What Businesses Need To Know About UK Sanctions Enforcement Action Posted on 10 January 202628 January 2026 by Farazia Gillani The UK sanctions enforcement action framework has evolved rapidly since Russia’s invasion of Ukraine. On 6 January 2026, the government updated its sanctions enforcement action hub, adding a link to the Office of Trade Sanctions Implementation (OTSI) review and a blog explaining what makes a good breach report. This article explains how the enforcement landscape has changed, summarises key guidance and answers common questions raised by clients in the UK. Overview of UK Sanctions Enforcement Action and Enforcement Bodies Sanctions are restrictive measures used to support foreign-policy and national‑security objectives. The UK may impose financial sanctions (asset freezes and investment bans), director-disqualification sanctions, trade sanctions (including arms embargoes and other trade restrictions), transport sanctions and immigration bans. Enforcement is split across several bodies: Office of Financial Sanctions Implementation (OFSI) Part of HM Treasury. It handles civil enforcement of financial sanctions and the Russia Oil Price Cap. OFSI can impose monetary penalties and publishes decisions and “notes on compliance” to help the industry understand its expectations. National Crime Agency (NCA) Investigates and prosecutes criminal breaches of financial and transport sanctions. Recent high‑profile operations have included disrupting large money‑laundering networks linked to Russia. Office of Trade Sanctions Implementation (OTSI) A new unit within the Department for Business and Trade. Created in October 2024, OTSI enforces trade sanctions relating to UK services and international trade where goods and services do not cross the UK border. It issues licences, investigates breaches and can impose civil monetary penalties. HM Revenue & Customs (HMRC) Responsible for criminal enforcement of trade sanctions and for all trade sanctions involving goods that cross the border. HMRC also enforces export controls and assists the NCA with prosecutions. The sanctions enforcement action hub launched in November 2025 consolidates information from all four agencies. It lists monetary penalties, prosecution outcomes and disclosure notices, and provides case studies and annual reviews. The update on 6 January 2026 added links to OTSI’s first‑year review and a blog on breach reporting, making it easier for businesses to learn from enforcement cases. OTSI’s First Year: Statistics and Lessons OTSI was formally established when the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 (TASSCER) came into force on 10 October 2024. The unit enforces trade sanctions covering: the provision or procurement of sanctioned services; the movement, making available or acquisition of sanctioned goods or technology outside the UK; and ancillary services associated with sanctioned goods or technology. Licensing and Business Support OTSI is responsible for licensing the provision of professional and business services prohibited under UK sanctions. In its first year (up to 9 October 2025), OTSI received 60 licence applications, mainly concerning Russia‑related restrictions. Twelve applications were granted in full or in part, three were refused, seven were withdrawn and one was deemed not to require a licence. The average decision time was 82 working days, reflecting the complexity of applications. OTSI plans to publish further guidance to help applicants provide better information and shorten assessment times. Enforcement and Compliance Reporting by industry is a key information source for OTSI. During its first year it received 146 reports or referrals relating to potential trade‑sanctions breaches, mostly from the financial services sector; however, 16% came from sectors without mandatory reporting obligations. OTSI has not yet imposed any civil monetary penalties but has several investigations underway and has referred cases to HMRC and other government partners. The unit emphasises prevention: it engages with businesses, publishes guidance and administers licences to help firms comply. Significantly, OTSI can impose civil fines up to £1 million or 50% of the value of the breach, whichever is higher. A strict‑liability regime applies, meaning that an intention to breach is not required for a penalty. OTSI can also require information and enforce reporting obligations. Serious cases may be referred to HMRC for criminal prosecution. What Good Sanction Breach Reporting Looks Like OTSI’s December 2025 blog explains why sanction breach reporting matters and provides a template for useful reports. Providers of financial or legal services and money service businesses are legally obliged to report suspected breaches of trade sanctions. Others can report voluntarily using the government’s online tool. The blog recommends that reports include: Contact details – name and email of the reporter. Details of the suspected breacher – names and addresses of the individuals or businesses involved. Other parties’ details – names and contact information of any other participants. Supporting documents – emails, contracts or other papers that explain the situation. OTSI emphasises that a good report should: Explain the UK nexus – describe how the activity is linked to the UK. Provide a clear narrative – set out what happened in simple, honest language. Identify potential sanctions prohibitions – mention any rules that might have been breached, if known. Mention contact with other authorities – state if other regulators have been informed. The blog stresses that OTSI values openness and honesty and would rather receive a concise report than none at all. All reports are handled carefully, and more detail reduces the need for follow‑up questions. Cross‑Government Review and Consolidated Enforcement Hub In May 2025 the Foreign, Commonwealth and Development Office (FCDO) led a cross‑government review of sanctions implementation and enforcement, which identified ten actions to improve compliance and deterrence. These actions included creating a consolidated enforcement hub, updating guidance and exploring civil settlement schemes. One headline commitment was delivered on 3 November 2025 when the government launched the sanctions enforcement action page, providing a single landing point for enforcement outputs and case studies. The hub aggregates decisions, press releases, blog posts and annual reviews from OFSI, the NCA, OTSI and HMRC, making it easier for businesses to learn from enforcement outcomes. The review also noted industry feedback that maintaining two separate sanctions lists causes duplication. As a result, from 9 am on 28 January 2026 the UK Sanctions List will become the only authoritative list of UK sanctions designations; the OFSI Consolidated List will be retired. Businesses using the OFSI list must update their screening systems to use the UK Sanctions List and switch from the “OFSI Group ID” to the UKSL Unique ID. This change aims to simplify compliance and reduce the risk of missed designations. Reporting Obligations and Penalties for Sanction Breaches Who must report? Certain firms – including financial service providers, money service businesses and legal services providers – have statutory obligations to report potential trade‑sanctions breaches. The list of mandatory reporters is detailed in guidance issued by OFSI, OTSI and the Department for Transport. However, anyone can report a suspected breach or circumvention attempt using the government’s online tool. Reporting protects the integrity of sanctions and helps law‑enforcement agencies tackle serious crime. What are the penalties for sanction breaches? For financial sanctions, the Policing and Crime Act 2017 and the Sanctions and Anti‑Money Laundering Act 2018 give HM Treasury powers to impose monetary penalties. OFSI’s guidance explains that it may impose a penalty when a breach of financial sanctions legislation occurs and sets out how it determines the amount and the rights of review and appeal. The maximum penalty is usually the greater of £1 million or 50% of the value of the breach. The Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024 extended these powers to trade sanctions enforced by OTSI. OTSI will consider mitigating factors such as timely disclosure and effective compliance systems, while aggravating factors like prior breaches or obstructive behaviour may increase penalties. Criminal penalties can be severe. The NCA and HMRC investigate and prosecute intentional breaches; convictions can result in unlimited fines and imprisonment. HMRC has already issued multi‑million‑pound fines against exporters who contravened export controls. Businesses should therefore treat sanctions compliance as a core component of their risk management. Whistle‑blower protections Legislation enacted in 2025 amended the Public Interest Disclosure (Prescribed Persons) Order to cover reports of financial, transport and certain trade sanctions breaches. This change means workers who disclose suspected sanctions breaches to OFSI, OTSI or the Department for Transport qualify for whistle‑blower protections. The cross‑government review emphasised that expanded whistle‑blower legislation would encourage more reporting. How We Can Help You At Apex Accountants, we help businesses navigate the complex world of sanctions and export controls. Our team of accountants and compliance specialists offers: Sanctions compliance health‑checks – assessing existing systems against UK requirements and international best practice. Policy and procedure development – drafting tailored sanctions policies, screening workflows and escalation protocols. Licence application support – advising on whether a licence is required and assisting with applications to OTSI or OFSI. Breach reporting assistance – helping clients collate information and prepare concise breach reports that meet OTSI’s expectations. Training and workshops – providing staff training on sanctions awareness, reporting obligations and whistle‑blower protections. Ongoing monitoring – offering regular updates on sanctions developments and reviewing compliance programmes as the landscape evolves. Conclusion The UK’s sanctions regime continues to expand and enforcement is becoming more coordinated. The launch of a consolidated sanctions enforcement action hub and the upcoming move to a single sanctions list show the government’s determination to make compliance easier while increasing transparency and deterrence. Businesses should take these developments seriously: OTSI’s first‑year statistics underline that reports are being received and investigations are underway. With civil penalties of up to £1 million or 50% of the breach value and the prospect of criminal prosecution, firms cannot afford complacency. By investing in robust compliance frameworks, leveraging professional advice and embracing a culture of transparency, companies can mitigate sanctions risks and avoid costly enforcement actions. Frequently Asked Questions 1. What is enforcement action in the UK? Enforcement action refers to regulatory or legal steps taken by UK authorities to investigate breaches, impose penalties, prosecute offences and secure compliance with laws, including sanctions, tax, customs and financial regulations. 2. Under which act can UK sanctions be enforced? UK sanctions are enforced under the Sanctions and Anti-Money Laundering Act 2018, alongside regulations made under it, allowing civil penalties, criminal prosecutions and licensing controls. 3. Who is the enforcement agency for sanctions in the UK? Sanctions enforcement is shared between OFSI for financial sanctions, OTSI for trade and services sanctions, HMRC for customs enforcement, and the NCA for serious criminal investigations. 4. What are the consequences of breaching UK sanctions? Breaches can lead to civil penalties, criminal prosecution, asset freezes, reputational damage, loss of licences and, in serious cases, unlimited fines or imprisonment for individuals and directors. 5. What is OTSI and how is it different from OFSI? OTSI enforces trade and services sanctions where goods do not cross UK borders, while OFSI enforces financial sanctions such as asset freezes, investment bans and the Russia oil price cap. 6. How do I report a breach of sanctions? Anyone can report suspected breaches using the government’s online service. Mandatory reporters must report promptly, providing details of parties involved, UK links, transaction information and supporting evidence. 7. What penalties can be imposed for sanctions breaches? Authorities may impose civil penalties up to £1 million or 50% of the breach value. Serious cases can lead to criminal prosecution, unlimited fines, director liability and imprisonment. 8. What changes will occur on 28 January 2026? From 28 January 2026, the UK Sanctions List becomes the sole official list. Businesses must update screening systems and identifiers to avoid relying on outdated or withdrawn sanctions data. 9. How can businesses prepare for stricter enforcement? Businesses should update sanctions policies, screen customers and suppliers, train staff, maintain audit trails, strengthen due diligence controls and seek professional advice on compliance and risk management.
Dedicated Tax Planning and Financial Support for the Food and Beverage Sector Posted on 9 January 202612 January 2026 by Rida Ahmed The food and beverage sector operates under tight margins, strict compliance requirements, and fast-changing consumer trends. Apex Accountants offers specialist tax planning, financial management, and accounting services tailored to the needs of food businesses across the UK. Since 2006, we’ve helped restaurants, food manufacturers, delivery services, and packaging firms stay compliant, improve profitability, and grow sustainably.
Accounting and Tax Support for Financial Services Businesses Posted on 9 January 202612 January 2026 by Rida Ahmed Financial services companies face some of the toughest compliance, tax, and reporting pressures in the UK. Regulatory deadlines are strict. Errors carry heavy penalties. And client trust depends on financial accuracy. At Apex Accountants, we provide specialist accounting, tax, and advisory services tailored to the financial services sector—from fintech disruptors to legacy insurance providers. We help you stay compliant, transparent, and growth-ready.
Specialist Accountants for Film, Television and Media Production Businesses in the UK Posted on 9 January 202628 January 2026 by Waheed Ahmed The film, television, and media production industries are a cornerstone of the UK’s creative economy. From studio-based productions to digital content and post-production work, each subsector presents unique financial, tax, and operational challenges. At Apex Accountants, we work with producers, agencies, technicians, and creatives to provide sector-specific support across all stages of the production lifecycle. Whether you’re applying for tax reliefs, managing freelancers, or scaling internationally, we deliver practical guidance and reliable financial systems tailored to your needs.
Accounting and Financial Services for Environmental and Sustainable Businesses Posted on 30 December 202530 December 2025 by Rida Ahmed The environmental and sustainability sector is expanding quickly across the UK due to regulatory requirements, climate commitments, and increased demand for responsible operations. Each subsector faces its own financial pressures, compliance duties, and investment needs. At ApexAccountants, we work with organisations across the green economy to provide accounting, taxation, and strategic financial guidance that supports long-term resilience and growth.
Tax Support For The UK Education And Training Sector Posted on 30 December 202530 December 2025 by Muhammad Asif At Apex Accountants, we provide tailored tax and accounting services to meet the diverse needs of education and training providers. Our team understands the financial pressures that come with running institutions, managing compliance, and balancing innovation with operational demands. We support schools, learning platforms, training firms, and education product developers with sector-specific solutions that simplify tax, payroll, and reporting.
Tailored Accounting Services for the Design and Creativity Sector Posted on 30 December 202530 December 2025 by Rida Ahmed The design and creativity sector is a dynamic and diverse field, full of businesses that bring imagination to life through art, design, and innovation. From graphic design agencies to product design companies, each part of the industry presents unique financial challenges and opportunities. At Apex Accountants, we offer comprehensive accounting, tax planning, and advisory services specifically tailored to businesses in this creative sector. Our team of experts understands the intricacies of design and creativity firms, and we are here to help you navigate the complexities of finance while you focus on what you do best—creating.
First-tier Tribunal (FTT) on VAT on Cooked Food and Its Impact on Your Business Posted on 19 December 202515 April 2026 by Farazia Gillani The FTT’s recent decision regarding Morrisons’ rotisserie chickens has serious consequences for food retailers across the UK. In a ruling that places rotisserie chickens under the standard 20% VAT rate for hot food, the court has sparked important questions for businesses. This article will explain what this ruling means for your operations, why it is relevant for your business in terms of VAT on cooked food, and how it could affect your pricing strategy moving forward. Stay ahead of the changes and understand how to ensure your business is fully aligned with the latest VAT regulations. What Was the Court Ruling on Morrisons’ Rotisserie Chickens? After losing a legal challenge against HM Revenue & Customs (HMRC), Morrisons, a major UK supermarket chain, now faces a £17 million tax bill. The case centred on the potential application of VAT on Morrisons’ rotisserie chickens. The supermarket argued that the chickens, which are often eaten cold or reheated later, should not attract the standard 20% VAT rate applied to hot food. However, the court ruled that the rotisserie chickens are still considered “hot food” for VAT purposes. The key factor in the court’s decision was that the chickens were sold while still above ambient temperature, despite being packaged to cool down. Even after two hours, the chickens were still warm at temperatures between 42°C and 45°C. Without the special packaging, the temperature would have been much lower—around 31.8°C. This ruling highlights that food items, even those intended to be consumed cold later, are still subject to VAT if they are sold at temperatures significantly above ambient levels when purchased. Understanding HMRC VAT rules for food is crucial to prevent unexpected tax liabilities. How Does This Affect My Business if I Sell Hot or Cooked Food? If your business sells cooked food such as rotisserie chickens, pies, or other takeaway meals, this ruling has important implications. If your food is sold while still hot or warm, even if it’s later consumed cold, it could be subject to the standard 20% VAT rate. For example, food products stored in a hot cabinet and sold while still above room temperature would fall under the VAT charge. However, if the food cools down and is sold at room temperature, it may not attract VAT. The key factor is whether the product is still considered “hot food” when sold. How Retailers Can Ensure Compliance with VAT To ensure VAT compliance for food retailers, businesses selling cooked food must be clear about when VAT applies. If food products are stored in a way that retains heat or are sold while still above ambient temperature, VAT will likely apply. This includes items like rotisserie chickens that remain warm at the point of sale. On the other hand, food sold at room temperature or that cools naturally before sale may be exempt from VAT. Retailers should carefully review how they store and display their food to ensure they follow the correct HMRC VAT rules for food. Adjusting Prices to Reflect VAT VAT-registered businesses must display prices inclusive of the 20% VAT on hot takeaway food (VAT Notice 709/1, para. 2.5). For example, a rotisserie chicken priced at £4.40 net will be £5.28 inclusive (£4.40 net + £0.88 VAT). When reclassifying from zero-rating, businesses should determine if previous prices need adjustment to maintain net margins. A price increase from zero-rated £4.40 to VAT-inclusive £5.28 may reduce volume by 10%–20%, especially among price-sensitive customers. To mitigate this, retailers can test pricing in stores, offer loyalty schemes, bundles, or promotions, and shift to zero-rated cold products. Absorbing the VAT cost or seeking HMRC clearance may also help avoid penalties. Reclaiming VAT on Cooked Food Products If your business is VAT-registered, you can reclaim VAT on purchases used for business purposes. This includes ingredients and other supplies used to prepare cooked food products. To maximise the benefits of the VAT system, it’s essential to track and report your VAT accurately, ensuring that you’re claiming the correct amount. These steps will help your business maintain compliance while improving cash flow and managing your tax liabilities effectively. How Apex Accountants Can Support Your Business with VAT on Cooked Food At Apex Accountants, we offer expert VAT consultancy to help your business stay compliant with the latest regulations. If you sell cooked foods, such as rotisserie chickens, we can guide you through the complexities of VAT, ensuring your pricing strategies reflect the correct tax treatment and minimising your tax liabilities. Our services include: VAT Compliance and Advisory for Food Retailers Pricing Strategy Optimisation to Account for VAT VAT Registration and Reporting Assistance Support with VAT Audits and Disputes Tailored VAT Solutions for the Retail Sector By partnering with us, you can confidently manage your VAT obligations, stay ahead of changes, and make informed decisions that support your business’s growth and compliance. What Should You Do Next? If you’re unsure about how VAT applies to your food products, now is the time to review your sales practices and packaging. You may need to adjust your pricing or sales strategy to ensure compliance with VAT regulations. At Apex Accountants, we’re here to help you manage these changes and support your business in maintaining VAT compliance for food retailers. If you need any clarification about VAT or need assistance with your pricing strategy, don’t hesitate to get in touch with us today.
Tax Rebate Owed to Deceased Estate: What You Need to Know Posted on 19 December 202520 July 2026 by Rida Ahmed When a person passes away, handling their financial affairs becomes a critical responsibility for the executor. One area of concern is whether a tax rebate owed to the deceased forms part of their estate for inheritance tax (IHT) purposes. In a recent case, the UK First-tier Tax Tribunal (FTT) provided clarity on this issue, ruling that a tax rebate owed to deceased estate at the time of death should be included in the estate for IHT calculations. This decision is crucial for those managing estates and handling tax rebates, as it confirms that tax rebates are indeed treated as assets of the estate, impacting the overall inheritance tax liability. This ruling provides both guidance and practical implications for executors and estate administrators in understanding how a tax rebate for deceased person is handled under UK inheritance tax law. The clarity on this issue ensures that tax refunds owed to the deceased are accounted for correctly, helping to avoid future disputes or errors in inheritance tax return for deceased estate submissions. What Was the Case About? The case involved the late Eunice Thomas, who passed away in December 2020. Eunice had been receiving income from pensions and dividends and had designated her son to manage her financial affairs via an enduring power of attorney (EPA). In May 2020, a tax return was filed on her behalf for the 2019/20 tax year, which showed an overpayment of income tax amounting to £66.03. Although the rebate was not paid before her death, the contingent right to the repayment existed at the time of death, making it an asset for inheritance tax (IHT) purposes, as per HMRC’s guidance. Following Eunice’s passing, her son, as executor of the estate, filed an inheritance tax return for deceased estate, valuing the estate at £476,542.04, which included an estimated income tax repayment of £1,340 as part of the estate’s assets. However, the son later amended this IHT return, claiming that the tax repayment should not be included in the estate. He argued that, as the deceased had no enforceable right to the repayment at the time of death; it should not be considered property for IHT purposes. However, as HMRC’s guidance in the Inheritance Tax Manual (IHTM28330) confirms, income tax overpayments owed at the date of death are treated as property passing on death if there is a contingent right to them, which was the case here. The son’s amendment was rejected, as section 5(1) of the Inheritance Tax Act 1984 defines property broadly, including choses in action like tax repayment claims, which must be valued at the time of death. What Did the Tribunal Decide? The FTT sided with HMRC, ruling that the right to the tax rebate for deceased person was indeed part of Eunice’s estate. The tribunal clarified that, while the tax rebate would only be paid after her death, the right to receive that payment existed before her passing and was therefore an asset of the estate. According to the FTT, the term “property” under the Inheritance Tax Act (IHTA) includes all forms of rights and interests, including those that may be payable in the future. Therefore, the right to a tax rebate is considered property for inheritance tax purposes, even though it would not be paid out until a later date The FTT also rejected the appellant’s argument that the tax rebate was merely a “hope” and not a legally enforceable right. The tribunal found that the right to the repayment existed at the moment of Eunice’s death and became part of the estate, subject to inheritance tax. Why Executors Should Include the Tax Rebate Owed to Deceased Estate in the IHT Return This ruling serves as an important reminder to executors and administrators of estates that any tax rebates owed to a deceased individual should be included in the IHT return. Even if the rebate is not payable until a later date, the right to receive it exists as an asset of the estate. When valuing the estate for inheritance tax purposes, executors must properly account for any expected tax refunds or rebates. It’s also worth noting that the FTT’s decision reinforces the broad definition of “property” under inheritance tax law, which includes not only physical assets like cash or property but also rights and claims, such as the right to receive a tax rebate. How Can Apex Accountants Help With Inheritance Tax and Estate Administration? At Apex Accountants, we offer expert services to help you manage the complexities of inheritance tax and estate administration. Whether you are an executor or a family member handling an estate, we can guide you through the process with clarity and precision. Our services include: Inheritance Tax Planning: We offer advice on how to reduce inheritance tax liabilities and ensure tax-efficient estate planning. Estate Administration: We assist executors with all aspects of managing an estate, ensuring that all assets, including tax rebates, are properly included in the IHT return. Tax Rebate Advice: We provide expert guidance on how income tax rebates should be treated in an estate and help ensure they are correctly included for inheritance tax purposes. Final Tax Returns: Our team can assist with filing final tax returns for deceased individuals, including any income tax rebates due. Asset Valuation: We ensure all assets, including intangible rights like tax rebates, are properly valued as part of the estate. For expert advice on managing tax rebates in estates and navigating inheritance tax, contact Apex Accountants today. Our experienced team is ready to assist you with all aspects of estate administration. Book your free consultation today! FAQs What Happens to Tax Rebates Owed to a Deceased Person? Tax rebates owed to a deceased individual form part of their estate for inheritance tax purposes, even if the payment is made after death. Should Tax Rebates Be Included in an IHT Return? Yes, any tax rebates owed to the deceased at the time of death should be included as assets in the IHT return. Are Tax Rebates Considered Property for Inheritance Tax Purposes? Yes, the right to a tax rebate is considered property for inheritance tax purposes, as it is a legally enforceable right. Can a Tax Rebate Be Excluded From an Estate for Inheritance Tax? No, unless there is a specific exemption. The right to a tax rebate is considered part of the estate and should be included in the inheritance tax calculations. How Can I Reduce Inheritance Tax Liabilities on an Estate? Strategic planning, such as gifting during the deceased’s lifetime, using trusts, and taking advantage of exemptions, can help reduce inheritance tax liabilities.
