As 2025 draws to a close, we want to take a moment to reflect on a year shaped not just by our own milestones, but by the journeys of the clients we are privileged to support. Every individual, family, and business we work with faces moments of growth, challenge and transition and our purpose is to help them navigate each step with clarity, care and confidence.
Celebrating 50 years of trust, expertise, and financial excellence
This year marked an incredible 50 years of Sopher + Co. This occasion allowed us to reflect on our evolution over five decades while also reaffirming our commitment to the values that continue to drive our work today.
Reflecting on the year, Daniel Sopher shared:
“As we celebrate 50 years, our focus remains firmly on the milestones that matter most, those of our clients. With upcoming industry changes and the recent budget announcement, our role as trusted advisers has never been more important. I’m incredibly proud of our team and the dedication they show to supporting clients through whatever the future holds.”
Welcoming Jason Coker and His Team
A major highlight of 2025 was the acquisition of LWBM Limited earlier this year. By combining Sopher + Co’s established infrastructure – including its Private Office, UK and US tax advisory, and digital accounting services – with LWBM Limited's specialist experience in global touring, royalty audits, and revenue tracking, the firm is uniquely positioned to support clients through key milestones.
The acquisition comes at a pivotal moment for the music industry in particular, as streaming revenues, digital rights management, and AI-driven innovation reshape how artists and entertainment businesses manage their finances and intellectual property.
Sopher + Co’s expanded team will help clients protect and grow their IP portfolios, manage multi-jurisdictional income streams, and maximise global earnings across touring, publishing, recording, and merchandising.
We’re delighted to welcome Jason Coker and his team into Sopher + Co. You can find out more about our Business Management services here.
A New Website Designed Around Client Milestones
In November, we launched our new website to support our mission to guide clients through the key milestones in their personal and business journeys, from marriage, property and family planning to launching, growing, or exiting a business.
Because every decision you make, every transition you face, and every goal you set deserves clear guidance and a trusted partner committed to your success.
Looking Ahead: Budget Implications and Strategic Planning
With significant industry changes expected from key compliance changes to the outcome of the recent budget and broader economic shifts, the year ahead will demand careful financial planning. Our teams are working closely with clients to prepare for regulatory updates, explore opportunities, and build robust strategies that support sustainable growth.
We know that in times of change, clear and empathetic guidance matters more than ever, and we’re committed to providing exactly that into 2026 and beyond.
The rules that govern who pays Income Tax in Scotland is determined by whether an individual is considered a Scottish taxpayer. For most people, determining Scottish taxpayer status is straightforward. Individuals who live in Scotland are considered Scottish taxpayers, while those who live elsewhere in the UK are not.
If a taxpayer has homes in both Scotland and elsewhere in the UK, HMRC guidance is used to determine their main home for Scottish Income Tax purposes. Those without a permanent home who regularly stay in Scotland, such as offshore workers or hotel residents, may also be liable for SRIT.
If a person moves to or from Scotland during a tax year, their tax liability is determined by where they spent the majority of that year. Scottish taxpayer status applies to the entire tax year and cannot be split.
Those defined as Scottish taxpayers are liable to pay the Scottish Rate of Income Tax (SRIT) on their non-savings and non-dividend income.
Employees with a second job, third job or more may be able to defer or delay paying Class 1 National Insurance on their additional employment. This deferment can be requested when Class 1 National Insurance contributions are being paid to more than one employer.
If you have 2 jobs, over the tax year you’ll need to earn:
If you have more than 2 jobs, over the tax year you’ll need to earn:
This deferral could result in NIC deductions at a reduced rate of 2% on your weekly earnings between £242 and £967 in one of your jobs, instead of the standard rate of 8%.
If you are allowed to defer, HMRC will inform you which employer is your main one for full Class 1 National Insurance contributions and which employers you can pay at the reduced 2% rate, sending those employers a certificate of deferment. HMRC does not share information about your other jobs with your employers.
HMRC will check if you have paid enough National Insurance at the end of the tax year and will write to you if you owe anything.
VAT road fuel scale charges are fixed, standardised amounts that businesses must use to account for output VAT when they provide fuel for private use in a vehicle that is also used for business purposes.
The VAT road fuel scale charges are published annually with the current figures applying from 1 May 2025 to 30 April 2026. The fuel scale rates are designed to encourage the use of cars with low CO2 emissions.
A business can use the VAT fuel scale charges to work how much VAT they need to pay back when a business car is used for private journeys. This approach removes the need to keep detailed mileage records. In practice, businesses should reclaim all the VAT on the fuel for the car, then use the fuel scale charge tool to work out the correct charge for the period. Once calculated, this amount needs to be included in the VAT owed on the VAT Return.
Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used. There are special rules for cars which are too old to have a CO2 emissions figure.
There are now less than 2 months to the self-assessment filing deadline for submissions of the 2024-25 tax returns. We urge our readers who have not yet completed and filed their 2024-25 tax return to file as soon as possible to avoid the stress of last-minute preparations as the 31 January 2026 deadline fast approaches.
You should also be aware that payment of any tax due should also be made by this date. This includes the remaining self-assessment balance for the 2024-25 tax year, and the first payment on account for the 2025-26 tax year.
Earlier this year, more than 11.5 million people submitted their 2023-24 self-assessment tax returns by the 31 January deadline. This included 732,498 taxpayers who left their filing until the final day and almost 31,442 that filed in the last hour (between 23:00 and 23:59) before the deadline!
There is a new digital PAYE service for the High Income Child Benefit Charge (HICBC). This allows Child Benefit claimants who previously used self-assessment solely to pay the charge to opt out and instead pay it through their tax code.
If you are filing online for the first time you should ensure that you register to use HMRC’s self-assessment online service as soon as possible. Once registered an activation code will be sent by mail. This process can take up to 10 working days.
If you miss the filing deadline you will be charged a £100 fixed penalty (unless you have a reasonable excuse) which applies even if there is no tax to pay, or if the tax due is paid on time. There are further penalties for late tax returns still outstanding 3 months, 6 months and 12 months after the deadline. There are additional penalties for late payment of tax amounting to 5% of the tax unpaid at 30 days, 6 months and 12 months.
HMRC has published a new Making Tax Digital newsletter. This newsletter is mainly intended for taxpayers and agents who are currently testing the Making Tax Digital for Income Tax (MTD for IT) system. MTD for IT will become mandatory in phases from April 2026.
For nearly two years, HMRC has been stress-testing its MTD for IT systems to ensure they can support increasing numbers of volunteer taxpayers. So far, HMRC has confirmed that testing has successfully deal with:
More recent testing in 2025 as HMRC scales up the rollout include:
April–June 2025
July–September 2025
During the testing phase, there are no penalties for late submissions, but submitting on time is encouraged by HMRC as it helps those testing the system understand the requirements and allows for the service to be properly stress tested.
If your qualifying income is over £50,000 in the 2024–2025 tax year, you will be required to start using MTD for IT from 6 April 2026. There are some minimal exemptions in place.
The Financial Services Compensation Scheme (FSCS) has raised its savings guarantee for bank deposits, increasing the deposit protection limit from £85,000 to £120,000 per person. This change came into effect on 1 December 2025 and marks a significant increase in how your bank deposits are protected in the UK.
This new deposit protection limit ensures that qualifying UK bank and building society depositors are covered if their bank fails. The FSCS compensation limit is reviewed periodically by the Prudential Regulation Authority (PRA). Following a consultation in March 2025, the PRA confirmed the increase in November 2025. Prior to this, the £85,000 limit had been in place since January 2017.
The FSCS protection applies per person, per bank or building society, which means joint account holders are eligible for double the protection, or up to £240,000 in total. In addition, savers with certain types of temporary high balances such as proceeds from a house sale, insurance payouts or inheritances can also benefit from increased protection. This limit has increased from £1 million to £1.4 million per depositor per life event. This additional coverage is available for up to six months.
For most savers, the new £120,000 limit will provide adequate protection. However, those with deposits exceeding this amount should consider spreading their savings across multiple banks or building societies to ensure all their funds are covered. It is important to note that if you hold multiple accounts within a single banking group (i.e., banks that share the same banking licence), the £120,000 limit applies to the total amount across all accounts within that banking group, not to each individual account.
You do not need to take any action to benefit from the increased protection. If your bank or building society were to fail, the FSCS would automatically compensate you up to the new limits.
From all at the Sopher + Co team we would like to wish you a very happy holiday season!
Please note that our offices are closed over the Christmas & New Year holiday period on the following dates:
Christmas: Wednesday 24th to Friday 26th December 2025
New Year: Wednesday 31st January 2025 and Thursday 1st January 2026.
Many modern companies insist on the inclusion of restrictive covenants to limit the freedoms of employees upon the termination of their contracts. However, the High Court recently reinforced the stringent legal principles governing the enforceability of such restrictive covenants, suggesting that they often overstep.
A young man had been working as a salesperson for a UK subsidiary of an American company that sells made-to-measure suits and shirts manufactured in the USA. His original contract included restrictive covenants limited to 6 months. However, the contract was changed in 2022 to double the duration of the non-compete covenant to 12 months and remove the previous reliefs, significantly widening their scope. The employee asserted that he was not informed of these changes, and the claimant failed to produce any evidence to justify the widening of the scope of the limitations or the doubling of their duration.
The employee’s initial performance was strong, although following a conduct issue in January 2025, he was subjected to an addendum requiring humiliating and intrusive conditions, including weekly “counselling”, a ban from earned trips, and exclusion from leadership roles. The ex-employee had also raised product quality concerns, which he felt were ignored, and found the work culture ‘toxic’ and the disciplinary action both unfair and intrusive. As a consequence, he resigned in frustration in 2025, only to be subjected to an “insensitive, verging on brutal” retaliation. Within two days, the HR manager had cut off all IT access, threatened an investigation, and banned the defendant from the office. A day later, on Sunday, the claimant’s lawyers hand-delivered a threatening letter to the defendant’s home seeking to enforce a 12-month restrictive covenant. Moreover, there were claims that the defendant had breached his contractual duties, including running down his sales in the months prior to his resignation, and soliciting staff.
The High Court dismissed the claim for breach of contract and ruled that the 12-month restrictive covenant was unenforceable, as it far exceeded what was reasonably necessary to protect the claimant’s business. Moreover, the Court found the decline in performance to be stress-related and due to his inevitable demotivation.
This case reinforces the longstanding principle that courts will not uphold a covenant if it extends beyond what is strictly necessary to protect an employer’s legitimate business interests, which are typically delimited to confidential information and customer goodwill. The case serves as a warning in relation to the risks employers run when their conduct is perceived to be heavy-handed, humiliating, or toxic, particularly during disciplinary or exit procedures. HR departments should be wary of engaging in overtly humiliating or heavy-handed disciplinary rituals, as these may be viewed as a form of brutality.
As we look ahead to 2026, there is growing speculation about how the Bank of England will manage interest rates during what many economists believe will be a period of calmer inflation, steadier wage growth and a more predictable economic backdrop. After several years shaped by sharp price rises, supply chain shocks and policy responses that required rapid increases to the Bank Rate, the outlook for the coming year appears more settled and this is creating a sense that borrowing costs may edge downwards rather than upwards.
The current Bank Rate stands at around four per cent following a series of cuts through 2024 and 2025 as inflation eased gradually. Policymakers have indicated that they remain alert to any resurgence in inflationary pressure, yet they also recognise that the period of high inflation is now behind us. If this trend continues and inflation drifts closer to the Bank’s long term target, it will give the Monetary Policy Committee more room to make modest reductions during 2026. Many forecasters expect something in the region of a quarter to half a percentage point of cuts during the year, although the timing will depend heavily on the data released each quarter.
For households and businesses, this would create a slightly more comfortable lending environment. Mortgage borrowers on variable deals may feel some relief as repayments fall a little and businesses that rely on flexible credit facilities could find that their financing costs ease. Fixed mortgage rates may also become more attractive if lenders anticipate further gradual reductions. However, the broader economic impact is unlikely to be dramatic, since the Bank is not expected to deliver large or rapid cuts. The emphasis is more likely to remain on steady adjustments that avoid disrupting confidence or encouraging excessive borrowing.
It is worth noting that a full return to the ultra-low interest rate environment seen before the pandemic is not expected. Structural changes in the UK economy, global supply conditions and the government’s fiscal position all point towards a future in which interest rates remain higher than the levels seen in the decade prior to 2020. Even so, a move towards slightly lower borrowing costs in 2026 would be consistent with a maturing recovery and a gradual balancing of supply and demand across the economy.
Overall, the most probable outcome for 2026 is a measured reduction in interest rates that supports economic stability without risking a renewed surge in inflation.
Mayfair
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