Every week, we take a look at what is trending in the accountancy and tax press and share items that we think will interest you. However, these are only outlines and where they relate to tax planning should not be acted upon without looking into them more completely, as everyone’s circumstances are particular to them. You need to take specific advice appropriate to your own circumstances.

While every effort is made to deliver accurate, informative and balanced articles, this content is general in nature and should not be used as the sole basis for making decisions.

 

Directors Under the Microscope

From 2025/26, directors will be required to provide additional information on their tax returns. This includes confirming:

• Whether they were a director during the tax year (box 6) and,
• If so, whether the company is a close company (box 7)

This is reported through the SA102 (employment pages). Historically, the form included boxes for this information, but these were not mandatory.

Where an individual is a director of more than one company, a separate SA102 must be completed for each directorship. Where the company is a close company, the reporting goes further.

Directors will need to provide:

• The company’s name (box 7.1);
• The company’s registration number (box 7.2);
• The dividend received from that closed company (box 7.3), even if the amount is zero, and
• The total percentage of the share capital held in the company (box 7.4), even if the percentage held is zero.

These additional requirements are new.

HMRC have not expected every company director to submit a self-assessment tax return. That position remains unchanged. The new requirements simply mean that where a return is required, the additional information must be provided.

The need to report a percentage shareholding is likely to generate the most questions, particularly where there are multiple share classes with different nominal values. HMRC have said that the percentage should be calculated by reference to the nominal value of shares owned.

Another point that may catch some off guard is the scope of shares that must be included in the calculation. The legislation refers to share capital, rather than “ordinary share capital”. For the purposes of this requirement, however, all issued share capital should be taken into account and must be included in the calculation.

Directors may acquire or dispose of shares during the course of a tax year, which raises the question of what percentage should be reported. HMRC have said that the percentage should be the highest percentage “owned” at any point during the tax year.

A particularly important practical point is that the boxes must be completed even where the relevant figure is zero. Leaving these boxes blank is not the same as entering zero. An omission may be treated as a failure to provide the required information, which could result in a penalty.

 

 

The New Digital HMRC

The UK tax compliance system either now runs on commercial software or will do so in the near future.

With almost 90% of digital tax returns already submitted through third‑party products, HMRC has formally set out how it expects software developers to underpin future tax administration.

The strategy marks a further step away from HMRC providing services directly and towards a system where compliance, interaction and customer experience are largely delivered through the private sector. As HMRC continues to withdraw its own digital offerings, including services to file VAT returns and, most recently, the online corporation tax return, reliance on third‑party software is no longer optional for many taxpayers.

For smaller accountancy practices, low‑income taxpayers and digitally excluded customers, the market has at times struggled to provide affordable, proportionate solutions. The strategy says little about how HMRC will mitigate these risks or ensure inclusivity when access to compliant software increasingly comes with a significant price tag.

HMRC wants tax compliance to become a seamless part of day-to-day business activity, with record-keeping, reporting and filing all embedded within normal workflows. It believes that integrated systems should result in fewer errors and reduce the steps required to meet obligations.

 

 

Football Referees

A case has been progressing through the legal system concerning whether professional referees are employed or self-employed.

The latest decision comes after the Supreme Court returned the case to the First Tier Tribunal for a ruling on the narrow issue of employment status.

This involved a group of around 60 professional referees who worked as Level 1 national group football referees, on a freelance basis, primarily at Championship and FA Cup fixtures.

HMRC argued the referees were employees and issued determinations to that effect, setting off the protracted tax litigation.

The picture was painted of skilled professionals participating voluntarily in a regulated framework, undertaking discrete engagements for remuneration while retaining substantial autonomy and independence.

It has now been held that the individual match engagements were therefore not contracts of employment. They were contracts for services performed within a framework of regulatory oversight designed to preserve independence, integrity and high officiating standards.

 

 

Lower Paid Self-Employed Tax Returns

Self-employed workers on the lowest incomes are significantly more likely to miss the Self-Assessment filing deadline than higher earners.

Those below the basic rate tax threshold are filing late at nearly double the rate of higher and additional rate taxpayers.

The data, covering tax years 2019-20 to 2023-24, shows that in the most recent year, 5.9% of below basic rate tax self-employed filers submitted their return late, compared with 3.1% of basic rate taxpayers, 2.7% of higher rate taxpayers and 2.6% of those paying additional rate tax.

 

 

Criminal Companies

The Crime & Policing Act 2026 rewrites the government’s approach to corporate criminal liability, introducing new ways in which companies may be held criminally responsible for crimes committed by ‘senior managers’.

‘Senior manager’ means an individual who plays a significant role in the making of decisions about how the whole or a substantial part of the activities of the body corporate or partnership are to be managed or organised, or the managing or organising of the whole or a substantial part of those activities.

 

 

MTD: Quarterly Updates

Under current rules, quarterly updates are due one month after the quarter end.

Quarterly updates are not tax returns. They are designed to move away from the end-of-year rush to record transactions. They are simple snapshots of income and expenses at a particular point in time, taken from your digital records and submitted electronically to HMRC.

There is no requirement to finalise figures, make accounting adjustments or achieve completeness in the way that would be expected for a formal return.

Quarterly updates are cumulative by design. Each submission covers the tax year to date, not just the most recent three months. If a transaction is missed or an error is identified, it can simply be included in the next update. There is no need to reopen or restate earlier quarters.

The rationale for quarterly updates is to improve the timeliness and quality of record-keeping.

HMRC do not expect every update to contain every transaction flawlessly recorded. What they are aiming for is an average improvement in record‑keeping quality across the year and across the population.

For new entrants to MTD for Income Tax, there is a soft landing in the first year (2026/27), and so penalty points for late or missing quarterly updates are not applied. This recognises that awareness and familiarity take time to build and gives people space to adjust to the new system.

From the second year onwards, the points‑based penalty system applies. For quarterly obligations, a financial penalty is only charged once four penalty points have been accumulated. In practice, that means you can be late with more than one quarterly update without an immediate financial sanction.

MTD is fundamentally about changing when and how records are kept, not about increasing the record-keeping requirement.

When considered in the round, quarterly updates are a central feature of a policy designed to improve overall record‑keeping quality and reduce errors, rather than acting as standalone pressure points.

Quarterly updates are a means to that end. When seen in that context, a one‑month submission window is not about pressure or perfection, but about encouraging a more timely and more accurate way of meeting Income Tax obligations.

 

 

High Court and Farm Tax

In a quick decision, just two months after farmers Thomas Martin and his father George Martin, 74, brought the claim against the chancellor and HMRC and seeking judicial review. They argued that ‘the consultation exercise was flawed and unlawful’.

Now the High Court has struck out the judicial review request after a two-day hearing.

The judicial review request disputed the Treasury’s consultation process, rather than directly arguing against the inheritance tax (IHT) reforms to agricultural property relief (APR) and business property relief (BPR).

The farmer’s legal argument revolved around the wording of several government policy documents dating between 2010 and 2017, which “made a clear and unambiguous promise devoid of relevant qualification that there would be consultation on tax policy changes.”

 

 

The King’s Speech

King Charles delivered the King’s Speech to the Houses of Lords and MPs, in a brief address running for less than 15 minutes but full of regalia, with 35 Bills scheduled for debate and ideally Royal Assent over the next 12 months.

One of the most eye catching announcements was a plan to introduce an EU Bill, to strengthen ties with the European Union [European Partnership Bill], designed to ‘support the economic security of British businesses’.

 

 

Questions?

If you have any questions about any of these, you know where to find us. If you prefer, just give me a ring on 07770 738770 or email me at alan.long@thelongpartnership.co.uk.