The UK’s financial and tax landscape is evolving rapidly. Whether you are a business owner, freelancer, investor, or landlord, the way you report income, manage accounts, and interact with HMRC is undergoing significant changes.
From artificial intelligence in bookkeeping to new tax rules targeting cryptocurrency, side hustles, and property ownership, the period after May 2025 marks the start of a new era for UK taxpayers.
At Friendly Assist Accountancy, we believe that the best way to stay ahead is to prepare early. Understanding the key changes now will help you make smarter financial decisions and avoid unnecessary penalties later.
Cryptocurrency and Digital Assets: New Rules for a New Era
Cryptocurrency is no longer a fringe interest. Around one in four small UK businesses now use digital assets, and that figure rises to 60 percent among mid-sized firms. However, more than 60 percent of those businesses do not have proper accounting systems in place for crypto transactions, leaving them exposed to compliance risks and potential penalties.
From 2026, new rules under the OECD’s Crypto-Asset Reporting Framework (CARF) will significantly change how crypto activity is monitored and taxed.
What’s Changing
- Global Reporting: Exchanges, wallets, and DeFi platforms will be required to share customer data with HMRC, similar to how banks already report capital gains and interest.
- Clearer Tax Treatment: Earnings from NFTs, staking, and yield farming will be explicitly defined and taxable under new guidance.
- International Data Sharing: HMRC will exchange information with overseas tax authorities, so trading on international platforms will no longer go unnoticed.
What You Should Do
- Keep Detailed Records: Track every transaction, including trades, staking rewards, and DeFi lending. Specialist tools such as CoinTracking or Recap can help.
- Get Expert Advice: Work with an accountant experienced in crypto tax to ensure accurate valuations, especially for less-liquid tokens.
- Disclose Past Activity: If you have unreported crypto income, consider making a voluntary disclosure before new enforcement measures come into effect.
HMRC is investing heavily in systems to monitor digital asset activity. Accurate, well-organised records are now essential.
IR35: Tighter Rules and More Audits
IR35 enforcement is being stepped up, particularly in sectors such as technology, logistics, and the creative industries where freelance work is common. A new version of the Check Employment Status for Tax (CEST) tool is due to launch, offering improved reliability for assessing employment status.
Agencies and intermediaries will also bear greater responsibility for ensuring contractors are correctly classified. This shift means that freelancers using Personal Service Companies (PSCs) and the businesses that hire them must be more proactive about compliance.
How to Prepare
- Review Contracts: Regularly review and update contracts to ensure they accurately reflect working arrangements.
- Use Updated Templates: Avoid relying on outdated contract templates that may no longer meet HMRC standards.
- Consider Insurance: Tax investigation insurance can provide valuable protection in the event of an HMRC audit.
HMRC’s Expanded Powers: Faster and Broader Investigations
HMRC now has more tools to identify and investigate tax discrepancies. Several key changes make enforcement more efficient and more likely.
- Points-Based Penalty System: Missing a deadline will initially result in a warning, but repeated delays will trigger escalating penalties even if the tax return itself is accurate.
- Financial Institution Notices (FIN): HMRC can now request bank account information without a court order or notifying the taxpayer.
- Platform Reporting: Gig economy and e-commerce platforms such as eBay, Vinted, Airbnb, Etsy, and Deliveroo are now required to report users’ income directly to HMRC.
What You Should Do
- Declare All Income: If you earn more than £1,000 per year from self-employment, side hustles, or digital income streams, you must report it.
- Treat All Earnings Equally: Record and track gig or freelance income with the same diligence as salary or dividend income.
- Schedule Annual Reviews: Have an accountant review all income sources annually to ensure nothing is missed.
Even small amounts of undeclared income can now be easily detected. Staying compliant from the start is far less costly than dealing with an investigation later.
Property Tax: Shifts on the Horizon
The property tax landscape is also changing, with some landlords and investors facing higher costs while others may see relief.
Key Changes to Expect
- Business Rates Revaluation (April 2026): Rates will be recalculated based on updated rental data, which could lead to significant increases for some properties.
- Continued Sector Relief: Reliefs for retail, hospitality, and leisure are expected to continue, although eligibility rules may become stricter.
- Stamp Duty Land Tax (SDLT): Buy-to-let investors could face higher SDLT charges as part of measures to curb speculative investment and address housing shortages.
What Property Owners Should Do
- Review Your Property Valuation: Check your new rateable value and appeal if it appears excessive.
- Plan Ahead: Complete buy-to-let purchases ahead of potential SDLT changes.
- Explore Green Upgrades: Energy efficiency improvements can boost property values and may qualify for tax incentives.
Final Thoughts: Prepare Now, Benefit Later
The pace of tax reform is accelerating, and 2026 will be a defining year for UK taxpayers. Those who plan ahead will be best placed to minimise risks and take advantage of new opportunities.
At Friendly Assist Accountancy, we specialise in helping individuals and businesses stay compliant, reduce tax exposure, and make confident financial decisions. Whether you need support with crypto accounting, IR35 status reviews, or property tax planning, we are here to help.
Your first telephone consultation is free. Get in touch with Steffen today and start preparing for the future before the new rules come into force.
For more details on the upcoming changes, you can read the official HMRC summary here:
Tax Update Spring 2025 – Simplification, Administration and Reform