September 2025

Technical and Client Update

In this issue

Statutory Sick Pay – changes for employers from April 2026

Artificial Intelligence – friend or foe?

Government unveils small business plan

Exam success

Statutory Sick Pay – changes for employers from April 2026

The Department for Business and Trade (DBT) has announced that major reforms to Statutory Sick Pay (SSP) will take effect from April 2026. The reforms will enhance employee rights but potentially raise costs for employers. The key changes are:

  • SSP will be payable from the first day of sickness absence (currently SSP is payable after the third day).
  • Employees will no longer be required to meet the £125 per week earnings threshold to qualify for SSP.
  • For those earning less than £125 per week, their SSP entitlement will be the lower of:
    • 80% of their normal weekly earnings; and
    • The set rate of SSP (currently £118.75 per week).

The SSP reforms will present an additional cost to many employers already dealing with the recent increases to National Minimum Wage and Employers’ National Insurance.

It should be remembered that, unlike statutory maternity and paternity pay, SSP cannot be recovered from HMRC. Forecasting for potential increases in payroll costs will be essential, particularly for businesses that experience high levels of staff absence.

Employers are responsible for ensuring employees are paid the right amount of SSP at the right time. It is important to ensure payroll systems are updated in time for April 2026.

Artificial Intelligence – friend or foe?

In a recent Upper Tribunal case (HMRC v Marc Gunnarsson), a taxpayer did not have any professional representation and used Artificial Intelligence (AI) software to draft his skeleton argument in the run-up to the hearing.

The Upper Tribunal found that Self-Employment Income Support Scheme (SEISS) claims made by the taxpayer - a director of a limited company - were incorrect and he was required to repay the amounts received.

His skeleton argument referred to three First Tier Tribunal decisions to support his case, but those cases did not exist – they had been ‘hallucinated’ by generative AI.

The use of AI is increasing, and it is important to verify that the information generated is accurate before relying on it. There is a real danger that inaccurate or fictitious information may be used as evidence in legal proceedings.

Whilst AI obviously has advantages in today’s world, when it comes to tax, it’s very important to verify tax advice with a trained, qualified professional.

Government unveils small business plan

Will it help your business?

The government launched its Small Business Plan in August which it believes will help small businesses grow and encourage entrepreneurs to start businesses.

The plan recognises that small businesses make a vital contribution to the economy, employing 60% of the UK’s workforce and generating £2.8 trillion in turnover.

Here is a breakdown of some of the key measures and how they may impact your business.

Could This Be the End of Late Payments?

Likely not, however, the government is promising the toughest late payment legislation in the G7.

They plan to introduce:

  • A legal requirement for large businesses to pay within 60 days, moving to 45 days over time.
  • Mandatory interest charges on late payments.
  • Greater powers for the Small Business Commissioner, including the ability to fine persistent offenders and carry out spot checks.
  • Audit committees to be legally obliged to scrutinise payment practices.

These reforms could ease cashflow pressures for you and reduce the amount of time spent chasing invoice payment.

Better Access to Finance

The plan includes several measures that could increase access to finance, including:

  • 69,000 Start-Up Loans, paired with business mentoring.
  • A £3 billion boost to the British Business Bank to help more lenders offer loans.
  • £340 million in regional equity investment to help entrepreneurs across the UK.
  • A new Code of Conduct on personal guarantees for government-backed loans.

These changes could mean that there will be more routes to affordable finance.

Cutting Red Tape

The plan promises to make a 25% cut in regulatory administration costs, and reform the tax and customs system to make things simpler and quicker.

Any time saved on compliance and admin means more time for growing your business.

Other Measures

Other measures included in the plan include targeted support for high street businesses, education and training for the next generation of entrepreneurs, and helping businesses to take advantage of additional opportunities at home and abroad.

To review the Small Business Plan in full, see here.

Exam success

We’re delighted to announce that Tommy Matthews has successfully passed his final exams to become a fully qualified Accounting Technician (AAT).

Tommy, who works for Partner Greg Penfold in our Eastbourne office, will now take the next exciting step in his career by beginning his ACA training to become a Chartered Accountant.

Well done, Tommy – and best of luck on the next stage of your journey!