From March 2025, traffic management companies working on construction projects have officially been brought under the Construction Industry Scheme (CIS). This update by HMRC recognises some traffic management operations as part of construction work that includes road closures, diversions, on-site safety and preparatory works. This is a fundamental shift for traffic-management businesses. The change introduces new compliance responsibilities and stricter reporting requirements, bringing greater accountability across the sector. Understanding the Construction Industry Scheme (CIS) The Construction Industry Scheme (CIS) regulates how payments are made to subcontractors working in the construction industry. Under the scheme, contractors must register with HMRC, verify subcontractors before making payments, deduct tax at source, and submit monthly CIS300 returns and remit taxes to HMRC by strict deadlines. Before the changes introduced in March 2025, traffic management companies operated outside these regulations, which sometimes led to unequal tax treatment and the misclassification of workers. The update closes that gap, bringing traffic management in line with other core construction activities and ensuring greater consistency across the sector. Traffic-Management Operations Included Within the Scope CIS According to HMRC’s internal manual CISR14305, traffic management services required to enable road works and other construction operations to be completed safely are now classed as preparatory or integral operations under the Construction Industry Scheme (CIS). Examples of traffic-management operations now covered by CIS include: Source: HMRC CISR14305 Manual Operations Explicitly Excluded (Remain Outside CIS) HMRC also lists some traffic management work that remains out of the scope of CIS: Source: GOV.UK – CIS Guidance VAT Domestic Reverse Charge From 1 March 2025, traffic management services within the Construction Industry Scheme (CIS) will also be subject to the Domestic Reverse Charge rules for VAT. This means that when one VAT-registered contractor supplies services to another, no VAT is charged on the invoice. Instead, the customer accounts for the VAT on their VAT return. However, when the service is supplied to an end user (like a developer, local authority, or business using the service themselves), the reverse charge does not apply. In that case, normal VAT rules apply, and VAT must be charged on the invoice to the end user. Source: GOV.UK – VAT Domestic Reverse Charge for Building and Construction Services Compliance and Potential Risk CIS compliance is not a simple responsibility. Returns must be submitted monthly, records must be maintained accurately, and tax deductions must be applied correctly. Any errors can lead to penalties, lost contracts, or reputational damage. Compliance responsibilities go beyond payment deductions and tax reporting. You are required to perform right-to-work checks, identity checks, IR35 status determination checks and meet data protection (GDPR) obligations. When subcontractor arrangements are not carefully examined, there’s a serious risk of misclassifying a worker as self-employed. How The Infinity Group Can Help The Infinity Group takes the administrative burden off your shoulders by managing the entire CIS process. We take care of everything from start to finish, ensuring complete accuracy and compliance. CIS Payroll Management Compliance Checks Subcontractor Support Secure Online Portal Our online portal provides complete visibility over payments, deductions, invoices and statements — helping contractors and subcontractors access all data easily, anytime. All data is processed in line with GDPR regulations, ensuring security, transparency, and reliability. With The Infinity Group, you can save time, minimise compliance risk, and focus on your core operations while we manage your CIS responsibilities accurately and efficiently. To find out more about our services, get in touch with our CIS team today. Conclusion: Adapting to the New Rules The inclusion of traffic management companies within CIS has changed the compliance requirements across the industry. Contractors must now ensure all processes are carried out in line with HMRC standards, as all the rules are already in effect. Infinity Group provides the guidance and support needed to manage this transition. We handle the complexity, reduce risk and give you peace of mind that your business is fully compliant. Contact our CIS experts today to ensure you are meeting every requirement under the new rules. Frequently Asked Questions (FAQs) Should traffic management companies be registered for CIS?Yes. Traffic management providers delivering services related to construction must be registered under the Construction Industry Scheme since March 2025. What happens if I do not adhere to CIS rules?Failure to comply may result in penalties from HMRC, loss of contracts and reputational damage. What is the procedure for verifying subcontractors under CIS?Before making any payments, subcontractors must be verified with HMRC to determine the correct tax deduction rate. We carry out this verification directly with HMRC and apply the appropriate rate of 20%, 30%, or 0% (gross payment status). This ensures all payments are fully compliant with CIS regulations. 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Identity Verification at Companies House: What UK Directors Need to Know
From 18 November 2025, verifying identity with Companies House will become a new legal requirement for all UK company directors and people with significant control (PSCs). This change, introduced under the Economic Crime and Corporate Transparency Act 2023, aims to improve corporate transparency and prevent UK companies from being used for fraud, money laundering, and other financial crimes. This is not a routine compliance step for directors and business owners. It represents a major change in UK company regulation. Verified identity will now be required when filing a confirmation statement or registering a new company. Without verification, filings may be rejected and penalties may be imposed. In serious or repeated non-compliance cases, Companies House can strike a company off the register, effectively dissolving it. At The Infinity Group, we see this reform as an opportunity for businesses to enhance transparency, strengthen governance, and build trust. Preparation should begin early, ensuring that identity verification is completed well in advance rather than left until the last moment, as delays could prove costly. Why the Government Is Introducing Identity Verification The UK is known for having a fast and simple system of setting up companies. While this has encouraged growth and new business, it has also left gaps that have been used for illegitimate purposes. Examples include: To deal with these risks, the government has introduced compulsory identity verification checks. The aims are to: This reform is not only about tackling financial crime, it also helps to strengthen the reputation of UK companies and build trust with legitimate businesses. Who Needs to Verify Their Identity You’ll need to verify your identity if you are: In most cases, you’ll only need to verify your identity once. You won’t need to repeat the process unless you are told to do so. Identity verification will also be required later for: For more detail, see the official guidance on when to verify. Key Deadlines and the Transition Period Verification becomes compulsory from 18 November 2025, marking the start of a 12-month transition period. It is not a single deadline. Instead, you’ll need to provide your personal code at the correct time, depending on your role and when your company filings are due. 1. Directors (or equivalent) 2. People with Significant Control (PSCs) 3. Authorised Corporate Service Providers (ACSPs) You can check your company’s deadline here: Check when your next confirmation statement is due. Failure to comply means the company cannot file its confirmation statement. This can quickly escalate to late filing penalties, reputational harm, and in extreme cases, compulsory strike-off. How to Verify Your Identity Verification can be done in two ways: GOV.UK One Login This is the most common option for UK-based directors and PSCs. The process is completed online, and individuals must provide identity documents, such as a UK photo driving licence, biometric passport (from any country), UK biometric residence permit (BRP), UK biometric residence card (BRC), or UK Frontier Worker permit (FWP). You’ll also need to provide your current address when verifying your identity and either sign in or create a GOV.UK One Login account. Once your identity is successfully verified, Companies House will issue you a personal code. This code is linked to all your company roles and must be used in all future filings. If you do not have these types of photo ID, you can check other accepted options here:Verify your identity for Companies House Authorised Corporate Service Provider (ACSP) Verification can also be carried out on behalf of directors and PSCs by authorised agents such as approved accountants, solicitors, and other professionals. This is a practical solution for overseas directors or those unable to complete verification online. The ACSP checks the identity documents, confirms the information, and arranges the issue of the personal code. Find out more here: https://www.gov.uk/using-your-gov-uk-one-login/proving-your-identity. Companies House will not accept identity documents by post or email. Verification can only be done online or through a registered service provider. Verification Process in Steps The process is designed to be straightforward: Details are available here: Find out about your Companies House personal code. Preparing Your Business Now The best way to avoid this is to be ready early rather than be in a hurry to meet deadlines. Practical steps include: Such measures will reduce the level of disruption and get your company back on schedule. Non-Compliance Consequences The new regime is mandatory. In case directors or PSCs are not verified: The results are severe. Checking is no longer an option; it is now a requirement before one can conduct business in the UK. Staying Up to Date The identity verification is one of the wider reforms to UK company law. Additional changes will also come into effect, which include limited partnerships, corporate directors, and members of LLPs. In order to remain well informed on your company: How The Infinity Group Can Help At The Infinity Group, we keep businesses informed about the latest updates in laws and regulations in the UK. We provide timely updates, practical guidance, and direct you to the appropriate official resources when needed. To ensure you remain compliant and up to date with legal changes, subscribe to our newsletter. Frequently Asked Questions Do overseas directors need to verify?Yes. Every director and PSC must verify, even if they are based outside the UK. Can one personal code be used for multiple companies?Yes. The same personal code applies to all your roles, but each company must link it individually. What if my identity documents do not match the Companies House register?You must correct the register before completing verification. Any mismatch will prevent the process being completed. Some corrections may require a paper form. Is verification a one-time process?Yes. Once completed, the verification does not need to be repeated, but your personal code and verification statement will be required whenever you take on a new role. Can The Infinity Group act as an ACSP?Yes. The Infinity Group is authorised to verify identities on your behalf, providing a convenient solution for both UK-based and overseas stakeholders. Subscribe
Tackling non compliance in Umbrella market – Understand the upcoming changes in 2026
Before we proceed: If you are a construction company processing subcontractors through the Construction Industry Scheme (CIS), you can relax, this change does not affect you. It only applies to umbrella companies operating PAYE payroll. As companies deal with the complexities of payroll, staying up to date with UK tax policies is critical to avoid consequences and ensure compliance. A huge change is coming in 2026 that will impact umbrella businesses, recruitment agencies, and end clients who rely on umbrella payroll services. From April 2026, a shift in legal liability will require businesses supplying workers in the umbrella supply chain to take duty for making sure PAYE (Pay As You Earn) tax and National Insurance Contributions (NICs) are properly deducted, even when using an umbrella company. Here’s everything you need to understand about those modifications and how agencies can stay compliant. Background to the 2026 Umbrella Payroll Liability Changes Currently, many UK businesses use umbrella companies to manage the employment of temporary workers, particularly in industries such as construction. These umbrella companies are responsible for handling payroll, ensuring that PAYE and National Insurance (NI) contributions are deducted and submitted correctly. However, from April 2026, this obligation will no longer rest solely with umbrella companies. The new rules will shift legal responsibility for payroll taxes to the recruitment agency, or to the end client in cases where no agency is involved. This means agencies operating within the labour supply chain can no longer outsource the legal liability for PAYE tax and NIC deductions. The UK government introduced this change after discovering that a significant number of umbrella companies had been failing to meet their tax obligations. HMRC reported that around 275,000 workers were engaged through non-compliant umbrella companies in 2022/2023, leading to losses of approximately £500 million in tax avoidance. The government aims to tackle tax avoidance and ensure businesses operate with full transparency, while also protecting workers from unexpected and often substantial tax bills. Why Are These Changes Necessary? The shift in legal liability for payroll tax obligations is a direct response to the major issues related to non-compliant umbrella companies. For years, umbrella companies have been used by recruitment agencies and businesses to facilitate payroll processing for temporary workers. However, a significant number of these umbrella companies have failed to meet the necessary HMRC tax guidelines, with some becoming involved in tax avoidance schemes. These failures have often led to individuals receiving unexpected, large tax bills, leaving them at risk of financial difficulty. These changes are designed to close the current tax gap, prevent tax avoidance, and protect workers from being unknowingly involved in such schemes. By moving the responsibility to account for PAYE onto recruitment companies and end clients, the government ensures that businesses take more control over their supply chain and avoid relying on non-compliant intermediaries. This legislation aims to improve compliance across the sector, providing workers with more protection and ensuring that taxes are paid correctly and on time. How Will the 2026 Changes Affect Businesses? From April 2026, businesses must be prepared for significant changes in how payroll is managed. Recruitment agencies will no longer be able to outsource their legal liability for tax deductions when using umbrella companies. If an umbrella company is involved in the supply chain, the responsibility will fall on the recruitment agency to ensure the correct tax deductions are made. In cases where no agency is involved, the end client will bear full responsibility for ensuring that tax deductions are made and submitted to HMRC. It is important to note that these changes do not affect businesses operating under the Construction Industry Scheme (CIS). Businesses can still use umbrella companies for payroll, but they will no longer be able to shift the legal liability. Any shortfalls in PAYE or NIC compliance through umbrella arrangements will now make the recruitment agency or end client directly accountable. Key Changes for Businesses: While umbrella companies can still process payroll and make deductions, agencies and end clients can no longer outsource the legal responsibility. They must carry out due diligence and ensure the umbrella company is compliant with HMRC rules — protecting both the business and the worker. How the Infinity Group Assists You in Remaining Compliant Infinity Group is a payroll specialist and is equipped to provide all kinds of payroll services such as CIS payroll services to construction companies and umbrella payroll solutions to many types of industries. Our team can assist your business in remaining ahead of the changes in payroll liability laws and ensure compliance. We provide: You also won’t risk missing important tax updates with us, as our team combines expertise with real-time monitoring. We handle every calculation and submission with precision, ensuring your business is always audit-ready and protected from penalties. How Businesses Can Prepare for the 2026 Umbrella Payroll Changes As the deadline for the new umbrella payroll regulations approaches in April 2026, businesses must begin assessing their payroll and supply chain operations to ensure they are compliant with the new regulation. We recommend the following steps: It is important that businesses act proactively to ensure that by the time the changes come into force in 2026, they are well-positioned. Delaying this process could result in fines, legal issues, or disruption to your workforce. Conclusion The 2026 reforms of umbrella payroll liability are a transfer of the PAYE and NIC tax deductions liability. These changes can be addressed without fear by using expert payroll solutions provided by Infinity Group, ensuring that UK tax regulations are not violated. By collaborating with us, you will be able to protect your business, shield your workers from any tax surprises, and avoid the risks of working with non-compliant umbrella companies. Don’t wait until the last minute. Review your payroll system now to ensure that your business is ready for the new rules. Talk to The Infinity Group today to inquire about how we can help your business stay compliant with payroll rules without limitations. 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How Employers Can Prepare for the Payrolling Benefits in Kind (PBIK) Mandate from April 2027Â
Payrolling Benefits in Kind (PBIK) refers to the process of taxing noncash employee perks such as company cars or private health insurance through payroll in real time instead of reporting them annually via P11D forms. In its April 2025 Employer Bulletin, HMRC announced that PBIK will become mandatory from April 2027, phasing out most P11D submissions. With less than two years to prepare, employers must act now to streamline payroll systems, avoid penalties, and ensure a seamless transition to real-time reporting. The implementation of the measure has been delayed from April 2026 to April 2027. However, employers still have the option to voluntarily payroll benefits in kind prior to the new deadline. What Are Benefits in Kind? Benefits in Kind (BiK) are non-monetary perks provided to employees, these benefits have a monetary value and are considered taxable, even though they are not paid as salary or wages. Common examples include: Traditionally, employers reported these benefits annually using P11D forms, with tax adjustments made through employee tax codes. Payrolling simplifies this by taxing BiK in real time through monthly payroll, improving accuracy and reducing year-end admin. What’s Changing in April 2027? HMRC’s Spring 2025 updates confirm that PBIK will be mandatory from April 2027, eliminating the need for most P11D forms. Key changes include: This shift aligns with HMRC’s digital-first strategy to reduce errors and streamline compliance. Employers are encouraged to review the HMRC payrolling guidance for specifics. Why Employers Should Act Now? Early preparation offers critical advantages: The April 2025 Employer Bulletin underscores that proactive employers will face fewer compliance risks. Steps to Start Preparing for PBIK 1. Audit Current Benefits Identify which BiK you provide and confirm they’re eligible for payrolling (e.g., cars, medical insurance). 2. Update Payroll Software Ensure your software supports real-time payrolling of BiKs. HMRC-approved options are listed here. 3. Register with HMRC Opt in for voluntary payrolling via your PAYE Online account before April 2027. 4. Train Teams Provide training for payroll and HR staff on calculating and reporting BiK values accurately 5. Communicate with Employees Explain how payrolled benefits will appear on payslips and affect their tax deductions. 6. Common Challenges & Solutions For tailored support, consult The infinity Group – payroll advisor. The April 2027 PBIK mandate is a pivotal shift in UK payroll compliance. By reviewing benefits, registering early, and leveraging HMRC’s voluntary trial window, employers can ensure a stress-free transition. Don’t wait, start preparing today to stay ahead of the curve. Subscribe to Our Newsletter for Weekly Updates!
Understanding the New Employers National Insurance Thresholds for 2025
What Employers Need to Know? Staying compliant with the latest payroll regulations is crucial for UK employers and one of the biggest updates this tax year comes in the form of changes to National Insurance (NI) thresholds. As announced in HMRC’s April 2025 Employer Bulletin, adjustments to the Class 1 National Insurance thresholds have officially come into effect. These changes directly impact how much both employees and employers contribute to National Insurance, affecting everything from payroll processing to employee take-home pay. Here’s what you need to know. What Are National Insurance Thresholds? National Insurance contributions (NICs) are mandatory payments deducted from employees’ wages and paid by employers to fund key public benefits, including the NHS, pensions, and unemployment support. The thresholds are specific income levels that determine how much NI must be paid. For employers, it’s critical to understand these brackets because they dictate: For 2025–2026, these changes apply to Class 1 contributions, which are the most relevant for standard employer-employee relationships. What’s New in April 2025? From 6 April 2025, the following updated thresholds apply to Class 1 NICs: Type of Threshold Weekly Rate Monthly Rate Lower Earnings Limit (LEL) Employees do not pay National Insurance but get the benefits of paying ÂŁ125 ÂŁ533 Primary Threshold (PT) Employees start paying National Insurance ÂŁ242 ÂŁ1,048 Secondary Threshold (ST) Employers start paying National Insurance ÂŁ96 ÂŁ417 Upper Earnings Limit (UEL) All employees pay a lower rate of National Insurance above this point ÂŁ967 ÂŁ4,189 (Source: Rates and allowances: National Insurance contributions – GOV.UK) Key points to note: Implications for Employers These updated thresholds mean: If using manual systems, employers must be especially careful to input the new rates precisely. Failure to comply may result in penalties or incorrect deductions. Compliance Tips and Best Practices To navigate these updates efficiently: Communicating Changes to Employees While these updates primarily affect payroll departments, clear communication with staff is important. Employees might notice slight changes in their NI deductions. Here’s how you can help: Transparent communication builds trust and helps staff understand their take-home pay. Conclusion The 2025–26 National Insurance threshold updates are an essential consideration for UK employers. By updating payroll systems, training teams, and communicating changes effectively, you can ensure smooth compliance and avoid errors. Stay informed by subscribing to the HMRC Employer Bulletin and consult your payroll advisor or accountant if you’re unsure how these updates impact your business. Subscribe to Our Newsletter for Weekly Updates!
How to fill in a self-assessment tax return: 2025 Guide
Table of Content: What is a Self-Assessment Tax Return? A Self-Assessment tax return is an annual declaration to HM Revenue & Customs (HMRC) that allows individuals to report their income, gains, and expenses to calculate how much tax they owe for the year. While many taxpayers have taxes automatically deducted through PAYE (Pay As You Earn) from salaries or pensions, Self-Assessment is required for those with additional or untaxed income streams. This system ensures HMRC collects the correct amount of tax on income such as: You may also need to file a Self-Assessment return if you: The process involves submitting either a paper form or, more commonly, an online tax return through HMRC’s portal. Once filed, HMRC calculates your final tax liability or refund based on the information provided. Why Self-Assessment Tax return is important? Filing accurately and on time ensures compliance with tax laws, avoids penalties, and helps you claim legitimate deductions. Missing the deadline or underreporting income can trigger fines, interest charges, or even HMRC investigations. For first-time filers, HMRC provides tools like the Self-Assessment registration checker to confirm whether you need to submit a return. Who Needs to File a Self-Assessment Tax Return? Over 12.1 million individuals were required to submit a Self-Assessment tax return for the previous tax year. While self-employed workers must file annually to pay income tax and National Insurance on their profits, many others also fall under this requirement. You must complete a Self-Assessment return if you: Some individuals must file a return and pay via PAYE, such as those with private pensions, investment income, taxable capital gains, or a side business alongside employment. Limited company directors must also submit both a personal tax return and a company tax return. Will HMRC Send Me a Tax Return? HMRC typically issues a tax return if you: However, do not wait for HMRC to contact you if you know you owe tax. It is your legal responsibility to declare all taxable income annually. If HMRC sends you a tax return, you must submit it – even if you owe nothing. How to Register for Self-Assessment ? If you’re filing a tax return for the first time, you must register with HMRC’s Self-Assessment system. Follow these steps carefully to ensure a smooth process: 1. Register with HMRC 2. Receive Your Unique Taxpayer Reference (UTR) 3. Activate Your Government Gateway Account 4. Complete Your Account Setup 5. Submit Your Tax Return ⚠️ Important Notes: Struggling with your tax return? Avoid mistakes and penalties by letting our experts handle it for you. Book a free consultation today! How to Fill in a Self-Assessment Tax Return Filing your Self-Assessment tax return requires careful attention to detail, whether you choose the online or paper method. Here’s a breakdown of the process and key information you’ll need: Online vs. Paper Returns Simplified SA200 Form: Key Details to Include 2. Deductions & Reliefs 3. Special Circumstances Documents to Prepare Before starting, gather: Mandatory: Additional (If Applicable): Pro Tip: Double-check figures against your records to avoid errors. If filing on paper, allow extra time for postal delays – HMRC must receive your return by 31 October to avoid penalties. By staying organized and methodical, you’ll streamline the process and reduce the risk of mistakes. Self-Assessment Tax Return Deadlines Understanding Self-Assessment deadlines is critical to avoiding HMRC penalties and staying compliant with HMRC. Here’s what you need to know: Tax Year Basics: Self-Assessment tax calculations are based on the UK tax year, which runs from 6 April to 5 April of the following year. Your tax return and payment for the 2024-25 tax year are due in 2026, as outlined below. Key Deadlines for 2024/25 Tax Returns Date What’s Due Consequences of Missing It 5 October 2025 Register for Self-Assessment (first-time filers) ÂŁ100 penalty for late registration 31 October 2025 Submit paper tax returns Immediate ÂŁ100 fine 31 January 2026 – Submit online tax returns – Pay 2024/25 tax owed – ÂŁ100 fine + daily penalties – Interest on unpaid tax Important Notes Why These Dates Matter Pro Tip: Even if you can’t pay in full by 31 January, submit your return anyway to avoid the ÂŁ100 filing penalty. Use HMRC’s Time to Pay scheme if struggling with payments. Mark these dates in your calendar and set reminders – HMRC does not offer extensions! Avoid Late Filing Penalties Did you know a late tax return can cost you ÂŁ100 or more? Don’t risk fines – let us help you submit on time.Chat with a tax expert now! How Do Self-Employed Tax Returns Differ? Self-employed tax returns require careful attention to income, expenses, and unique tax rules that differ from standard employment. Here’s what sets them apart: 1. Tax Period: Accounting Dates vs. Basis Periods 2. Payment Schedule: Overlap Profits Self-employed tax payments follow a unique timeline: 3. Payments on Account After your first year, HMRC requires advance tax payments for the current tax year: Key Notes: Why This Matters Pro Tip: Use accounting software to track profits, expenses, and overlap relief. If closing your business, claim overlap relief to recover overpaid tax. By understanding these rules, self-employed taxpayers can avoid surprises and optimize their tax strategy. Why Do I Have to Make Payments on Account? + Payments on account spread your tax bill across two instalments to avoid a single large payment. However, your first year can be challenging: On 31 January 2026, you’ll pay: 2024-25 tax owed (final bill) 50% of your 2025-26 estimated tax (first payment on account) What If My Tax Bill Exceeds My Payments on Account? + If your actual tax exceeds estimates: Pay the remaining balance (a “balancing charge”) by 31 January. Example: 2023-24 Tax: ÂŁ10,000 → 2024-25 payments: ÂŁ5,000 x 2 2024-25 Actual Tax: ÂŁ12,000 31 Jan 2026: ÂŁ2,000 (balance) + ÂŁ6,000 (2024-25 first payment) = ÂŁ8,000 31 Jul 2026: Second payment of ÂŁ6,000 If your tax is lower: Receive a refund. Future payments adjust downward. Are Payments on Account Compulsory? + You don’t need to pay if: Your
The Ultimate Guide to Self Assessment Tax Returns in the UK
Self Assessment tax returns are an essential responsibility for UK residents with untaxed earnings. Understanding the process is crucial for anyone earning additional income or working as self employed. Who Needs to File a Self Assessment Tax Return? You must file a Self Assessment tax return if you: Important Deadlines to Remember Avoid penalties by marking these key dates on your calendar: Penalties for late submissions start at ÂŁ100 and can increase if delays persist. How to File Your Self-Assessment Tax Return: A Step-by-Step Guide 1. Register for Self Assessment If this is your first time filing, register with HMRC to receive your Unique Taxpayer Reference (UTR) number. You can register online using the Government Gateway. 2. Gather Necessary Documents Ensure you have the following: 3. Log in to HMRC Online Services Use your Government Gateway ID and password to access the Self Assessment Tax Return form. 4. Complete the Tax Return Fill in all sections accurately according to your sources of income. Errors may trigger an HMRC investigation. 5. Submit Your Return Review all details before submitting. You can amend your return for up to 12 months after the deadline if needed. To make changes, log into your HMRC account, select your submitted return, and follow the instructions to modify any errors. 6. Pay Any Tax Owed You can pay via: Allowable Business Expenses for the Self-Employed Understanding which expenses you can claim is crucial for accurately calculating your taxable profit. Allowable expenses are costs that are essential and exclusively incurred for business purposes. Here are some key categories: 1. Office, Property, and Equipment Costs 2. Travel Expenses 3. Clothing Expenses 4. Staff Expenses 5. Reselling Goods 6. Legal and Financial Costs 7. Marketing and Training 8. Use of Home as an Office Note: You cannot claim personal expenses, fines, or entertainment costs as business expenses. Common Mistakes to Avoid Expert Assistance with Self-Assessment The Infinity Group provides expert tax and accounting advisory services to simplify the Self Assessment Tax Return process. Their team offers personalized advice to ensure your tax return is accurate and compliant with HMRC regulations. They can help maximize deductions, avoid penalties, and manage expenses effectively. Additionally, individuals can seek assistance from HMRC’s helpline or independent accountants if they need further guidance. Visit their website for more information on their financial solutions. Final Thoughts Self Assessment tax returns may seem complex, but with proper preparation, they become manageable. Stay informed, meet deadlines, and ensure accuracy to avoid unnecessary penalties. FAQs 1. What happens if I miss the Self Assessment deadline? An automatic ÂŁ100 fine applies if you miss the deadline, with additional penalties if delays continue. Unpaid taxes may also accrue interest. 2. Can I amend my tax return after submission? Yes, you can correct your tax return up to 12 months after the deadline. Log into your HMRC account to make necessary amendments. 3. What expenses can I claim as a self-employed person? You can claim expenses directly related to your business, such as office supplies, travel costs, and business utilities. Refer to the list of allowable expenses above. 4. How can I calculate my tax? Once you submit your return, HMRC will notify you of the tax amount due. You can also check your online account for details. 5. Do I need to keep records of my tax return? Yes, HMRC may request your financial records at any time, even after submission. It is advised to keep records for at least five years. Subscribe to Our Newsletter for Weekly Updates!
Right to Work Checks 2025: Updates and Employer Compliance
The UK government will introduce significant updates in 2025 to the right-to-work checks. These updates are aligned with digital transformation and include stricter compliance measures. Employers need to be informed in order to avoid civil penalties and ensure compliance with the law. This document details the main changes, employer responsibilities and legal consequences. Updates to 2025 1. Decommissioning Biometric Cards Biometric Residence Permits and Biometric Resident Cards (BRC) no longer serve as valid proof of the right to work. People who used to rely on physical immigration documents will need to create a UKVI Account in order to access their E-Visa. This will be their new method of right-to-work confirmation. Employers are required to use the Home Office’s online checking service in place of physical BRPs/BRCs. 2. Criminal Liability & Increased Civil Penalties Civil penalties of up to ÂŁ60,000 for each violation can be imposed if the right-to-work check is not conducted properly. Employers may also be subject to criminal liability for hiring individuals who are not legally entitled to work in the UK 3. Sponsor License Holders Businesses that hold a sponsor license are required to exercise greater diligence. Non-compliance could result in penalties such as: 4. Visa Expiry Checks and Follow-Up Checks Before an employee’s permission to work expires, employers must perform a follow-up check. It is important to do this in order to keep the statutory exemption from liability for hiring an illegal worker. In 2025, the grace period for verifying visa expiry has been reduced significantly. This makes timely follow-ups crucial for compliance. 5. Statutory Defence & Legal Protection Employers are protected from liability if they comply with the Prevention of Illegal Working Legislation. A statutory defense is only available when the employer performs the right-to-work check before employment begins. 6. Acceptable documents for manual checks Manual checks of right-to-work are still allowed but for British and Irish citizens. Acceptable documents are a valid British passport, an Irish passport, or a combination that proves the individual’s right to work in the UK. The Home Office’s latest guidance must be followed by employers when conducting these checks. 7. The Ukraine Permission Extension Scheme The Ukraine Permission Extension Scheme will officially open on February 4, 2025. This scheme allows Ukrainian nationals who qualify to extend their stay in the UK. Employers should be aware of the scheme and conduct checks on employees’ right to work in accordance with it. 8. Remove COVID-19 Temporary Adapted Checks Has withdrawn all temporary adjustments made to the right-to-work checks during the COVID-19 Pandemic. Employers are now required to follow the standard procedures for right-to-work verification, including document checks in person where applicable. Expert Compliance & Workforce Solutions The Infinity Group helps businesses comply with the right-to-work laws, employer obligations and sponsor license requirements. Our expert guidance will help you navigate Home Office regulations efficiently, avoid penalties and maintain a legally secure workforce. FAQs Employers can still manually check the right-to-work documents. Only British and Irish citizens are allowed to undergo manual checks. All other workers are required to be verified by the Home Office Online System. What are the penalties if you fail to pass a right-to-work check? Non-compliance with the law can lead to: How does the Home Office Online Checking System work? Employers can verify the employee’s work status by using a code generated via the Home Office site. What should an employer do when a visa expires? Employers must conduct follow-up checks on the right to work before an employee’s current authorization to work expires. It is important to do this in order to keep the statutory exemption from liability for hiring an illegal worker. Do remote workers require right-to-work verification? Yes. All employees who work for UK-based companies must go through a right-to-work check before beginning employment, regardless of their location. Subscribe to Our Newsletter for Weekly Updates!
Common CIS registration mistakes: Avoid these costly errors
Construction Industry Schemes (CIS) are a mandatory compliance requirement in the UK for all contractors and subcontractors. Many businesses in the UK make costly mistakes during the CIS Registration process, which can lead to fines and payment delays. HMRC may even investigate. We highlight the most common CIS mistakes to help you avoid penalties and stay compliant. Failure to register for CIS in time The most common mistake made by CIS contractors is to not register before beginning construction. Before making payments, contractors must register with HMRC. They also need to complete the CIS Verification Process for subcontractors. Subcontractors that do not register could face CIS tax deductions up to 30% instead of the usual 20%. What to do: Registration incorrect or incomplete Incorrect or incomplete information provided during CIS registration could lead to delays in processing and possible HMRC scrutiny. Including incorrect National Insurance numbers (NI), business details or tax references are common errors. What to do: Misclassification of workers as contractors or subcontractors A CIS compliance issue can arise if you don’t understand the difference between a subcontractor and a contractor. Subcontractors are paid after deductions for CIS tax. Contractors must deduct CIS tax. What to do: Failure to deduct the correct tax rate Contractors who do not check the CIS registration status of subcontractors may end up applying the wrong tax rate and causing overpayments or payments. What to do: Neglecting monthly CIS returns Contractors are required to submit monthly CIS reports to HMRC detailing all payments to subcontractors, tax deductions and other information. Late submissions can result in CIS fines and penalties, as well as investigations. What to do: Overlooking CIS Gross Payment Status Eligibility Some subcontractors qualify for the gross payment status. This allows them to receive their full payment without CIS tax deductions. If you do not meet the eligibility criteria, this status can be revoked or rejected. What to do: Ignoring CIS penalties and compliance checks Penalties can be imposed for non-compliance, ranging anywhere from fines for late filing to HMRC investigations. Warning letters are often ignored by businesses, which can exacerbate their CIS compliance problems. What to do: Right-to-Work Checks: What You Should Not Miss Contractors must perform right-to-work checks as part of CIS registration to verify that subcontractors have the legal authority to work in the UK. If these checks are not performed, penalties, fines and legal issues can result. What to do: Final Thoughts It is important to avoid common CIS mistakes in order to ensure compliance, minimise tax deductions and prevent costly CIS fines and penalties. Contractors and subcontractors who stay informed and follow best practices can streamline the CIS Registration process in the UK. They can then focus on growing their business. Need Help with CIS Registration? Infinity Group can help you with every step. We will guide you to navigate CIS requirements and verify subcontractors. We will also conduct checks on right-to-work and ensure compliance with HMRC. Contact us for professional assistance! FAQs (Frequently Asked Questions) Who is eligible to register with CIS? Contractors and subcontractors who are involved in UK construction must both register with CIS. As part of the CIS process, contractors must verify subcontractors prior to making payments. 2. What happens if you don’t register? Subcontractors who fail to register may face higher CIS tax deductions (30% rather than 20%) and possible fines or penalties. 3. Can I claim back the CIS tax that I have overpaid? Subcontractors can reclaim CIS taxes they have paid in excess by submitting a return of tax at the end of the year. 4. How can I verify if a contractor is registered with CIS? Contractors can check the CIS registration of subcontractors through HMRC’s online CIS Verification process or by contacting HMRC. 5. How do I qualify for gross payment status? The gross payment status allows for subcontractors to be paid in full without CIS tax deductions. HMRC has set certain requirements for qualifying businesses, including turnover, tax compliance and business conduct. 6. Why is it important to check for right-to-work in CIS registrations? Checking the rights to work of subcontractors is essential to ensure they are allowed to work legally in the UK. These checks help businesses avoid penalties and fines for hiring unauthorised workers. Subscribe to Our Newsletter for Weekly Updates!
How to Create a Compliance Checklist for Your Business
Compliance is a critical aspect of running a business, ensuring adherence to legal, regulatory, and industry standards. A well-structured compliance checklist helps businesses avoid legal risks, maintain operational efficiency, and build trust with customers and stakeholders. In this guide, we’ll walk you through the steps to create an effective compliance checklist tailored to your business needs. Understanding Compliance Requirements Before creating a checklist, it’s essential to understand the different types of compliance your business must adhere to: Steps to Create a Compliance Checklist 1. Identify Legal and Regulatory Requirements Research and list all relevant local, national, and international compliance requirements. Consider consulting a legal expert to stay updated with evolving regulatory frameworks and compliance monitoring requirements. 2. Categorise Compliance Areas Break down your checklist into key categories such as: 3. Define Specific Compliance Actions For each category, define clear, actionable steps. Example: 4. Assign Responsibilities Ensure accountability by assigning compliance tasks to specific team members or departments. Use a compliance automation tool to track progress efficiently. 5. Implement Compliance Training Programmes Regular training keeps employees informed about new regulatory compliance standards. Conduct workshops and provide access to compliance manuals for effective policy adherence. Cover areas such as ethical standards, governance frameworks, and corporate policies. 6. Conduct Regular Audits and Assessments Schedule internal and external audit processes to evaluate compliance effectiveness. Identify gaps and take corrective measures promptly. Implement an audit trail to track compliance activities. 7. Update the Compliance Checklist Periodically Laws and industry standards evolve, so regularly updating your compliance checklist is crucial. Stay informed about new governance frameworks and industry standards to ensure ongoing compliance. Monitor regulatory fines & penalties to avoid non-compliance risks. Conclusion A well-maintained compliance checklist is essential for protecting your business from legal risks and ensuring operational efficiency. By following these steps and leveraging compliance automation tools, your business can stay compliant with ease. Regularly update your checklist to keep up with changing regulatory frameworks and industry standards. FAQs Why is compliance important for my business? Compliance ensures that your business adheres to legal and regulatory standards, reducing the risk of fines, penalties, and lawsuits. It also enhances your reputation, builds trust with customers, and promotes operational efficiency. What are the common compliance requirements for small businesses? Small businesses often need to focus on tax compliance, data protection (GDPR, CCPA), workplace safety (OSHA), risk management, and industry-specific regulations. The requirements vary based on your location, industry, and the size of your business. How often should I update my compliance checklist? You should update your compliance checklist regularly at least once a year or whenever there are significant changes in laws, regulations, industry standards, or governance frameworks. This ensures your business stays aligned with current compliance requirements. Can I automate compliance tasks? Yes, there are various compliance management tools and software available that can automate tasks such as monitoring regulations, tracking deadlines, generating reports, and conducting audits. Tools like ZenGRC, LogicGate, and Hyperproof can streamline compliance processes. What should I do if my business fails to comply with a regulation? If you discover non-compliance, it’s important to take immediate corrective action. This may involve conducting an internal audit, consulting with legal experts, implementing corrective measures, and notifying relevant authorities if required. Preventative measures, such as employee training, compliance culture development, and periodic audits, can help avoid future non-compliance. Subscribe to Our Newsletter for Weekly Updates!