CrossCountry Accountants : December 2025
Welcome to this month’s edition of UK Tax and Accounting updates. With the Autumn Budget now delivered and the Finance Bill published, December is a pivotal month for businesses and individuals to digest new legislation and prepare for 2026. Below we highlight the most urgent developments and compliance actions.
1. Autumn Budget 2025 – Key Measures Now Law
The Chancellor’s announcements on 26 November are now embedded in the Finance (No. 2) Bill 2024–26, published on 4 December2.
Partnership NICs: Draft legislation confirms a new Employer-style NIC charge on LLP and partnership profits, effective April 2026. Firms should model the impact immediately.
Capital Gains Tax (CGT): Reforms include tighter rules on share reorganisations and Employee Ownership Trusts. Expect higher effective rates and reduced relief scope.
Inheritance Tax (IHT): Anti-avoidance rules for trusts and non-long-term UK residents are introduced, alongside capped trust charges.
Salary-Sacrifice Pensions: From April 2029, contributions above £2,000 annually will attract NICs.
Property & SDLT: Stamp Duty Reserve Tax relief changes take effect from 27 November.
Other Duties: Tobacco and Alcohol Duty rates increased from 26 November.
Action Required:
Review structures now for CGT and IHT exposure. Partnerships and LLPs should prepare for NIC liabilities. Employers using salary sacrifice must plan for the 2029 NIC change.
2. Compliance & HMRC Guidance Updates
Companies House ID Verification: Mandatory verification continues. All directors, LLP members, and PSCs must complete GOV.UK One Login verification before their next Confirmation Statement.
Construction Industry Scheme (CIS): HMRC guidance updated to clarify employment status, agency rules, and off-payroll working applications.
Crypto-Asset Reporting Framework (CARF): Effective 1 January 2026. Crypto service providers must implement due diligence and reporting systems.
Automatic Exchange of Information (AEOI): From 2027, separate CRS and FATCA reporting schemas will be required.
Fraud Warning: HMRC has flagged fraudulent payroll models offering artificial tax credits. Employers should exercise caution.
3. Accounting & Reporting Overhaul – January 2026 Readiness
FRS 102 Lease Accounting: All leases must be capitalised on balance sheets.
FRS 102 Revenue Recognition: New Five-Step Model applies.
MTD for Income Tax (ITSA): Mandation letters continue. Self-employed and landlords with £50k+ income must be ready for quarterly submissions from April 2026.
4. International Tax Developments
Double Tax Treaties: UK ratification progress with Andorra, Peru, Portugal, and Romania is nearly complete.
Transfer Pricing & Diverted Profits Tax: Reforms effective for accounting periods starting 1 January 2026.
5. Essential Compliance Dates: December 2025
7 Dec: VAT Return & Payment (quarter ending 31 October 2025).
16 Dec: Finance Bill Second Reading in Parliament.
17 Dec: NICs Bill Second Reading (salary-sacrifice pensions).
19 Dec: PAYE/NICs Electronic Payment deadline.
31 Dec: Corporation Tax Return filing deadline (CT600) for companies with a 31 December 2024 year-end.
Visit the CrossCountry Website: www.crosscountry-accountants.co.uk
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