Mandatory payrolling of benefits in kind (BiKs) and taxable employment expenses will be introduced from 6 April 2027. This represents a major change in reporting and means that for most benefits, the annual P11D form will no longer be required from the start of the 2027-28 tax year.

The requirement to report Income Tax and Class 1A National Insurance on most BiKs through Real Time Information (RTI) was originally due to start on 6 April 2026 but has been delayed until 6 April 2027 to allow additional time for employers, payroll professionals, software providers and agents to prepare.

The deadline to register for the current voluntary payrolling service for the 2026-27 tax year is 5 April 2026. After this, the service will close in preparation for the introduction of mandatory payrolling. 

From April 2027, employers will report BiKs and expenses via the Full Payment Submission (FPS), aligning reporting with the process currently used for reporting salaries. The number of RTI fields will be expanded to reflect the data currently captured through P11D and P11D(b) forms. Employers will also have the option to payroll employment-related loans and accommodation on a voluntary basis.

To support implementation, HMRC will waive penalties for inaccuracies related to mandatory payrolling for 2027-28, provided there is no evidence of deliberate non-compliance. However, existing late filing, late payment penalties and interest will continue to apply.

HMRC has confirmed that its Basic PAYE Tools software will also be updated to support payrolling of benefits in kind from April 2027.

It was confirmed as part of the Autumn Budget that the Income Tax thresholds will continue at their current levels for a further three years, extending the freeze until April 2031. This means that most tax allowances are to remain frozen for 2026-27 and beyond.

As a result, the personal allowance will stay at £12,570, while the higher rate threshold will remain at £50,270 for taxpayers across most of the UK (with different thresholds applying in Scotland). National Insurance thresholds will also remain fixed over the same period.

Keeping these thresholds unchanged means that many taxpayers will gradually pay more tax as their earnings increase over time. This effect, commonly known as fiscal drag, occurs when wages rise but tax bands do not. As incomes grow due to inflation or pay increases, a larger portion of earnings becomes taxable, and more people move into higher tax brackets.

In practical terms, the continued freeze is likely to push increasing numbers of taxpayers into the 40% higher rate band and, for some, the 45% additional rate band. Others who previously earned below the personal allowance may also begin paying Income Tax for the first time. Although tax rates themselves remain unchanged, the overall tax burden rises as more income becomes subject to tax.

Fiscal drag is influenced by several factors, including government policy on tax thresholds, inflation levels and wage growth. In periods of rising wages or high inflation, the impact of frozen thresholds becomes more pronounced. For taxpayers the impact of fiscal drag effectively operates as a stealth tax over time.

A Companies House blunder has raised concerns after a flaw in the WebFiling service briefly exposed sensitive company data. The issue, identified on 13 March 2026, meant that a logged-in user could potentially access and amend limited details of another company by carrying out a specific sequence of actions.

Companies House has stated that this system vulnerability was not available to the general public. Only users with authorised access codes who were already logged into the system could have exploited it. Nevertheless, the nature of the flaw meant that certain private information, such as dates of birth, residential addresses and company email addresses may have been visible. There was also a risk that unauthorised filings, including accounts and changes to director details, could have been submitted on another company’s record.

After identifying this issue, Companies House shut down the WebFiling service at 13:30 on 13 March to investigate. Following independent testing, the system was restored at 09:00 on 16 March. Companies House has said that passwords and identity verification data were not compromised, and that existing filed documents, such as accounts or confirmation statements, could not be altered.

The issue is believed to have arisen from a WebFiling systems update in October 2025. It has been reported to both the Information Commissioner’s Office and the National Cyber Security Centre.

Companies are now being urged to review their registered details and filing history carefully. While no confirmed misuse has been reported so far, Companies House is continuing to investigate. If a company has a concern, it should raise a complaint via the Companies House complaints page at www.gov.uk/government/organisations/companies-house/about/complaints-procedure and include evidence to describe the issue.

External risks can affect even well managed businesses. Many threats arise outside the control of business owners, yet they can have a significant impact on profitability, cash flow and long term stability. Economic change, regulatory developments, market disruption and supply chain pressures can all create uncertainty. Forward planning allows businesses to prepare for these risks and respond with greater confidence.

Economic uncertainty

Changes in interest rates, inflation levels and consumer demand can quickly alter trading conditions. Rising costs may reduce margins, while reduced customer spending may affect turnover. Businesses that monitor economic trends and prepare financial forecasts are better placed to identify pressures early. Planning allows time to review pricing policies, reduce unnecessary expenditure and strengthen cash reserves where appropriate.

Legislative and regulatory change

Tax legislation, employment law and compliance requirements frequently evolve. Businesses that do not keep pace with change may face unexpected costs or administrative burdens. Examples include developments in Making Tax Digital, changes to employment rights, or adjustments to tax reliefs and allowances.

Planning enables businesses to anticipate regulatory developments and assess the likely financial impact. Early preparation reduces disruption and allows time to consider alternative structures or processes where appropriate.

Supply chain disruption

Recent global events have demonstrated how supply chains can be affected by political tensions, transportation difficulties and shortages of key materials. Businesses reliant on a limited number of suppliers may face delays or increased costs.

Contingency planning may include identifying alternative suppliers, reviewing stock levels or renegotiating delivery arrangements. Diversifying supply sources can improve resilience and reduce dependency on any single provider.

Technology and market disruption

Technological change continues to reshape many industries. New entrants, digital platforms and automation can alter customer expectations and competitive pressures. Businesses that review their market position regularly are better placed to identify opportunities as well as risks.

Planning may involve investment in systems, staff training or revised marketing approaches. Understanding customer needs and monitoring competitor activity supports more informed decision making.

Cash flow pressure

Cash flow remains one of the most common causes of business difficulty. External factors such as rising costs or delayed customer payments can place strain on working capital.

Preparing cash flow forecasts allows businesses to anticipate shortfalls and consider funding options where required. Early discussions with lenders or advisers can provide greater flexibility than reactive decision making.

Conclusion

External threats are an unavoidable aspect of running a business. While risks cannot always be prevented, their impact can often be reduced through careful planning. Regular review of financial performance, regulatory developments and market conditions helps businesses respond more effectively to change.

A structured planning approach supports resilience and improves the ability to make timely decisions. Businesses that take time to assess potential risks are often better positioned to maintain stability and identify opportunities for sustainable growth.