Simplifying Tax and Accounting from I Hate Numbers:

From April 2026, dividend tax rates are increasing, and for many business owners, that means one thing — higher tax bills.

In this episode of the I Hate Numbers podcast, we explain what the dividend tax increase actually means, how it impacts your income, and more importantly, what you can do about it.

While the change may only be a 2% increase on paper, the real-world impact can quickly add up, especially if you rely on dividends as part of your income strategy.
What’s Changing from April 2026?

The UK government has increased dividend tax rates by 2 percentage points:
Basic rate taxpayers: from 8.75% to 10.75%
Higher rate taxpayers: from 33.75% to 35.75%
Additional rate taxpayers: unchanged at 39.35%


The dividend allowance remains at £500, which means very little protection against rising tax costs.
What Does This Mean in Real Terms?

Let’s make it practical. If you take £50,000 in dividends annually, this increase could cost you around £1,000 extra in tax each year.

That is money that could have been reinvested into your business, used for personal expenses, or saved for future growth.
Why Planning Matters More Than Ever

This change highlights the importance of proactive tax planning. Doing nothing means accepting a higher tax bill by default.

However, with the right strategy, you can reduce the impact and stay in control of your finances.
Key Strategies to Consider

1. Timing Your Dividends Carefully

One approach is to bring forward dividend payments before April 2026. However, this must be done carefully.

If you push yourself into a higher tax band, you could end up paying more tax now just to avoid paying slightly more later.

Always review your tax position before making large withdrawals.
2. Using Family Allowances

If you operate a family company, consider using alphabet shares to distribute dividends across family members.

This allows you to utilise lower tax bands and reduce the overall tax burden.
3. Pension Contributions

Employer pension contributions can be a highly tax-efficient alternative to dividends.

The company receives tax relief, and you avoid dividend tax altogether while building long-term wealth.
4. Get the Paperwork Right

Dividend planning is not just about numbers. It requires proper documentation.

Board minutes and dividend vouchers are essential. Without them, HMRC can challenge your position.

Good paperwork protects your profits.
Using the Right Tools

Having clear visibility over your finances is critical when making these decisions. Tools like
Xero cloud accounting can help track profits, plan distributions, and ensure you are making informed choices.
Key Takeaway

The dividend tax increase is coming, and it will affect how business owners extract profits from their companies.

If you plan ahead, review your structure, and consider alternative strategies, you can reduce the impact and stay in control.

If you ignore it, you will simply pay more tax.
Episode Timecodes

00:00 – Introduction to dividend tax changes
01:00 – New tax rates explained
02:00 – Real-world impact example
03:00 – Timing strategies and risks
04:00 – Family dividend planning
04:30 – Pension contribution strategy
05:00 – Importance of documentation
05:30 – Final thoughts


Further Support

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If this episode helped you understand the dividend tax changes, share it with another business owner who needs to prepare.

Plan it. Do it. Profit.

One of the biggest advantages of running a business through a limited company is the protection it
offers your personal assets. But that protection is not absolute. In this episode of I Hate Numbers, we
look at the corporate veil, when it holds, when it does not, and what HMRC can do when directors cross
the line on unpaid corporation tax.
What Is the Corporate Veil?

When you set up a limited company in the UK, you are effectively building a wall between your
business and your personal life. On one side sits the company, its debts, its bills, and its taxes. On
the other side is you, your home, your car, and your personal savings. This is limited liability, a
legal shield designed to encourage people to take risks and start businesses without fearing that one
bad month will cost them the family home.

The problem is that wall is not indestructible. HMRC has ways of climbing over it, and they are
using them more and more. The law protects honest directors who run into genuine bad luck, but where
there is evidence of misconduct, negligence, or what HMRC calls deliberate behaviour, that shield can
vanish entirely.
Preference Payments: Paying the Wrong People First

The most common way directors get into serious trouble is through preference payments. Imagine your
business is struggling. You have a corporation tax bill due to HMRC but also owe money to a family
member who helped you start the business. You check your bank balance, see a few thousand pounds, and
decide to pay your brother or sister back first. That is a preference. You are choosing a friendly
creditor over a legal one.

If the company later fails, a liquidator will examine those bank statements. They can, and will,
reverse that payment and sue you personally to recover the money. Loyalty to family is understandable,
but it is not a defence in the eyes of the law.
Fraudulent and Wrongful Trading

Fraud is the serious end of the spectrum. Taking deposits for products you know will never be
delivered, or hiding cash from HMRC, can result in a personal financial order that puts your personal
assets on the table to settle company debts.

Wrongful trading is more common and perhaps more relevant to many directors. This is where you
continue trading even though you knew, or should have known, that the company was heading for
insolvency. If the tax debt grows during that period, you can be held personally liable for the
additional amount. Ignorance is not a defence. The law expects directors to know their numbers.
Unlawful Dividends

Most directors of small UK companies take a modest salary and draw the rest as dividends, which is
perfectly legal when done correctly. The key word is distributable profits. Think of it like a pie. You
can only eat what is left after paying for the ingredients. If your company makes a profit of one
hundred thousand pounds, a portion of that must be set aside for corporation tax. If you take that tax
money as a dividend, the dividend becomes unlawful.

Should the company go into liquidation, the liquidator can demand every penny of those unlawful
dividends back. As the director who authorised the payments, you also face a breach of your duties.
That is a double whammy that is entirely avoidable with the right financial discipline in place.
The Six Month Rule on Asset Sales

There is also a specific rule worth knowing around asset sales. If your company sells an office,
a van, or any significant asset, the tax on that gain must be paid to HMRC within six months. If it is
not, HMRC can bypass the courts entirely and send the bill directly to your home address. They have two
years to begin this process, which means you could be sitting at home eighteen months later thinking
the dust has settled, only for a substantial bill to land on your doorstep.
The Consequences of Getting This Wrong

Beyond losing money, the consequences can be severe. Directors can be issued with a personal
liability notice or disqualified from acting as a director for up to fifteen years. For anyone building
a business career, that is a significant and damaging outcome that could have been avoided entirely.
How to Stay Safe: A Practical Checklist

Staying on the right side of the law requires discipline and consistent habits. We run through five
practical steps in this episode.

First, review your management accounts every single month. Do not wait until the year end to
discover you are in difficulty. If you do not have management accounts in place, get in touch with us
at I Hate Numbers and we can help you set them up.

Second, treat your tax money as untouchable. Open a separate bank account and move between ten and
twenty five percent of your income into it as soon as it arrives. If you cannot see it, you are far
less likely to spend it.

Third, if the business is struggling, halt dividends immediately and switch to a basic salary until
things stabilise. There is nothing unlawful about paying yourself a salary.

Fourth, always take professional advice before selling a major company asset.

Fifth, treat HMRC as your most important supplier. They are the only creditor with the power to
take your home, and they are becoming increasingly assertive in pursuing unpaid taxes.
Conclusion: Keep the Wall Standing

HMRC and liquidators will examine everything: bank statements, emails, receipts, and payment
records. Acting proactively, keeping clear records, and respecting the legal boundary between you and
your business is what keeps your personal wealth safe. If you are concerned that your paperwork or
management accounts are not where they should be, do not panic. Reach out to us at
I Hate Numbers and we will help you get things in order.
For a deeper grounding in business finance, the
I Hate Numbers book is the ideal place to start.
Episode Timecodes

[00:00:00]Introduction: the corporate veil and when HMRC can pierce it
[00:00:41]What limited liability actually means for directors
[00:01:28]When the legal shield disappears: misconduct and deliberate behaviour
[00:01:52]Preference payments: paying the wrong creditors first
[00:03:00]Fraudulent trading: the serious end of the spectrum
[00:03:14]Wrongful trading: the ostrich approach and its consequences
[00:03:54]Unlawful dividends: when taking money out becomes a problem
[00:05:00]The six month rule on asset sales
[00:05:25]Personal liability notices and director disqualification
[00:05:46]Five practical steps to protect yourself as a director
[00:07:06]Why HMRC is becoming more assertive and what that means for you
[00:07:26]Closing thoughts: keep clear records and keep the wall standing


Take the Next Step

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profit.
Further Support

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From April 2026, Statutory Sick Pay (SSP) rules are changing significantly. In this episode of the I Hate Numbers podcast, we break down what those changes mean, why they matter, and how employers can prepare. These updates are part of wider employment reforms and will impact businesses of all sizes, from private companies to social enterprises. :contentReference[oaicite:0]{index=0}
What Is Changing with SSP?
The new rules introduce two major shifts. First, the removal of the lower earnings limit (LEL). Second, the abolition of waiting days. Previously, employees earning below a certain threshold were not eligible for SSP. From April 2026, that barrier is removed. Every eligible employee, regardless of earnings, will qualify. At the same time, SSP will now be payable from day one of sickness rather than starting on the fourth day.
More Employees, More Cost
These changes will bring approximately 1.3 million additional workers into the SSP system. While this strengthens employee protection, it also increases financial pressure on employers. SSP is not reimbursed by the government. The cost sits entirely with the business.
How SSP Will Be Calculated
The calculation method is also changing. Employers must now pay the lower of:
80% of the employee’s average weekly earnings
A flat weekly rate (currently expected to be £123.25)

This introduces additional complexity into payroll calculations and increases the need for accurate systems.
The End of Waiting Days
The removal of waiting days means SSP must be paid from the very first day of sickness. This increases both the administrative burden and the direct cost of short-term absences. It also raises important questions around workplace culture and sickness management.
Linked Periods Still Apply
While many rules are changing, linked periods of sickness remain in place. If absences occur within a 56-day window, they are treated as a continuous period. This affects how SSP is calculated, as the original rate continues even if the employee’s earnings change during that period.
Transitional Rules
Employees already receiving SSP before April 2026 will be subject to transitional protection. Those in specific earnings bands will move to the new flat rate for the remainder of their absence. This adds another layer of complexity for payroll and HR teams to manage.
What Employers Should Do Now
Review Payroll Systems
Ensure your payroll provider can handle the new 80% vs flat rate calculation, as well as transitional rules.
Update Policies
Sickness policies and staff handbooks referencing waiting days must be updated before April 2026.
Train Your Team
HR teams and managers must understand that SSP now applies from day one and includes lower-paid employees.
Monitor Workplace Trends
Increased coverage may influence absence patterns. Understanding your internal data will be critical.
Key Takeaway
The SSP changes are not just a compliance update. They represent a shift in cost, administration, and employee support expectations. Planning ahead will help you stay compliant, manage costs, and maintain control of your business.
Episode Timecodes
00:00 – Introduction to SSP changes
01:00 – Employment law reforms and context
02:00 – Removal of the lower earnings limit
03:00 – New SSP calculation rules
04:00 – Removal of waiting days
05:00 – Linked periods explained
06:00 – Transitional protection rules
07:00 – Practical steps for employers
08:00 – Final thoughts

Further Support
📘 Book https://www.ihatenumbers.co.uk/i-hate-numbers-book/ 🎧 Podcast https://www.ihatenumbers.co.uk/i-hate-numbers-podcast/ 🌐 Website https://www.ihatenumbers.co.uk If this episode helped you understand the upcoming SSP changes, share it with another employer who needs to prepare. Plan it. Do it. Profit.

Companies House identity verification is now a mandatory requirement for directors and persons with significant control (PSCs). If you run a company in the UK, this is no longer something you can put off for later. It is now part of the compliance landscape for businesses, charities, and social enterprises.
In this episode, we explain why these rules were introduced, what the deadlines mean for existing companies, and most importantly how you can complete the process smoothly without unnecessary stress.
We also explain how our team at I Hate Numbers can help verify your identity and ensure everything is correctly linked to your Companies House records.
Why Identity Verification Was Introduced
For many years, the UK company register allowed individuals to form companies with very few identity checks. While that made it easy for entrepreneurs to start businesses, it also created opportunities for fraud, hidden ownership, and misuse of company structures.
As a result, the government introduced the Economic Crime and Corporate Transparency Act. One of the key changes is the requirement for identity verification for company directors and persons with significant control.
The purpose is simple. Companies House wants to ensure that every person listed on the register is a genuine individual responsible for the company they are connected to.
Important Deadlines for Directors and PSCs
The new rules officially came into force on 18 November 2025. Since then, anyone forming a new company must verify their identity before they can even begin the registration process.
For existing companies, there is currently a transition period.
Directors must complete identity verification before submitting their next confirmation statement. If verification has not been completed, Companies House may reject the filing.
For persons with significant control who are not directors, the verification window is triggered by the month of their birth.
The 14-Day PSC Window
If you are a PSC but not a director, your verification deadline is linked to your birth month.
From the first day of that month, you have 14 days to complete the identity verification process.
This staggered system helps Companies House avoid millions of people verifying their identity at the same time.
However, it also means you need to stay alert to ensure your deadline is not missed.
What Happens After You Verify
Once your identity has been successfully verified, you receive a personal verification code.
This code becomes your permanent Companies House identifier. The important point is that you only need to complete identity verification once.
If you hold multiple roles across different organisations, the same personal code will apply to all of them.
However, if verification has not been completed before filing a confirmation statement, Companies House may reject the filing and flag the company for non-compliance.
How Identity Verification Can Be Completed
Option 1: Complete It Yourself
You can verify your identity directly through the GOV.UK login system.
This usually involves uploading identification, completing a facial recognition check, and confirming your details through the government portal.
For some people, this process takes only a few minutes.
However, many business owners find the process frustrating if documents are rejected, technology fails, or identification cannot be verified immediately.
Option 2: Use an Authorised Corporate Service Provider
The alternative is to complete identity verification through an authorised corporate service provider (ACSP).
At I Hate Numbers, we are registered as an authorised provider with Companies House. This means we can verify identities on behalf of directors and PSCs and submit the verification directly to the register.
Rather than navigating the process yourself, we take care of:
• verifying identification documents
• performing the necessary identity checks
• submitting verification to Companies House
• ensuring your personal verification code is correctly linked to all your roles
For many business owners this removes the stress of dealing with the system themselves and ensures everything is done correctly.
Why Many Business Owners Use Our Service
Many directors choose to complete verification through us because they want peace of mind that the process has been handled properly.
This service is particularly helpful if you:
• run multiple companies
• live outside the UK
• have a complex company structure
• prefer professional support handling compliance
Our team ensures that your Companies House records remain compliant and that your identity verification status remains correct across your roles.
If you would like support completing your identity verification, our team is happy to help. Simply get in touch through our contact page and we can guide you through the process and ensure everything is submitted correctly.
Many directors find that having professional support saves time, reduces frustration, and provides reassurance that everything has been handled properly.
Episode Timecodes
00:00 – Introduction to Companies House identity verification
00:20 – Why identity verification was introduced
01:06 – Overview of the new rules from November 2025
01:29 – The PSC birth month verification rule
02:50 – Director deadlines and confirmation statements
03:11 – Understanding the Companies House personal code
03:56 – Consequences of missing verification
04:36 – The two ways to verify your identity
05:00 – GOV.UK self-verification explained
05:21 – Using an authorised corporate service provider
06:39 – Why the new rules matter for every organisation
07:18 – Final advice and next steps

Further Support
📘 Book https://www.ihatenumbers.co.uk/i-hate-numbers-book/
🎧 Podcast https://www.ihatenumbers.co.uk/i-hate-numbers-podcast/
🌐 Website https://www.ihatenumbers.co.uk
If this episode helped clarify Companies House identity verification, share it with another business owner who needs to hear it.
Plan it. Do it. Profit.

In this episode of the I Hate Numbers podcast, we discuss something that many small business owners have not fully realised yet — the hidden cost behind Making Tax Digital for Income Tax. For decades the system was straightforward. You earned money, logged onto the government website, submitted your tax return, and paid what you owed. It was a public service funded through taxes. However, from April 2026 that arrangement changes significantly. HMRC will close the free self-assessment filing portal for many taxpayers and require the use of third-party software instead. We call this the software tax.
What Is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) is HMRC’s long-term programme to modernise the tax system and reduce errors in reporting. In theory, digital record-keeping can reduce mistakes and improve efficiency. We support digital accounting in principle. In fact, tools like Xero cloud accounting can save time, improve visibility, and help businesses make better decisions. But the concern is not digitalisation itself. The concern is forcing taxpayers into paid software just to comply with the law.
The Timeline for MTD
The rollout schedule has already been announced:
April 2026:Sole traders and landlords with income above £50,000 must comply.
April 2027:The threshold falls to £30,000.
Future plans:The threshold could fall to £20,000.

Importantly, this threshold refers to income, not profit. That means even relatively small businesses may fall within the rules.
More Reporting, Not Less
Instead of filing one tax return each year, businesses will need to submit:
Four quarterly updates
An end-of-period statement
A final declaration

That means significantly more reporting — and all through third-party software.
Why This Creates a “Software Tax”
HMRC’s official position is that taxpayers must use recognised commercial software. In effect, this creates a new financial burden. To comply with tax law, individuals must now enter a commercial marketplace and pay for software subscriptions. Some providers offer “free” tools, but many of these operate on a freemium model where additional features quickly trigger subscription fees. Even some bank-provided software requires you to open accounts with specific institutions. Access to tax compliance should not depend on where you bank.
The Government’s Justification
HMRC estimates the UK tax gap at around £46.8 billion. A large proportion of this gap comes from small business errors or incomplete reporting. Digital systems could certainly help reduce those mistakes. However, if the government expects taxpayers to adopt new digital systems, it could reasonably provide a basic free tool to enable compliance.
A Practical Solution
We are not asking for government software that replaces commercial accounting tools. Instead, we believe a basic state-owned compliance tool should exist that allows taxpayers to:
Maintain a simple digital ledger
Submit quarterly updates
Upload spreadsheet data
File their final declaration

Spreadsheets are already digital. There should be a straightforward way to upload them without needing paid intermediary software.
Why This Matters
This is not simply a technical change. It is about fairness and accessibility. Tax compliance has historically been free at the point of use. Requiring businesses to purchase software simply to fulfil legal obligations introduces a new cost for millions of taxpayers. Small businesses, freelancers, and landlords will be affected most.
What You Can Do
If you care about keeping tax compliance fair and accessible, there are a few practical actions you can take:
Sign the petition to stop the software tax
Write to your MP
Share the issue with other business owners and freelancers
Spread awareness about the impact of Making Tax Digital

You can learn more and support the campaign here: 🔗 Stop the Software Tax CampaignEpisode Timecodes
00:00 – Introduction and the broken tax deal
00:45 – What Making Tax Digital means
01:45 – Timeline for MTD rollout
02:40 – Why this creates a software tax
03:40 – HMRC’s justification and the tax gap
04:20 – Why a government tool should exist
05:00 – What action business owners can take
05:30 – Final thoughts

Further Support
📘 Book https://www.ihatenumbers.co.uk/i-hate-numbers-book/ 🎧 Podcast https://www.ihatenumbers.co.uk/i-hate-numbers-podcast/ 🌐 Website https://www.ihatenumbers.co.uk If this episode helped clarify the changes around Making Tax Digital and the growing conversation around the software tax, share it with another business owner who needs to hear it. Plan it. Do it. Profit.