Business Law and Practice 2025/26 Update for July 2026 Exam

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023 and has made some changes to the Companies Act 2006. Not all of its provisions are in force and further changes are likely to be implemented in the course of 2026/27. Useful updates on implementation can be found on the ‘Changes to UK company law’ pages of the gov.uk website.

Under ECCTA, from 18 November 2025 it is no longer a requirement for companies to keep their own statutory books, save for the register of members. However, some companies may continue to choose to hold them. From 26 January 2026, companies can no longer elect to hold membership information solely on the central register.

Under ECCTA, identity verification requirements (IDV) are being gradually introduced for directors, people with significant control (PSCs) and those delivering documents to Companies House (s 1110A and s 1110B CA 2006). A 12-month transition phase began on 18 November 2025, although voluntary IDV became possible from 8 April 2025. The procedure is now compulsory on incorporation and for both new and existing individual directors and PSCs and members of LLPs. IDV requirements for others (including those who file documents at Companies House) is expected to follow in November 2026. Existing directors must confirm their identity as part of the company’s next Confirmation Statement, and PSCs are given a 14-day period for compliance. Under the procedure, relevant individuals must have their identity verified at Companies House online, at a post office or by an ‘Authorised Corporate Services Provider’ (ACSP), registered with Companies House. There are criminal penalties for non-compliance.

The definition of a small company for accounts purposes is now a company which satisfies two or more of the following:

· Turnover of not more than £15m (increased from £10.2m)

· Balance sheet of no more than £7.5m (increased from £5.1m)

· Not more than 50 employees (this has remained static).

A new capital allowance was introduced on 1 January 2026 – the first-year allowance (FYA). The new relief is set at 40% and applies to assets beyond the current availability of full expensing and the AIA. It applies to all businesses (incorporated and unincorporated) and, although second hand assets and cars are specifically excluded, it can include assets bought for leasing. The relief is particularly useful for the balance of any new expenditure where the cap applying to the AIA has been exceeded.