If you use your own car for work, there is some good news from HMRC. The approved mileage allowance payment (AMAP) rate has increased from 45p to 55p per mile for the first 10,000 business miles you drive each year.

Chancellor Rachel Reeves announced the 10p increase late in May, with the new rate backdated to take effect from the start of the 2026/27 tax year on 6 April.

Incredibly, it is the first rise in the approved mileage rate in 15 years, since 2011 and for contractors who regularly travel between clients or sites, the difference could be significant.

For example, if you drive 5,000 business miles a year, the increase puts an extra £500 in your pocket tax-free compared to last year’s rate.

The rate applies to cars and vans, but it does not cover motorbikes or bicycles and the rate for carrying a passenger remains unchanged.

Importantly, the higher rate for miles beyond 10,000 stays at 25p, which has disappointed some who felt the secondary rate was equally in need of review.

It is also worth noting the temporary workplace rules that govern mileage claims, as not every journey qualifies.

If you are unsure whether your travel counts as business mileage or not, it is worth checking with us before you start claiming.

The increase forms part of a broader cost of living package from the Government and while it has been welcomed across the contracting community, some advisers have been quick to point out that it does not offset the wider tax pressures contractors have faced in recent years.

Nevertheless, it is good to see some support being offered to freelancers who are facing higher costs in many other areas.

If you have questions about how the new mileage rate applies to your business, our team is happy to help.

As a director of your own limited company, you can provide yourself and your employees with small, tax-free perks known as “trivial benefits.”

These benefits are becoming more popular and are exempt from tax and National Insurance as long as all rules are met.

If the provision of the trivial benefit meets the required conditions, then it is tax free in the hands of the recipient and will not be subject to national insurance contributions.

What counts as a trivial benefit?

A benefit is considered trivial if it meets all of the following conditions:

• Cost is £50 or less (including VAT).
• It is not cash or a cash voucher.
• It is not a reward for work performed or a contractual entitlement.
• It is provided for a genuine non-work-related reason (e.g., birthday, Christmas, thank-you gesture).

Examples of acceptable trivial benefits

• A £30 bottle of wine or chocolates as a gift.
• Flowers or a small gift for a special occasion.
• Gift Voucher (for example Amazon)
• Small seasonal gifts (Christmas, Easter, Birthday, Religious Festivals etc.).

Limits for directors

If you are a director of a close company (most contractor limited companies are), you can claim:

• Up to £50 per benefit, AND
• Up to £300 total per tax year for the director.

This £300 annual cap applies only to directors and only for their trivial benefits, not for employees.

Employees (excluding directors)

Employees can receive multiple trivial benefits with no annual cap, as long as each one stays within the £50 rule and meets the criteria (but we would not advise exceeding the £300 Directors limit for employees).

Important restrictions

• You cannot claim a trivial benefit if it is intended to reward performance or is part of any contractual agreement.
• You cannot reimburse yourself for cash and call it a trivial benefit.
• If the cost exceeds £50 by even £1, the full amount becomes taxable (not just the excess).

How to record trivial benefits

Keep simple evidence such as:

• Receipt for the item.
• Brief note of the occasion (e.g., “Christmas gift”, “Birthday gift”).
• Who received the benefit.

These records support your company accounts in case HMRC requests them.

Why use trivial benefits?

• Tax-free and NI-free for both company and director/employee.
• Fully tax-deductible expense for the company.
• A simple and legitimate way to extract small amounts of value from your company.

If you require any further information, please speak to your Account Manager.

The 2026 FIFA World Cup is now well underway and by the time you read this England have already faced Croatia and Ghana in the group stage and with the final group game against Panama just days away.

Hopefully it already feels like football’s coming home, but Tuchel’s squad are more than likely approaching a pivotal moment in the tournament.

Of course, we can’t forget the Scottish national team as well, who have been bringing joy to the US with the Tartan Army’s screams of “No Scotland, No Party”.  It is great to see the team back at the World Cup for the first time in 28 years!

If you have been watching the games, you will have noticed that most of England’s fixtures, so far, kick off at 9pm or 10pm UK time.

That is not too painful for most fans, but across the wider tournament, dozens of matches involving other nations are kicking off at midnight, 1am, 2am and beyond, as the North American time zones push games deep into the night time.

For employees, staying up until 3am to watch Argentina or Brazil can mean a difficult conversation with a manager the next morning. For contractors, it is a different story.

One of the genuine, if rarely advertised, advantages of working for yourself is control over your own schedule.

If you want to rearrange your day to catch a late kick-off, stay up for a second group stage game or simply take a slower start the following morning, you can in most cases.

There is no need to book annual leave or explain yourself to anyone. You simply manage your time around your commitments.

That flexibility is part of what makes contracting an attractive way to work. The World Cup happens once every four years and this one is the biggest yet (at least according to Donald Trump). There are 48 teams and 104 matches across the tournament to enjoy.

Of course, football isn’t for everyone but with a summer of sport ahead of us, including the start of Wimbledon on Monday, there is plenty for everyone to enjoy.

Whether you are following England into the knockout stages, keeping an eye on how Scotland fare or looking forward to strawberries and cream as you watch the tennis, being your own boss means you do not have to miss the moments that matter.

Enjoy the summer of sports and if any of the financial side of contracting needs attention while you have a quiet moment between games, our team is here to help.

The new Companies House ‘Identity Verification Process’ launched on 18 November 2025, making it a legal requirement for new and existing Company Directors and Persons with Significant Control (PSCs) to verify their identity over a 12-month period, as and when their company’s annual Confirmation Statement and PSC ID are due for filing.

This verification process will help deter those wishing to use companies for illegal purposes.

Anyone setting up, running, owning or controlling a company in the UK needs to verify their identity over this 12-month period in order to prove they are who they claim to be.

We have been writing to clients over the past few months and are continuing to do so before it is time for us to file their company’s annual Confirmation Statement and PSC ID, with full details of how to apply to Companies House for their unique filing code.

Once you have received an email from us, you should attend to it without delay.

It is also extremely important that you forward the unique filing code to us as soon as it has been received from Companies House, as we are unable to file the company’s Confirmation Statement and PSC ID without it and this may incur unnecessary late filing fines and penalties.

We recently sent out our 2025-26 tax questionnaires and if you would like Cogent to prepare and file your 2025-26 tax return, please send us your completed Self-Assessment Tax Return Questionnaire.

If you have a second shareholder, they may also need to file a tax return, even if they haven’t previously. For further advice, please contact our Tax Department.

The standard charge including VAT for a basic tax return is £270. Questionnaires received by 30 September 2026 will receive the full discount on a basic tax return, charged at £99.

If your questionnaire is received between 1 October and 31 December 2026, the fee will be discounted to £150; any returns received after 31 December 2026 will be charged at the full rate of £270.

Please note, that more complicated tax returns where additional work or supplements are required, will be subject to additional charges.

Our deadlines have been set so that we can complete your return in time to meet the HM Revenue & Customs’ (HMRC) online filing deadline of 31 January 2027.

If you have any queries or haven’t received the questionnaire, please contact our tax department by emailing tax@cogentaccountants.co.uk

Please return your completed questionnaire together with any attachments by email to our Tax Department – tax@cogentaccountants.co.uk

If you’ve felt the conversations with prospective clients shifting lately, there’s a reason for it.

The cost of employing someone permanently in the UK has climbed steeply over the past eighteen months and the businesses you work with are feeling it.

For contractors who understand what that means, there’s a real commercial opportunity sitting on the table.

Here’s what’s happening, and why it matters for the way you pitch your services.

What’s actually changed for UK employers

The headline figure from the British Chambers of Commerce this month is striking – 73 per cent of UK businesses now cite labour costs as their single biggest pressure.

This is a number that has held steady for six months, which tells you this is a structural shift in businesses costs rather than just a passing concern.

The reasons aren’t hard to find, especially when you consider that employer National Insurance jumped to 15 per cent in April 2025, with the threshold on which it kicks in dropping from £9,100 down to £5,000.

For most businesses, that single change added thousands of pounds to the annual cost of every employee on the books.

Then April 2026 brought the National Living Wage up to £12.71 an hour and the Employment Rights Act started rolling out in earnest, which includes new rights for employees to day-one statutory sick pay, day-one paternity and parental leave entitlements, as well as a compliance regime that HR and legal teams are still scrambling to understand.

Further changes around zero-hours contracts, guaranteed hours obligations and stronger unfair dismissal protections from the six-month mark are still phasing in through 2026 and into 2027.

Stack all of that on top of pension auto-enrolment, holiday pay, sick pay and the management overhead of running a permanent workforce and the true cost of a permanent employee now sits well above their headline salary.

Why this matters for you as a contractor

None of this is your problem, which is good for you and for employers.

When a client engages you on a contract basis, they’re not paying employer NI on your fees and they’re not accruing a holiday pay liability.

They’re also not on the hook for statutory sick pay, parental leave or the unfair dismissal exposure that now kicks in at six months under the new Act.

Instead, they are paying for a defined piece of work, on agreed terms, with a clear beginning and end, there is less risk involved for them.

Contractors have always offered something different from permanent employment, but the gap between the two has widened in the last eighteen months.

Neil Carberry at the Recruitment and Employment Confederation said as much last year, noting that contractors look more attractive now precisely because permanent employment has become more expensive.

The conversation that’s happening in your clients’ finance teams

Here’s what we’re hearing from contractors on our books and what the wider data backs up.

Finance directors and business owners are sitting down with their numbers and asking a different set of questions than they were two years ago.

Not just “can we afford another hire?” but “is permanent employment even the right structure for this piece of work?”

That’s a conversation contractors are uniquely placed to help, but for many the default pitch still leans heavily on skills, experience and availability, rather than the cost benefit.

If you can talk fluently about what your engagement model offers compared to a permanent hire, such as no employer NI, no Employment Rights Act exposure, no long-term liability and no headcount on the books, you’re addressing the specific anxiety that’s keeping your prospective client awake.

However, not every nervous client becomes a contractor-friendly client.

The same BCC survey that shows the labour cost anxiety also shows business investment stuck in negative territory for the sixth quarter running, with nearly a quarter of businesses expecting turnover to fall over the next year.

This means that here’s a growing difference between clients who won’t spend anything and clients who are actively rethinking how they build their team.

The second group exists in larger numbers than usual right now and they’re asking workforce questions they weren’t asking before.

The Employment Rights Act has concentrated minds in a way that employment legislation often doesn’t, because the obligations are specific, the phasing is real and the costs are quantifiable.

What we’d suggest

If you’re a contractor and you’re refreshing how you pitch your services or thinking about how to position yourself when a prospective client is weighing up their options, make sure you go in armed with this knowledge.

The numbers genuinely support what you offer right now. The conditions that make the contractor model attractive to a hiring business are more clearly in place than they’ve been for years.

We work with contractors every day and we’re always happy to talk through how the current environment affects your own position, so please get in touch if that would be useful.

As a director of your own limited company, you can provide yourself and your employees with small, tax-free perks known as “trivial benefits.”

These benefits are becoming more popular and are exempt from tax and National Insurance as long as all rules are met.

If the provision of the trivial benefit meets the required conditions, then it is tax free in the hands of the recipient and will not be subject to national insurance contributions.

What counts as a trivial benefit?

A benefit is considered trivial if it meets all of the following conditions:

• Cost is £50 or less (including VAT).
• It is not cash or a cash voucher.
• It is not a reward for work performed or a contractual entitlement.
• It is provided for a genuine non-work-related reason (e.g., birthday, Christmas, thank-you gesture).

Examples of acceptable trivial benefits

• A £30 bottle of wine or chocolates as a gift.
• Flowers or a small gift for a special occasion.
• Gift Voucher (for example Amazon)
• Small seasonal gifts (Christmas, Easter, Birthday, Religious Festivals etc.).

Limits for directors

If you are a director of a close company (most contractor limited companies are), you can claim:

• Up to £50 per benefit, AND
• Up to £300 total per tax year for the director.

This £300 annual cap applies only to directors and only for their trivial benefits, not for employees.

Employees (excluding directors)

Employees can receive multiple trivial benefits with no annual cap, as long as each one stays within the £50 rule and meets the criteria (but we would not advise exceeding the £300 Directors limit for employees).

Important restrictions

• You cannot claim a trivial benefit if it is intended to reward performance or is part of any contractual agreement.
• You cannot reimburse yourself for cash and call it a trivial benefit.
• If the cost exceeds £50 by even £1, the full amount becomes taxable (not just the excess).

How to record trivial benefits

Keep simple evidence such as:

• Receipt for the item.
• Brief note of the occasion (e.g., “Christmas gift”, “Birthday gift”).
• Who received the benefit.

These records support your company accounts in case HMRC requests them.

Why use trivial benefits?

• Tax-free and NI-free for both company and director/employee.
• Fully tax-deductible expense for the company.
• A simple and legitimate way to extract small amounts of value from your company.

If you require any further information, please speak to your Account Manager.

Running a limited company brings freedom and flexibility, but it also means taking full responsibility for financial planning.

Whether you’re a contractor, consultant or company director, how you take profits and protect your income can make a significant difference to your long-term security.

Many directors rely on dividends and salary while they are working but can neglect their future income needs for when they are retired.

Similarly, directors are often the sole earners in their household and have nothing in place to protect their family and household income if they couldn’t work.

Using the limited company, through a combination of pensions and protection planning, it’s possible to reduce tax, build wealth and provide peace of mind for both you and your family.

Pensions – A smarter way to take profits

Paying into a pension directly from your company is one of the most tax-efficient ways to extract profits:

• Corporation Tax relief – Employer contributions are treated as an allowable business expense, cutting your company’s Corporation Tax bill
• No National Insurance – Unlike salaries, pension contributions aren’t subject to National Insurance
• No Dividend Tax – Pension contributions avoid Dividend Tax, which has steadily increased in recent years
• Tax-free growth – Pension investments grow free from capital gains and Income Tax, helping retirement savings compound faster.

For example, a £60,000 employer pension contribution could save a company £15,000 in Corporation Tax, with no National Insurance or Dividend Tax to pay.

That’s money staying in the business owner’s pocket and working harder for the future.

Reviewing and consolidating pensions

Many business owners will have accumulated multiple pensions from previous roles. Reviewing and consolidating these can help ensure the funds are invested efficiently and aligned with your retirement goals.

For some, particularly those approaching the latter part of their working career, the focus shifts to assessing whether existing arrangements are truly fit for purpose – evaluating efficiency, reducing duplication and considering how pensions can best support income needs in retirement.

Life cover and Income Protection– Protecting your income and your family

While pensions build future wealth, life cover and income protection cover provides protection today.

Contractors and directors don’t always have the same benefits that employees enjoy, so arranging cover through the business can be particularly valuable.

• Life Cover – A lump sum payout on death provides security for loved ones
• Income Protection Cover – A monthly payout if one is unable to work due to injury or illness to ensure there is always money coming into the household
• Business efficiency – Relevant Life Cover and Executive Income Protection can be arranged through the company. Premiums are tax-deductible, with no benefit-in-kind for the employee.
• Tax savings – Compared to paying for personal protection out of post-tax income, company-funded policies can be significantly more cost-effective.

Balancing profit, protection and planning

Good planning for contractors and directors goes beyond immediate profit extraction. It’s about striking the right balance and using pensions to reduce tax and grow wealth for the future, while also putting cover in place to protect what matters most today.

Contact us to see how smart planning can reduce your tax bill today and secure your financial future tomorrow.

We can recommend you to a firm of Independent Financial Advisers to help you maximise tax efficiencies.

We have developed a close relationship with Finli so that you can draw on their experience and expertise to work together to understand and meet your retirement goals.

Please contact Jeremy – jeremy@cogentaccountants.co.uk – for further details.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

Financial advice given by Finli is regulated and authorised by the Financial Conduct Authority.

Please note that due to the Easter break and holiday commitments next month, our offices will be closed on the following days in the next couple of weeks:

• Thursday 2nd April and Friday 3rd April (Good Friday)
• Monday 6th April (Easter Monday)
• Wednesday 8th April and Thursday 9th April

We will be open for business as usual on all other dates.

We thank you in advance for your understanding.

The new Companies House ‘Identity Verification Process’ launched on 18 November 2025, making it a legal requirement for new and existing Company Directors and Persons with Significant Control (PSCs) to verify their identity over a 12-month period, as and when their company’s annual Confirmation Statement and PSC ID are due for filing.

This verification process will help deter those wishing to use companies for illegal purposes.

Anyone setting up, running, owning or controlling a company in the UK needs to verify their identity over this 12-month period in order to prove they are who they claim to be.

We have been writing to clients over the past few months and are continuing to do so before it is time for us to file their company’s annual Confirmation Statement and PSC ID, with full details of how to apply to Companies House for their unique filing code.

Once you have received an email from us, you should attend to it without delay.

It is also extremely important that you forward the unique filing code to us as soon as it has been received from Companies House, as we are unable to file the company’s Confirmation Statement and PSC ID without it and this may incur unnecessary late filing fines and penalties.