to your bottom line.

Cut Direct Costs Without Cutting Corners

Take a close look at your cost of sales. Can you negotiate better terms with suppliers? Are there alternative materials or services that are more cost-effective without affecting quality? Regularly benchmark your supplier costs and don’t be afraid to shop around. That said, cutting quality to save money usually backfires. The goal is value, not just cheapness.

Upsell and Cross-Sell

Increasing the average transaction value is a smart way to lift gross profit. Train your team (and yourself) to spot opportunities to upsell or cross-sell. For example, if you sell coffee, can you offer a pastry at a discounted rate? If you're in professional services, can you bundle related services together? It’s often easier to sell more to an existing customer than to find a new one.

Streamline Production or Service Delivery

Time is money, especially if you sell services. Look at how you or your team deliver work. Are there steps that can be automated or removed? Can you reduce waste, rework, or idle time? The more efficiently you operate, the more profit you keep.

Monitor Your Margins

Finally, don’t rely on gut feel – use your accounts. Regularly track your gross profit margin by product, service, or client type. This helps you spot what's making money and what's not. Focus your energy where the returns are highest.

For many small and medium-sized enterprises (SMEs), the core business keeps the lights on, but additional income streams can provide much-needed stability and growth. Whether you're a service provider, a retailer, or run a niche consultancy, diversifying your revenue can cushion seasonal dips, economic shocks, or customer churn. Here are some practical ways to bring in extra income without straying too far from your core business.

Offer Online Courses or Webinars

If you’ve got specialist knowledge, turn it into a digital product. Creating online courses or hosting webinars allows you to monetise what you already know. This works particularly well for consultants, tradespeople, or niche service providers. Platforms like Teachable or Thinkific make setup relatively easy.

Introduce Subscription Services

Subscription models work for more than just magazines. If you sell products, consider offering a monthly bundle or repeat-order service. If you’re in a service industry, a retainer model or premium membership can offer exclusive content, support, or discounts to subscribers.

Rent Out Equipment or Space

Do you have tools, machinery, or office space that sits idle some of the time? Renting these out, even on an occasional basis, can generate passive income. This is especially useful for creative or construction businesses that own specialist gear.

Sell Branded Merchandise

If you’ve built a recognisable brand, merchandise could be a low-effort income stream. Think branded mugs, notebooks, tote bags, or even digital downloads like planners or templates. Print-on-demand services mean you don’t need to hold stock.

Affiliate Marketing or Product Referrals

If you already have a mailing list or online presence, recommending relevant products or services could bring in commission. Just ensure the partnerships are relevant and credible to maintain trust with your audience.

Create a Paid Newsletter or Exclusive Content Channel

If your business produces insights or useful information, consider launching a paid newsletter or members-only blog. Tools like Substack or Patreon allow you to test this with minimal upfront cost.

Offer Freelance or Consulting Services

If your business has a quiet season, consider offering your skills on a freelance basis. This works well for design, IT, marketing, or finance professionals looking to supplement core revenue.

Need help tailoring any of these ideas for your business? Call now so we can discuss your options.

Dissolving a company ends its legal existence — but unresolved assets become property of the Crown under bona vacantia. Directors must act carefully to settle assets and liabilities before dissolution, avoiding costly mistakes and lost opportunities.

Dissolving a company is a formal legal process that marks the end of its existence. While this process may seem straightforward, it is essential for directors and company officers to understand the legal and financial consequences that arise once a company is dissolved. In particular, in relation to outstanding assets, liabilities, and the principles of bona vacantia.

A company legally ceases to exist upon dissolution. From that point forward, it can neither undertake activities nor receive assets, including tax refunds. It is therefore the responsibility of the company's directors to ensure that all assets and liabilities are appropriately resolved prior to the dissolution taking effect.

Any assets or rights (excluding liabilities) that remain within the company at the date of dissolution automatically pass to the Crown as bona vacantia, a legal doctrine meaning “ownerless goods.” The management of bona vacantia assets is delegated to different bodies across the United Kingdom depending on the company's location, but all act on behalf of the Crown.

Importantly, only companies that have been formally dissolved fall under bona vacantia. Companies that are in the process of liquidation or being wound up are not yet subject to these rules, as they are still legally in existence. Until dissolution is complete, the company retains ownership of its assets and rights.

In certain circumstances, it may be possible to restore a dissolved company to the Companies Register if the dissolution occurred within the last six years. Restoration would reverse the effects of bona vacantia, reinstating the company’s rights to its previously held assets. However, this process can be complex, time-consuming, and should not be relied upon as a remedy for poor planning.

When claiming tax relief or capital allowances on R&D, it’s crucial to ensure activities meet strict statutory definitions. Understanding Section 437 ITA and DTI guidelines is key to securing legitimate tax benefits and avoiding costly mistakes.

An activity is generally considered as R&D if it meets two key criteria:

1. It is recognised as R&D under standard accounting practice; and
2. It satisfies the specific conditions set out in the Department of Trade and Industry (DTI) guidelines.

In addition, the definition of R&D for Capital Allowances purposes includes oil and gas exploration and appraisal activities. These are defined as operations conducted with the objective of:

• Searching for petroleum within a defined area; or
• ascertaining the characteristics, extent, or reserves of a petroleum-bearing area in order to assess the commercial viability of extraction.

The legislation also allows for the definition of R&D to be further clarified or restricted by secondary regulations made under ITA/S1006. These regulations may either designate certain activities as qualifying R&D or exclude specific activities from being treated as such.

For the purposes of Research and Development Allowances (RDA), any activity defined as R&D under ITA/S1006 regulations must be treated accordingly. Conversely, if an activity is specifically excluded by regulation, it must not be considered R&D for RDA claims.