Hi Reader,

It's been one of those fortnights where every headline seems to come with a deadline attached. Grab a coffee. Possibly a calendar too.

IN THIS ISSUE:

• Employment law is changing: and why hiring freelancers isn't the loophole it looks like.
• Companies House wants to see your ID: the ten-minute job with a November deadline.
• Making Tax Digital, round two: the next date for your diary.

Plus: £26bn stuck in late invoices, and why banks say no.

⚖ Employment law is changing. No, freelancers aren't the loophole.

If you employ even one person, the next four months matter more than the last four years.

The Employment Rights Act starts to bite this week.

• From 1 October, staff get six months instead of three to bring most tribunal claims, including unfair dismissal and discrimination.
• From 30 October, you’ll need to take “all reasonable steps” to prevent sexual harassment, including from customers and clients, and give staff a written statement about their right to join a union.
• Then comes the big one. From January 2027, protection from unfair dismissal kicks in after six months’ service, down from two years, and the cap on compensation is removed. Anyone you hired since July will already be covered on day one of the new rules.

So should you just use freelancers instead?

Here’s the catch: you don’t get to decide who’s a freelancer. HMRC and tribunals look at how the work actually happens. Do you set their hours? Do they use your kit? Could they send someone else to do the job? If they look like an employee, they probably are one. Get it wrong and you could owe back PAYE, employer’s National Insurance, interest and penalties, plus the employment rights you thought you’d sidestepped.

What to do this month:

• Put a harassment policy in place with a named contact, and look at any customer-facing or lone-working roles
• Set probation at five months, with a proper review before the six-month mark​
• Keep short notes of performance conversations from day one.
• Be honest about which of your “freelancers” are really staff.

Would your current setup survive a tribunal asking to see the paperwork?

👨👩 Companies House wants to know it's really you

If you’re a director of a limited company, this is the deadline not to let slide.

Since 18 November 2025, verifying your identity with Companies House has been a legal requirement. Existing directors and people with significant control (PSCs, usually anyone owning more than 25%) were given a 12-month transition to get it done, and that window runs out in November (GOV.UK).

Miss it and you’re committing an offence. That can mean a fine, and being unable to file company documents or set up new companies.

The good news? It’s quick. You can do it yourself through GOV.UK One Login with photo ID such as your passport, or ask your accountant or formation agent (an “authorised corporate service provider”) to do it for you.

Top tip: Make sure it's done this week, while it’s a ten-minute job rather than a panic.

💻 Making Tax Digital: round two

Sole trader or landlord with income over £50,000? Your second quarter ends on 5 October, and the update is due by 7 November.

Missed the first one? Sort it now.

HMRC isn’t handing out penalty points for late quarterly updates this tax year. That won’t last. After that, four points means a £200 fine.

Over £30,000? You’re in from April 2027. Once you’re in, HMRC’s free online return is no longer an option, so you’ll need compatible software.

Pick it now, not next March.

​

👀 Worth checking out this week

• £26bn stuck in late invoices. 42% of small firms were paid late in the past year. A good nudge to tighten your payment terms. (CPA)
• Why banks say no. The Financial Conduct Authority (FCA) says complicated applications and vague reasons for refusal, not regulation, are what’s holding back small business lending. (Credit Connect)
• Just 4% of the self-employed pay into a pension. If that’s you, future you would like a word. (Startups)
• £10m Hospitality Grant Scheme. How to apply if you’re in hospitality. (Gov.UK)

One thing …

Have the employment changes made you rethink hiring, or are you pressing on as planned?

Hit reply and let us know. We read every response, and it genuinely shapes what we cover next.

We’re here to help you make better business decisions quicker — right from BEFORE day one.

All the best,

Graeme and Neil

Co-founders, Basics of Business (BoB)

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