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.
Companies House
Anyone who deals with Companies House on a regular basis will be aware that they have had significant system problems, particularly affecting the filing of documents with the knock on affects to incorporation, changing a company’s name and certified documents. This means it will take longer than usual for a user’s filing to appear on the register after submission.
It currently takes longer than usual for your filing to appear on the register after you submit it. A date for resolution of the processing backlog has not yet been confirmed but hopefully it will not be long.
These delays may mean that time sensitive submissions such as accounts, are late. The majority of documents are filed online by companies and agents, but for those still submitting paper documents, these always take longer to process than digital filing.
Companies House said that all documents filed on paper are registered with the date they were received at Companies House, provided they’re in an acceptable format.
Everything is now back up and running and Companies House is getting back up to date. But when filings are time sensitive, it goes to show how much we rely on Government getting it right.
P&L Accounts for Small Companies from April 2028
The government has decided to go ahead with balance sheet and profit and loss (P&L) filing for small companies and micro-entities from 1 April 2028, but with a major caveat after intense lobbying against the plans.
While they will have to file more detailed accounts, these smaller businesses will not be required to have their full accounts details published on Companies House for public view on the register.
Small companies and micro-entities will be able to opt out of publication of the P&L
Allowing small companies and micro-entities to opt out of publishing their filed profit and loss accounts addresses concerns from the business and investment community around the privacy and commercial risks for smaller companies of disclosing this information.
Abridged accounts which will no longer be allowed.
However, small companies will not be required to file a director’s report as part of their annual report and accounts.
Bringing filing into the digital age, all companies will have to file accounts using commercial software from April 2028 using iXBRL format using commercial software. This applies to companies who file their own accounts as well as those who use third party agents or accountants to file their annual accounts. The web and paper-based filing systems will be closed for accounts filings from this date.
Companies will also have to provide a ‘strengthened eligibility statement if they are claiming an audit exemption.
Another change will see a limit on the number of times a company can shorten its accounting reference period with changes to secondary legislation required. Currently, a company can shorten its accounting period as often as it wishes. This ‘loophole’ has often been used as a way of obtaining additional time to file the company’s accounts where the original filing deadline may not be met for whatever reason.
The reforms are expected to align the shortening of an accounting period with that of lengthening one, i.e. once every five years. It is likely that special permission would need to be obtained to shorten an accounting period more than once within a five-year period once this provision in the ECCTA is enacted.
Companies House will contact all companies via their registered email address to tell them about these changes and signpost available guidance.
Details of how smaller companies can opt out of publication of their P&L will be confirmed in due course. Where a company opts out of publishing its profit and loss accounts, Companies House, law enforcement and HMRC will still have access to help identify and tackle fraud, economic crime and tax evasion.
There are currently no details on how the opt-out regime will work, but many small and micro-entities will be planning to take advantage of it.
There will be a strengthened eligibility statement for all companies that claim an audit exemption. This statement will identify the exemption being taken and will confirm that the company is eligible to apply it.
Radical Change Required at MoD
The Public Accounts Committee issued a damning report on the level of fraud and economic crime at the Ministry of Defence (MoD) stating that the department is far behind the curve in preventing the loss of precious public funds.
Weak fraud controls and a lack of oversight means more than £1.5bn was lost in fraud in just one year.
The MoD’s ‘potential exposure to fraud’ is assumed to be around £1.5bn a year, but the PAC report said officials from the MoD, who appeared before the committee at a lengthy hearing, could not say when it will have a more reliable estimate of the scale of the problem.
The chair of the Public Accounts Committee, said: that incremental change will not suffice and that there must be a radical change of culture within the MoD if the flow of funds lost to fraudulent activity is to be stemmed.
While it has reported that it may be exposed to up to £1.5bn of fraud losses each year, this figure is derived from external benchmarks… The department itself describes the estimate as an academic construct.
The committee indicated other government organisations were effectively managing fraud and the MoD should learn from their best practice by working with the Public Sector Fraud Authority and NHS Counter Fraud Authority to develop a more robust estimate of its fraud losses.
The committee stated MoD has been slow to adopt cutting edge technology and has yet to capitalise on the use of new technologies.
PAC told the MoD that within six months, it must write to the committee with an assessment of areas of fraud risk where data analytics could be applied cost-effectively to detect and prevent fraud.
Chinese Directors and 4.3k Phantom Companies
More than 4,300 company addresses had been registered for client companies in sectors ranging from the wholesale of alcohol to the supply of computer equipment.
Following an investigation by the Insolvency Service, Sinosia was found to have provided a registered office address to at least 2,597 client companies, and Longshine acted as company secretary to a further 1,746.
The Insolvency Service said Longshine appeared to be squatters in a genuine Fleet Street address without the landlord’s knowledge or consent. They also used a single apartment in London as the registered office for 2,873 companies.’
Both companies were found diverting all fees to Chinese bank accounts, and providing no evidence they carried out the money laundering checks they were required to do.
The listed director admitted that Sinosia and Longshine were essentially “one company”, with the same operating mode, structure and clients.
She claimed UK Sinosia Business Limited was registered as a trust and company service provider, but this was granted to a separate Hong Kong company with no legal standing in the UK.
Both companies appeared in reality to be under the control of a single Chinese national up until November 2024.
The most recent action follows three companies being wound up in January after they registered more than 8,500 companies at a single address in South Croydon.
Ways to Cut Your Capital Gains Tax
HMRC data showed capital gains tax (CGT) receipts totalled £24.3bn in 2025-26, up 77% compared to the previous tax year. When compared with a decade ago, the reality is even starker, with the figure up by 244%.
CGT may be payable when selling an investment, but also when gifting an investment to anyone other than a spouse or civil partner.
A major driver is the sharp reduction of the annual CGT allowance, now just £3,000, down from £12,300 in 2022-23. This means more people are pulled into paying CGT on more of their gains.
At the same time, CGT rates also increased in October 2024.
Here are 3 ways that might help reduce your CGT.
- Your CGT allowance – use it or lose it
You’ve got a £3,000 tax-free CGT allowance which refreshes each tax year – if you don’t use it, you lose it. It’s also possible to offset capital losses incurred either in the current year or carried forward from an earlier year.
If you’re married, or in a civil partnership, you can transfer investments between you, to take advantage of both CGT allowances a lower tax rate band.
- Use your ISA allowance
The beauty of holding investments in an ISA is that they are completely tax-free. Every penny of growth is yours to keep, less any investment charges.
If you’ve got existing investments outside an ISA, you can transfer them piecemeal to the ISA so that the gain on any shares realised in the year is below your £3000 allowance.
- Use your pension to save for retirement and limit CGT
Investments held in your pension do not attract CGT or dividend tax. Such contributing to your pension can directly reduce your adjusted net income, which can keep you below key income tax thresholds.
Rollover Relief on Property Gains
Rollover relief is available when a business asset is sold and replaced with another. If all proceeds from the sale are reinvested rollover relief is available in full.
As this is a deferral relief, the gain is taxed when the new asset is sold, achieved by reducing the base coat of the new asset by the amount of the gain arising on the disposal of the old one.
CGT is due on any part of the proceeds not re-invested.
Both the asset sold and the asset purchased must be qualifying assets, although not necessarily the same category. The available categories are set out in the legislation.
However, there are slightly different rules when a depreciating asset is purchased. A depreciating asset is one with a useful life not exceeding 60 years, which might be a lease.
In this situation, relief is given by freezing the gain on the old asset for a certain period of time rather than it reducing the base cost of the new asset. The frozen gain crystallises on the earlier of three events:
- the disposal of the replacement asset;
- when the replacement asset is no longer used for the purposes of the trade; or
- 10 years after the acquisition of the depreciating asset.
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.
