Staying on top of accounting changes helps you manage costs, prepare accurate financial statements and remain compliant with UK regulations. As we enter the 2025/26 tax year, we have seen adjustments to tax allowances, reporting requirements and financial standards that will continue to influence the way businesses plan and perform. In this blog, we examine these updates to support your decision-making and maintain accurate records.
According to gov.uk, 890,684 companies were incorporated in the financial year ending 2024. This shows that many owners are looking to capitalise on fresh opportunities. Being aware of the latest changes in tax rules, Companies House requirements and accounting standards helps both new and established businesses keep ahead of compliance and future-proof their operations.
Below, we look at the key factors that have changed or will soon change. Each section breaks down the information in practical terms so that you can adapt your strategy as needed.
Updates and freezes to tax allowances and thresholds
One of the most significant decisions in 2025/26 is the continuation of the frozen personal allowance, which remains at £12,570. This applies to individual taxpayers, including directors who draw a salary from their limited companies. The higher-rate threshold remains at £50,270, and the additional-rate threshold is set at £125,140.
For corporation tax, the main rate of 25% continues to apply to businesses with profits above £250,000. Where profits fall between £50,000 and £250,000, a tapered rate applies. These figures help owners forecast their tax liabilities and plan their budgets, so it is wise to review profit projections in good time before the year end.
You may also need to account for changes in national insurance (NI). While the government has maintained some NI thresholds in line with previous policy, keep an eye on any announcements that could affect NI rates or reliefs. Each update can affect wages, dividends and director salary planning. We recommend scheduling time with an accountant for a thorough year-end review if you have not already done so.
Important HMRC developments
HMRC regularly updates its guidance and regulations. One example that still affects many businesses is the requirement to maintain digital records for VAT through Making Tax Digital (MTD). There are also plans to extend MTD to income tax (MTD IT), though the timeframe has shifted in recent years. As of now, it is set to impact certain self-employed individuals and landlords with income above the HMRC thresholds. These measures aim to reduce errors and encourage businesses to use secure, compliant software.
You can check the latest information on HMRC’s official page to see whether you or your clients must implement further digital processes soon. Regardless of the timeline, we suggest adopting digital bookkeeping early so that your records are always current and accurate. It also helps you quickly prepare returns without the stress of manual calculations at year end.
Revisions to Companies House requirements
Companies House has continued to update its processes for document filing, confirmation statements and the disclosure of beneficial owners. Recent changes mean that some filings are expected more promptly and businesses must ensure the accuracy of the information they provide. Late filings can trigger penalties and damage a company’s reputation.
If you have reorganised your company structure or introduced new shareholders, check whether you must update your persons with significant control (PSC) register or file additional paperwork. This is especially relevant if you have overseas owners or if you recently converted from another business model. Regularly reviewing Companies House updates helps avoid any oversights.
Changes in financial reporting standards
New or amended financial reporting standards can affect how you present your accounts. These standards often focus on revenue recognition, leases or asset valuations. While large publicly listed entities tend to follow International Financial Reporting Standards (IFRS), many private UK companies use FRS 102. If you apply these standards, keep an eye on any modifications that affect disclosures, measurement techniques or classification of financial items.
Even small updates can alter your balance sheet and profit and loss figures. You might need to present more details on certain transactions or consider new methods for valuing assets. We encourage you to schedule a conversation with our team at Thompson Wright if you think these revisions will apply to your business. We can help you produce financial statements that reflect any changes accurately and align with the 2025/26 rules.
Impact on strategic planning and compliance
Accounting changes do not exist in a vacuum. They affect strategic decisions about cashflow, investments and recruitment. If your corporation tax rate increases because your profits rise above certain thresholds, consider whether you want to reinvest some of that profit or distribute it to shareholders.
Also, reflect on how digitisation requirements have changed workflows. If you must comply with MTD or adopt other HMRC recommendations, factor in the cost of new software or training. Budget these expenses ahead of time so that you spread out the costs and avoid rushing your team.
For newly registered companies, reviewing accounting changes early can help you build robust systems from the start. Regular compliance checks make sure that you file the correct data, pay the right amount of tax and deliver any supplementary details that the law requires. This consistency helps build confidence among stakeholders and prevents penalties.
If you manage multiple business ventures or partnerships, you need to coordinate your accounting and reporting for each entity. Different thresholds, deadlines and reliefs may apply. Planning in advance avoids confusion when it is time to compile year end figures.
Practical tips for year-end readiness
- Review all thresholds: Confirm that your salary and dividend arrangements are consistent with the personal allowance and corporation tax bands. Use accurate forecasts to estimate your profits for the remainder of the 2025/26 tax year.
- Digitise where possible: Embrace cloud-based accounting platforms. This ensures that you are prepared for the next stages of MTD and minimises the risk of misplacing invoices or receipts.
- File on time: Log each important Companies House deadline in your calendar. Early filing shows reliability and leaves room to correct any minor errors without incurring fines.
- Stay informed on statutory changes: Accounting standards may change in ways that require additional disclosures or different asset valuations. Speak with a professional if you are unsure about how new standards affect your books.
- Link your business decisions to year-end data: Check if your planned investments, staff changes or expansions are still viable given the updated costs and regulations. Align your business strategy with any new obligations or opportunities introduced by the 2025/26 changes.
If you need further practical guidance on the steps above, you can read more about our services at Thompson Wright. We are here to assist with everything from meeting reporting deadlines to setting up digital bookkeeping systems that support your long-term objectives.
Statistics and findings
Data on newly formed companies shows that the UK business environment remains active. Many are capitalising on consumer demand and shifting market conditions, so the overall business population is likely to keep growing. Keeping your accounts in order is vital if you want to focus on productivity and growth instead of reacting to compliance concerns at the last minute.
HMRC has launched various campaigns to improve tax compliance, including harsher penalties for late or incorrect returns. From a practical point of view, this means keeping an accurate record of all transactions, saving digital copies of invoices and reconciling bank statements regularly.
Lean on us for guidance
Accounting changes have a direct effect on your future plans, compliance and financial performance. By understanding the updates to tax thresholds, HMRC guidance and Companies House regulations, you can manage your business with confidence and present clear, accurate financial statements at the end of the 2025/26 tax year.
If you want to explore the best way to handle any accounting changes, contact us today. We can discuss your objectives and provide tailored support that helps you position your business for future success.