In this edition of eNews, we look at the new service launched by Companies House that allows individuals to verify their identity through GOV.UK, the launch of the government’s new Cyber Governance package containing the Cyber Governance Code of Practice, recommendations on the upcoming Spending Review, and the cost of tax red tape on small businesses. There is also the business reaction to tariff negotiations and HMRC’s latest guidance for employers to update you on.
- Companies House begins to verify identities
- Business group welcomes launch of Code of Practice
- Spending Review ‘could brighten living standards outlook’
- Tax red tape costs small businesses nearly £25 billion a year
- Government taking right approach to tariff negotiations
- Latest guidance for employers
Companies House begins to verify identities
A new service has been launched that allows individuals to verify their identity directly with Companies House through GOV.UK.
The introduction of identity verification is one of the key changes to company law as part of the Economic Crime and Corporate Transparency Act 2023. Companies House has landmark new and enhanced powers to combat economic crime and boost economic growth.
More than six million people will be required to comply in the 12 months after identity verification becomes a legal requirement later this year. According to Companies House, identity verification will provide more assurance about who is setting up, running, owning and controlling companies in the UK.
Louise Smyth, CEO of Companies House, said: ‘Identity verification will play a key role in improving the quality and reliability of our data and tackling misuse of the companies register.
‘To save time later, we encourage directors, people with significant control of companies (PSCs) and those filing information with Companies House to verify their identity during the voluntary window.
‘We expect identity verification to become mandatory from Autumn 2025.’
Internet link: GOV.UK
Business group welcomes launch of Code of Practice
The Institute of Directors (IoD) has welcomed the launch of the government’s new Cyber Governance package, which is underpinned by the Cyber Governance Code of Practice.
The Code of Practice shows boards and directors how to manage digital risks and protect their business from cyber-attacks.
It outlines how directors can build resilience to a wide range of cyber risks across their organisation.
The Code, which has been co-designed with technical experts from the National Cyber Security Centre (NCSC) and a range of governance experts across industry, focuses on the actions senior leaders should take to govern cyber risks effectively within their organisation.
Erin Young, Head of Innovation and Technology Policy at the IoD, commented: ‘With cyber-attacks becoming more frequent, harmful and costly, cyber resilience is now a crucial boardroom responsibility. The new Cyber Governance Code of Practice provides practical guidance for boards and directors to effectively govern cyber risk and safeguard future growth.’
Internet link: IoD website
Spending Review ‘could brighten living standards outlook’
Think tank the Resolution Foundation has suggested that the government’s upcoming Spending Review could help to brighten the ‘bleak living standards outlook’ for low-to-middle income families.
The Foundation stated that the Review should prioritise spending on services they use the most, and that public services are crucial for quality of life. It said that household disposable income is expected to fall from 2025/26 but public service spending is rising by £18 billion a year in 2028/29 in real terms.
Public services are not, however, used equally across all households, the Resolution Foundation added. The allocation of extra funding between departments at the June Spending Review will determine which families benefit.
Emily Fry, Senior Economist at the Resolution Foundation, said: ‘Britain’s outlook for real disposable incomes is bleak, especially for poorer households after the benefit cuts announced at the Spring Statement. But the wider picture is more positive when the £18 billion boost to public services is included, as this will provide vital ‘in-kind’ benefits, particularly for poorer households.
‘A focus on improving families’ experience of a range of downtrodden services in the Spending Review could help boost quality of life for lower income families in a challenging living standards environment.’
Internet link: Resolution Foundation website
Tax red tape costs small businesses nearly £25 billion a year
Tax compliance costs the UK’s small businesses nearly £25 billion a year, according to recent research conducted by the Federation of Small Businesses (FSB).
The average small firm spends £4,500 and 44 hours a year on tax compliance, according to the research.
These annual totals could include time spent trying to contact HMRC, the cost of staff time used to manage compliance, and the price of software subscriptions and/or an external accountant, among other outlays.
Poor levels of customer service from HMRC are a recurring theme within the report, making tax compliance even more difficult and stressful for small businesses.
Tina McKenzie, FSB’s Policy Chair, said:
‘Tax compliance is far from a niche issue – it affects all five and a half million small businesses in the UK, costing them £4,500 and 44 hours a year each on average.
‘Collectively, that adds up to an annual total cost to the small business community of nearly £25 billion and over 240 million hours.
‘This is money and time that could be far, far better spent on building up their business, and the overall cost to the economy in terms of lost growth and wasted productivity is enormous.
‘Given the challenges facing the economy, and the need for growth, reducing the burden placed on small firms by tax compliance must be a priority – something the government has recognised as a priority for other regulators. HMRC should be included in the government’s drive to make regulation better support growth.’
Internet link: FSB website
Government taking right approach to tariff negotiations
The UK government is taking the right approach to tariff negotiations with the US despite downgrades to the economic outlook, says the British Chambers of Commerce (BCC).
The International Monetary Fund (IMF) has cut its growth forecast for global GDP to 2.8% from 3.3% this year.
The IMF predicts that the increase in tariffs and uncertainty will lead to a significant slowdown in global growth.
US growth is now expected to be 1.8% this year, down from the IMF’s estimate of 2.7% for the US in January. The forecast for the UK has also been cut from 1.6% to 1.1%.
William Bain, Head of Trade Policy at the BCC, said:
‘The downgrades for both the UK and global economy should come as no surprise to anyone.
‘Firms were already facing into a wall of higher domestic costs, including the national insurance rise, before the US unleashed its explosive tariff proposals.
‘But there is strong support for the government’s approach to continue negotiation and not immediately retaliate. The US has been open to talks and the signals that a deal can be reached are promising.
‘But talk of recession remains premature, it is by no means certain. The government must do all it can to boost business confidence by providing practical support around infrastructure projects, reforming business rates and cutting red tape in the right areas.’
Internet link: BCC website IMF website
Latest guidance for employers
HMRC has published the latest issue of the Employer Bulletin. The April issue has information on various topics, including:
- the new rates of the National Minimum Wage
- reporting expenses and benefits for the tax year ending 5 April 2025
- changes to notifications by employers to operate PAYE on a proportion of a globally mobile employee’s income and changes to Overseas Workday Relief.
- the tax treatment of double cab pickups.
- Capital Gains Tax — working out your adjustment for the 2024 to 2025 tax year.
Internet link: GOV.UK
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