Category: Resources

The UK government is taking a bold step to improve the property buying and selling process. Through smart data project, the aim is to reduce the time, cost, and risks involved in property transactions by up to two-thirds. This project is set to revolutionise the property sector by streamlining data sharing, improving transparency, and increasing efficiency.

At Apex Accountants, we recognise the significance of smart data in transforming industries, particularly in property transactions. With the increasing reliance on digital technologies, secure data sharing will not only reduce friction but also help businesses stay compliant while saving both time and money. As experts in financial advisory services, we believe that property businesses must embrace this shift, as it offers new opportunities for operational efficiency and better financial management.

What is Smart Data and How Will It Impact Property Transactions?

Smart Data refers to the secure and standardised sharing of data between individuals and organisations. In the property sector, it involves using consent-driven methods to share property data across multiple platforms. The Data (Use and Access) Act 2025 sets a legal framework for developing smart data schemes, which is an important step in this process.

A £742,700 grant from the Regulators’ Pioneer Fund has been awarded to the Council for Licensed Conveyancers (CLC) to pilot this initiative. In collaboration with the Open Property Data Association (OPDA) and Raidiam, the project aims to create a trusted, transparent, and secure data-sharing platform for conveyancers, reducing the time and cost of property transactions.

How Smart Data Transforms Property Management and Investment

Smart data is reshaping the property sector by integrating AI, IoT, and big data analytics. These technologies provide real-time insights, enabling more efficient property management and informed investment decisions.

At Apex Accountants, we recognise the power of smart property management and investment strategies. By adopting these technologies, property businesses can stay competitive, transparent, and efficient in an ever-evolving market.

Key Benefits of Smart Data for Property Investors

• Predictive Market Analysis: AI-driven tools like Automated Valuation Models (AVMs) predict market trends, helping investors identify the best times to buy or sell based on property features, renovation impacts, and market changes.
  
• Data-Driven Investment Decisions: Big data analytics allows investors to assess key factors like population growth, employment trends, and historical property prices to make objective investment decisions and identify high-performing areas.
  
• Operational Efficiency: IoT devices, such as smart thermostats and locks, collect data on energy consumption and tenant preferences. This data helps property managers reduce costs, optimise services, and improve tenants’ satisfaction.

Smart Data and Property Transactions

• Digital Property Packs: Secure, consent-based platforms facilitate seamless data-sharing among all participants in property transactions, including buyers, sellers, lenders, and regulators. This streamlines the process, making transactions faster and more transparent.
  
• Automated Valuations: APIs enable automated property valuations, reducing manual effort and providing real-time insights into market trends and property status. This leads to faster decision-making and improved transaction accuracy.

Enhancing Smart Buildings and Communities with IoT

• IoT Integration: IoT devices, such as sensors and access control systems, collect real-time data from properties and communities. This data helps property managers improve operational efficiency, security, and tenant services.
  
• Integrated Service Platforms: By incorporating third-party services like healthcare, e-commerce, and other community services on a single platform, property managers can offer tenants a seamless living experience while optimising property management tasks.

Why Is Smart Data Crucial for Property Transactions?

The property market in the UK has long faced issues such as slow transactions, lack of transparency, and poor communication between stakeholders. According to the House of Commons Research (2022), moving home is one of the most stressful life experiences, often due to the complexities involved in the process. For example, property data is scattered across various government departments, local authorities, and private institutions, making it difficult to share in a consistent and trusted manner.

Smart property management will address these challenges by creating a unified, standardised format that allows seamless data transfer between parties involved in property transactions. This will ensure that stakeholders, such as conveyancers, buyers, and sellers, have access to accurate and real-time information, thereby reducing the risk of transaction failures and unnecessary delays.

The Benefits of Smart Data Project

There are several benefits of smart data project for businesses operating in the property sector:

1. Increased Efficiency: By reducing manual processes, smart data enables faster transactions, allowing conveyancers and other professionals to access property information quickly and efficiently.
   
2. Cost Savings: The reduction in transaction failures and delays will lead to significant cost savings for property firms and their clients.
   
3. Transparency: A secure, standardised approach to data sharing will improve transparency in property transactions, reducing the potential for errors or fraud.
   
4. Improved Customer Experience: The seamless process will result in a smoother and less stressful experience for home buyers and sellers.

How Will the Smart Data Project Be Tested?

We will set up a dedicated sandbox environment to test the technical infrastructure necessary to meet regulatory, security, and governance standards. This test space will allow participants to simulate the sharing of property data and demonstrate how secure, API-based data sharing can create an interoperable property ecosystem. 

The project will run over 12 months, with a three-month onboarding phase, followed by six months of testing. The insights gained will guide smart data adoption across the UK economy.

What’s Next for the Property Sector?

The UK government’s smart data initiative offers immense potential for the future of property transactions. By adopting these technologies, property businesses can enhance operational efficiency, reduce costs, and provide a more transparent and seamless experience for clients. At Apex Accountants, we are committed to helping property businesses navigate these changes and optimise their financial and operational strategies to remain competitive and compliant. Contact us today or book a free initial consultation to learn how we can support your business in embracing these transformative changes.

FAQs on Smart Data and Property Transactions

1. What is smart data in property transactions?

Smart data refers to the secure and standardised sharing of property data between parties that reduces inefficiencies and risks in the buying and selling process.

2. How does smart data reduce property transaction costs?

By providing quicker access to accurate data, smart data reduces delays, transaction failures, and the need for multiple parties to share information.

3. What is the role of the Council for Licensed Conveyancers (CLC)?

The CLC is leading the initiative, working alongside the OPDA and Raidiam to develop the technical infrastructure for secure data sharing in property transactions.

4. How will this project benefit property businesses?

The project will streamline operations, reduce costs, and improve transparency, resulting in a more efficient and profitable property market.

5. How does smart data improve the property buying process?

Smart data simplifies the property buying process by streamlining access to essential information, automating valuations, and reducing delays. With real-time data, buyers, sellers, and agents can make quicker, more informed decisions, making the process faster and less stressful.

At Apex Accountants, our industry-specific tax and accounting services are meticulously designed to meet the diverse needs of various industries. We offer bespoke tax planning and optimisation strategies, recognising that each sector has its own specific requirements. Hence, our expertise ensures that we deliver tailored solutions for maximum tax efficiency.

HM Revenue & Customs (HMRC) has increased its scrutiny of personal expense claims made as business costs in tax returns. This move is part of a wider campaign to close the UK’s tax gap, improve compliance, and recover unpaid tax from incorrect claims. Many self-employed individuals, landlords, and small business owners are now facing more detailed checks on what they class as allowable expenses. At Apex Accountants, we are helping clients across the UK understand how HMRC reviews personal expenses and how to keep their tax affairs compliant, accurate, and stress-free.

Why HMRC is targeting personal expenditure

HMRC has found that a large number of taxpayers mistakenly or deliberately claim private spending as business costs. In its 2024 pilot campaign, HMRC recovered around £27 million in unpaid tax by identifying wrongly claimed personal expenses. Following this success, the department has now launched a full-scale digital campaign focused on personal expenditure on self-assessment returns that show unusually high or inconsistent expense claims.

This new approach uses HMRC’s Connect big data system, which cross-checks bank records, digital invoices, and third-party data such as credit card transactions and property ownership details. If an expense looks excessive, inconsistent, or unrelated to the business activity, HMRC can flag the case for review.

Common areas under review include:

• Home office and utility costs
  
• Travel and vehicle expenses
  
• Mobile phone and internet bills
  
• Meals, clothing, and entertainment costs
  
• Repairs, rent, and insurance for mixed-use properties

The “wholly and exclusively” rule explained

HMRC’s main test for allowing business expenses is whether they are “wholly and exclusively” incurred for the purpose of trade. If a cost includes an element of personal benefit, only the proportion relating to business can be claimed.

For example:

• If you use your home for business, you can claim part of the electricity, heating, and rent. The claim must reflect the actual portion of time and space used for work.
  
• If a car is used for both business and private journeys, only the business mileage should be deducted.
  
• If you use your mobile phone for both personal and work calls, you can only claim the percentage that relates to business use.
  

Expenses that are capital in nature—such as buying computers, tools, or vehicles—are treated separately under capital allowances rules rather than being deducted as trading expenses.

HMRC expects taxpayers to apply reasonable apportionment methods and maintain supporting records. Estimates without documentation are no longer acceptable under the new compliance checks.

The digital enforcement approach

Using the Connect data analysis platform, HMRC can access information from banks, social media, property records, and even online marketplaces. This system allows cross-referencing between declared income and lifestyle indicators such as holidays, car purchases, or home improvements.

If spending patterns appear inconsistent with declared income, HMRC may open an enquiry. These checks are not random—they are data-driven, often identifying discrepancies between reported business expenses and other financial activity.

The new campaign also encourages taxpayers to correct previous returns voluntarily if they realise expenses were incorrectly claimed. Doing this before an enquiry starts can significantly reduce potential penalties.

Common mistakes leading to HMRC checks

Expense Type	Common Mistake	Correct Approach
Home office	Claiming 100% of household bills	Apportion by rooms or usage hours
Travel	Including private journeys	Keep detailed mileage logs
Meals & entertainment	Claiming all meals	Only claim meals while travelling on business
Internet & phone	Full bill claimed	Separate business use based on actual usage
Repairs & maintenance	Personal home repairs included	Only claim if the property is used for business

HMRC’s Private and Personal Expenditure Toolkit highlights these areas as high-risk, urging both taxpayers and accountants to ensure accurate and consistent claims.

What this means for self-employed individuals and landlords

The renewed focus on personal expenditure will primarily affect:

• Sole traders filing Self Assessment returns
  
• Partnerships with shared business expenses
  
• Landlords claiming property-related deductions
  

HMRC expects detailed record-keeping, evidence of apportionment, and clear separation between private and business costs. Taxpayers who cannot justify their expense claims may face penalties or the disallowance of deductions, leading to higher tax bills.

How Apex Accountants Can Help With Personal Expense Claims 

At Apex Accountants, we help clients prepare accurate, compliant tax returns while optimising legitimate deductions. Our services include:

1. Expense Review and Risk Assessment

We review your expense categories to identify any high-risk or incorrectly claimed items. Our specialists ensure your claims meet HMRC’s “wholly and exclusively” rule.

2. Digital Record-Keeping Setup

We help you maintain digital records using HMRC-compliant software. This makes it easier to evidence expense claims if your return is reviewed.

3. Self Assessment Review and Submission

Our accountants prepare or check your self assessment return before filing, reducing the likelihood of enquiries and penalties.

4. HMRC Enquiry Support

If HMRC contacts you for clarification, we represent you in all correspondence and negotiate fair resolutions.

5. Tax Planning and Business Structuring

We advise on structuring your business costs in tax-efficient ways that avoid compliance risks while maximising allowable deductions.

Best practices to stay compliant

• Keep all receipts and invoices for a minimum of six years.
  
• Record your business use percentage for shared assets and services.
  
• Avoid claiming estimated or round figures.
  
• Review your expense claims annually for consistency.
  
• Get professional advice before submitting your return.
  

Conclusion

HMRC’s focus on personal expenditure on self assessment marks a stronger stance against incorrect expense claims. With advanced digital tools and increased data visibility, the risk of being questioned has never been higher.

At Apex Accountants, we help you stay compliant, claim what’s rightfully yours, and avoid unnecessary stress or penalties. Whether you’re self-employed, a landlord, or a company director, our expert team will guide you through the process with accuracy and care. Contact Apex Accountants today to review your expenses and protect your tax position.

Frequently Asked Questions

1. Will HMRC notify me if I need to file a Self Assessment return?

HMRC sometimes issues a Notice to File when it believes you have taxable income that has not been declared through PAYE. However, the responsibility ultimately rests with you. If you earn income outside regular employment—such as rental income, freelance work, or investment gains—you must check whether you meet the filing criteria.

You can use HMRC’s official online tool to confirm if you need to complete a Self Assessment return. If you receive a notice, you must still file, even if you think no tax is due. Those who no longer meet the filing requirements can request HMRC to withdraw their notice.

2. Can expenses be claimed without receipts?

Receipts and invoices are essential evidence for every expense claim. HMRC expects all claims to be backed by documentation. Only in rare cases—such as very small or cash-based purchases—may reasonable estimates be accepted if they are supported by clear notes or bank entries.

Relying on estimates increases the risk of disallowance during an enquiry. Keeping digital or physical records of every purchase is the safest approach.

3. What expenses can be claimed through HMRC?

Allowable business expenses include day-to-day costs that are wholly and exclusively incurred for business purposes. These can cover rent, utilities, marketing, insurance, travel, professional fees, software subscriptions, and training related to your trade.

Expenses that have both personal and business elements—such as mobile phone bills or vehicle use—should be apportioned fairly. Some categories, such as client entertainment or personal clothing, are not deductible. Large purchases like vehicles or machinery fall under capital allowances instead of standard expense claims.

4. Is HMRC warning people about side hustle income?

Yes. HMRC is running awareness campaigns reminding people earning money from side jobs, online sales, or freelance work that income over £1,000 per year must be declared. This includes digital platforms, renting property, influencer income, and gig economy work.

The campaign, known as Tax Help for Hustles, encourages early registration to avoid penalties and interest. HMRC is also reminding taxpayers to declare cryptoasset income where applicable.

5. What are the penalties for not filing a return?

Failing to file when required results in an automatic £100 fine, even if no tax is due. Continued non-compliance attracts further daily penalties, typically £10 per day, plus interest on any unpaid tax. HMRC may also remove disputed expense claims if you cannot justify them with evidence.

6. Do I need proof for every deduction I claim?

Supporting evidence is required for all deductions, especially those involving travel, equipment, and repairs. Acceptable records include invoices, receipts, contracts, or detailed mileage logs. If documentation is lost, obtain replacements or use bank statements to verify the transaction.

Digital storage platforms make it easier to retain these records for at least six years, as HMRC may request evidence even years after filing.

7. How much income requires Self Assessment registration?

The £1,000 trading allowance applies to individuals earning from self-employment or side activities. Income above that amount must be declared through Self Assessment. Registration should take place by 5 October following the end of the tax year in which the income was earned.

This applies whether your earnings are from freelancing, online sales, or other sources outside PAYE.

8. What happens if my personal expense claims are incorrect?

HMRC’s recent crackdown targets inaccurate personal expense claims made in tax returns. If business and personal spending are not properly separated, HMRC can disallow deductions and impose penalties.

Keeping accurate records and making reasonable apportionments between business and personal use protects you from challenges. HMRC’s digital systems now flag inconsistencies automatically, increasing the importance of transparency.

9. How is HMRC identifying false or inflated expense claims?

Using its Connect data system, HMRC analyses bank transactions, property records, and digital sales platforms to match spending against declared income. Any mismatch between lifestyle indicators and reported profits can trigger a compliance check.

Taxpayers with multiple income sources or unusually high expense claims are more likely to be reviewed.

10. How can Apex Accountants help me?

Our team supports clients in every step of the compliance process. We review your records, identify eligible expenses, and remove risky or unsupported claims before submission. We also help set up digital record-keeping systems aligned with HMRC’s standards.

If you’re contacted for a review, we manage the correspondence and negotiations on your behalf. We also provide ongoing tax planning to structure expenses efficiently and maintain compliance year after year.

At Apex Accountants, we combine technical accuracy with proactive guidance to keep your finances secure and HMRC-ready.

The Autumn Budget 2025, due on 26 November, will be closely watched. The Chancellor, Rachel Reeves, must balance tight public finances, slow growth, and political promises. Here are the key areas that may be addressed — and how we at Apex Accountants can help you prepare for the expected tax changes in autumn budget in UK.

Fiscal Context & Constraints

• The government faces a shortfall of £20 billion to £30 billion in revenue due to weaker growth and higher interest costs.
• The Chancellor aims to build a “buffer” (or fiscal headroom) to insulate against shocks in bond markets and maintain credibility with the Office for Budget Responsibility (OBR).
• Labour’s manifesto included pledges not to raise income tax, VAT, or national insurance — so revenue must be found elsewhere.

Likely Tax & Policy Measures

Analysts predict the government will announce the following UK Autumn Budget predictions:

1. Property & Housing Taxes

• The government may replace stamp duty in the upcoming autumn budget with a new annual property tax or transaction tax for higher-value homes. 
• A National Insurance levy on rental income (e.g. 8 %) is under discussion.
• Council tax reform or a revaluation could also feature.

Learn more about Rachel Reeves’ property tax proposals and their potential impact on landlords, developers, and homeowners.

2. Capital Gains, Inheritance & Wealth Taxes

• The Chancellor may look closely at Capital Gains Tax (CGT) changes, including potential removal of exemptions on primary residences.
• Inheritance tax (IHT) reform is also probable. The seven-year gift rule may be tightened.
• The government might consider introducing wealth taxes or levies on financial assets.

3. Freezing or Adjustment of Tax Bands (Fiscal Drag)

• A freeze on income tax thresholds is likely. That would raise revenue through “fiscal drag” as wages rise.
• Similarly, moving thresholds in national insurance or benefit tapering could generate extra revenue.

4. Business & Entrepreneur Incentives

• To support growth, the Budget may include tax incentives for innovation, such as enhanced R&D credits or better terms for intellectual property.
• Revisions to Enterprise Management Incentives (EMI) or equity-based schemes are possible.

5. Sin Taxes, Gambling & Windfall Levies

• A reform of gambling taxes is under consideration. A simplified rate or increased levy could yield billions. 
• The government may introduce a windfall tax on banking profits or financial institutions.
• Officials could also adjust ‘sin taxes’ on alcohol, sugar, or unhealthy foods.

6. Spending Cuts & Efficiency Measures

• Some public spending cuts or efficiencies are likely in less politically sensitive areas.
• Measures targeting welfare, benefit uprating or eligibility may feature.

Risks & Challenges

• If taxes hit productive activity, growth could weaken further. 
• Breaking manifesto promises (e.g. raising income tax) would be politically risky.
  
• Tax changes often require lead time; transitional reliefs or grandfathering will be crucial for business planning.
• Data revisions by OBR or ONS may force last-minute adjustments in forecasts.

What You Should Do Now

1. Review exposure to property and capital gains

If you hold high-value property or potential gains, consider whether ahead-of-time structuring or timing changes may help.

2. Plan for cashflow impact

Freezes or levies may raise your future tax bills gradually. Budget for this.

3. Optimise business incentives

Review your R&D, EMI, IP or investment plans to be ready to benefit from any enhancements.

4. Seek professional advice early

Because legislation may change, early input helps guard against surprise costs.

How Apex Accountants Can Help You With Expected Tax Changes in Autumn Budget 2025 in UK

• Forecasting & modelling: We can simulate proposed Budget options on your financials.
• Tax planning: We will identify strategies to mitigate impact — especially in property, gains, and business tax.
• Structuring and implementation: Our experts help with executing changes, transitional reliefs, and compliance.
• Staying updated: We will monitor the final statutory texts and advise promptly.

If you’d like a tailored briefing for your sector (property, corporate, high net worth) or a meeting to plan your position ahead of the Budget, we at Apex Accountants would be happy to assist.

FAQs Related to Autumn Budget Predictions

When is the Autumn Budget 2025?

The Autumn Budget 2025 is scheduled for 26 November 2025, led by Chancellor Rachel Reeves. It will be Labour’s first major Budget since taking office, setting the direction for taxation, public spending, and business support in the UK.

Why is this Budget important?

This Budget will outline Labour’s first full fiscal strategy, focusing on economic growth, fairer taxation, and improved public services. It will also show how the government plans to balance investment with financial responsibility.

Will taxes increase in 2025?

Yes, targeted tax rises are expected. Rather than raising income tax or VAT, the government is likely to focus on property, wealth, and capital gains to boost revenue while protecting lower and middle-income earners.

Could income tax or VAT go up?

Unlikely. Labour has pledged not to raise income tax, VAT, or National Insurance. Instead, attention is shifting toward closing avoidance gaps and reviewing reliefs on property, investment, and inheritance.

What new taxes are being discussed?

Potential measures include a property levy on high-value homes, a wealth tax targeting investment portfolios or luxury assets, and National Insurance on rental income for landlords. These policies aim to create a fairer tax system without increasing headline rates.

Are Capital Gains Tax or Inheritance Tax changing?

Changes are possible. Capital Gains Tax (CGT) reliefs could be reduced, particularly for property and business assets. The seven-year inheritance gift rule and lifetime exemptions may also be reviewed to close long-term planning gaps.

What about business support?

The Chancellor is expected to announce R&D incentives, investment allowances, and green energy funding to encourage innovation. Support for SMEs, regional growth, and digital transformation will likely remain key priorities.

How will pensions be affected in the 2025 Autumn Budget?

The Budget may change how tax-free cash and pension reliefs work. A flat-rate tax relief system could replace higher-rate reliefs. Pension funds may also be encouraged to invest more in UK infrastructure and sustainable projects.

What should landlords prepare for?

Landlords should expect stricter taxation rules. Possible reforms include National Insurance on rental income, reduced mortgage interest relief, and tighter capital gains treatment for buy-to-let properties and second homes.

Will motorists see changes?

The government is reviewing vehicle tax bands, electric vehicle (EV) incentives, and fuel duty. The focus will likely be on promoting cleaner transport, meaning traditional fuel users could see gradual tax increases.

Could there be new wealth or asset taxes?

Yes. Analysts anticipate measures targeting second homes, investment portfolios, and luxury assets. These could be framed as “fair contribution” policies designed to raise funds without broad tax hikes.

What’s expected for small businesses?

Small firms may benefit from new digital reporting incentives, VAT simplification, and energy-efficiency funding. The Budget may also promote green investment and support for start-ups adopting digital accounting systems.

How big is the UK’s budget deficit?

The UK’s deficit is estimated between £30 and £50 billion. This creates pressure to raise revenue while maintaining fiscal discipline. The Budget is expected to balance new tax policies with measured spending controls.

Will the government cut public spending?

Spending cuts could target non-essential or duplicated programmes to create room for key investments in housing, infrastructure, and healthcare. Efficiency reforms are likely to replace large-scale austerity.

What are the Autumn Budget 2025 predictions for stamp duty?

Stamp Duty Land Tax (SDLT) could undergo major reform. Options include a property sale tax replacing SDLT or higher rates for second homes and luxury properties. Some analysts suggest exemptions for first-time buyers and regional thresholds to make the system fairer.

What are the Autumn Budget 2025 predictions for pensioners?

For pensioners, changes may include adjustments to tax-free cash, pension relief, or the state pension triple lock. While Labour is unlikely to remove the triple lock immediately, future reviews could link rises more closely to earnings growth.

What are the Autumn Budget 2025 predictions for property?

The property sector is expected to face reforms to investment and ownership taxes. Potential measures include wealth levies on second homes, reduced reliefs for landlords, and a shift from stamp duty to annual property taxation. These changes aim to stabilise the market and increase fairness.

What are the Autumn Budget 2025 pension changes likely to be?

The Budget could introduce a flat-rate pension tax relief, potentially set at 25–30%, replacing higher-rate benefits. The 25% tax-free lump sum may be restricted for high earners. The government may also review pension inheritance rules for pots over £1 million.

How can Apex Accountants help before the Budget?

At Apex Accountants, we provide pre-Budget reviews, tax forecasting, and personalised financial planning. Our experts help clients prepare for new tax rules, assess pension or property impacts, and identify strategies to stay compliant and financially secure.

The UK’s film and TV industry is thriving, making it crucial for production businesses to understand VAT planning. Value Added Tax (VAT) affects their registration, tracking, filing, and payment processes. We will discuss key aspects of VAT planning for film and TV production businesses. This includes registration thresholds, filing options, VAT schemes, rates, returns, and the treatment of VAT on expenses. Understanding these topics helps businesses comply with HMRC regulations.

VAT Registration

Companies or self-employed individuals must register with HMRC for VAT when their business turnover exceeds or is expected to exceed the specified threshold in a financial year. You can find the current registration thresholds on the HMRC website. However, businesses can also make a voluntary election to register for VAT, even if their turnover is below the threshold or if they have dealings with other EU countries that require registration. The registration process can be completed online, and upon successful registration, HMRC provides a unique reference number required for filing VAT online.

VAT Filing and Payment

Once companies and individuals register for VAT, they account for VAT quarterly, although they can choose to file monthly VAT returns if preferred. This option benefits productions with minimal output VAT by allowing earlier VAT reclaims and improving cash flow. Businesses must file VAT returns on time and make payments before the deadline to avoid fines. HMRC provides several payment options, including direct debit, online payment, and bank payment.

VAT Schemes

In addition to standard VAT accounting, HMRC offers several VAT schemes that may be beneficial for film and TV production businesses. These schemes provide alternative methods of accounting for VAT and can help simplify the VAT process.

Cash Accounting Scheme

Businesses can account for VAT only on items that they have paid, thanks to the cash accounting scheme. This scheme is an alternative to the accruals basis, which accounts for VAT on invoices dated in the relevant quarter, whether they are paid or not. Businesses must consistently apply the chosen accounting basis each quarter.

Flat Rate Scheme

The flat rate scheme is available for businesses with turnover below a certain level (currently £150,000 as of March 2020). Under this scheme, businesses still charge VAT on sales invoices at the usual rate but pay HMRC a reduced fixed percentage of the VAT charged. However, businesses using the flat rate scheme cannot claim input VAT, as the reduced VAT paid covers potential input VAT.

Annual Scheme

The annual accounting scheme allows businesses to make equal quarterly or nine monthly payments of VAT on account throughout the year. These payments are based on the VAT paid in the previous year. At the end of the year, businesses only need to complete one VAT return. If they have overpaid, they can claim a refund from HMRC, and if they have underpaid, they make a balancing payment.

VAT Rates

The standard rate charges most UK VAT, but there are exceptions. Some items are zero-rated, meaning they are subject to VAT, but the applicable rate is zero percent. Additionally, certain items are exempt from VAT, such as insurance and interest charges. It is crucial for film and TV production businesses to understand the VAT rates applicable to their activities to ensure accurate VAT accounting.

VAT Returns

When filing a VAT return, HMRC focuses on the numbers in boxes 1 and 4, which represent output VAT and input VAT, respectively. Companies should keep separate nominal accounts for output VAT and input VAT and reconcile the nominal ledger VAT accounts with the net VAT payable on the VAT return. Companies must investigate and resolve any discrepancies before submitting the VAT return.

Making Tax Digital

HMRC’s rules for Making Tax Digital for VAT require VAT registered businesses with a turnover above the VAT registration limit to follow them from April 2019. This initiative aims to digitise VAT records and requires businesses to submit their VAT returns using compatible software. Before making VAT returns, businesses need to authorise their software for this purpose.

VAT for TV Production in the UK

VAT for TV production in the UK is a key part of financial planning for broadcasters, production houses, and post-production firms. Television projects often involve multiple suppliers, freelancers, and international transactions, which makes VAT treatment complex.

Key VAT Rules for TV Production

• Most UK TV production services are standard-rated at 20% VAT.

• Pre-production, filming, editing, and post-production costs are generally eligible for input VAT recovery, provided the company is VAT-registered.

• Exports of programming to non-UK broadcasters may qualify as zero-rated supplies, depending on where the customer is based and the place of supply rules.

• Co-productions involving overseas partners require careful VAT apportionment and contract-based review to determine liability.

Common Challenges

Production companies often face difficulties in recovering input VAT on mixed-use costs (for example, staff time shared between taxable and exempt supplies). Partial exemption methods and correct VAT coding are essential to maintain compliance.

Apex Accountants’ VAT Support for TV Producers

At Apex Accountants, we assist television producers with VAT registration, return preparation, and identifying reclaim opportunities on production costs. Our experts help apply the correct VAT rates, manage cross-border transactions, and prepare for HMRC queries or audits.

Strong VAT compliance in TV production not only reduces risks but also supports cash-flow stability, especially for long-running or commissioned series.

VAT for Movie Production in the UK

VAT for movie production in the UK plays a vital role in controlling budgets and maintaining compliance with HMRC’s strict digital record-keeping requirements. Film projects involve numerous suppliers, international spending, and rebates, all of which must be managed within the UK VAT framework.

Core VAT Considerations for Film Producers

• UK film production services are typically standard-rated at 20%, though some exports can qualify for zero-rating.

• Expenses incurred overseas may be eligible for recovery through the 13th Directive VAT refund scheme.

• Producers claiming Film Tax Relief (FTR) must keep VAT treatment consistent with cost allocations reported to HMRC.

• VAT grouping can simplify accounting for studios with multiple entities or subsidiaries.

Industry-Specific Complexities

Film production often includes grant income or investor funding, which can affect VAT recoverability. Additionally, imported equipment, crew accommodation, and location hire require correct reverse-charge and input VAT treatment.

How Apex Accountants Support Film Producers

Apex Accountants help UK and international film producers maintain full VAT compliance from pre-production through post-release stages. We advise on reclaiming input VAT, managing VAT on co-production deals, and preparing digital VAT submissions under Making Tax Digital (MTD).

With proper VAT planning, movie producers can prevent costly errors, safeguard rebates, and keep projects HMRC-ready at every stage.

VAT on Filming and Location Agreements

Traditionally, treating access to land or property for filming as a right over land did not involve charging VAT unless additional services provided were ancillary or apportionment was necessary. However, following the ruling in the Harewood Estate case, estates and country houses used for filming should now typically charge VAT for film income. Location agreements may vary in terms of services provided, such as electricity, toilets, parking, and accommodation. Even if owners have existing HMRC rulings stating that film income is exempt, these exemptions can be overturned. Therefore, it is advisable for owners to charge VAT where commercially achievable, as collecting VAT after the event can be challenging.

Treatment of VAT on Expenses

The treatment of VAT on expenses is an important consideration for film and TV production businesses. The production can reclaim VAT on disbursements, which are items where ownership transfers to the production. However, the production can only reclaim VAT on personal expenses if employees or non-VAT registered freelancers incur them, and the production keeps the original receipts. VAT registered freelancers must invoice for the net amount, with VAT charged on top, for the production to reclaim the VAT. Fuel receipts follow specific rules, such as fuel scale charge rules, when claiming VAT. These guidelines also apply to actors, extras, and other casual workers engaged in film, TV, or similar productions.

Conclusion

VAT planning is a crucial aspect of financial management for film and TV production businesses in the UK.

Please feel free to Book a free consultation with us today to plan your VAT affairs efficiently.

If you are a company director, business owner, or part of senior management, the UK’s new fraud laws may have already caught your attention. With the introduction of the failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), many businesses are now seeking clear failure to prevent fraud guidance to understand what it means for them.

From 1 September, a major change in the UK’s new fraud laws 2025 will affect how companies deal with fraud. This law means large organisations can be held criminally liable if someone connected to them commits fraud to benefit their business and the company does not have proper safeguards in place.

Business leaders are asking a key question: does this mean directors are personally liable if fraud occurs? The short answer is no—but companies cannot ignore the new rules. The focus is firmly on whether the organisation has a strong and regularly reviewed anti-fraud framework.

At Apex Accountants, we believe this shift is one of the most important legal changes for UK businesses recently. In this article, we explain what the law means, which organisations are affected, the types of fraud it covers, and the practical steps companies should now take to prepare.

Are directors personally liable if fraud occurs?

No. Directors are not personally liable for the new offence of failure to prevent fraud. The responsibility falls on the organisation itself. If an employee, agent, or subsidiary commits fraud to benefit the company, the business could face prosecution. The individuals directly involved in the fraud can still be charged under existing criminal law, but the new rules do not extend personal liability to directors.

What does “failure to prevent fraud offence” mean?

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduces this offence, which comes into force on 1 September 2025. It is a strict-liability offence. That means:

• If someone linked to the company commits fraud to benefit the business or its clients, the company is liable.
  
• Prosecutors do not need to show that directors or senior managers ordered or knew about the fraud.
  
• The test is whether the company had reasonable anti-fraud procedures in place.
  

This strategy makes sure businesses concentrate on prevention rather than responding after the damage has already occurred.

Which organisations are affected?

The offence only applies to large organisations. A business is considered large if it meets at least two of the following:

• More than 250 employees
  
• Turnover above £36 million
  
• Assets over £18 million
  

These thresholds apply to groups as a whole, not just individual subsidiaries. Overseas companies are also caught if the fraud is carried out in the UK or harms UK victims.

What types of fraud are covered?

The law applies to a broad range of fraud offences. These include:

• Fraud by false representation, failing to disclose information, or abuse of position.
  
• False accounting.
  
• Fraudulent trading.
  
• Assisting or encouraging any of the above.
  

This wide coverage reflects the government’s aim to tackle corporate fraud in all its forms.

Do directors face any risk at all?

While directors are not personally liable under this specific offence, they still carry responsibility for oversight. Other laws, such as those against fraudulent trading and making false statements, can apply directly to individuals. This means governance and transparency remain essential. A robust compliance culture is the safest protection for both companies and their leaders.

What defences are available for companies?

A business can avoid conviction if it can prove:

• It had reasonable procedures in place to prevent fraud; however,
  
• It was not reasonable to expect such procedures given the nature of the organisation.
  

The cornerstone of this defence is a fraud risk assessment. Organisations are expected to:

• Identify where they are vulnerable to fraud.
  
• Document why certain procedures were adopted or rejected.
  
• Review the risk assessment regularly.
  

If assessments are not kept up to date, courts may decide that procedures were not reasonable.

What counts as reasonable procedures?

To defend against the failure-to-prevent fraud offence, companies must show they had reasonable procedures in place. Government guidance highlights six principles that every organisation should follow:

1. Leadership commitment
   Senior management must set the tone by promoting a culture of zero tolerance towards fraud. A clear message from the top builds confidence across the organisation.
   
2. Regular risk assessment
   Businesses should identify potential fraud risks, assess their likelihood and impact, and keep these assessments up to date as circumstances change.
   
3. Proportionate policies and controls
   Organisations need clear, practical anti-fraud policies supported by robust financial controls and internal reporting systems that match the size and nature of the business.
   
4. Training and communication
   Staff, contractors, and agents must be trained to spot warning signs of fraud and understand how to report concerns quickly and safely.
   
5. Monitoring and review
   Procedures must not remain static. Companies should monitor their effectiveness and adapt them as new risks emerge.
   
6. Third-party management
   Due diligence on suppliers, partners, and agents is vital. Contracts should include fraud-prevention clauses to make expectations clear.

By applying these principles, organisations put themselves in the strongest possible position to demonstrate that their prevention measures are both reasonable and effective.

What steps should businesses take now?

Apex Accountants recommends that organisations prepare before the offence takes effect.

• Check if you qualify under the large organization’s thresholds.
  
• Carry out a fraud risk assessment and keep it under regular review.
  
• Update anti-fraud policies across your group.
  
• Train employees, contractors, and agents on fraud awareness and reporting.
  
• Review contracts with partners to include anti-fraud clauses.
  
• Keep records showing how procedures were designed, applied, and monitored.

How Apex Accountants’ Failure To Prevent Fraud Guidance Can Help

Adapting to a failure to prevent fraud offences requires more than just policies on paper. It demands a clear, practical framework that proves a business takes fraud prevention seriously. At Apex Accountants, we provide hands-on support to help organisations prepare for this legal change.

Fraud Risk Assessments

We work with companies to identify their fraud risks, from internal controls to third-party exposure. To maintain their credibility in the eyes of regulators and courts, our team regularly reviews assessments and documents findings.

Policy and Procedure Design

We help draft proportionate anti-fraud policies, financial controls, and reporting systems tailored to your organization’s size and complexity.

Training and Awareness

Our training programs give employees and agents the knowledge they need to identify fraud risks and report concerns. This builds a culture of accountability across the business.

Monitoring and Review

We provide ongoing support to test and improve procedures, ensuring your fraud framework stays strong as your business grows and risks change.

Group and Third-Party Support

For groups with subsidiaries or overseas partners, we help implement consistent policies across all operations. We also review contracts to add the right fraud-prevention clauses.

Key takeaway on New Fraud Laws 2025

From 1 September 2025, large organisations will be liable for failing to prevent fraud committed by employees or associates. Directors are not personally liable, but the company itself could face prosecution and heavy fines.

At Apex Accountants, we work with businesses to design fraud-resilient systems, carry out risk assessments, and train teams. Contact Apex Accountants today to discuss how we can help your organisation prepare. Acting now will protect your organisation and show that you are ready for the new law.

HMRC’s latest annual report shows that losses from small-business phoenixing reached £836 million in 2022–23, a 45% increase on previous estimates. The practice now accounts for about a fifth of HMRC’s overall tax losses. The Chancellor has announced plans to tackle the problem through joint action by HMRC, Companies House and the Insolvency Service.

In this article, we will explain what phoenixing is, why it is a particular problem among small businesses, and outline the penalties that directors face when using it illegally. We will also explore how HMRC investigates phoenixing, the warning signs it looks for, the role of Companies House, and the resources available to help businesses avoid accidental breaches. Finally, we will set out how Apex Accountants can provide expert support to help directors stay compliant and protect their business from risk.

What is phoenixing?

Phoenixing (sometimes called “phoenix trading”) occurs when a company enters insolvent liquidation and the directors form a new company using the same or similar name in order to continue trading. The new entity often carries on the same business but without the liabilities of the former company, leaving creditors (including HMRC) unpaid. HMRC’s internal manual on the Targeted Anti‑Avoidance Rule (TAAR) notes that phoenixism allows individuals to convert what would otherwise be dividends into capital receipts; the new company “rises from the ashes” of the old one. Deliberately using phoenixing to escape tax liabilities is illegal.

What is small‑business phoenixing?

Small‑business phoenixing is the abuse of this tactic by directors of small and micro companies. The Insolvency Service reports that phoenixing often involves close companies (five or fewer shareholders) where the owners have a 5% or greater shareholding. HMRC estimates that about 81% of tax evasion losses come from small businesses, with a significant portion linked to phoenixism. Retail and construction sectors are particularly vulnerable to this abuse.

Government response to phoenixing

Phoenixing takes place when a company is closed down and a new business is created in its place.

• In some cases, it is a legal restart after genuine financial difficulty.
• In other cases, it is used to avoid paying taxes, suppliers, or other debts.
  

When directors deliberately shed liabilities and start again debt-free, HMRC treats it as tax evasion.

Scale of the problem

The most recent data shows that phoenixing made up nearly 20% of HMRC’s total tax losses. The pandemic delayed insolvency declarations, which contributed to the rise. Reports also suggest the practice is common among small firms, particularly in retail and construction.

The Chancellor has pledged stronger action. A joint strategy now links HMRC, Companies House, and the Insolvency Service. Planned measures include:

• Higher upfront payment requirements.
• Wider use of enforcement powers.
• Greater personal liability for directors.

These steps aim to stop deliberate abuse while still allowing genuine business recovery.

Penalties for small‑business phoenixing

Penalties for illegal phoenixing vary depending on the circumstances and laws breached:

• Income tax charges and penalties – under the TAAR, distributions from a winding up that meet the four conditions are taxed at dividend rates. This can result in a higher tax bill than the entrepreneur expected.
  
• Joint and several liability – when HMRC issues a joint and several liability notice, directors and other individuals can be held personally liable for the company’s tax debts. Individuals who ignore such notices risk civil recovery and insolvency.
  
• Civil penalties and enforcement sanctions – HMRC can demand security deposits, impose penalties, and use enforcement sanctions. The transformation roadmap aims to double the amount of tax protected to £250 million by 2026‑27 through increased sanctions.
  
• Director disqualification and criminal prosecution —Directors who breach insolvency legislation by continuing to trade under a prohibited name can be disqualified for up to 15 years and may be prosecuted. The Insolvency Service reports a case where a director running multiple phoenix companies received an eight‑month suspended prison sentence and a five‑year disqualification.
  
• Further criminal offenses— HMRC can bring charges for fraudulent trading, tax evasion, or other offences under the Fraud Act or Insolvency Act. Serious cases may lead to imprisonment, fines and the confiscation of assets.

Where to find more information about HMRC’s efforts

Useful resources for understanding HMRC’s response include:

• HMRC’s Transformation Roadmap – published in July 2025. The roadmap explains that HMRC is working with the Insolvency Service and Companies House to crack down on contrived insolvency and abusive phoenixism by increasing the use of upfront payment demands (securities), making more directors personally liable for company debts and boosting enforcement sanctions gov.uk.
  
• Company winding‑up TAAR manual (CTM36305) – the HMRC internal manual sets out the conditions under which HMRC will treat liquidation distributions as income rather than capital. It includes examples of phoenixism and details the four conditions.
  
• Insolvency Service’s Director Information Hub – launched in 2023. The hub provides bite‑sized guidance to help directors understand their duties, recognise signs of distress and avoid insolvency.
  
• HMRC’s tax fraud reporting service – GOV.UK includes an online form and fraud hotline for reporting suspected tax avoidance or evasion.
  
• Companies House business plan and blog – these explain how new powers under the Economic Crime and Corporate Transparency Act allow Companies House to query and remove false information and implement identity verification to help disrupt phoenixism.
  

How does HMRC investigate phoenixing?

HMRC investigates phoenixing through a combination of civil powers, targeted anti‑avoidance rules and criminal enforcement. Key tools include:

Targeted Anti‑Avoidance Rule (TAAR)

HMRC will treat a liquidation distribution as an income distribution (subject to dividend tax) if four conditions are met: the individual held at least a 5% interest; the company was a close company within the previous two years; the individual resumes the same or similar trade within two years; and obtaining a tax advantage was one of the main purposes. HMRC interprets the “similar trade” condition broadly – carrying on the same activity as a sole trader, through a partnership or through another company can trigger the rule. The TAAR denies the lower capital gains tax rate, thereby removing the tax benefit of phoenixing.

Joint and several liability notices

Under Finance Act 2020, HMRC can issue a notice making directors or participants personally liable for the tax debts of companies where there is repeated insolvency followed by phoenixing. Once issued, the individual becomes jointly and severally liable for the outstanding tax.

Enforcement with the Insolvency Service

HMRC works closely with the Insolvency Service to investigate breaches of company and insolvency law. The Insolvency Service’s annual report notes that phoenixing is a priority and gives examples where directors have been prosecuted and disqualified for breaching section 216 of the Insolvency Act 1986; one director received an eight‑month suspended prison sentence and a five‑year director disqualification for operating multiple phoenix companies.

Collaboration with Companies House

New powers allow Companies House to share data with HMRC and the Insolvency Service, remove incorrect information and strike companies off the register more quickly. HMRC uses this data to identify patterns of repeated insolvency, suspicious director activity and false addresses.

Upfront payment demands

HMRC can require businesses considered high risk (for example, those with a history of default) to provide a security deposit before trading. The transformation roadmap indicates that HMRC will increase use of these securities to deter phoenixism.

Resources to help businesses avoid accidental phoenixing

Directors who want to avoid inadvertently falling foul of the anti‑phoenix rules should:

• Use the Director Information Hub for guidance on their duties, day‑to‑day business management and recognising distress. The hub includes topics such as spotting the signs of company distress, turning the company around and consequences of insolvency.
  
• Watch for financial distress signals – the Insolvency Service lists warning signs such as persistent cash‑flow problems, late payment of bills, delaying PAYE or National Insurance contributions, high interest on loans and low profits despite strong sales. Early action can help companies restructure rather than resort to illegal phoenixing.
  
• Obtain professional tax advice before winding up a company. The TAAR can apply if a person holds 5% or more of a close company and restarts a similar trade within two years.
  
• Ensure compliance with Companies House filing requirements. New identity verification rules and stricter removal powers mean false or misleading filings are more likely to be detected.
  

How to report suspected phoenixing

Anyone can report suspected phoenixing or tax evasion to HMRC by:

• Completing HMRC’s online fraud reporting form on GOV.UK.
  
• Calling the HMRC Fraud Hotline on 0800 788 887 (or +44 203 080 0871 from outside the UK). The hotline is open Monday to Friday, 9am to 5pm. Reports can be made anonymously, and HMRC keeps details confidential.
  

For fraudulent use of the dissolution process, members of the public can also complain to Companies House using its “Report it to us” service. This supports HMRC and the Insolvency Service in identifying misuse of company dissolutions.

Warning signs HMRC looks for

HMRC and the Insolvency Service look for patterns that indicate abusive phoenixing. Common warning signs include:

• Repeated insolvency followed by new companies carrying on identical trades under the same directors.
  
• Directors with a history of liquidating companies and immediately forming new entities.
  
• Transfers of assets to a new company for little or no value, leaving creditors unpaid (often identified through insolvency investigations).
  
• Requests for payments to a different company while employees, management and operations remain unchanged – this can indicate a shift to a new, debt‑free entity.
  
• Low tenders or quotes that are below market rates and cannot be sustained.
  
• Late or missing PAYE/NIC payments; HMRC lists delaying tax payments as a sign of a company in distress.
  
• Changing company names and directors but keeping the same management and staff.
  
• Not providing payslips or superannuation/pension contributions to employees – while this guidance originates from the Australian Taxation Office, the same warning signs often flag potential illegal phoenixing.
  

Business owners should seek advice if they see these signs within their own organisation or when dealing with suppliers or contractors.

Role of Companies House

Companies House is no longer simply a passive register. The Economic Crime and Corporate Transparency Act 2023 has given it new powers to play an active role in preventing phoenixism and economic crime. According to Companies House’s 2024‑25 business plan:

• It now acts as a gatekeeper of company information, with authority to query and remove false, misleading or incorrect data.
  
• It can remove suspicious registered office addresses and officer details; by January 2025 it had removed over 60,000 suspicious addresses and 47,200 officer addresses.
  
• From March 2025, Companies House gained powers to strike off companies quickly if registered on a false basis and to require all directors and people with significant control to verify their identity. Identity verification makes it harder for directors to hide behind false names when repeatedly forming phoenix companies.
  
• It shares intelligence with HMRC and the Insolvency Service as part of a joint plan to tackle phoenixism.
  

By improving the accuracy of company data and working with other agencies, Companies House helps identify repeated insolvency patterns, suspicious director behaviour and fraudulent filings. This data supports HMRC’s investigations and allows early intervention.

How Apex Accountants Can Help

We support tighter rules to reduce the abuse of insolvency law. However, legitimate business owners who need to restructure should not be penalised. The right advice can help companies exit financial distress while staying fully compliant.

At Apex Accountants, we provide:

• Compliance guidance: We help directors understand HMRC’s TAAR conditions and ensure that any winding‑up is compliant, preventing inadvertent tax penalties.
  
• Risk assessment: We analyse clients’ trading patterns and director histories to flag potential phoenixing risks before HMRC does.
  
• Restructuring support: If a company is in distress, we advise on rescue options and legitimate liquidations, so owners can restart without breaching anti‑phoenix rules.
  
• HMRC liaison: Our experts manage communications with HMRC, including responses to joint liability notices and security deposit requests.
  
• Reporting and training: We assist with fraud reporting and deliver training to staff on recognising red flags and complying with new Companies House identity‑verification requirements.

Conclusion

Small-business phoenixing has become a growing concern, with HMRC losses now exceeding £800 million. To address this, HMRC is stepping up its approach through targeted anti-avoidance rules, joint and several liability notices, closer collaboration with Companies House and the Insolvency Service, and tougher penalties for illegal phoenixing.

For directors, it is vital to understand legal duties, recognise early signs of financial distress, and seek timely professional advice before winding up a company. Acting responsibly reduces the risk of breaching anti-phoenixing rules and protects both businesses and the wider tax system.

At Apex Accountants, we support directors in managing company restructuring, compliance, and tax planning in line with HMRC requirements. Our team offers clear, practical guidance to help businesses make the right decisions, avoid penalties, and continue trading on a secure foundation. By working with us, business owners can stay compliant, safeguard their reputation, and contribute to a fairer tax environment.

Contact Apex Accountants today to discuss your company’s position and get tailored advice on compliance, restructuring, and future growth.