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What Advantage Is There In Having A Management Account?

Sun, 26 Jul 2026 20:15:13 GMT

What Are the Advantages of Management Accounts?

Many business owners only look closely at their finances once a year, when their annual accounts are prepared.

By that point, however, the information is already historical.

Management accounts give you a much clearer and more up-to-date picture of how your business is performing throughout the year. They help you understand what is working, identify problems early and make better decisions based on real financial information.

For growing businesses, management accounts can be one of the most useful tools available.

What Are Management Accounts?

Management accounts are internal financial reports prepared regularly, usually monthly or quarterly.

Unlike annual statutory accounts, they are not normally submitted to HMRC or Companies House. Instead, they are produced for business owners, directors and managers to help them understand the financial position of the business.

A typical set of management accounts may include:

A profit and loss report
A balance sheet
Cash flow information
Budget comparisons
Sales performance
Expense analysis
Debtor and creditor information
Key performance indicators
Commentary explaining the figures

The reports can be tailored to your business, so you receive the information that is most useful to you.

Understand Whether Your Business Is Profitable

A healthy bank balance does not always mean that a business is making a profit.

Money in the bank may include VAT, unpaid supplier costs, loan funds or amounts that will soon be needed for tax.

Management accounts show whether the business is genuinely profitable by comparing income with the costs of generating that income.

They can help answer important questions such as:

Are sales increasing?
Is gross profit improving?
Are overheads becoming too high?
Which products or services are most profitable?
Is the business performing better or worse than last year?

Without regular financial reporting, these issues can easily go unnoticed.

Identify Problems Early

Annual accounts are often prepared several months after the end of the financial year.

This means a problem may have existed for a long time before it becomes visible.

Monthly or quarterly management accounts can highlight issues much sooner, such as:

Falling sales
Reduced profit margins
Rising costs
Slow-paying customers
Excessive stock levels
Increasing borrowing
Unexpected cash flow pressure

The earlier a problem is identified, the more time you have to take action.

For example, you may decide to increase prices, reduce unnecessary spending, improve credit control or focus on more profitable areas of the business.

Make Better Business Decisions

Good decisions should be based on more than instinct.

Management accounts provide reliable information to support decisions about:

Employing new staff
Purchasing equipment
Opening another location
Increasing prices
Introducing a new product or service
Reducing costs
Investing in marketing
Taking on additional borrowing
Paying dividends
Expanding the business

They allow you to assess whether the business can afford a decision before committing to it.

This does not remove all business risk, but it allows decisions to be made with a much clearer understanding of the likely financial impact.

Improve Cash Flow Management

A profitable business can still experience cash flow difficulties.

This is because profit and cash are not the same thing. A business may have issued invoices and recorded a profit but may still be waiting for customers to pay.

Management accounts can help you understand:

How much cash is available
How much customers owe you
How much you owe suppliers
When major payments are due
Whether future cash shortages are likely
Whether the business can afford planned spending

Better cash flow planning gives you time to prepare for quieter periods, tax bills, large purchases and unexpected costs.

Compare Actual Performance Against Your Budget

Creating a budget is useful, but it becomes much more valuable when actual performance is compared against it.

Management accounts can show:

Whether sales are above or below target
Whether expenses are within budget
Whether profit is in line with expectations
Where unexpected differences have arisen

This is often known as variance analysis.

For example, if sales are strong but profits are lower than expected, the reports may reveal that supplier prices, wages or other operating costs have increased.

This allows you to understand why the business is not performing as planned and decide what needs to change.

Monitor Your Most Important Numbers

Every business has key figures that are particularly important.

These are often referred to as Key Performance Indicators, or KPIs.

Depending on the business, they may include:

Gross profit margin
Net profit margin
Average customer spend
Sales by department
Staff costs as a percentage of turnover
Number of new customers
Customer retention
Debtor days
Stock turnover
Monthly recurring revenue

Management accounts allow these figures to be reviewed regularly.

This helps you focus on the areas that have the greatest effect on the success of your business.

Plan for Tax Liabilities

Tax bills can create significant cash flow pressure if they are not planned for properly.

Regular management accounts can help estimate future liabilities for:

Corporation Tax
VAT
PAYE and National Insurance
Income Tax
Payments on account

While estimates may change before the final tax return is prepared, they can still give you a valuable indication of how much money should be set aside.

This reduces the risk of reaching a payment deadline without enough cash available.

Support Applications for Finance

Banks, lenders and investors may ask for recent financial information before providing funding.

Annual accounts may not give them a sufficiently current picture, particularly when they were prepared several months earlier.

Up-to-date management accounts can demonstrate:

Current profitability
Cash flow performance
The strength of the balance sheet
Business growth
The ability to repay borrowing
The financial effect of future plans

Professional and accurate reports can strengthen a finance application and give lenders greater confidence in the business.

Improve Control Over Business Spending

Small increases in costs can have a significant effect on overall profitability.

Management accounts make it easier to compare expenses from month to month and identify areas where spending is increasing.

You may discover:

Subscriptions that are no longer needed
Supplier prices that have risen
Excessive bank charges
Unprofitable advertising
High staffing costs
Duplicate services
Unexpected operating expenses

Regular review helps prevent unnecessary costs from continuing unnoticed.

Understand Which Areas of the Business Perform Best

A business may appear profitable overall while some departments, services or products are making a loss.

Management accounts can be divided into different categories, such as:

Branches
Departments
Projects
Products
Services
Salespeople
Locations

This can reveal which areas generate the strongest return and which require attention.

You can then make better decisions about where to invest time, money and resources.

Hold Directors and Managers Accountable

Management accounts provide clear evidence of business performance.

When responsibilities are shared between directors, managers or departments, regular reporting can show whether agreed targets are being achieved.

This creates greater accountability and encourages informed discussions about performance.

Instead of relying on opinions, meetings can focus on actual results, identified concerns and practical next steps.

Gain Greater Confidence in Your Business

Many business owners feel uncertain about their finances because they do not have regular access to clear information.

Management accounts can provide reassurance by showing:

Where the business stands
Whether it is profitable
What money is available
What liabilities are approaching
Whether performance is improving
Where action is required

Having accurate information reduces uncertainty and allows you to run your business with greater confidence.

How Often Should Management Accounts Be Prepared?

The most appropriate frequency depends on the size and complexity of the business.

Monthly management accounts

Monthly reports are often suitable for growing businesses, businesses with employees, companies with tight cash flow or those undergoing significant change.

They provide frequent information and allow problems to be identified quickly.

Quarterly management accounts

Quarterly reports may be suitable for smaller or more stable businesses that do not require monthly financial analysis.

They still provide regular insight while reducing the level of administration involved.

The most important point is that the reports are produced frequently enough to support useful decisions.

Are Management Accounts Only for Large Businesses?

No.

Management accounts can be useful for businesses of all sizes.

A small business may benefit from a simple monthly profit and loss report, cash flow review and estimated tax position.

A larger or more complex business may require detailed departmental reporting, budgets, forecasts and performance indicators.

The reports should be proportionate to the needs of the business. They do not need to be unnecessarily complicated to be valuable.

What Makes Good Management Accounts?

Good management accounts should be:

Accurate
Up to date
Easy to understand
Relevant to the business
Consistent from one period to the next
Supported by clear explanations
Delivered in time for decisions to be made

Producing reports is only part of the process.

The real value comes from understanding what the figures mean and using that information to improve the business.

Take Control of Your Business Finances

Management accounts allow you to look forward rather than simply reviewing what happened in the past.

They provide the information you need to manage cash flow, improve profitability, control costs and make confident business decisions.

How Partridge Accountancy Services Can Help

At Partridge Accountancy Services, we prepare clear and practical management accounts to help business owners understand their finances and make informed decisions.

Our support can include:

Monthly or quarterly management accounts
Profit and loss reporting
Balance sheet reviews
Cash flow analysis
Budget comparisons
Tax estimates
Debtor and creditor reporting
Departmental or project analysis
Key performance indicators
A clear explanation of what the figures mean

We do more than simply provide reports.

We help you identify trends, understand potential concerns and decide what action may be needed.

Would you like a clearer understanding of how your business is performing? Contact Partridge Accountancy Services to discuss monthly or quarterly management accounts tailored to your business.

Please Note

This article is intended for general information only and does not constitute personalised financial, tax or business advice.

For that, you will need to contact one of our Accountants directly.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.

Self Employed (Sole Trader) Or Limited Company?

Sun, 26 Jul 2026 19:44:23 GMT

Self-Employed or Limited Company: Which Is Right for You?

Starting a business is exciting, but one of the first important decisions you will face is how to structure it.

Should you operate as a self-employed sole trader, or should you set up a limited company?

There is no single answer that works for everyone. The right choice will depend on your profits, the risks involved in your work, how you intend to take money from the business and your plans for the future.

Let’s look at the main differences.

What Does Being Self-Employed Mean?

When people say they are “self-employed”, they are usually referring to operating as a sole trader .

As a sole trader, you and your business are legally treated as the same person. You personally own the business, make the decisions and keep the profits after paying tax. However, you are also personally responsible for the business’s debts and liabilities.

Operating as a sole trader is generally the simplest way to start a business.

You will normally need to:

Register with HMRC for Self Assessment
Keep records of your business income and expenses
Submit a Self Assessment Tax Return
Pay Income Tax and National Insurance on your taxable profits

You generally need to register as a sole trader when your gross trading income exceeds £1,000 during a tax year.

The Advantages of Being a Sole Trader

Simple and inexpensive to start

Becoming a sole trader involves less administration than setting up and running a limited company. There are fewer formal filing requirements, making it an attractive option for people starting a small business or testing a new idea.

Less paperwork

You will still need to maintain proper business records and submit your tax information, but the reporting requirements are usually less complicated than those of a limited company.

Easy access to your money

The business profits belong directly to you. You do not need to process a salary, declare dividends or maintain a director’s loan account before using the money personally.

Greater privacy

A sole trader’s annual business accounts are not normally published on the Companies House register.

The Disadvantages of Being a Sole Trader

Personal responsibility for debts

There is no legal separation between you and the business. If the business cannot pay its debts, your personal finances and assets could potentially be at risk.

Tax can increase as profits grow

As your profits increase, operating as a sole trader may become less tax-efficient, depending on your overall income and personal circumstances.

However, forming a limited company does not automatically guarantee a lower tax bill. A proper comparison should consider Corporation Tax, salary, dividends, National Insurance, accountancy costs and how much money you need to withdraw personally.

It may appear less established

Some customers, suppliers, agencies and lenders prefer to deal with limited companies. This may be particularly relevant when tendering for larger contracts or working with corporate clients.

What Is a Limited Company?

A limited company is a separate legal entity from the person who owns or manages it.

The company has its own finances, obligations and responsibilities. It normally pays Corporation Tax on its taxable profits, while its directors and shareholders may pay personal tax on money they receive from the company.

A limited company may offer greater protection because, in most circumstances, the owners are not personally responsible for the company’s debts. However, this protection is not absolute, particularly where personal guarantees, misconduct or failures in directors’ duties are involved.

Running a limited company also brings additional responsibilities. Directors are legally responsible for maintaining company records, preparing annual accounts, submitting a Company Tax Return, paying Corporation Tax and ensuring the required information is filed with Companies House.

The Advantages of a Limited Company

Limited liability

Because the company is a separate legal entity, your personal assets may receive greater protection if the business experiences financial difficulties.

Potential tax-planning opportunities

A limited company may provide more flexibility over how and when income is taken.

Directors may receive money through a combination of salary and dividends, where appropriate. Dividends can only be paid from available company profits and must be formally declared and recorded.

The most suitable approach will depend on the company’s profits, the director’s other income and current tax legislation.

A more established business image

Operating through a limited company can create a more professional or established impression. It may also make it easier to bring in shareholders, transfer ownership or sell the business in the future.

Ability to retain profits

You do not necessarily have to withdraw all the company’s profits personally.

Some profits can be retained within the company to support future investment, provide working capital or fund business growth. Tax advice should be taken before deciding how much money to retain or withdraw.

Protection of the company name

A limited company’s registered legal name is protected, meaning another UK company cannot register exactly the same name.

The Disadvantages of a Limited Company

More administration

A limited company must maintain proper accounting records and comply with both HMRC and Companies House requirements.

This may include:

Annual accounts
A Company Tax Return
Corporation Tax payments
A yearly confirmation statement
Payroll reporting
Dividend paperwork
Records of directors, shareholders and people with significant control

Directors remain legally responsible for ensuring these obligations are met, even when an accountant has been appointed to assist them.

Higher accountancy and operating costs

Limited company accounts and tax returns are more complicated, so professional fees are generally higher than they would be for a straightforward sole trader.

There may also be additional costs for payroll, bookkeeping, Companies House submissions and company secretarial support.

The company’s money is not automatically your money

Money held in the company’s bank account belongs to the company.

Directors must take money out correctly, usually through salary, dividends, repayment of expenses or a properly recorded director’s loan. Taking money without correctly recording it can create tax complications.

Less privacy

Certain company information is publicly available through Companies House, including the company’s registered office, directors, annual accounts and confirmation statements.

Which Structure Pays Less Tax?

This is often the first question business owners ask, but tax should not be the only consideration.

Historically, limited companies were often assumed to be more tax-efficient once profits reached a particular level. However, changes to Corporation Tax, dividend taxation and National Insurance mean that the answer is now more complicated.

The result will depend on factors including:

The level of annual profit
How much money you need to withdraw
Whether you have another job or source of income
Whether another person will own shares
Whether profits will be retained in the business
Pension contributions
Student loan repayments
Child Benefit or childcare considerations
The additional cost of running a company

A personalised calculation is the best way to compare the two options properly.

When Might Being a Sole Trader Be Best?

Operating as a sole trader may be suitable when:

You are starting a new or relatively small business
Your expected profits are modest
The business carries limited financial risk
You want simple administration
You need to withdraw most of the profits personally
You are testing whether the business idea will work
You do not yet need investors or shareholders

You can begin as a sole trader and incorporate later if the business grows or your circumstances change.

When Might being a Limited Company Be Best?

A limited company may be more suitable when:

Your profits are increasing
You want greater separation between personal and business finances
Your work carries a higher level of commercial risk
You plan to retain profits for future growth
You want to bring in shareholders
You intend to build and eventually sell the business
Your clients prefer or require you to operate through a company
A detailed tax comparison shows that incorporation would be beneficial

What About Expenses?

Both sole traders and limited companies can claim legitimate business expenses, provided the costs meet the relevant tax rules.

However, the treatment of certain expenses can differ depending on the business structure. A cost that is allowable for a limited company may be treated differently for a sole trader, particularly where there is mixed business and personal use.

Keeping accurate digital records and separating business transactions from personal spending will make the accounting process much easier, regardless of which structure you choose.

Can I Change from Sole Trader to Limited Company Later?

Yes. Many businesses begin as sole traders and incorporate once their profits, risks or commercial needs increase.

However, moving to a limited company is more than simply opening a new bank account. You may need to transfer contracts, equipment, stock, employees, VAT registrations and other business assets to the new company.

There may also be tax consequences, so the change should be carefully planned.

So, Which Option Is Right for You?

Choose self-employed sole trader when simplicity, flexibility and lower administration are your main priorities.

Consider a limited company when you need greater legal separation, want to retain profits, plan to grow or could benefit from the additional tax-planning opportunities.

Most importantly, do not create a limited company simply because someone has told you that it will save tax. The right answer can only be determined by reviewing your actual figures and personal circumstances.

How Partridge Accountancy Services Can Help

At Partridge Accountancy Services, we help sole traders and limited companies understand their obligations, organise their finances and choose the most appropriate structure.

We can:

Compare the estimated tax position of sole trader and limited company structures
Help you register as self-employed
Form and register your limited company
Set up Xero and digital bookkeeping
Manage payroll, Corporation Tax and Companies House requirements
Prepare your annual accounts and tax returns
Help you plan the move from sole trader to limited company

Choosing the right structure at the right time can protect your business, reduce unnecessary administration and help you plan confidently for future growth.

Thinking about becoming self-employed or setting up a limited company? Contact Partridge Accountancy Services for practical, straightforward advice based on your individual circumstances.

PLEASE NOTE

This article provides general information only and should not be treated as personalised tax or legal advice. Tax rules and individual circumstances can change, so please call us for professional advice before making a decision.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

Submitting Receipts To Your Accountant Via Xero

Fri, 24 Jul 2026 01:07:13 GMT

How to successfully Submit Your Receipts and Invoices to Your Accountant Using Xero to avoid receipt rejections and queries.

Hello again!

To be fair, this happens a lot less than we expect, but still, we have a lot of new Clients coming on board via MTD and this is all a little bit new for some, so thought it may be useful to have a reference we can guide new clients to on the site. :)

Please upload your receipts and purchase invoices regularly rather than waiting until the end of the quarter or tax year; they really do pile up and get lost to the mists of time (and under car seats) unless kept on top of!

We put time aside every day to check for your receipts so we can chip away at those reconciliations; the more receipts we have against transactions the happier HMRC will be with the Accounts we are submitting to them and for us as Accountants its a pretty exciting experience to see them come in (Yes, a little sad, I know).

But if it feels like a boring task after a long day at work, just imagine the unbridled joy on our little faces when we receive them; surely that's a great motivator isn't it?

OK.

Its pretty simple once you have processed a few and will quickly become second nature.

Using the Xero Accounting mobile app

Download the Xero Accounting app from the Apple App Store or Google Play Store.
Sign in using the email address and password connected to your Xero account.
Select the correct business if you have access to more than one Xero organisation.
Tap the “+” button.
Select “Receipt” or “Upload receipt” .

Take a clear photograph of the receipt using your phone’s camera.

IMPORTANT

Before uploading, check that the entire receipt is visible and contains the following information

Supplier’s name

Date of purchase

Total amount paid

VAT amount (where applicable)

Description of the goods or services purchaed

A receipt with payment amount and supplier only cannot be coded without details of the date andgoods or services provided.

Enter or check the transaction details requested by Xero.

Add a short description explaining what the purchase was for, particularly where the business purpose may not be obvious.

Save or submit the receipt.

The receipt will then be available in Xero for your very pleased accountant or bookkeeper to review and match against the relevant bank transaction. Xero’s mobile app supports uploading receipts and creating purchase transactions from them.

Uploading receipts from a computer

You can also upload receipts and invoices through Xero using your computer:

Sign in to your Xero account
Open your business organisation
Go to the relevant bills, purchases or files section
Select the option to upload a document/picture
Choose the receipt or invoice saved on your computer
Add a description or any relevant information
Save the document/picture

Xero allows documents to be photographed, uploaded or emailed into the accounting records.

Important points

Please submit one receipt or invoice per photograph wherever possible.
Make sure the photograph is clear and not blurred, dark or cropped.
Do not upload card-payment slips without the corresponding itemised receipt.
Please include invoices received by email as well as paper receipts.
Do not upload personal expenses unless they were paid personally on behalf of the business .
Add a note where the business purpose is unclear, such as meals, travel, gifts or mixed personal and business purchases.
Keep the original document until you are satisfied that the image has been uploaded successfully and correctly.
Upload receipts regularly so that your bookkeeping and quarterly MTD records remain up to date and as much evidence as possible is presented.

Providing clear and complete receipts (obtaining receipts that clearly state the VAT amount wherever possible, especially if you are VAT registered and the purchases are high value) really helps us process your bookkeeping accurately and identify any VAT or tax relief available to you and your business.

I hope this is useful; please do give us a call if you need further assistance.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.

What Is MTD And How Do I Know If I Need To Enrol?

Thu, 23 Jul 2026 23:06:50 GMT

Making Tax Digital for Income Tax – Key Information

Hello again!

This will hopefully answer some of the questions we often get about the new MTD (Making Tax Digital) roll out.

We hope this information is useful.

As always we are just a telephone call away if you have any further questions regarding MTD.

Who must use MTD for Income Tax?

You must use Making Tax Digital for Income Tax if:

You are a sole trader, a landlord, or both .
Your total gross income from self-employment and property exceeds the relevant threshold.
You are registered for Self Assessment and have a National Insurance number.
Your qualifying income is assessed before deducting expenses, allowances or tax.

Limited companies, partnerships and individuals whose only income is from employment or pensions are not currently included in the first phase.

When does MTD become compulsory?

From 6 April 2026: those with qualifying income of more than £50,000 , based on the 2024/25 tax return.
From 6 April 2027: those with qualifying income of more than £30,000 , based on the 2025/26 tax return.
From 6 April 2028: those with qualifying income of more than £20,000 , based on the 2026/27 tax return.

It remains the taxpayer’s responsibility to check whether they must join, even if they do not receive a letter from HMRC.

What income counts?

The threshold is based on the combined gross income from:

Sole-trader businesses.
UK property income.
Overseas property income.

This is the total income received before expenses are deducted .

Certain types of income do not count, including:

Employment income.
Pension income.
Dividends and savings interest.
Partnership income.
Income fully covered by Rent a Room relief.
Certain qualifying care income.

What will taxpayers need to do?

Under MTD for Income Tax, taxpayers (or their agents) must:

Keep digital records of business and property income and expenses.
Use HMRC-recognised MTD-compatible software (We recommend Xero).
Submit quarterly updates to HMRC.
Submit an end-of-year tax return through compatible software.
Pay any tax due by the normal Self Assessment payment deadline.

The quarterly updates provide HMRC with totals for income and expenses recorded during each quarter. They are not final tax returns, and accounting or tax adjustments can still be made at the end of the year.

Quarterly update deadlines

For most taxpayers (But not all), the standard deadlines will be:

7 August – first quarterly update.
7 November – second quarterly update.
7 February – third quarterly update.
7 May – fourth quarterly update.

For the 2026/27 tax year, the first quarterly update is due by 7 August 2026 .

What if someone has more than one business or property?

Digital records must be maintained separately for each relevant source of income , such as:

Each sole-trader business.
UK property income.
Overseas property income.

The compatible software will use these records to prepare the required quarterly updates.

What happens if my income later falls below the threshold?

Joining MTD does not necessarily mean that a taxpayer must remain within it permanently.

If qualifying income falls below the relevant threshold for three consecutive tax years , the taxpayer may choose to leave MTD for Income Tax. They may also choose to continue voluntarily.

Exemptions

Some taxpayers may be exempt from MTD for Income Tax.

An exemption may be available where it is not reasonable or practical for the person to use digital tools because of circumstances such as:

Age.
Disability.
Religious beliefs.
Location or unreliable internet access.
Other circumstances causing digital exclusion.

Some exemptions apply automatically, while others require an application to HMRC. Even when exempt from MTD, the taxpayer must continue reporting their income through Self Assessment.

Penalties

For taxpayers required to join from 6 April 2026, HMRC has confirmed that penalty points will not be issued for late quarterly updates during the first MTD tax year, 2026/27.

However, normal penalties may still apply for:

Late submission of the end-of-year tax return.
Late payment of the tax liability.

In summary

MTD for Income Tax requires affected sole traders and landlords to:

Maintain digital accounting records.
Use compatible software.
Report income and expenses to HMRC every quarter .
Complete an end-of-year tax return .
Continue paying Income Tax through the usual Self Assessment system.

Preparing early and choosing suitable software will help make the transition as straightforward as possible.

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.

PAS Small Business Update July 2026

Thu, 23 Jul 2026 22:25:05 GMT

PAS Small Business Update - July 2026

We hope you and your team are managing to stay cool in this very warm weather we are having!

Well, here it is, another Newsletter.

We are hoping we can make this a monthly thing so keep an eye out for more from us!

Please also, (if you are reading this in August of 2026) ensure you scroll to the bottom of this email for an important update from Carla!

Since the beginning of the new tax year, several important changes have taken effect for sole traders, landlords, limited companies and employers. Here is our straightforward summary of what has changed, what is coming next and what you may need to do.

Making Tax Digital for Income Tax has begun

Making Tax Digital for Income Tax became compulsory from 6 April 2026 for sole traders and landlords whose combined qualifying income from self-employment and property was more than £50,000 during the 2024/25 tax year .

The £50,000 threshold is based on gross income before expenses, rather than taxable profit.

Those affected must:

maintain digital accounting records;
use MTD-compatible software; and
send quarterly updates to HMRC.

The deadline for the first quarterly update is 7 August 2026 , followed by further deadlines on 7 November 2026, 7 February 2027 and 7 May 2027.

HMRC has confirmed that it will not apply penalty points for late quarterly updates during the first year of MTD. However, penalties can still apply where a tax return or tax payment is late.

PAS reminder: Even where HMRC has not written to you, it remains your responsibility to establish whether MTD applies. Please contact us if your combined self-employment and property income exceeded £50,000 and you have not yet made arrangements.

Additionally, If you, as a current PAS client, know somebody who is still unsure about MTD and think they may benefit from working with us at PAS, give them our contact details and ask them to let us know who referred them; If they go on to sign up with us for MTD services we will reward you for every individual converted recommendation with a £25 Amazon gift Voucher!

Self Assessment payment deadline: 31 July

The second Self Assessment payment on account for 2025/26 is due by 31 July 2026 .

Payments on account are normally two advance payments towards the following year’s tax liability, with one due in January and the second in July.

You may be able to reduce your payments on account where your profits or other taxable income have fallen. However, the reduction must be reasonable because HMRC can charge interest if the payments are reduced too far.

Please do not assume that nothing is payable simply because you have not received a reminder from HMRC.

PAS reminder: Please check your HMRC account or contact us before the deadline if you are unsure how much you need to pay.

Minimum wage and mileage rates have increased

The following hourly minimum wage rates have applied since 1 April 2026 :

Age 21 and over: £12.71
Age 18 to 20: £10.85
Under age 18: £8.00
Apprentice rate: £8.00

Mileage rates have also increased from 1 April 2026 from 0.45p per mile to 0.55p per mile.

PAS reminder: Employers should check more than just the hourly rate shown on a payslip. Unpaid working time, deductions from wages and additional time spent opening, closing, travelling or completing training can sometimes cause the effective hourly rate to fall below the legal minimum. For further advice, or to discuss a package that includes payroll services, give us a call - we are here to help.

Statutory Sick Pay has changed

From 6 April 2026 , Statutory Sick Pay (SSP) became available from the first full qualifying day of sickness. The previous three waiting days have been removed.

The lower earnings threshold has also been removed, meaning more lower-paid employees may now qualify.

The weekly SSP rate is the lower of:

£123.25 per week ; or
80% of the employee’s average weekly earnings .

Employers cannot reclaim Statutory Sick Pay from HMRC.

PAS recommendation: Sickness policies, employment contracts and payroll procedures should be reviewed to make sure they reflect the new rules.

New day-one family leave rights

Employees can now give notice to take Paternity Leave and Unpaid Parental Leave from their first day of employment.

The service and earnings conditions for receiving Statutory Paternity Pay have not been removed, so an employee may qualify for the leave without necessarily qualifying for statutory pay.

PAS Recommendation: Employers should ensure that managers and payroll teams understand the difference between an employee’s entitlement to leave and their entitlement to statutory pay.

Companies House identity verification

Companies House identity verification is now a legal requirement for directors and people with significant control, known as PSCs.

Existing directors will generally need to provide their personal Companies House code when the company files its next confirmation statement. PSCs may also have a separate 14-day period in which to provide their verification details.

Identity verification can be completed directly through GOV.UK One Login or through an Authorised Corporate Service Provider, such as a registered accountant.

PAS recommendation: Please do not leave verification until the day your confirmation statement is due. Where a company has several directors or shareholders, each relevant individual may need to complete their own verification. Need further clarification? Give us a call!

The joint company accounts and tax return service has closed

If you are already signed up as a Client with PAS, you are already compliant.

However, the old joint HMRC and Companies House online filing service closed on 31 March 2026 .

Companies filing their own Corporation Tax returns must now use suitable commercial software to submit the Company Tax Return to HMRC.

For the moment, some companies can still file their annual accounts separately through Companies House WebFiling or on paper. However, further changes are on the way.

From 1 April 2028 , all UK companies will be required to file their accounts using commercial software. Small companies and micro-entities will also need to submit a profit and loss account, although they will be able to apply for this information not to be displayed publicly. Abridged accounts will no longer be available.

PAS reminder: If you, as a PAS client, know somebody who is still managing their own accounts (or are considering changing Accountant) that you think may benefit from working with us at PAS, give them our contact details and ask them to quote your name. If they sign up with us we will reward each and every converted recommendation with a £25 Amazon gift Voucher!

Further employment changes are coming in October

Several additional employment-law changes are planned from 1 October 2026 . These include:

extending the normal time limit for most Employment Tribunal claims from three months to six months;
strengthening employers’ responsibilities to prevent sexual harassment; and
introducing stronger consultation requirements for businesses that distribute tips and service charges.

Hospitality businesses will need to consult workers when preparing or changing their written tipping policies.

PAS recommendation: Employment contracts, staff handbooks, harassment policies and tipping arrangements should be carefully reviewed before October.

Business-rates support for pubs and music venues

Eligible pubs and live music venues in England can receive a 15% reduction in their business-rates bill for the 2026/27 financial year .

On 23 July 2026 , the government also announced a further 20% business-rates reduction for eligible pubs, clubs and live music venues from April 2027.

PAS recommendation: Restaurants, cafés, hotels and nightclubs are not automatically included within the existing pubs and live music venues relief, so businesses should check their individual position with their local authority.

Looking ahead

With a new government now in place, further tax and business announcements are likely over the coming months.

Partridge Accountancy Services will continue monitoring developments from HMRC, Companies House and the government. We will keep our clients informed of any changes we come across that may affect their businesses, employees or personal tax positions via email and/or via our website at www.partridgeaccountancy.co.uk .

Finally!

A summer holiday note from Carla

Carla will be visiting family and working from Brazil from 2 to 28 August 2026 .

Partridge Accountancy Services will remain open during this period and calls can be made as usual into the office landline number and will be transferred to Carla via a VoIP Connection at no additional charge to you, and of course, there is always webcam and WhatsApp if you need a face-to-face chat.

You may receive emails from Carla at unusual times because of the time difference and responses may not be as quick as usual (Brazil is 4hrs behind UK time - Calls are best placed to Carla after 12 noon UK time). We apologise for any inconvenience caused.

We will have a house sitter while we are away, but the home office will be unavailable for visits during August as Clare will be working from home

Partridge Accountancy Services
Helping businesses stay informed, compliant and prepared.

Simple.

We wish all our clients a wonderful summer and, as always, thank you for your continued support.