For many business owners, stepping away from a company they have helped build is one of the most difficult decisions they will ever make. Here, Andrew Diver, Head of Tax at Beatons Group, explains that when the time does come – whether due to retirement, succession planning, or simply a desire to move on – there are practical and tax implications of exiting a company which need careful thought.

At the moment, we are seeing a growing number of shareholders considering their exit options. Rising tax rates and upcoming changes to capital gains tax are prompting many business owners to review their positions and decide whether now is the right time to act.

However, one of the challenges for shareholders in private companies is that selling shares externally is often far from straightforward.

Unless the shares offer control of the business, it can be difficult to find a buyer willing to invest.

In these situations, a Company Purchase of Own Shares can provide an effective solution.

What does this mean?

In simple terms, this is where the company itself buys the shares from the exiting shareholder. The company then cancels those shares, meaning the remaining shareholders own a larger percentage of the business.

For example, if three shareholders each hold 30 shares (one-third each) and one shareholder sells their shares back to the company, those shares are cancelled. The two remaining shareholders would then each hold 50 per cent of the company.

Provided certain conditions are met, the payment received by the exiting shareholder can be treated as a capital gain, rather than income. And this can make a significant difference from a tax perspective.

How does it work?

Currently, qualifying gains are taxed at 14% on the first £1 million, with gains above that amount taxed at 24%. However, the 14% rate will increase to 18% from 6 April 2026, which is why some shareholders are reviewing their options now.

Even relatively modest transactions can result in meaningful tax savings. For example, a sale of shares worth £150,000 completed before the change could save around £6,000 in tax. For larger transactions above £1 million, the savings could be as much as £40,000.

Company purchases of its own shares are often used when a shareholder is retiring or stepping back, while the remaining shareholders continue running the business.

They can also be helpful where shareholders want to go in different directions, and one party wishes to continue with the company without the dissenting shareholder.

However, several important conditions must be satisfied.

The company must be able to fund the purchase from distributable profits, and the shareholder must usually have held the shares for at least five years. After the sale, the exiting shareholder must also cease to be connected with the company.

There is also a small stamp duty payable by the company, at 0.5% of the share value. For example, a £500,000 share buyback would incur £ 2,500 in stamp duty.

As with many areas of tax planning, the detail matters. If the rules are not followed correctly, HMRC could treat the payment as a dividend instead, which could mean tax of up to 39.35% – and nobody wants that!

Therefore, for business owners considering their next chapter, taking professional advice early can make a significant difference – helping ensure the exit is both smooth and tax-efficient.

For more advice, contact beatons.co.uk 

At first glance, the changes coming to the 2025/26 Self-Assessment tax return look fairly innocuous. Another box to fill in. Another small administrative tweak. The sort of thing most business owners assume their accountant will quietly deal with in the background. But here, Andrew Diver, Head of Tax at Beatons Group, examines why one of these changes – the way dividends from close companies are reported – is more than just a technical update.

Tax returns are rarely something people look forward to.

For some directors and business owners, they’re a once-a-year chore – gather the paperwork, hand it over to your accountant, sign where you’re told to sign and move on. The details of the form itself don’t usually attract much attention.

But occasionally, the form’s design tells you something important about what HMRC is thinking, not in headlines or policy announcements, but in the quiet changes to what they now want to know about you, your business and how money flows between the two.

The new way dividends from close companies are reported on the 2025/26 return is one of those moments. It’s a subtle shift in disclosure, but it carries a much louder message about scrutiny, transparency and the direction of travel for owner-managed businesses.

What does it mean?

From 2025/26, anyone receiving dividends from a close company will have to disclose more details on their tax return than before.

It’s no longer enough to report a single, simple total figure for dividend income. HMRC will now know exactly which company those dividends came from and what percentage of the business the recipient owns.

On the surface, this doesn’t change how much tax you pay.

But it fundamentally changes how visible your arrangements are to HMRC. By linking personal tax returns directly to Companies House and corporation tax data, HMRC is making it much easier to join the dots between ownership, control and how profits are distributed.

Why does it matter?

It matters because it brings certain structures into much sharper focus.

Over the years, many owner-managed businesses have used different classes of shares, dividend waivers and other mechanisms to distribute profits in a tax-efficient way. In many cases, these arrangements are legitimate.

In others, the commercial rationale can be harder to defend. Either way, they are about to become far more transparent.

One particularly telling detail is where this new disclosure sits on the tax return. Dividends from close companies now appear on the employment pages.

That may sound like a technical footnote, but it is quite revealing. It reflects HMRC’s increasing interest in situations where what is labelled as a “dividend” may, in substance, look and feel more like a payment for work done in the business.

Is this going to mean I can’t pay dividends?

No. It doesn’t mean dividends are suddenly off the table for directors and shareholders. But it does show a clear direction.

HMRC is becoming more confident in challenging arrangements that blur the line between capital and labour rewards, particularly where structures have been put in place primarily for tax rather than commercial reasons.

Where challenges succeed, the consequences can be significant, potentially bringing National Insurance into play alongside income tax.

What now?

For many business owners, this change won’t require any action.

If your share structure is straightforward and your dividends reflect genuine ownership, the new reporting requirements are unlikely to cause sleepless nights.

But if your company has more complex arrangements, this is a sensible moment to take stock. The question to ask is not just “is this technically compliant?”, but “how will this look when HMRC has the full picture in front of them?”

The reporting change itself is small. The message behind it is not.

For help and advice on this or any other accountancy queries, visit www.beatons.co.uk

Much of the recent attention around inheritance tax has focused on Agricultural Property Relief (APR). But, as Head of Tax at Beatons Group, Andrew Diver explains, a far less publicised change could be even more relevant for family-owned and owner-managed businesses across the freight and shipping sector – Business Property Relief (BPR).

January has arrived, and with it the usual tax-season focus. But this year, there is some genuinely positive news for business owners.

Business Property Relief now has the exact same relaxations as Agricultural Property Relief. This change increases the allowance from £1m to £2.5m and removes pressure to rush decisions, and allows for more measured, commercially sensible planning.

The timing is particularly relevant, arriving just as many businesses are reviewing their tax position for the year ahead.

What’s changed?

Business Property Relief (BPR) is an inheritance tax relief designed to help family-owned and trading businesses pass from one generation to the next without being forced to sell or break up the company to pay a tax bill.

In simple terms, BPR can reduce the value of qualifying business assets for inheritance tax purposes – in many cases by 50% or 100% – provided certain conditions are met.

This commonly applies to shares in unlisted trading companies, family businesses and business assets that are actively used in the trade.

In recent years, uncertainty about inheritance tax treatment has led many business owners to accelerate succession planning or transfer shares earlier than they would have ideally chosen.

However, the revised approach to BPR means that, in many cases, this urgency is no longer necessary.

A quieter change with important tax consequences

One of the less obvious implications of the previous restrictions on BPR was that they pushed business owners towards making lifetime gifts earlier than they might otherwise have planned.

While this could reduce exposure to inheritance tax, it often came with an unintended cost – the loss of the capital gains tax uplift that typically applies on death.

In practical terms, transferring assets too early can mean saving inheritance tax, but creating a larger capital gains tax bill for the next generation when those assets are eventually sold.

Under the revised BPR position, many family businesses may now be better placed to retain shares for longer. This can preserve access to the capital gains tax rebasing on death, potentially resulting in a more efficient overall tax outcome and leaving more value within the family.

The key point is that rushing transfers purely to mitigate inheritance tax can sometimes create avoidable tax costs elsewhere.

Why this matters for freight and shipping businesses

Many businesses operating in freight, logistics and shipping are built for the long term.

They are often asset-heavy, family-owned and structured around gradual succession rather than abrupt handovers.

The relaxation of BPR better reflects this reality.

Instead of restructuring ownership simply to meet perceived tax deadlines, business owners can now take a more balanced approach — aligning succession planning with the long-term health, stability and continuity of the business.

In short, planning can once again be driven by what makes sense commercially, rather than fear of missing a tax window.

The right moment to review, not rush

January is the time of year when tax returns, payments and deadlines dominate attention.

For many in the freight and shipping industry, this is a timely reminder to ensure that:

• self-assessment returns are filed on time
• tax liabilities are understood and paid by the relevant deadlines
• pension contributions are structured efficiently, with relief fully claimed
• Making Tax Digital (MTD) obligations are being monitored and prepared for

This year in particular, it’s important that short-term compliance pressures do not spill over into rushed long-term decisions.

While January inevitably focuses minds on immediate obligations, it is also an ideal moment to step back and review wider planning – including ownership structures, succession strategies and reliefs such as BPR.

A shift with lasting implications

The changes to Business Property Relief may not have made headlines, but they are likely to influence succession and estate planning decisions for years to come.

For business owners who felt pressure to act quickly, this is a welcome development.

For advisers and companies alike, it is a reminder that January should not just be about filing returns – it is also an opportunity to reset, review and plan with confidence.

If you would benefit from advice on how the revised BPR position applies to your business, speak to a specialist adviser before making irreversible decisions.

www.beatons.co.uk

As 2025 draws to a close and the dust settles on November’s Autumn Budget, businesses finally have a period of stability to plan within. Here, Andrew Diver, Head of Tax at Beatons Group, explains why January is the ideal moment to reset, review and make the smart tax decisions that will shape a stronger start to the new tax year.

As we reach the end of 2025, many business owners tell me the same thing: “This year has felt like a marathon.”

Between inflation pressures, shifting interest rates, and another Autumn Budget that asked businesses to do more with less, it is no surprise people are heading into the new year hoping for stability.

The good news is that we now have the clarity we lacked for much of the year. The November Budget did not bring sweeping reform, but it did provide something arguably more valuable: certainty. And certainty is the foundation on which good tax planning is built.

Understanding where you stand

The Autumn Budget continued the trend of frozen thresholds and reduced allowances. While many businesses were hoping for more generous measures, the upside is that there were no shocks and no unexpected shifts.

We know exactly what we are dealing with between now and 5 April – which makes the next three months an opportunity to get ahead rather than play catch-up.

If you are a company director, the new year is a sensible time to revisit how you extract profit from the business both before and after April 2026 because of the changes to tax rates on dividends announced at the recent budget.

Making best use of the reliefs that remain

While allowances are tighter, there is still value to be unlocked.

Pension contributions, ISAs, Gift Aid, and capital gains planning remain essential tools, but they have limited carry-forward provisions, so using annual allowances is important before the tax year ends.

One of the most common misconceptions is that tax efficiency is something you “fix” at year’s end.  In reality, it is something you build incrementally, and January provides enough time to review, plan and act without pressure.

The same applies to business investment. Confirmation that full expensing will continue is rare good news for capital-intensive sectors. Whether you are considering machinery, vehicles, technology upgrades or improvements to your premises, the timing of your investment genuinely matters.  The timing of purchases can accelerate relief by an entire year, improving cash flow at a time when many businesses need it most.

VAT, payroll and the quiet details that often matter most

Beyond the headline measures, the Autumn Budget reinforced the importance of compliance – particularly in areas like VAT, payroll and benefits reporting.

These are not the most exciting conversations, but they are often the ones that prevent costly surprises.

VAT thresholds remaining frozen means more businesses are drifting into compulsory registration simply because turnover has inflated rather than grown.

Payroll changes, including National Minimum Wage increases from April, need to be modelled early so that staffing decisions and pricing strategies are based on real numbers. The new year is the ideal time to step back and ensure these foundations are in place.

A moment of clarity for business owners

January often becomes the month of firefighting – tax returns, deadlines, staff returning from leave, and customers re-engaging.

But it is also the one moment in the year where you can clearly see both the year behind you and the year still ahead of you.

Looking ahead to April – and beyond

The message I give clients every January is the same: tax efficiency is not achieved in a rush at the last minute.  It is often the phrase David Brailsford, UK Cycling chief, famously coined “marginal gains”, doing a series of transactions more efficiently in combination, that makes your business and finances work more profitably – about investment, remuneration, payroll, pensions and personal planning.

If the past few years have taught us anything, it is that resilience comes from being prepared, not reactive.

As we enter 2026, I hope businesses can lift their heads and look forward again. Yes, pressures remain. But if you take the opportunity now to look over your position, optimise where you can, and seek advice early, the new year – and the new tax year – can start on a stronger footing.

This month, Companies House began the most significant overhaul of its register in decades. Here, Andrew Diver, Head of Tax, Beatons Group, looks at how the changes will impact business owners and what you need to do to get your ducks in a row.

From yesterday, 18th November, every company director and every person with significant control (PSC) must verify their identity with Companies House.

The move is part of a wider push to make the UK business register more accurate, reduce fraud, and strengthen trust in corporate information.

It may sound like a small administrative step. Still, it marks a fundamental shift in how Companies House operates – from a passive record-keeper to an active regulator of corporate transparency.

Who needs to verify – and when

The new identity rules apply to all directors and PSCs, whether you run a limited company, a start-up, or sit on the board of several entities.

Existing directors will need to verify their identity before submitting their following confirmation statement after 18 November 2025.

That means timing will vary from company to company, so it’s worth checking your filing date now and planning.

If you’re a director of more than one company, you’ll need to provide your single personal verification code for each role you hold – so keeping a record of your code will be essential.

For new directors, the process will happen automatically as part of the company formation or appointment. You won’t be able to take up your role until verification is complete.

The rules also extend to People with Significant Control (PSCs) – typically anyone who owns or controls more than 25% of a company.

If you are a PSC and also a director, you’ll need to verify both roles simultaneously.

If you are a PSC but not a director, your verification window will open on the first day of your birth month. For example, if you were born on 20 December, your 14-day window begins on 1 December.

If you become a new PSC after 18 November, you’ll have 14 days from the date you are added to the register to complete verification.

Companies House has confirmed that it will contact each company directly with details, so you’ll receive guidance when your deadline approaches.

How the process works

Verification can be completed in two ways:

1. Directly through Companies House, using the GOV.UK One Login service. This involves submitting identification such as a passport or driving licence, along with a live photo to confirm your identity.
2. Through an Authorised Corporate Service Provider (ACSP), such as your accountant or solicitor, who can verify your identity on your behalf.

Once verified, you’ll be issued a personal code.

This code confirms your verified status and must be provided each time you act in a new company role.

Over one million people have already completed voluntary verification since the service opened earlier this year – so if you haven’t done so yet, it’s a good time to start.

What happens if you don’t verify

Failure to complete verification won’t simply be an administrative oversight – it will carry consequences.

From next year, unverified directors will be prevented from performing their duties, Companies House filings may be rejected, and in some cases, continuing to act as a director could constitute an offence.

Put simply, if your identity isn’t verified, you could find yourself unable to submit statutory filings or continue in your role legally.

How to prepare your business

These checks might sound bureaucratic, but they are part of a broader cultural shift towards greater accountability in UK business.

Getting ahead of the process now will save time and potential disruption later.

Here are five practical steps to take this month:

• Map your roles – List every directorship and PSC position you hold, including those in group or dormant companies. You’ll need to verify each one separately, so an accurate list will make the process smoother.
• Check your filing dates – Look up when your following confirmation statement is due, as that’s when the requirement will likely apply. Adding this to your compliance calendar will ensure you don’t miss your window.
• Complete your verification early – Use GOV.UK One Login or ask your accountant to verify through the Authorised Corporate Service Provider system. Early verification means fewer headaches when deadlines approach.
• Ensure your records match – Make sure your Companies House records, ID documents, and registered address all align exactly. Minor discrepancies – even a middle initial – can cause delays.
• Communicate with fellow directors and shareholders – Everyone in a leadership position will need to verify, so make sure the whole board understands the requirement and the process.

A new era for corporate transparency

The introduction of identity checks is more than a compliance exercise – it’s a cultural milestone.

For years, Companies House has mainly operated on trust, with minimal verification of who was behind the companies on its register. The new system aims to restore confidence in UK corporate data and create a more transparent, fair and trusted business environment.

That’s good news for investors, suppliers and customers – but it means businesses need to treat this as a must-do, not a nice-to-do.

Beatons can help directors and shareholders navigate the verification process and manage filings across multiple companies. If you would like advice or to arrange verification through our Authorised Corporate Service Provider service, please call 01473 659777 or visit www.beatons.co.uk.

Image credit: GOV.UK

Forget ghosts and ghouls – the real scare this autumn could come from HMRC. Here, Andrew Diver, Head of Tax at Beatons Group, explains why small businesses are in the spotlight as the taxman sharpens his tools.

October might bring pumpkins, costumes and trick-or-treaters, but for small businesses, the real fright this season could arrive in a brown HMRC envelope.

With the autumn Budget fast approaching, there’s plenty of speculation about where the Chancellor will find funds to shore up the public finances, and one answer is clear – the HMRC is gearing up to close the “Tax Gap” – and small businesses are firmly in the firing line.

What is it?

The Tax Gap is the difference between what HMRC believes it is owed and what actually gets paid. For 2023/24, that figure stood at a spine-chilling £46.8 billion – roughly the size of the UK’s annual defence budget. Unsurprisingly, therefore, it’s becoming a prime target for the Treasury’s fiscal tricks.

Unfortunately for those of you running SME’s more than half of that gap – around £27 billion – is attributed to small businesses.

By comparison, large businesses account for around £6 billion, while mid-sized firms owe close to £4 billion.

Individuals (excluding the self-employed) account for just over £4 billion, criminals for £3.4 billion, and wealthy individuals for £2.3 billion.

In short, the biggest slice of the pumpkin pie lies with small businesses, and that’s precisely where HMRC is pointing its torch.

While it’s tempting to assume HMRC will go after multinational giants or shadowy corners of the hidden economy, their current strategy is far more pragmatic. Follow the numbers.

HMRC has just completed intensive training for 5,500 new enquiry officers, all of whom are joining the Individuals & Small Business Compliance (ISBC) Team. Their mission? Launch around 250,000 additional enquiries over the coming years.

To put that into perspective, there are about 240,000 small businesses in the UK with 10–49 employees. In theory, there’s now enough workforce to look into every single one.

Why the sudden zeal?

Because it pays. For every £1 HMRC spends on enquiry staff, it typically raises £20 in extra tax. In political terms, it’s a no-brainer – or perhaps a zombie-brainer.

For small businesses, though, this isn’t a ghost story you can ignore.

Even those with clean records may find themselves facing more routine enquiries as HMRC casts its net wider.

At Beatons, our clients have historically had very low levels of HMRC scrutiny, which is why we’ve been able to offer fee protection insurance at highly competitive rates.

This covers the professional costs of defending a challenge – even if it goes all the way to court. But with the new wave of investigations coming, no one can afford to assume they’ll be overlooked.

So, how do you keep the monsters at bay?

• Get your records in order. Good compliance is your best defence.
• Work with a reputable accountant who has a track record of handling enquiries effectively.
• Consider fee protection insurance to avoid nasty financial surprises if HMRC comes knocking.
• And don’t expect the helpline to save you – HMRC has redirected resources from call centres to fund these enquiry teams.

This Halloween, while the ghosts and ghouls are out for sweets, HMRC may be out for unpaid tax. Make sure your business isn’t the one caught in their haunted house.

beatons.co.uk