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Salary or Dividends in 2026/27: What Is the Most Tax-Efficient Mix?

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If you run a limited company, deciding how to pay yourself can make a significant difference to your take-home income and your company’s tax bill.

A combination of salary and dividends remains worth considering for many director-shareholders. However, higher dividend tax rates in 2026/27 mean it is time to review your figures.

The most tax-efficient mix depends on your company’s profits, your other income and whether your business can claim Employment Allowance. See our blog here on this topic.

Here is how to approach the decision.

What has changed for 2026/27?

The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. The basic and higher dividend tax rates have both increased by two percentage points, while the additional rate remains unchanged.

Dividend tax band 2026/27 rate
Basic rate 10.75%
Higher rate 35.75%
Additional rate 39.35%

The annual dividend allowance remains £500. Dividends covered by any unused Personal Allowance are also tax-free. However, the £500 dividend allowance still uses part of your tax band; it does not extend the basic-rate band.

These changes make reviewing your remuneration worthwhile, even if your business and personal circumstances have stayed the same.

Why the lowest personal tax bill may not give the best result

Salary and dividends affect the company differently.

Salary and related employer National Insurance are generally deductible when calculating taxable company profits, provided the costs meet the relevant rules. Dividends are paid from profits after Corporation Tax and do not qualify as a business expense.

For most trading companies, Corporation Tax is 19% on profits of £50,000 or less and 25% above £250,000, with marginal relief potentially available between those limits. The thresholds can be reduced for associated companies and shorter accounting periods.

This means comparing the dividend tax rate with the salary Income Tax rate alone can give a misleading answer. You need to calculate the total company cost and the amount left in your pocket.

Is a £12,570 salary still worth considering?

For a director with a full Personal Allowance and no other income using it, an annual salary of £12,570 is a useful starting point to assess.

Assuming a full-year directorship and standard National Insurance treatment, that salary normally attracts no employee National Insurance or Income Tax. However, employer National Insurance is generally charged at 15% on salary above £5,000.

That produces an employer National Insurance bill of £1,135.50, before any Employment Allowance is applied.

The employer charge does not automatically make a lower salary better. The Corporation Tax relief on salary and employer National Insurance may still make £12,570 attractive overall.

The right comparison is therefore the combined tax cost of different salary levels, alongside the dividends needed to meet your income target.

How Employment Allowance changes the calculation

Employment Allowance can reduce eligible employers’ National Insurance bills by up to £10,500 in 2026/27. If your company qualifies and has sufficient unused allowance, it could cover the employer National Insurance on your director’s salary.

However, a company with only one director cannot claim where that director is the only employee liable for employer Class 1 National Insurance. Having someone else on the payroll does not automatically establish eligibility.

Before deciding your salary, check both whether the company qualifies and how much allowance its wider payroll will use.

A worked example of salary and dividends

Suppose a director takes:

  • A salary of £12,570.
  • Dividends of £37,700.
  • Total income of £50,270.

Assume they have their full Personal Allowance, no other income, no taxable benefits and no adjustments affecting their tax bands.

The salary uses the Personal Allowance. Of the dividends, £500 falls within the dividend allowance, leaving £37,200 taxed at 10.75%.

The resulting dividend tax is £3,999, leaving personal income after that tax of £46,271.

For the same salary and dividends in 2025/26, dividend tax would have been £3,255. The rate increase therefore adds £744 to the annual personal tax bill. These calculations use HMRC’s published dividend rates and allowance.

This illustrates the personal tax position, rather than proving this is the best mix. The company must also fund the salary, any employer National Insurance and the Corporation Tax due before profits are available for dividends.

Can the company afford the dividends?

Money in the company bank account is not necessarily available to distribute.

Dividends must be supported by sufficient distributable profits, taking account of losses and the company’s tax position. They also need proper approval and records, including dividend vouchers.

Before paying yourself, check current management accounts and leave enough cash for tax, suppliers, payroll and other commitments. A payment that helps your personal finances today should not create a company cash-flow problem next month.

A practical decision guide for directors

Start with how much net income you need from the business. Your accountant can then compare ways of providing that income using the same underlying company profit.

The review should cover:

  • Your other income: employment, pensions, rent and investment income can affect the allowances and tax bands available.
  • Company profits: the Corporation Tax position influences the benefit of salary deductions.
  • Employment Allowance: eligibility and remaining allowance can alter the salary calculation.
  • Your National Insurance record: a very low salary may affect whether the year counts towards contribution-based entitlements.
  • Timing and cash flow: consider when income is needed and when the company can afford to distribute profits.

If you do not need to withdraw all the profits, retaining some in the business may also be worth assessing. Employer pension contributions can form part of a wider remuneration review, subject to pension allowances, tax rules and your need for accessible income.

Review your mix before carrying it forward

There is no single salary-and-dividend formula that suits every director. A figure recommended to another business owner may produce a different result for you.

At Spicer & Co, we can help you compare the options, understand the combined company and personal tax costs, and plan withdrawals around your business’s cash flow.

Book a free initial consultation with Spicer & Co to review your salary and dividends for 2026/27 and find a mix that works for you.

Figures reflect the rules checked on 1 October 2026. Examples are illustrative; individual circumstances can change the outcome.

 

How to pay a Limited company Director

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Many of our clients run limited companies. As their accountant, one of the most common questions we’re asked is: “What’s the best way to pay myself?”

For many owner-managers, the answer is a combination of salary and dividends. Getting the balance right can make a significant difference to both your personal tax bill and your company’s finances. As allowances and tax rates have changed significantly in recent years, it’s important to review your situation and determine the right balance for you. It may have changed!

Are you an owner-manager of a limited company?

If so, you are not alone in facing the “how should I pay myself?” dilemma. Companies House estimates that 88% of UK companies (over 1.6 million) have at least one Company Owner Manager (COM). Within this group, 720,720 private limited companies have just one COM. (gov.uk)

Payment Options for Company Owner Managers

  1. Salary

Directors can also be employees of their limited companies. This means you can pay yourself through your payroll system.

A salary is an allowable business expense, meaning it can reduce your company’s taxable profits and therefore its Corporation Tax bill. However, salaries can also trigger employer and employee National Insurance contribution liabilities.

For 2026/27, your standard tax-free Personal Allowance is £12,570, while employee National Insurance is generally charged at 8% between the primary threshold (£242 per week) and upper earnings limit (£967 per week). Employers generally pay National Insurance at 15% above the secondary threshold (£96 per week or £5,000 per year).

With these contributions in mind, paying yourself a large salary isn’t necessarily the most tax-efficient approach.

  1. Dividends

Dividends are paid to you as a shareholder from your company’s available, distributable profits. Dividend payments reflect shares owned rather than work carried out.

One major advantage is that dividends do not attract National Insurance contributions.

However, dividend payments could attract a tax liability. For 2026/27, the dividend allowance is just £500. Dividends above this are taxed at 10.75% for basic-rate taxpayers, 35.75% for higher-rate taxpayers and 39.35% for additional-rate taxpayers.

Your company must also have sufficient profits to legally pay a dividend.

  1. A combination of salary and dividends

For many directors, a tax-efficient combination of a modest salary plus dividends can work well. But there isn’t a one-size-fits-all answer.

Your ideal mix will depend on your company’s profits, other income, pension contributions, personal tax position and whether you need to retain funds in the business.

Corporation tax rates range from 19% for smaller profits up to £50,000 to 25% for larger profits over £250,000. Therefore, planning when and how you extract profits is important.

‘The key to paying yourself as a company owner-manager is to plan when you’ll extract funds from your company, rather than simply taking money when you need it,’ explains Shivani, trainee Chartered Accountant at Spicer & Co Chartered Accountants in Dunstable. ‘A little planning can go a long way to minimising your tax liability.’

As your accountant, we can look at the numbers for your particular circumstances and help you decide how much to take as salary and/or as dividends. We can also advise what funds should potentially be left in the company.

Would you like to review your payment arrangement? Talk to the friendly experts at Spicer & Co Chartered Accountants. Let’s arrange an initial discussion without obligation or jargon, just good advice and great coffee!

 

Posted in Uncategorised | Tagged limited company set up, paying a limited company director

What records should a Limited company keep?

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Good record-keeping underpins a well-run limited company.  From invoices and bank statements to shareholder information and company decisions, there are a number of records your limited company is obliged to keep. Getting this right can save you time, money and a lot of unnecessary stress.

What financial records do you need to keep?

Cog

Your company’s accounting records need to be detailed enough to show and explain its transactions and allow you to prepare accurate accounts.

That means keeping records such as:

  • Sales and purchase invoices
  • Receipts and expenses
  • Bank statements
  • Money paid into and taken out of the business
  • Details of assets and liabilities
  • Stock records, where relevant
  • Contracts and other documents supporting significant transactions
  • Records supporting the figures in your accounts and tax returns

Ultimately, you should be able to look at your records and understand where the company’s money has come from, where it has gone and how the figures in your accounts have been calculated.

Record-keeping beyond the numbers

Limited companies also have wider responsibilities around their corporate records. It is the directors’ responsibility to ensure the company keeps adequate and accurate records.

You must keep details of:

  • Shareholders and the results of any shareholder votes and resolutions.
  • Promises for the company to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to.
  • Promises the company makes for payments if something goes wrong and it’s the company’s fault (known as “indemnities”).
  • Transactions when someone buys shares in the company.
  • Loans or mortgages secured against the company’s assets.

Some records should be submitted and maintained externally, such as providing registers of directors, directors’ residential addresses, company secretaries or people with significant control (PSCs) to Companies House.

How long should you keep your records?

You must keep records for 6 years from the end of the last company financial year they relate to, or longer if:

  • They show a transaction that covers more than one of the company’s accounting periods.
  • The company has bought something that it expects to last more than 6 years, like equipment or machinery.
  • Your corporate tax return was submitted late.
  • HMRC has started a compliance check into your corporate tax return.

Most companies now keep digital records. It’s important to ensure this data is secure and backed up regularly. A good cloud accounting system such as Xero helps to organise your financial records efficiently.

Informing business decisions

Keeping accurate records isn’t simply about satisfying HMRC or Companies House.

‘Up-to-date accounts and bookkeeping can show you whether you’re actually making money, where your cash is going, what you’re owed and what you owe,’ says Anna, Accounts and Operations Manager with Spicer & Co Chartered Accountants in Dunstable. ‘They can also highlight potential problems before they become real with potential costs attached.

‘Importantly, accurate, well-organised records help you plan ahead, making informed, proactive business decisions.’

How we can help

Is your company’s record-keeping up to scratch? A quick review now could save you considerably more time and hassle later. Let’s arrange an initial discussion without obligation.

 

Posted in Uncategorised | Tagged limited companies, record keeping

Business Tax Myths Debunked

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When you run a business, tax advice can come from all directions. A fellow business owner mentions something at a networking event, a social media post makes a bold claim, or someone tells you what “their accountant said”. Sometimes that advice is helpful. Sometimes it is wrong.

Tax myths can be surprisingly costly. Believing the wrong information can mean missed tax-saving opportunities, unexpected bills, poor record keeping or avoidable compliance problems.

As local accountants working with small businesses every day, we hear the same misconceptions come up time and again. Here are the most common tax myths we come across and the reality behind them.

Question 6750015_640
  1. If it’s for my business, it’s automatically tax deductible.

Not necessarily. For a cost to be allowable, it generally needs to be incurred wholly and exclusively for business purposes. If there is a personal element, only the business proportion may be claimable or it may not be allowable at all.

  1. I don’t need to keep receipts because everything is digital now.

Digital records are absolutely fine, but you still need evidence to support your claims. That might be a scanned receipt, a digital invoice or an email confirmation. Good record keeping is still essential, whether your paperwork is in a filing cabinet or in cloud accounting software such as Xero.

  1. If my business made a loss, I don’t need to file a tax return.

Making a loss does not remove your filing obligations. If you are required to file a tax return or submit company accounts, those obligations still apply whether your business made a profit or a loss. Missing deadlines can still lead to penalties.

  1. HMRC won’t notice small mistakes.

HMRC receives information from multiple sources, including payroll submissions, VAT returns, banks and other reporting systems. Even genuine mistakes can lead to problems if they are not corrected, so it’s always worth ensuring your tax information is right from the outset.

  1. I can claim every meal as a business expense.

This is a very common myth. Your usual lunch while you are at work is not generally an allowable expense. However, meals during qualifying business travel or in certain business-related situations may be claimable.

  1. A limited company always pays less tax than being self-employed.

There is no one-size-fits-all answer here. The right structure depends on your profits, long-term plans, how you take money from the business, pension contributions, administrative costs and other factors. What works well for one business owner may not be the best option for another. Reviewing your business structure for tax efficiency and your future plans is part of our business advisory service.

Taxes 646504_640
  1. My accountant will automatically claim every tax relief available.

Your accountant can only work with the information you share. If you’ve had significant purchases, business travel, training costs, research and development activity, home working expenses or charitable giving, make sure you mention it. The more complete the picture, the better the advice.

  1. I only need to think about tax once a year.

In reality, the best tax planning happens throughout the year, not just when a deadline is looming. Being proactive about tax helps you manage cash flow, plan ahead and avoid a last-minute rush as deadlines approach.

Lastly, the biggest tax myth of all…

  1. Tax is just about paying as little as possible.

‘Good tax planning is about paying the right amount of tax, while respecting the rules,’ explains Anna, Accounts and Operations Manager at Spicer & Co Chartered Accountants in Dunstable. ‘This approach enables you to minimise tax payments while remaining fully compliant. It involves understanding your options, planning ahead and making informed decisions as your business grows.’

For many small businesses, proactive tax advice can reduce stress, improve cash flow and help avoid costly mistakes.

figure of man carrying the word tax

How we can help

If you would like clear, practical tax advice for your business, we’re always happy to help. Please get in touch with our team for friendly support and straightforward guidance.

Revised Deadline for Companies House Filing Changes

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Here’s an important update about the planned changes to company accounts filing at Companies House. The major reforms that were due from April 2027 have now been officially delayed until 1 April 2028.

For many limited company owners, the extra breathing space is good news as the planned changes are significant. Extra time to prepare for the new rules is welcome.

These reforms are part of the Economic Crime and Corporate Transparency Act 2023. This change aims to improve the accuracy of the information held at Companies House, making it harder for limited companies to be used for fraud or other criminal activity.

Ultimately, Companies House wants more complete, more reliable financial information on the public register. That will affect how many small companies prepare and file their annual accounts.

Red tick

What are the accounts filing changes involved?

One of the biggest changes is for small and micro-entity companies. This impacts many owner-managed businesses and smaller limited companies, including micro-entities and small companies (with turnover of up to £1 million and £15 million respectively, subject to balance sheet and employee limits).

In the future, these businesses are expected to file a profit and loss account with Companies House. Companies may opt out of having their profit and loss account published on the public register, so these details can be kept private if preferred. (Details of how to do this are to be confirmed.) The option to file abridged accounts is also being removed, making accounts filing more consistent for all companies.

This means that filing your limited company’s accounts will become more detailed, transparent and publicly visible.

What happens now?

Although the start date has moved, the reforms themselves have not gone away. Your company will still need to:

  • meet stricter filing requirements,
  • submit more digital filing, and
  • have less flexibility over what can be left out of accounts submitted to Companies House.
Pourquoipas Company 1067978_640

‘The delay should be seen as a useful opportunity to get prepared,’ says Max, an accountant with Spicer & Co Chartered Accountants in Dunstable. ’If your bookkeeping or year-end process could be more organised, now is a good time to review things. Also, it’s helpful to confirm any filing exemptions your company currently relies on. Getting your records in order early will make life much easier when the new requirements arrive.’

How we can help

If you are unsure how the postponed Companies House reforms could affect your business, we are always happy to talk it through, covering:

– what is changing,

– what you may need to do differently, and

– your accounts processes.

Let’s ensure your company is ready to meet the new requirement ahead of April 2028. Contact us for an initial discussion without obligation. Let’s make the most of the extra breathing space and ensure your company’s prepared for the filing changes ahead of time.

How Can The “Backing Your Business” Plan Help Your Business?

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Running a small business is demanding. Rising costs, staffing pressures, cashflow concerns and changing technology are all demanding your attention. That’s why the UK Government’s new “Backing Your Business” plan is worth considering.

It was launched almost a year ago, in July 2025, yet businesses are simply not taking advantage of the benefits offered by the scheme. Governmental departments’ action plans go through to 2028, with some financial commitments extending to 2030. There’s time to explore and take advantage of this initiative.

The Department for Trade and Industry states: ‘Growth is this government’s number one mission and SMEs are the engine room. Our plan is to make the UK the best place to start and grow a business, with a culture that supports entrepreneurship in every community and high street.’(gov.uk, March 2026)

“Backing Your Business” is designed to support SMEs with practical measures around finance, skills, late payments, digital growth and high street investment. However, many businesses are simply unaware of the support available and could miss valuable opportunities.

Why does this initiative exist?

SMEs impact the UK economy hugely. There were around 5.64 million SMEs in 2025, making up 99.9% of all UK businesses. Together, they employ 16.6 million people and generate an estimated £2.8 trillion in turnover. (FSB)

upwards arrow

What’s in the “Backing Your Business” plan?

The government’s plan focuses on several key areas:

  • Tackling late payments
  • Improving access to finance
  • Supporting digital and AI adoption
  • Reducing red tape
  • Revitalising local high streets
  • Improving business skills and training

One of the biggest opportunities is finance. The government is working with the British Business Bank and lenders to improve funding access for growing businesses. Recent UK Finance figures showed SME lending increased during 2025, with lending to firms turning over under £2 million rising by more than 25% year-on-year. (The Times)

However, many SMEs are still not taking advantage of the support available. Government research suggests 86% of SMEs say they have no desire to borrow, even though access to funding can help accelerate growth, invest in technology and improve resilience. (gov.uk)

Shaking hands having been recruited

How good financial planning helps

As accountants, we already help our business clients review whether they could benefit from:

Two pounds signs with people

‘The “Backing Your Business” plan signals a stronger, long-term focus on SMEs,’ says Max, an accountant with Spicer & Co Chartered Accountants in Dunstable. Business owners who stay informed and proactive are often best placed to realise advantages for their companies.’

If you are unsure what support may apply to your business, now is a good time to review your plans for the next 12–24 months.

Explore the potential!

Acting now can avoid pressure later, and ensure your business makes the most of the support available.

Succeeding as a Family-Run Business

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Is your limited company a family-run business?

Working with relatives adds an extra dimension to your business. We know from first-hand experience … Spicer & Co Chartered Accountants is a family-run accountancy practice! Some of our clients are family businesses too. Is your business one of the UK’s five million family-run enterprises?

(Source: Family Business UK)

Every family is unique and has its own dynamic and characters that impact the business. Overall there are significant strengths to promote and enjoy, with cautionary issues affecting the company too. With our specialist work and our family in mind, here are the issues to be aware of when working with your family.

Five Advantages of a Family-Run Business

1.Commitment

Family members often have a strong commitment to the business’s success, driven by personal and emotional ties. This dedication can lead to hard work and an ability to overcome challenges.

2. Long Term Perspective

Family businesses usually consider the long term view, with the goal of growing the business for future generations. This can contribute to stability and resilience.

3. Quick Decision-Making

A shared business vision enables family businesses to respond quickly to opportunities and market conditions.

4. Strong Working Relationships

The close-knit nature of family businesses can foster strong relationships and trust among family members and employees. This can lead to a more cohesive and committed team.

5. Flexibility and Adaptability

Decision-making within a family business is often flexible, thanks to fewer layers of bureaucracy and shared goals for the business. This agility can increase proactivity regarding competitiveness and market changes.

Image of team members

Whilst a family-run organisation can harness these strengths, it’s important to note that the nature of these businesses creates some unique challenges:

Four Challenges of a Family-Run Business

1. Succession Planning

Changing leadership and ownership can be complex, potentially causing tension and business instability. Choosing a successor and managing the transfer of power should be discussed and planned in advance. 62% of employees say they would be “significantly more engaged” with their role if they knew their employer had a clearly defined succession plan in place. (Vistage research)

2. Conflict of Interest

Family dynamics may sometimes interfere with business decisions. This is especially true when family members have different visions for the business.

3. Limited Skill Set

Family businesses may face limitations in terms of the skill sets available within the family. This can be a challenge when it comes to implementing best practices and maintaining a high standard of performance. Hiring external talent might be necessary to fill gaps in expertise, but this can be resisted due to a desire to keep the business within the family.

4. Difficulty in Separating Personal and Business Matters

Family businesses can find it challenging to separate personal matters from business decisions, leading to emotional decision-making and potential conflicts.

two people in disagreement

‘The success of a family-run business relies upon harnessing the unique strengths available whilst proactively addressing the challenges involved,’ says Suzanne Spicer, founder of Spicer & Co Chartered Accountants. Suzanne runs the Dunstable-based accountancy practice with her husband, Steve. She adds: ‘From the specialist support we offer clients and our own experience, I suggest three keys to success: open communication, recognising when to outsource and clear succession planning.’

Are you involved with a family-run business?

Talk to the friendly team at Spicer & Co Chartered Accountants. Enjoy an initial chat without obligation or jargon. Our family is here to help your family’s business succeed.

A New Mileage Allowance Rate

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Business owners across the UK are facing continued pressure from rising fuel prices and motoring costs. After 15 years without change, the Government has approved an increase to the HMRC advisory mileage rate for cars and vans used for business travel.

This update is a welcome and much-needed change, offering some financial relief when employees use their own vehicles for work.

Understanding the mileage rate change

From April 2026, the approved HMRC mileage allowance for business journeys increases from 45p to 55p per mile. This applies to the first 10,000 business miles travelled in a tax year.

Once the 10,000-mile threshold has been reached, the rate will reduce to 25p per mile for additional business travel. This rate for higher mileage has not changed.

inside of car - dashboard and steering wheel

HMRC only allows claims for genuine business journeys. Ordinary commuting still doesn’t qualify. It’s important to remember that you can claim mileage using HMRC’s approved rates or claim fuel costs for a business journey.

Employers – do you reimburse the full mileage rate?

Some employers choose not to use the full HMRC mileage rate. If your company currently reimburses below the approved HMRC rate, employees may be entitled to claim tax relief on the shortfall. For example:

  • HMRC approved rate = 55p per mile
  • Employer pays = 35p per mile
  • Difference = 20p per mile difference

The tax relief may not make up the shortfall, however it can still be beneficial if employees are regularly driving to meetings or work locations.

Next steps for businesses

With the new rates coming into effect, now is a good time for employers to review:

  • Mileage reimbursement policies
  • Payroll settings
  • Expense claim procedures
  • Employee travel policies

Updating these systems early can help avoid payroll errors and ensure employees are reimbursed correctly. Bookkeeping software such as Xero should also be updated to reflect the new mileage rate.

Electric Car charging

‘As a first step, employers should review and update their mileage policy and payroll systems to reflect the new rate,’ says Claudia, Payroll Manager with Spicer & Co Chartered Accountants in Dunstable.

‘It’s important to remember that the change is backdated to April 2026, so additional payments for mileage from April onwards may be needed.’

How we can help

If you would like guidance on mileage claims, employee reimbursements, or updating your payroll systems, let’s talk.

Enjoy an initial discussion without obligation or jargon, just practical advice in plain English.

Why Are SMEs Turning to Virtual Finance Directors?

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As businesses grow, managing the company’s finances becomes more complex. Cash flow forecasting, budgeting, financial reporting, and strategic planning all require expertise. However, working with a full-time Finance Director is often too expensive for small and medium-sized businesses.

More than 60% of small businesses operate without strategic financial guidance. This is where a Virtual Finance Director (VFD) can make a real difference, giving your business a competitive, profitable edge. (Source: ACCA, Finance Evolution)

What is a Virtual Finance Director?

A Virtual Finance Director is an experienced financial professional who works with your business remotely. They provide high-level financial guidance without the cost of employing a full-time, high-level employee. Working with a VFD enables you to access expert financial leadership exactly when you need it.

Your Virtual Finance Director takes a more strategic role within your company. They help you understand the numbers behind your business and use that knowledge to make informed decisions. Many business owners use their accountant as their VFD. This works well when the accountant involved offers a business advisory role alongside compliance services such as tax returns and annual accounts. (The Spicer & Co Chartered Accountants team is happy to help by acting as your VFD.)

 

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What does a VFD do?

A Virtual Finance Director can assist with a wide range of services, including cash flow management, budgeting, forecasting, profit improvement, financial reporting, pricing strategies, and business growth planning. They can also liaise with banks and investors, support funding applications and help prepare your business for expansion or sale.

  • Flexible input

Whether you need support one day a week, a few hours a month, or help with a specific project, Virtual Finance Director services can be tailored to suit your requirements.

  • Cost-effective expertise

You only pay for the time or services required without full-time salary costs. This means you can access highly experienced chartered accountants who might otherwise be unaffordable.

  • Strategic insight

Often, business owners and managers are too involved with running a business to look at their direction strategically. Your VFD provides an objective, “bird’s-eye view” of your company’s financial health to support growth and decision-making.

  • Real-time support

Technology has also made virtual financial support more effective than ever. Cloud accounting software such as Xero allows your Virtual Finance Director to access real-time financial information securely. This means they can provide timely advice and up-to-date reporting wherever they are based.

  • Reassurance

Many business owners are experts in their own trade or profession but do not feel comfortable with financial planning and strategic decision-making, especially as their businesses grow. Working with a VFD lets you focus on running your business while knowing your finances are carefully monitored and managed.

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Adding value

Ultimately, a Virtual Finance Director offers businesses strategic financial expertise, improved financial clarity and better decision-making. You access this expertise without employment overheads, providing great value and flexibility.

‘For growing businesses looking to strengthen their financial position and plan confidently for the future, working with a VFD can be an extremely useful investment,’ says Steve Spicer, Director of Business Development at Spicer & Co Chartered Accountants in Dunstable. ‘We can fulfil this role, offering strategic advice while helping your business to face financial challenges and maximise opportunities.’

How we can help

The accountancy and business experts at Spicer & Co are available to help your business grow. Let’s have an informal discussion without obligation. We’d love to explore your business’s potential with you.

Benefits in Kind Reporting Update

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Significant changes to expenses and benefits reporting are approaching, making now an ideal time for employers to review and update their current processes.

What are Benefits in Kind?

Benefits in Kind (BiK) are non-cash perks provided by employers that have a taxable value but are separate from an employee’s salary. Common examples include company cars, private medical insurance, low-interest or interest-free loans and employer-provided accommodation.

Important deadlines

The deadline to register for payrolling benefits for the 2026/27 tax year was 5 April 2026. If your business is not registered, the standard reporting process still applies. This means you must:

  • Submit a P11D form for every applicable employee.
  • Submit a P11D(b) form to report Class 1A National Insurance contributions.
  • File both forms online by 6 July 2026.

Both forms must be submitted together and filed electronically. Late and/or inaccurate returns can lead to penalties and interest payments, so early preparation is essential.

Settings Wheel

For businesses already registered, HMRC’s online system allows you to manage employee benefits, amend records and keep reporting up to date throughout the year.

Don’t overlook the P11D(b)

The P11D(b) is used to summarise the total Class 1A National Insurance contributions (NIC) owed on employee benefits. You’ll usually need to submit a P11D(b) if:

  • You have submitted any P11Ds.
  • You have payroll employee benefits or expenses.
  • HMRC has requested a P11D(b) to be submitted.

Even if there is no Class 1A NIC liability to report, employers may still need to submit a nil return. Failing to respond can still result in penalties, so it’s important not to ignore HMRC notifications.

Mandatory payroll of Benefits in Kind is on the way

HMRC plans to introduce mandatory payrolling for most Benefits in Kind. Employers who are not already reporting benefits and expenses through the Full Payment Submission (FPS) process will need to register by 6 April 2027.

The FPS system is already used to submit salary and payroll information to HMRC, and the change is designed to reduce end-of-year paperwork while increasing real-time reporting through payroll systems.

‘The move to mandatory payrolling should simplify year-end reporting and create a more streamlined payroll process,’ explains Claudia, Payroll Manager at Spicer & Co Chartered Accountants in Dunstable. ‘Employers should begin reviewing their systems now so they have plenty of time to adapt before the deadline.’

creating change

How we can help

Managing Benefits in Kind and HMRC reporting can be time-consuming, and it’s essential to get it right and ensure employees are deducted the correct amount of tax through your payroll system.

Would you like support with payroll reporting?

The team at Spicer & Co Chartered Accountants in Dunstable can help you stay compliant, reduce administrative pressure and prepare for the upcoming changes. Contact us to arrange an informal, no-obligation conversation about how we can support your business.