CrossCountry Accountants: January 2026 Update

Welcome to the January edition of our tax and accounting update. January 2026 marks a historic shift in UK reporting and compliance. While the 31 January Self‑Assessment deadline is the immediate priority, this month also sees the “Day 1” launch of the most significant accounting standard changes in a decade.


1. Companies House: Major Fee Increases & New Compliance Rules

Companies House is raising fees significantly from 1 February 2026 to fund its expanded enforcement powers.

Fee Changes (Effective 1 February 2026)

  • Digital Incorporation: £50 → £100
  • Confirmation Statement (Digital): £34 → £50
  • Voluntary Strike‑off (Digital): £33 → £13

Compulsory ID Verification (Now Live)

All directors and PSCs must complete identity verification.
Unverified individuals risk rejected filings and potential enforcement action.

Registered Email Address

All companies must maintain a registered email address for Companies House statutory notices.

  • Not publicly visible
  • HMRC does not use this email — maintain HMRC contact details separately

Registered Office – “Appropriate Address” Requirement

Your registered office must be a physical location where documents can be delivered and acknowledged.

  • PO Boxes are not permitted
  • Virtual office users should confirm compliance with the new rules

Enhanced Companies House Powers

Companies House can now:

  • Query and reject suspicious filings
  • Remove inaccurate information
  • Share data with enforcement bodies

2. Corporation Tax & Capital Allowances

New 40% First‑Year Allowance (FYA)

Effective 1 January 2026, a permanent 40% allowance applies to “main rate” plant and machinery for both companies and unincorporated businesses.

Associated Companies Rules

The £50,000 and £250,000 CT thresholds are divided by the number of associated companies.
Ensure your January QIPs reflect your current structure.

R&D Filing Requirements

Two mandatory steps now apply:

  • Claim Notification (for first‑time or long‑gap claimants)
  • Additional Information Form (AIF) — must be submitted before the CT600

3. FRS 102 Transition: The New Era of Leasing

For accounting periods starting on or after 1 January 2026, the distinction between operating and finance leases for lessees has been removed.

On‑Balance Sheet Reporting

Nearly all leases must now be recognised as:

  • a Right‑of‑Use asset, and
  • a lease liability

Transition Approach

Most entities will use the modified retrospective approach, adjusting opening reserves at the start of 2026.
Full retrospective restatement is permitted.

Banking Covenants

Lease capitalisation will increase reported debt and assets.
Review loan agreements to avoid technical covenant breaches.

4. VAT & MTD for ITSA Updates

VAT Threshold Watch

The VAT registration threshold remains at £90,000.
A reduction to £70,000 from April 2026 has been signalled but not confirmed.

VAT Penalty Points System

Each late VAT return adds a point.
Reaching the threshold (e.g., 4 points for quarterly filers) triggers a £200 penalty, even for nil returns.

MTD for ITSA – Starts April 2026

If your 2024/25 Self‑Assessment shows gross income over £50,000, you must join MTD from 6 April 2026.

  • Partnerships join in 2027
  • Basis Period Reform applies now and may affect January tax bills

5. Other Key Changes Coming in April 2026

These are not January deadlines but are important for planning:

  • Dividend Tax Rate Increases
  • Restrictions to Business Property Relief (BPR) for IHT
  • Crypto‑Asset Reporting Framework (CARF) first reports due 2027
  • Possible VAT threshold reduction (pending Spring Budget)

6. Essential Compliance Dates: January 2026

1 January

  • New 40% First‑Year Allowance begins
  • CARF rules commence

7 January

  • VAT return & payment deadline (quarter ending 30 November 2025)

31 January (Midnight)

  • Self‑Assessment: Filing deadline for 2024/25
  • Balancing Payment: 2024/25 tax due
  • First Payment on Account for 2025/26: Where applicable
  • Corporation Tax: Filing deadline for 31 January 2025 year‑ends
  • Companies House: Filing deadline for 30 April 2025 year‑ends

1 February

  • New Companies House fees take effect

Visit the CrossCountry Accountants Website:
www.crosscountry-accountants.co.uk

CrossCountry Accountants WhatsApp

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