Closing the tax gap, using Companies House data to support your business, plus tax returns for side hustles
Today we’re talking tax – how the government are planning to recoup £7.5 billion in unpaid tax, how accessing data via Companies House could help you to grow your business, and tax rules around having additional jobs. Read on to find out more!
Government Targets £7.5 Billion in Unpaid Tax – Focus on Business Compliance
The government has announced plans to raise an additional £7.5 billion by stepping up efforts to close the tax gap – the difference between the tax HMRC expects to collect and what is actually paid.
Figures published on 19 June show that £46.8 billion in tax went unpaid in the 2023-24 tax year. That’s 5.3% of the total tax due, slightly up from previous estimates.
Small Businesses Under the Spotlight
The data reveals that small business non-compliance accounts for 60% of the total tax gap, with Corporation Tax accounting for 40%. The most common causes are:
- Failure to take reasonable care (31%)
- Error (15%)
- Tax evasion (14%)
As a result, HMRC is intensifying compliance work – particularly within the small business sector – with a clear aim to improve accuracy, reduce mistakes, and clamp down on evasion.
What’s Changing?
The government has committed £1.7 billion over four years to fund more HMRC staff, including 5,500 compliance officers and 2,400 debt management roles.
Meanwhile, HMRC’s Making Tax Digital (MTD) programme continues to expand. It’s expected to generate £4 billion in additional VAT over the next four years by reducing errors. MTD for Income Tax comes into force from April 2026, and this is forecast to raise £1.95 billion in additional tax revenue by 2030.
What This Means for Your Business
With HMRC stepping up compliance efforts, now is the time to make sure your business accounts and tax affairs are in order.
One of the biggest changes on the horizon is Making Tax Digital (MTD) for Income Tax, due to start in April 2026. Initially, it will affect anyone who earns over £50,000 from self-employment or property income. However, in future years this limit will drop to £30,000 and then £20,000 by April 2028.
Under MTD, you’ll need to:
- Keep digital records of your income and expenses
- Submit quarterly updates to HMRC using MTD-compatible software
- File an annual final declaration
This is a major shift in how tax is reported – and planning ahead is essential to avoid disruption.
While HMRC says the majority of taxpayers pay what they owe, the pressure is clearly growing to close gaps and improve standards – particularly among smaller businesses.
If you’re unsure whether your current systems and processes meet HMRC’s expectations or want to get ahead of the MTD changes coming in 2026, please give us a call. We would be happy to help you!
See: https://www.gov.uk/government/news/tax-gap-estimated-at-53
Ten Years of Free Companies House Data – and How It Can Help Your Business
Last week marked ten years since Companies House made all digital company data freely available through its online service on GOV.UK. Since launching on 22 June 2015, the Find and Update company information tool has become one of the UK’s most heavily used public data services, with over 16.5 billion searches carried out in 2023-24 alone.
The data includes details on every UK-registered company – such as directors, financial filings, registered addresses, filing history, and company status. It’s used every day by lenders, investors, regulators, law enforcement, and businesses of all sizes to make informed decisions.
How This Data Can Help You Run and Grow Your Business
As your accountant, we regularly use Companies House data behind the scenes – but it’s also a powerful tool that you can use to support growth, reduce risk, and manage your operations more effectively.
Here are some practical ways it can benefit your business:
- Check who you’re dealing with: Before working with a new supplier, customer, or partner, use Companies House to confirm their legal status, directors, and trading history. It’s a simple step that can help protect your business from fraud or unreliable firms.
- Monitor competitors or industry trends: You can view company filings, changes in directorship, or new company formations in your sector – useful for keeping an eye on competitors or spotting new opportunities.
- Improve credit control and chase debts: Knowing who legally controls a business (and where they’re registered) can help if you need to follow up on unpaid invoices. It’s also useful in preparing for legal action or insolvency procedures.
- Support funding and investment conversations: When applying for finance or pitching to investors, it helps to know how your business compares to others in your industry. Accessing competitor filings can provide useful benchmarks on growth, structure, or cash flow trends.
- Stay compliant: Seeing how other businesses meet their statutory filing requirements can help you understand what’s expected – and avoid late fees or damaging your reputation.
- Spot opportunities to expand: Looking at newly registered businesses in your area or sector can help you identify potential customers, partners, or gaps in the market.
What’s Next?
The data is about to become even more reliable. New reforms under the Economic Crime and Corporate Transparency Act will introduce mandatory identity verification for directors and other checks to improve accuracy.
If you’re unsure how to make the most of this information or would like help integrating it into your processes – from onboarding checks to competitor tracking – let’s talk. We’re here to help you use every tool available to support the health and growth of your business.
See: https://www.gov.uk/government/news/companies-house-celebrates-10-years-of-open-data
Earning Extra Income? You Might Need to File a Tax Return – Here’s What to Know
If you earn extra income from a side hustle, you could be legally required to register for Self Assessment and complete a tax return – and it’s better to get ahead of it now, rather than wait until the January deadline.
The threshold is simple: if you earn more than £1,000 in a tax year from any additional income, you may need to file. This applies whether you’re selling online, renting out property, freelancing, creating content, dog walking, tutoring, or even trading cryptoassets.
Why Act
Now?
Filing early means you:
- Avoid the stress of the January rush
- Know what you owe sooner, so you can budget or set up a payment plan
- Get peace of mind by knowing your tax affairs are in order
You don’t need to pay immediately – the deadline for payment is still 31 January 2026 for the 2024-25 tax year – but getting your return done early gives you options and avoids surprises.
Many people running side hustles or earning income outside of employment simply don’t realise that tax rules apply – until it’s too late. If you’re unsure whether you need to file, or want help staying compliant, get in touch with us. We’ll guide you through what’s required and make it as straightforward as possible.
New Industrial Strategy to Slash Energy Bills and Back British Business
The UK Government has launched a major 10-year Industrial Strategy aimed at cutting business costs, creating over 1.1 million good skilled jobs, and making the UK a world leader in clean, competitive industries.
A headline measure is a plan to cut electricity bills by up to 25% for more than 7,000 energy-intensive businesses starting in 2027. Companies in sectors like automotive, aerospace, steel, and chemicals will benefit from new exemptions on energy levies and deeper discounts on electricity network charges.
These changes, delivered through the British Industrial Competitiveness Scheme and an expanded British Industry Supercharger, aim to reduce the UK’s industrial energy costs – some of the highest in the developed world – and help British firms compete globally.
The new strategy also tackles delays in connecting to the energy grid, with a Connections Accelerator Service expected to launch at the end of 2025 to speed up access for major investment projects.
What It Means for Businesses Looking to Grow
The strategy includes measures that could make a real difference for businesses with ambitions to scale up or modernise. These include:
- Technology adoption support for more than 5,000 firms through the Made Smarter programme
- A streamlined centralised Business Growth Service to make government support easier to access
- Simpler planning rules and faster grid connections for new sites and facilities
- Easier access to investment and skills training, including short courses in high-demand sectors
- Cutting red tape, reducing regulatory costs for businesses by 25%
These measures may help to give growth-focused businesses the tools and confidence to invest, hire and compete.
Targeted Investment Across Key Sectors
The strategy focuses on eight high-potential sectors, including clean energy, advanced manufacturing, digital and technologies, creative industries, and professional and business services, with tailored plans and billions in public and private investment.
While the Industrial Strategy has been welcomed by many business leaders, the strategy’s success will depend on how it is delivered and implemented across the coming decade.
See: https://www.gov.uk/government/news/powering-britains-future-electricity-bills-to-be-slashed-for-over-7000-businesses-in-major-industry-shake-up