Payroll Changes – Benefits in Kind mandatory from April 2027
This affects all employers that provide benefit in kind (BIKs) to their employees and those employees who receive the benefits. What are BIKs, they are a non-cash benefit that can be given from an employer to their employees, instead of payments. It can be a physical item or something that gives extra value to the employees, things like company cars, health insurance, training or gym memberships.

Points to consider for employers and the employees:

• From 6 April 2027 it becomes mandatory for the following –
• company cars and fuel with private use for company cars, vans and fuel with private use for company vans, and employer-provided medical benefits and healthcare insurance. The Income Tax and Class 1A National Insurance on these benefits must be reported into real-time payroll processes through your payroll.
• From 6 April 2028: Most remaining benefits, such as gym memberships, non-cash vouchers and mobile phones outside the exemption, move into mandatory payrolling.
• Currently there are no plans for loans and employer-provided accommodation to become mandatory.
• For most BIKs, the method of taxation moves from an estimated tax-code adjustment to a real-time deduction each pay period.
• Exceptions such as Beneficial loans and living accommodation, which remain on the traditional system for now, will still need P11D and P11D(b) forms to be filed with HMRC and copies given to employees by 6 July following the end of tax year.

If you are not a payroll client with Synergy Accounting but would like our assistance in this respect, or other payroll matters, please do not hesitate to contact us.

From April 2025 directors are required to provide additional information in their tax returns, including the following –

• Were they a director during the tax year
• Whether the company is a closed company
• The company name
• The company registration number
• The amount of dividend received
• The percentage of share capital held

Synergy Accounting will ensure that the additional information is provided for those clients who are required to comply with the new reporting requirements. If you are not an existing client but would like to find out more, we would be happy to assist, so don’t hesitate to contact us.

• What are digital records – any records that are kept using a software programme, this can include spreadsheets
• What should be included in the quarterly updates – the total amounts, not details of each transaction
• When should I record the transactions – you can record income and expenditure at a time that suits you, they do not have to be recorded in real time, as long as they are complete for the quarter before submitting your update for that quarter
• When are the quarterly returns due – filing deadlines are 7 August, 7 November, 7 February and 7 May each year
• What happens if I miss a filing deadline – a new penalty regime based on points is in operation for Making Tax Digital for income tax, once the threshold is reached a financial penalty of £200 is applied by HMRC
• What happens if I make a late payment – you will be charged penalties for late payment of income tax
• How many tax returns are there – there is one Making Tax Digital tax return each year, the quarterly updates are not tax returns

for further information on what this means for you, and how it impacts on you, contact us and we will be happy to discuss the implications specific to your particular circumstances

The Employment Rights Act 2025 introduced changes to the operation of Statutory Sick Pay (SSP) from the 6^th April 2026.

These changes include –

• Employees will be paid from the 1^st complete day of sickness – there is no longer the requirement for 3 ‘waiting days’ before claiming SSP
• Employees are not required to be paid above the Lower Earnings Limit (LEL) for National Insurance Contributions
• SSP will be paid at 80% of Average weekly earnings or the standard weekly rate of £123.25, whichever is the lower

As Synergy Accounting will ensure that their payroll clients conform to the new requirements no action is necessary, they just need to be aware of the changes.

If you are not a payroll client but would like our assistance in this respect, or other payroll matters,  please do not hesitate to contact us.

The hourly rate for the minimum wage depends on your age and whether you are an apprentice.
You must be at least:
school leaving age to get the National Minimum Wage your school leaving age depends on where you live.
aged 21 to get the National Living Wage – National Minimum Wage will still apply for workers aged 20 and under
In England you can leave school on the last Friday in June if you’ll be 16 by the end of the summer holidays
You must then do one of the following until you’re 18:
• stay in full-time education, for example at a college
• start and apprenticeship
• spend 20 hours or more a week working or volunteering, while in part-time education or training

The hourly rates are:
• 21 years and over £12.71
• 18-20 years £10.85
• Under 18 years £8.00
• Apprentice £8.00

These rates represent a 4.1% increase for those aged 21+ and an 8.5% increase for 18–20-year-olds.
Apprentices are entitled to apprentice rate if they are either aged under 19 or aged over 19 and in the first year of their apprenticeship.
Apprentices are entitled to minimum wage for their age if they both are aged over 19 or over and have completed the first year of their apprenticeship.
These rates represent a 4.1% increase for those aged 21+ and an 8.5% increase for 18–20-year-olds.

There seems to be some confusion with how the Companies House system for Identity Verification works.

Identity Verification is a two-stage process.

Stage one verify your identity and receive a Personal ID code – consisting of 11 characters

Stage 2 submit that code to Companies House for each Directorship and each Person with Significant Control (PSC).

Stage 2 must be completed within a Submission Window – these windows vary by company and between the roles of Director and PSC even where the same individual holds both roles.

Companies House will not accept early submissions thus some ID codes can be held for some months before the system will allow the codes to be filed.

Further information can be found by following the links below –

Verify Your Identity

When you need to Verify your Identity

How will the budget increase Tax and National Insurance for employers and individuals  from April 2026 –

• Dividend Income to be taxed at an additional 2% (up from 8.75% to 10.75% for basic rate taxpayers and from 33.75% to 35.75% for higher rate taxpayers)
• Savings Income will be taxed at an additional 2% (22% for basic rate taxpayers and 42% for higher rate taxpayers)
• Rental Income will be taxed at an additional 2% (22% for basic rate taxpayers and 42% for higher rate taxpayers)
• National Living Wage to rise to £12.71 per hour for employees aged 21 and over and £10.85 per hour for those aged 18 to 20 years

Increases will be incurred by these measures for future years –

• Pensions will be subject to National Insurance will apply to Salary Sacrifice Pension Contributions if more than £2000 per annum (from 2029)
• Income Tax thresholds will be frozen for a further 3 years (until 2031)

Since 2002 HMRC had allowed double-cab pickups to be treated as vans for Income Tax, Corporation Tax and Benefits In Kind.

However, HMRC guidance was updated with effect from April 2025, the tax year 2025/2026.

As a consequence double-cab pickups are unlikely to be classed as goods vehicles because their primary purpose is not the transportation of goods.

Whereas in the past, the decision to buy a double-cab pickup may have been driven by the favourable tax rules for vans and, whilst the VAT position has not changed, the changes for benefit-in-kind and capital allowances purposes may influence those who might previously have chosen a double-cab pickup to make a different decision going forward.

To help businesses manage the changes, HMRC has introduced transitional arrangements, which vary depending on the type of tax involved.

Get in touch if you would like help in clarifying the position based on your particular circumstances before making any decision regarding whether to have a double-cab pickup for your next vehicle.

From 18 November 2025 a Confirmation Statement cannot be submitted unless the personal unique ID code for every director is included in the filing process. This means that before the Confirmation Statement is submitted every director of the company will need to have their identification verified to the satisfaction of Companies House and obtained their personal unique ID code.

Using the ‘Verify your identity for Companies House’ service

This service uses GOV.UK One Login to verify your identity. It is free of charge. 

GOV.UK One Login will ask you some simple questions to find the best way for you to verify your identity. Depending on your answers, you’ll then be guided to verify:

• with an app 
• by answering security questions online 
• by entering your details from your photo ID on GOV.UK One Login first, then going to a participating Post Office

contact us for further details

How does this affect you?

Now that Furnished Holiday Lettings are treated in the same way as Residential Lettings for tax purposes you need to be aware of the difference between the two tax regimes.

Three major changes are –

• Property owned jointly between spouses is split equally between the couple, unless the property is owned in unequal shares, in which case an application can be made to have the income and expenditure apportioned in line with the share of the ownership.  The application cannot be backdated and so the 50:50 split would apply up to the date of the application.
• Capital Allowances can no longer be claimed for any new equipment purchased.  You can only claim a deduction for the cost of replacing existing equipment.
• Profits will no longer be treated as relevant earnings for calculating the tax relief on pension contributions

If you own a Furnished Holiday Let and would like to know how the changes impact you contact us and we will be happy to guide you through the changes in relation to your individual circumstances.