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Le iperstizioni sono “profezie autovverantisi”, cioè rappresentazioni della realtà, concezioni, credenze, interpretazioni, comportamenti e così via, il cui fondamento principale sono il marketing concettuale e la diffusione massiva attraverso i media digitali (definizione reperita su concetticontrastivi.org). Il termine è stato coniato da Nick Land, filosofo e scrittore britannico, padre dell’ “Accelerazionismo”, per definire delle notizie prive di alcun fondamento che però viaggiano nel tempo e assumono progressivamente sempre più credibilità. Per analizzare un caso di questo genere e per tentare di comprendere se la vicenda aveva un reale fondamento o se si trattava invece proprio di una sorta di “iperstizione” prodotta nel 1930 e che poi si è conservata e diffusa con successo (essendo funzionale a diversi contesti sociali, politici e culturali), abbiamo tentato di applicare un metodo scientifico, scomponendo il quadro informativo proposto da scritti e comunicazioni orali in diversi sottoelementi che sono stati poi verificati singolarmente. Il risultato della nostra analisi lascia però pochi spazi ai dubbi. Gli elementi salienti, costitutivi della leggenda della “Dama Bianca di Poggio Catino” e che poi si sono rilevati oggettivamente non veri, sono i seguenti:

1. Lo scheletro contenuto in una cella all’interno del museo criminologico di Roma apparterrebbe a una donna uccisa in circostanze misteriose intorno alla fine del secolo XIV: notizia falsa (lo scheletro è di un uomo);
2. Lo scheletro apparterrebbe a una persona uccisa all’inizio del secolo XVI: notizia falsa (da una osservazione esterna del reperto lo scheletro dovrebbe risalire alla seconda metà dell’800 e comunque in assenza di esame all’isotopo di carbonio ogni datazione è pura congettura attesa la mancanza di contestualizzazione del reperto al momento della scoperta);
3. Al momento del ritrovamento di uno scheletro a Poggio Catino degli emissari del museo criminologico lo avrebbero prelevato insieme alle pareti della cella che è poi stata ri–assemblata nel museo: notizia falsa (la cella del museo che ospita lo scheletro è una ricostruzione in cartongesso); quindi nessuno smantellamento degli ambienti della fortificazione;
4. Lo scheletro ritrovato a Poggio Catino avrebbe avuto mani e pieni legate da catene che sarebbero state portate al museo insieme ad altro materiale ritrovato nell’occasione: notizia falsa; i ceppi attualmente presenti intorno ai polsi dello scheletro nel museo sono dei mezzi di contenzione per le caviglie e attribuibili, apparentemente alla fine dell’800;
5. Secondo Sergio Biraghi, nipote del proprietario del castello all’epoca del ritrovamento dello scheletro, il luogo dove sarebbe avvenuta la “macabra scoperta” sarebbe addossato a un muro, alla destra dell’ingresso alla parte alta della fortificazione e dove in passato c’era un torrione: notizia falsa (esperti di castelli, dopo accurati sopralluoghi, hanno escluso che nel punto indicato possa esserci stato un torrione poi crollato);
6. Secondo Sergio Biraghi, al momento del ritrovamento dello scheletro della Dama Bianca sarebbe venuto alla luce anche un armigero, forse anch’egli detenuto in una cella attigua, che sarebbe poi stato seppellito in una tomba nel cimitero comunale di Poggio Catino: notizia falsa, da accurate indagini all’interno del cimitero comunale non ci sono tracce di tombe dell’epoca che potrebbero ospitare l’armigero.

In effetti avevamo avuto la sensazione fin dall’inizio che la storia della Dama Bianca fosse poco credibile per il semplice motivo che la ricostruzione della vicenda, così articolata, ricca di particolari, moventi, personaggi, dinamiche familiari ed economiche, fosse stata possibile semplicemente ritrovando uno scheletro senza nome.

Per non cadere nella trappola delle pseudo–scienze e delle conclusioni affrettate basate sull’intuizione e non sui risultati di un metodo scientifico, abbiamo affrontato il caso in maniera “avalutativa” escludendo progressivamente, come del resto suggerì Sir Arthur Conan Doyle, tutte le ipotesi impossibili per giungere a quella che probabilmente è la verità su questa intricata ed emozionante leggenda. Come sia stato possibile che una “fake new” come quella della Dama Bianca possa essere sopravvissuta nel tempo e anzi si sia amplificata, trovando addirittura spazio in opere letterarie e siti istituzionali ufficiali, è poi relativamente facile da comprendere.

La leggenda ha infatti tutti gli ingredienti per divenire appetibile e trasmissibile. È in grado di provocare emozioni forti, si riferisce a un terribile sopruso, riguarda una giovane e forse bella donna, si affacciano infine intricate questioni di tradimenti e infedeltà. “l’iperstizione” della Dama Bianca di Poggio Catino ha quindi visto, fin dal suo inizio negli Anni Trenta, una cospicua serie di “venditori di storie” e in seguito una pletora di creduloni che negli anni hanno tramandato la vicenda (in realtà mai avvenuta) attraverso scritti e pezzi giornalistici, arricchendola talvolta di ulteriori particolari fantasiosi ma privi di alcun riscontro. Su questo si è innestata poi con una certa facilità anche la superstizione del fantasma nel castello. Così facendo, in sostanza, hanno creato una leggenda che si è “storificata” nell’immaginario collettivo anche se priva di riscontri scientifici, documenti, materiali. In primis i responsabili e i gestori del museo Criminologico nel periodo fascista che pur certamente avendo contezza della montatura, hanno cavalcato la “ghiotta” leggenda della Dama Bianca, in grado, per sua natura, di stimolare impetuosi sentimenti popolari e di interessare morbosamente i visitatori. L’emozione che è in grado di generare il pensiero della fine orribile e ingiusta di una giovane donna è stata poi abilmente sfruttata e resa spettacolare negli anni per migliaia di ignari spettatori del museo criminologico di Roma. Poi, all’inizio del 2019, quando sono cominciate a giungere richieste sempre più insistenti da parte di studiosi insospettiti che avrebbero potuto far scoprire la messa in scena, i responsabili attuali del museo hanno tentato, forse per pudore, una ultima strenua resistenza a svelare ”l’inganno originale” dei loro colleghi del Ventennio, rendendo difficile l’accesso ai fascicoli ed ai documenti relativi all’installazione museale e non consentendo una osservazione “ravvicinata”, una ispezione accurata od analisi della presunta Dama Bianca. Ma questo non è stato sufficiente a non svelare tale inganno. E a questo punto un interrogativo sorge spontaneo. A chi appartiene lo scheletro maschile presente nel museo criminologico di Roma e sottratto per così tanti anni a pietosa sepoltura per soddisfare i pruriti macabri dei visitatori giunti da tutto il mondo? Noi abbiamo fatto la nostra parte per gettare luce nella vicenda della Dama Bianca. Lasciamo lo studio di questo ulteriore “case cold” all’iniziativa di altri solerti studiosi a cui auguriamo tutte le fortune.

Una cosa è però adesso certa: i suoni lunghi ed a volte inquietanti, simili a veri e propri ululati, che in alcune notti si sentono distintamente provenire dall’apice del castello e che turbano i sonni degli abitanti del centro storico di Poggio Catino, non sono le richieste di giustizia da parte del fantasma della Dama Bianca ma è il vento di scirocco, che forse da sempre a conoscenza dell’inganno, fa sentire beffardo le sue lunghe risate. Poggio Catino non ha comunque bisogno di fantasmi e leggende per manifestare la sua bellezza. Il suo fascino è nelle sue atmosfere antiche, nello spirito medievale che scaturisce da ogni pietra dei suoi vicoli, nei suoi panorami mozzafiato e negli sguardi saggi, consapevoli e sornioni dei suoi abitanti.

L’invito all’Amministrazione comunale di Poggio Catino di partecipare alle fasi finali della redazione della nostra ricerca non ha avuto risposta.

Employment Hero’s research shows that job satisfaction could be better, with the average job satisfaction rating among employees being 6.4 out of 10. We know it’s not terrible, but it’s also not great. And we can all do better. 

The issue with a lack of satisfaction is that it leads to disengagement. It’s easy to spot employees who are quiet, going through the motions and doing the bare minimum. But for business owners and HR managers, knowing how to solve this problem is challenging. 

The old ways of motivating teams like the occasional team lunch and annual bonuses aren’t quite working the way they used to. This quiet quitting is a silent killer of productivity, innovation and morale. You need to wake your people up.

It’s time to move beyond outdated approaches and start communicating in a way that resonates with today’s workforce, through progress, achievement and recognition. While gamification for employee engagement is still gaining traction, forward-thinking companies are beginning to harness its power. They’re not just adding games to work; they’re reimagining how work can be more motivating, rewarding, and meaningful.

What is gamification?

Gamification is the strategic use of game-like elements to make everyday work more engaging and rewarding. This can include:

• Points 
• Badges
• Leaderboards
• Progress tracking

It’s not about playing games at work; it’s about tapping into the same human psychology that makes games so motivating. While it might sound like an obscure concept, by turning progress into something visible and achievement into something celebrated, gamification helps employees stay motivated, teams stay aligned and businesses build cultures that people genuinely want to be part of.

What is gamification in the workplace?

Gamification in the workplace is about transforming everyday tasks into meaningful, motivating experiences. The game mechanics brought into daily workflows are designed to spark engagement, drive performance and nurture a culture of growth and recognition.

For many businesses, success is measured by outcome, which can sometimes negatively impact motivation. Whereas companies using gamification for employee engagement foster a culture of celebrating progress. Imagine turning compliance training into a mission that earns rewards, or transforming sales targets into a friendly competition that fuels collaboration and achievement. It’s a simple yet powerful way to turn disengagement into energy, participation and real results.

How gamification can supercharge employee engagement

Companies using gamification for employee engagement tap into our core human drivers: the deep-seated desire for purpose, mastery, achievement and recognition. 

By creating clear goals, offering instant feedback on progress and celebrating every win, you turn work into a more satisfying experience. A well-designed gamification strategy can transform a disengaged workforce into a team of motivated players who are invested in their own success and the success of the business. The first step is often a simple employee engagement survey to see where you stand.

Real-life examples of gamification that works

Companies using gamification for employee engagement isn’t just folklore, it’s a strategy that businesses are already using. Tech giants, global sales organisations and innovative customer service teams are leveraging gamification to smash their goals. They are demonstrating that when you make work more engaging, you get better results. These businesses prove that gamification is a serious business tool, not a passing fad.

5 Powerful examples of gamification for employee engagement

This is your playbook of proven tactics. These examples can be adapted to almost any business to make an immediate impact on engagement. Here are five ways you can begin using gamification to supercharge employee engagement. 

1. Onboarding quests

Turn the onboarding process into an adventure. New hires earn points and unlock badges for completing key tasks, such as:

• Setting up their HR profile
• Completing mandatory training
• Meeting key team members. 

This makes the first few weeks more engaging and ensures critical steps aren’t missed.

2. Learning leaderboards

Make training a competition. Award points for completing e-learning modules, with a live leaderboard showing who is leading the way. This encourages faster completion and higher retention of information.

3. Wellness challenges

Create team-based wellness challenges where employees log activities like steps taken, minutes meditated, or healthy meals. Teams compete against each other, fostering both wellbeing and camaraderie.

4. Idea submission badges

Encourage innovation by creating a system where employees submit ideas for business improvement. Award badges for “First Idea,” “Most Voted Idea,” or “Implemented Idea” to recognise and reward creative thinking.

5. Digital “high fives”

Implement a peer-to-peer recognition system where employees can award points or digital “high fives” to colleagues who have helped them or demonstrated company values. This reinforces a culture of appreciation.

5 Smart examples of gamification for team building

A team that plays together, stays together. Gamification can be a powerful tool for strengthening the bonds between your employees. Here’s how: 

1. Team sales competitions

Instead of individual leaderboards, create team-based sales contests. The entire team works towards a shared goal and everyone shares in the reward. This promotes collaboration over cut-throat competition.

2. Virtual escape rooms

Use online escape room platforms that require a team to work together to solve puzzles and “escape” within a time limit. It’s a fun and effective way to improve communication and group problem-solving skills.

3. Collaborative project milestones

For large projects, create a shared progress bar or “map” where the team unlocks the next stage by completing a collective set of tasks. This visualises shared progress and celebrates teamwork.

4. “Guess Who?” team quizzes

Create quizzes based on fun facts submitted by team members. It’s a lighthearted way for people to learn more about their colleagues on a personal level, which is especially valuable for remote or hybrid teams.

5. Cross-departmental challenges

Pit different departments against each other in a friendly competition, such as a charity fundraising drive or a creative challenge. This builds bridges across the organisation and breaks down silos.

5 Impactful examples of gamification for strengthening team culture

Culture isn’t what you write on the wall; it’s what you reward and celebrate every day. Gamification is a powerful way to bring your company values to life.

1. Values-based recognition

Create a peer-to-peer recognition system where employees can award points specifically for actions that demonstrate a company value, such as:

• Customer obsession points. 
• Innovate and simplify badges.

2. Culture quizzes

Regularly run short quizzes about the company’s history, mission and values. This reinforces cultural knowledge in a fun, low-pressure way.

3. “Values Champion” leaderboard

Create a leaderboard that isn’t based on sales or performance, but on who has received the most values-based recognition points from their peers. This makes living the values a visible and celebrated act.

4. Ethical dilemma simulations

For roles that require strong ethical judgment, create gamified scenarios where employees must make decisions based on company values and policies, earning points for choosing the correct course of action.

5. On-the-spot rewards

Empower managers to award instant digital badges or points to employees they see living the company values in their day-to-day work. This reinforces desired behaviours in real-time.

The undeniable benefits of gamification for your business

It’s no secret, engaged teams don’t just work harder, smarter, stay longer and contribute more to business success. Gamification isn’t just a nice-to-have; it’s a proven way to drive measurable impact across your organisation. 

Companies using gamification for employee engagement often find they benefit from:

• Higher productivity: Gamification can lead to a significant increase in employee productivity by providing clear goals and instant motivation.
• Improved employee retention: Engaged employees are far less likely to leave. By making work more satisfying and rewarding, you reduce costly employee turnover.
• Better knowledge absorption: Gamified training leads to higher engagement and better retention of information, resulting in a more skilled and knowledgeable workforce.
• Stronger company culture: When you gamify your values and recognition, you build a stronger, more connected and more positive company culture.

The rules of the game: best practices for internal gamification

When it comes to gamification, design matters. A well-crafted experience can ignite motivation and connection. On the other hand, a poorly designed one can have the opposite effect. To create a game that truly engages your people, focus on these proven best practices.

• Align with business goals: Every game must have a purpose. Don’t gamify for the sake of it. Tie every initiative to a clear business objective.
• Keep it simple: The rules should be easy to understand in seconds. If it’s too complicated, people won’t participate.
• Ensure fairness and inclusivity: The game should be winnable by everyone, not just your top performers. Ensure it’s accessible and fair to all roles and skill levels.
• Celebrate participation, not just winning: Reward effort, progress and participation. Recognise people for trying, not just for coming in first place.
• Get feedback and adapt: Your first version won’t be perfect. Launch a pilot, gather feedback from your employees and be prepared to tweak the rules.

How gamification connects your employees, your customers and your business

There is a powerful ripple effect that starts with your team and ends with your customers. Engaged employees create happy customers, which drives business growth.

As an example, when you use gamification to train your customer service team on product knowledge, they provide faster, more accurate service. Or when your sales team is motivated by a team-based competition, they collaborate to close more deals and drive more revenue. Gamification connects the dots between internal engagement and external success, turning your employee engagement into a profit centre.

How to design your first gamification initiative

Ready to bring gamification to life in your business? Here’s your quick-start guide to getting it right from day one.

1. Identify a single problem: Don’t try to boil the ocean. Pick one clear, specific business problem to solve. (e.g., “New hires are taking too long to complete their onboarding training.”)
2. Define success: How will you know if you’ve won? Define a clear, measurable outcome. (e.g., “Reduce average onboarding completion time from 4 weeks to 2 weeks.”)
3. Choose simple mechanics: Start with the basics. A simple points-and-badges system is a great place to begin.
4. Launch a pilot: Roll out your game to a small, controlled group first. Measure the results, get their feedback and refine the process before you launch it company-wide.

Common gamification pitfalls and how to avoid them

Like any powerful HR tool, gamification works best when it’s thoughtfully designed. When done well, it inspires collaboration, motivation and achievement, but when done poorly, it can create frustration or even disengagement. The key is to strike the right balance between fun and function, competition and collaboration, recognition and reward.

Before you roll out your own initiative, learn from the common mistakes businesses make and more importantly, how to avoid them… so your gamification strategy sets your people up for lasting success.

The Pitfall	The Fix
Creating unhealthy, cut-throat competition that kills teamwork.	Focus on team-based competitions or individual progress against a personal best, rather than just individual leaderboards.
Making the rules too complicated or the rewards uninspiring.	Keep the rules simple. Offer rewards that people actually want, which might be non-monetary, like an extra day of leave or public recognition.
Only rewarding the top 1%.	Create multiple ways to win. Reward improvement, consistency and participation, so everyone feels they have a chance to be recognised.

Embrace the future of employee engagement with Employment Hero

Future-proofing is essential for modern businesses, and companies using gamification for employee engagement are ahead of the curve. By transforming everyday tasks into meaningful, motivating experiences, you’re not just improving engagement, you’re building a culture of progress, recognition and shared success.

Disengagement doesn’t have to be your business reality. When employees can see their impact, celebrate their achievements and feel part of something bigger, everything changes; productivity rises, retention strengthens and your culture thrives.

But finding the time to focus on new initiatives can be challenging when you have a to-do list as long as your arm. This is where Employment Hero comes into play. Our Employment Operating System (OS) takes the traditional, isolated elements of employment and puts them into one place. Find and hire top talent, onboard, manage complex payroll, supercharge employee engagement and more. 

One system, everything employment.mployee lifecycle. Find and hire top talent, onboard, manage complex payroll, support compliance and more.

In manufacturing and distribution companies, the CFO faces mounting pressures.

These range from a spike in economic uncertainty, to ongoing supply chain disruptions, and a slew of new regulations in areas such as packaging, AI practice, and emissions reporting.

More than ever, companies need finance to adopt a more strategic role to help them navigate volatility and change.

This article delves into the challenges finance chiefs face in these sectors, and how they can develop their roles to overcome these obstacles.

Here’s what we discuss:

Boosting decision support

Finance leaders are increasingly expected to collaborate more widely with other business functions, such as operations and sales, to support decision-making.

But research by Sage shows manufacturing CFOs are underrepresented in this area.

They are less involved in operations (57%) than the average (67%). And fewer than average report significant involvement in strategy and collaboration with the C-suite or board.

Gemma Hogan is CEO at Hawkhurst Accounting and previously finance business partnering manager at Mercedes-AMG Petronas Formula One.

She says to build strategic influence, finance leaders need to develop curiosity about the needs of others across the organisation.

For example, at a previous company, the operations director was known for having little time for finance people.

“The team expected I’d struggle to build any partnership with him,” she says. “Early on, I needed to address the lack of a structured forecasting process, and noticed operations weren’t involved.

“Knowing they must have some version of forecasting to manage raw material scarcity and production bottlenecks, I walked over and asked how his team approached it.

“He looked surprised, then laughed and said: ‘Nobody from finance has ever asked me that.’

“I explained I didn’t want to redesign the wheel, just translate his team’s process into a financial view. He cleared his morning to show me everything.

“From then, that director regularly came to my desk to discuss business issues or invite me to meetings for a finance perspective.

A genuine interest in his world had turned scepticism into trust and built the foundation for true business partnering. Every department should feel that finance is their trusted adviser, not the final checkpoint.

gemma hogan, Ceo, hawkhurst accounting

The best teams develop this trust by turning commentary into actionable insight, using language that resonates beyond finance.

If you have a big enough team, you can even go further by embedding finance staff in operations and commercial teams to transform your engagement with them.

“Once finance is invited, and shows up, in planning meetings, production reviews, and sales discussions, it stops explaining results and starts influencing them,” adds Hogan. “If your finance team is only invited at the end of a process, something’s wrong.”

Keeping up with sector changes

Operating models in manufacturing and distribution are evolving rapidly.

For example, distributors are replacing traditional transactional approaches with value-adding strategies in delivery, supply chains and warehousing.

New tools and methods, such as AI, automated vehicles and Industrial Internet of Things (IIoT) devices, are helping them transform value chains and strengthen relationships with customers and suppliers.

As this transformation accelerates, the finance role is sometimes expanding faster than teams or systems can keep up with in small and medium-sized firms, says Hogan.

“They are expected to maintain control while also driving innovation, often with lean resources. In many SMEs, the finance director or CFO also now oversees information systems alongside finance; and, alongside operations, they need to understand developments in areas such as sales and supply chain technology.”

To tackle these challenges, agility and cross-functional understanding are essential. Finance leaders need to operate holistically, which requires strategic breadth and operational empathy.

Romesh Jeyaseelanayagam, founder of The FD Consultant and co-host of the Strive and Thrive podcast, says: “There is so much change in these sectors—for example, in robotics and artificial intelligence.

“It’s a big challenge for CFOs to keep up. To thrive, you have to keep abreast of changes, embrace them and help implement them effectively.”

He recommends developing change management skills so you can be more involved in implementing projects effectively: “People don’t like change, so you need the emotional intelligence to persuade and bring people on board. If they are contributing to the change, and using it as an opportunity to develop themselves, they are more likely to embrace and see the value in it.”

Integrating ERP systems

Modern enterprise resource planning (ERP) systems, such as Sage X3, can quickly and seamlessly integrate ecosystems linking warehouse management, e-commerce, and IIoT data into a real-time operational view.

“One of my team of finance directors has recently put in a warehouse management system (WMS) with a client,” says Jeyaseelanayagam. “They found a system that worked seamlessly with other programs such as their ERP.

“That enabled real-time operational data to flow into finance.

“For example, they can now validate invoices quickly because the system shows goods received immediately, rather than waiting for paperwork or confirmation from operations.”

That visibility enables us to quickly address problems, such as having too much or too little stock, and see opportunities.

Romesh Jeyaseelanayagam, founder, The FD Consultant

Hogan says real-time data is vital for modern manufacturing and having one version of that information in your ERP drives confident, aligned decision-making across departments.

A single source of truth allows finance, operations and supply chain management to work from the same foundation, eliminating the debate about whose numbers are right.

“With dashboards, the need for manual consolidation and spreadsheet work should be minimal,” she adds. “That shift enables you teams to spend more time interpreting performance rather than compiling it.

“However, not every business needs an all-in-one system. Forcing everything into a single ERP can create rigidity. Often, the best solution is a blend of tools, smartly integrated through APIs.

“Well implemented modern systems don’t just digitise. They enhance consistency, transparency, and control across the organisation.”

Integrated ERPs can also transform how a business operates through:

• Mobile and remote access that gives teams visibility and control from anywhere.
• Improved traceability and governance, reducing duplication and error through shared data structures.

Combining these benefits with genuine cross-functional collaboration enables CFOs to develop their role as a central coordinating hub, driving these all benefits for the business.

A 5-step action plan

As finance leaders ready themselves for these challenges, here are five ways to keep ahead.

1. Develop your interest in operational needs and foster cross functional collaboration to enhance your strategic input. For example, aim to help identify new opportunities and improve efficiency in your supply chain.
2. Reinforce your strategic acumen. Get invited to operational and leadership meetings, and show up with new ideas and genuine insights.
3. Develop softer skills such as empathy, listening and emotional intelligence. You may be partnering with areas of the business, such as the factory floor or warehouse, with a different outlook to your own. Listen to and understand their needs and problems clearly before making any suggestions.
4. Carefully identify which AI and automation projects will provide return on investment, then accelerate them. Sharpen your team’s data literacy skills so they can offer better strategic analysis.
5. Adopt integrated systems such as ERP and warehouse management. Connect financial and operational workflows to increase line of sight across the business. Make informed decisions quickly with real-time data through integrated ERP dashboards. Modernise your systems with a cloud-native, integration-ready platform that can help your business scale with security and agility.

Final thoughts: Wider ecosystems can support your role

This article has examined the pivotal role CFOs in manufacturing and distribution can take in driving innovation and operational efficiency for their organisations.

It also underscores the crucial role integrated systems such as Sage X3 can play in this journey.

As well as using open APIs to allow seamless integration with other third-party software and hardware, Sage has expanded its ecosystem to support its worldwide partner community.

This enables partners of all sizes to work together to solve customers’ increasingly complex business problems.

With such powerful ecosystems behind them, finance leaders have vast opportunities to drive strategic growth and expand their influence. With the right skills and mindset, the prospects for adding value are bountiful.

The circular economy could be poised for rapid expansion with multiple trends set to boost the sector.

Manufacturers and distributors have been gradually increasing their use of these practices over the last few years. But experts agree there is huge potential to develop them further, supported by changes in the legal and business landscape.

This article looks at the main trends likely to impact the circular economy in manufacturing and distribution in 2026, and delves into how firms can take advantage of the opportunities.

Here’s what we discuss:

Economic benefits of the circular economy

Rather than the linear approach of making, using and discarding products, the circular model designs out waste and pollution by reusing, repairing, refurbishing, and recycling materials.

Business is increasingly recognising the benefits of circular practices.

Between 2023 and 2024, investment deal values in this sector grew 60%, according to BDO’s report Circular Economy Trends Report 2025.

The variety and maturity of business models attracting attention is also increasing, the report says.

With interest rates falling, investment in the circular economy could be set to accelerate further in 2026.

Research by research by UK charity WRAP and OC&C Strategy Consultants found that, since 2020, circular industries have grown 3.1% faster than linear industries, and circular-native businesses have grown up to twice as fast. The advantages include:

• Cutting costs, for example, on raw materials, energy use and disposal.
• Increasing competitive differentiation, and consumer and brand loyalty, by appealing to environmentally conscious customers, and increasing transparency and customer lifetime value.
• Adding revenue streams with new types of products or services.

David Stewart, engineering director, research & innovation at the High Speed Sustainable Manufacturing Institute (HSSMI), says the economic opportunity of recovering an expensive asset is now the overwhelming driver of circular models:

“Where there is a good business case to repurpose, remanufacture, recondition or recycle, businesses have flourished and adoption will remain strong,” he says. “In the battery industry for example, there have been many new ventures over the past three years to remanufacture battery packs or recycle them back to basic materials to incorporate into new cells.”

Material scarcity: A fundamental circular economy driver

In many countries, the growing financial incentive is also driven by the fact that China controls much of the global supply and or processing power for many critical raw materials.

This includes:

• Neodymium supply for electric motors.
• Gallium supply for semi-conductors.
• Nickel, manganese and cobalt refining and processing for batteries.

“Western continents like North America and Europe are largely at the mercy of Beijing’s controls on export of these materials,” adds Stewart. “Without enough domestic access, we rely on circular systems to collect, recover and consume these materials.”

To counter this, he predicts new recycling facilities for processing important materials, such as rare-earth elements, will launch across Europe.

Advanced sorting and dismantling technologies will also evolve to address the issue.

ERP and digital passports push adoption of the circular economy

In the UK, extended producer responsibility (EPR) legislation is set to drive more circular practice.

Previously, taxpayers footed the bill for the disposal and recycling of packaging.

But from FY26, producers pay a flat fee to help pay for these processes. From FY27, these payments will be based on recyclability, providing a huge incentive to make their packaging more circular.

In the UK, the government has established a Circular Economy Taskforce with a view to setting strategy in the near future. It is catching up with the EU, which already has multiple regulations promoting reuse and recycling.

One of the most important initiatives in 2026 will be phasing in digital product passports (DPP), starting with high environmental impact items such as batteries, textiles, electronics, and furniture.

For example, passports for many batteries will be required from February 2027.

A DPP is a scannable, dynamic profile that follows a product throughout its lifecycle, from raw material to resale. It reveals critical data such as material origins, manufacturing processes, energy use and emissions, durability, and repair or disposal options.

This will help firms track lifetime performance and improve reuse or recycling.

The EC is expected to produce a registry of passport requirements for specific product groups by mid-2026, with full deployment expected by 2030.

Innovation keeps pushing circular models

The transition to cloud-based systems will continue to drive circular economy adoption by supporting innovations such as remote condition monitoring, DPPs, and IIoT connections.

Increased storage access and processing power will drive new online platforms enabling product sharing, resale and refurbishment.

IIoT connectivity will continue to grow, allowing for timely maintenance and repairs. Building on this, predictive maintenance uses IIoT sensors combined with AI to track equipment and product conditions.

This enables intervention just before a failure occurs, extending product lifespan.

Digital twins take this even further by creating dynamic virtual models of physical items, updated with live data. For instance, a digital twin of a remote industrial pump can track use patterns, service history, and component wear after purchase to optimise the timing of repair, lengthening the product’s life.

The information can also inform product design, making products easier to disassemble, repair, and recycle—such as by minimising adhesives or incorporating modular components that are adaptable for reuse.

These are just a few of the many ways AI is expected to contribute to the circular value chain, with others ranging from hypersensitive sorting of materials in recycling to automated disassembly, predictive waste flow, and generative circular design.

Yet another innovation to watch is chemical processing techniques—such as pyrolysis, and photocatalytic and enzymatic recycling—which can convert plastic waste into valuable chemicals or fuels.

The obstacles remaining for circular economy adoption

Despite all these advancements, manufacturers will face many challenges in progressing circular practices in 2026.

Products are still not designed for circularity. For example, many batteries and devices are filled with glue, making them quick and easy to assemble but a nightmare to disassemble.

And manufacturers still face trade-offs with other business imperatives such as short-term revenue gain, speed to market, or lack of access to skills.

“Companies with new technologies and or tight budgets often focus on getting the product to market quickly, in volume and performing robustly,” says Stewart. “They don’t deny circular economics are important, they’re just too busy, and it becomes an afterthought. But it’s too late when you’ve already locked in the design. Manufacturers need to work more closely with designers to integrate disassembly options early in the process.”

Case study: Why refurbished phones are booming thanks to the circular economy

In Europe, Vodafone predicts refurbished mobile phones will grow from 309m in 2023, to 431m phones by 2027.

It’s part of a rapidly advancing global circular devices market that is set to exceed £150 billion by 2027, according to mobile operator organisation GSMA.

Steven Athwal, founder and CEO of The Big Phone Store, which has a strong focus on refurbished phones, says distributors and manufacturers are increasingly committing to refitting and reusing their products.

“Consumer demand for greener choices continues to grow, regulation is tightening, and customers are more inclined to enter the circular economy,” he says. “Scarcity of raw materials also makes refurbishment more financially appealing.”

Steven expects that tighter global rules on how e-waste is handled, reported and recycled—such as the UK Extended Producer Responsibility (EPR) scheme—will make manufacturers more accountable for product life cycles.

Governments could also increase rewards, such as tax incentives for refurbished goods. Or they could follow France’s lead in mandating the use of such goods—20% of IT devices bought by French organisations must be refurbished by law, with a target of 40% by 2040.

Steven also foresees more companies leasing so they can focus on reuse and reissue. And he predicts large companies will embed refurbishment into their business models, to gain control over their product life cycle.

However, as with other industries, phone manufacturers and distributors still face many challenges in product creation.

“Phones are designed to look great, but not to be opened, making them expensive and slow to fix,” he says. “We can overcome this with design standards that favour repairs and more research into modular parts. The other challenge is that customers are worried about warranties, software updates, safety, and the lifespan of refurbished devices. We have to promote quality control, extended warranties and transparent grading to gain their trust.”

Steven says a cultural shift is also needed for both companies and the public to move away from their obsession with new things.

A 5-step action plan for increasing circular practices

Here are some next steps for moving into the circular economy, or increasing your presence there:

• Increasing the amount you recycle is a good start. But consider a more holistic strategy that embeds circular principles—such as durability, modular designs and swappable parts—at the core of your product design and service.
• Promote a culture of long-term value. Think of every device as a long-term asset, not just a unit shipped. For example, consider generating value through leasing, repairs, and refurbishments.
• Investigate the latest developments in IoT, predictive maintenance, and digital twin technology to support a more circular model.
• Look at how AI is transforming production and distribution in areas such as real-time inventory monitoring and demand forecasting to reduce waste, or enhanced reverse logistics for more efficient returns and repairs.
• Get deeper insights and visibility on your entire manufacturing operations to make better decisions about waste. Consider integrating your ERP, third-party logistics (3PL) and warehouse management for greater efficiency.

Final thoughts

The shift towards a circular economy continues, and is no less vital to business effectiveness and efficiency than it ever was. It is the ultimate secret trick that the C-suite needs to know about.

For CFOs, this means rethinking how value is created and captured through financial performance, long-term resilience, compliance, and brand integrity.

Sage X3 is a new era of ERP that provides the backbone for that kind of visibility and control.

It allows finance leaders to integrate sustainability metrics into the same system that manages costs, inventory, and profitability.

By connecting data across the value chain, CFOs can model the financial impact of circular initiatives, identify efficiencies, and make decisions grounded in both sustainability and solid business logic.

As a leader, your single most important job isn’t having all the answers. It’s making sure your team knows what’s expected of them. When you fail to set clear expectations, you’re not just creating confusion; you’re actively setting your people up to fail. And that’s a fast track to chaos, missed deadlines and a revolving door of talent.

Unspoken expectations are just premeditated disappointments. You have a picture in your head of what “good” looks like, but if you don’t share it, how can anyone else possibly see it? They’re left guessing, second-guessing and trying to read your mind. It’s exhausting for them and frustrating for you.

This is your playbook for getting it right. We’re going to show you how to swap vague instructions for crystal-clear outcomes, turn confusion into alignment and build a high-performing team that knows exactly how to win.

Why setting clear expectations isn’t just a task, it’s your job

Setting expectations is the absolute foundation of effective leadership. It’s not a box-ticking exercise you do once and forget about. It’s the daily work of building trust, eliminating guesswork and creating the psychological safety your team needs to do their best work.

Many leaders shy away from being direct because they confuse clarity with micromanagement. They’re not the same thing. 

Micromanagement is telling people how to do their job. Setting clear expectations is about defining ‘what success looks like’ and then empowering them to figure out ‘the how’. It’s the difference between being a centralised decision-maker and being a guide. By providing a clear destination, you give your team the freedom and autonomy to navigate the journey. That’s not control; it’s empowerment.

This fundamental leadership skill is the bedrock of high-performing teams, but its absence can create hidden costs that quietly drain your business. So, here are 11 tips on setting employee expectations the right way.

1. The hidden costs of unclear expectations

Vague expectations are a quiet drain on your business. They create friction, waste and frustration that slowly grinds your team to a halt. When people don’t know what’s expected of them, the damage is real and quantifiable.

You see it in the wasted hours spent on rework because the first attempt missed the mark. You feel it in the plummeting morale when people feel like they can never win, no matter how hard they try. You notice it when your most engaged employees start to pull back, stop offering ideas and do just enough to get by. And you definitely feel it when your most talented people walk out the door, tired of the constant guessing games.

This isn’t just a “people problem”, it’s a performance problem. It’s a recipe for chaos that directly impacts your bottom line. Getting clear on expectations isn’t just a nice-to-have; it’s a business necessity.

The first step to fixing this is to get brutally clear on what you actually want your team to achieve.

2. How to define what ‘done’ looks like

“Can you sort this out for me?” is not an expectation. It’s a hospital pass. Stop assuming people know what you mean by “done”. You need to move from delegating tasks to defining outcomes. It’s a subtle but powerful shift.

The best way to do this is by using the SMART framework. It’s a classic for a reason—it works. It forces you to get specific and create a shared, unambiguous picture of the end goal.

• Specific: What exactly needs to be accomplished? Instead of “Improve our social media,” try “Increase our LinkedIn followers.”
• Measurable: How will you know when it’s done? “Increase our LinkedIn followers by 15%.”
• Achievable: Is this realistic given the resources and timeframe?
• Relevant: How does this connect to the bigger picture? Does it support the team’s and the company’s goals?
• Time-bound: When does this need to be completed? “Increase our LinkedIn followers by 15% by the end of Q3.”

Using this model eliminates ambiguity and ensures everyone is aiming for the same target. Once you know what ‘done’ looks like, you need to clarify who is responsible for getting it there.

3. End the confusion: Clarify roles with the RACI model

“I thought you were doing that!” is a phrase that should strike fear into any leader’s heart. It signals a complete breakdown in role clarity. The RACI model is a powerful, no-nonsense tool for making sure this never happens again.

It forces you to map out who does what, preventing tasks from being dropped and stopping people from stepping on each other’s toes. Here’s how it works:

• Responsible: The person (or people) who actually does the work. They are the ‘doers’.
• Accountable: The one person who is ultimately answerable for the work getting done correctly. This is the owner and there can only be one.
• Consulted: The experts who need to provide input or feedback before the work is done. This is a two-way conversation.
• Informed: The stakeholders who need to be kept up-to-date on progress but don’t need to be directly involved. This is a one-way communication.

Mapping this out for every major project or initiative is a game-changer. It provides a single source of truth for who is involved and in what capacity, bringing order to potential chaos.

Knowing what needs to be done and who needs to do it is crucial, but it’s not enough to inspire great work.

4. The power of ‘why’: Communicating purpose, not just tasks

People don’t pour their hearts into a to-do list. They pour their hearts into a mission. If you want your team to be truly motivated, you need to connect their work to a bigger purpose. Explain the ‘why’ behind the ‘what’.

Instead of just saying, “We need to hit our sales target,” explain why it matters. “Hitting our sales target this quarter means we can invest in the new product feature our customers have been asking for, which will help us serve them better.”

This simple shift in communication transforms a mundane task into a meaningful contribution. It helps your team see how their individual effort fits into the company’s goals and the value you provide to your customers. A sense of purpose is the ultimate performance-enhancing drug. It’s a core component of building a great company culture and demonstrating empathetic, effective leadership.

With the ‘why’ established, the timing of your conversation becomes critical.

5. Set expectations early to prevent chaos later

The best time to set expectations is right at the very start. The worst time is when a project is already off the rails. Being proactive here will save you a world of pain.

For any new project, role or initiative, your first step should be a dedicated kick-off meeting to establish alignment. Get everyone in a room (virtual or physical) and agree on the goals, roles (using RACI), timeline and what ‘done’ looks like.

This proactive approach prevents the massive waste of time, energy and morale that comes from having to course correct midway through a project. An hour spent on alignment at the beginning can save you weeks of rework and frustration later.

As you set these expectations, it’s also vital to consider the people who will be delivering on them.

6. How to align expectations with your team’s strengths

Great leaders don’t try to force a square peg into a round hole. They understand the unique talents of each person on their team and set expectations that play to those strengths.

Take the time to understand what each team member excels at and what they enjoy doing. Is one person a brilliant problem-solver but a less effective communicator? Assign them the complex technical task, not the client presentation. Is another a natural relationship-builder? Give them the responsibility of managing stakeholder communications.

When you assign tasks that leverage individual strengths, you get two massive benefits: better results and higher engagement. People are more motivated and effective when they are doing work they are good at and find rewarding.

Setting expectations is just the beginning; the real work happens in the follow-up.

7. The importance of check-ins and non-stop feedback

Setting expectations is not a “set it and forget it” activity. It’s a continuous conversation. You don’t just point the ship in a direction and hope for the best; you need to keep steering.

Regular, informal check-ins are your steering mechanism. They are crucial for reinforcing expectations, providing real-time coaching and clearing roadblocks before they become major crises. A quick, “How are you getting on with that report? Is anything unclear?” can prevent a small misunderstanding from derailing a whole week’s work.

This creates a continuous feedback loop that keeps everyone aligned and moving in the right direction. It’s not about checking up on people; it’s about checking in with them to offer support.

This culture of open dialogue should also flow in the other direction.

8. How to build a culture where people can challenge expectations

Your team on the ground often has a better view of the reality of a project than you do from a distance. Creating a culture of psychological safety, where employees feel comfortable questioning or pushing back on unrealistic expectations, is a sign of a healthy, confident team.

If a team member can say, “I understand the goal, but given our current workload, that deadline isn’t realistic,” it’s not insubordination—it’s valuable data. It gives you a chance to re-evaluate and create a better, more achievable plan. This collaborative approach prevents burnout and leads to far more successful outcomes than a top-down command-and-control style.

To support these conversations, verbal agreements aren’t enough.

9. If it’s not in writing, it doesn’t exist: Document your expectations

Human memory is notoriously unreliable. A verbal agreement made in a busy hallway is not a solid foundation for a critical project. If it’s important, write it down.

Documenting key expectations in a shared, accessible place is non-negotiable. Whether it’s in a project management tool like Asana or Trello, a follow-up email after a meeting or a formal project brief, you need a single source of truth.

This simple act eliminates the “I thought you meant…” arguments. When there’s a disagreement, you can both refer back to the written record. It holds everyone accountable, including you. Smart employee management software can provide a central place for this.

With everything documented, you can then focus on tracking your progress.

10. How to measure success and celebrate wins

What gets measured gets managed. You can’t know if you’re winning if you don’t keep score. It’s essential to track progress against the specific, measurable outcomes you defined with the SMART framework.

But tracking isn’t just about spotting problems. It’s also about celebrating progress. When your team hits a key milestone, acknowledge it. When they achieve the final goal, celebrate it. Recognition is the fuel that keeps a high-performing team going. A simple “great work on this” in a team meeting or a company-wide shout-out can have a huge impact on morale and motivation.

Even after the project is complete, there’s one final step to ensure you keep getting better.

11. Lessons learned: The power of the post-project debrief

The project is done, the champagne has been popped, but the learning has just begun. One of the most valuable things you can do is conduct a “lessons learned” session or a project retrospective.

This is a blame-free review to identify what went well, what didn’t and how the process of setting and managing expectations can be improved next time. Ask questions like:

• Were the initial goals clear?
• Did everyone understand their roles?
• Did we communicate effectively?
• What roadblocks did we hit and how could we have anticipated them?

This transforms every project, successful or not, into a learning opportunity, making your team smarter, stronger and more aligned for the next challenge.

Setting clear expectations is the art and science of great leadership. By implementing these strategies, you can build a culture of clarity, trust and high performance.

Ready to raise the bar on every project?

Empower your team with the tools and insights they need to succeed. Employment Hero’s employee management solutions help you set clear goals, track performance in real time and provide meaningful feedback that drives growth. 

From onboarding new hires to managing ongoing development, our platform makes it easy to keep everyone aligned, accountable, and motivated. By turning clarity into action, you can build a more engaged, productive workforce and ensure every project delivers its full potential. x

Discover how Employment Hero can transform the way your team works and help you achieve better results, every time.

Building a global team is one of the most powerful ways to scale your business. But the old way is broken. The costs and complexity of setting up local legal entities in every new country are a major barrier to growth. There’s a smarter way. An Employer of Record (EOR) lets you hire top talent anywhere in the world, without the administrative nightmare.

This streamlined approach gives you the flexibility and efficiency to build your dream team, no matter where they live. Forget the old rules. It’s time to access a global talent pool and drive your business forward.

The challenge with direct international hiring

Before we explore the benefits of a no-entity approach, it’s crucial to understand the challenges of hiring talent directly in another country, even on a temporary basis. For growing businesses, these hurdles can halt expansion before it even begins.

• Complex entity registration: Setting up a legal entity in a new country is a minefield of bureaucracy and delays. The process can take months, drain resources, and distract you from your core business goals.
• Navigating foreign laws: Employment laws vary drastically between countries. From contracts and termination rules to working hours and leave entitlements, staying compliant is a full-time job. A single misstep can lead to significant legal and financial penalties.
• Payroll and benefits headaches: Managing payroll and benefits in a country where you have no expertise is a high-risk game. Different tax systems, National Insurance (NI) contributions and mandatory benefits create a complex web that is easy to get wrong.

These challenges aren’t just inconvenient; they’re significant risks that can expose your business to unforeseen costs and legal disputes, stifling your ability to scale with confidence.

How an Employer of Record (EOR) simplifies global expansion

An Employer of Record service is the solution to these expansion roadblocks. An EOR acts as the legal employer for your international team members, handling all HR, payroll and compliance duties on your behalf. This allows you to tap into global talent pools quickly and efficiently.

Here’s how an EOR transforms your approach to building a global team:

Compliance

An EOR gives you immediate access to local expertise. Instead of spending months researching labour laws, you can rely on your EOR partner to ensure every hire is compliant. They manage:

• Compliant employment contracts: Creating locally compliant contracts that protect both your business and your employees.
• Adherence to labour laws: Managing all aspects of local regulations, from minimum wage and overtime to termination procedures.
• Risk mitigation: Minimising your exposure to legal disputes and penalties by ensuring every aspect of employment is handled correctly.

Streamlined and accurate payroll

Payroll errors are costly. The risk of mistakes multiplies when operating in an unfamiliar country. An EOR processes payroll accurately and on time, based on your instructions, while handling all the complexities. This includes calculating correct tax contributions, managing National Insurance contributions and ensuring compliance with local payment laws. You get the peace of mind that your team is paid correctly, every single time.

A unified employee experience

You want your entire team to feel connected, regardless of their location. Using different systems for international employees creates confusion and a disconnected culture. An all-in-one platform that integrates with an EOR service allows you to manage everyone under one roof. With a solution like Employment Hero, you can handle leave, documents, expenses and performance for your entire global workforce from a single interface. This creates a consistent and inclusive experience for all team members.

Significant cost and admin savings

Establishing and maintaining legal entities is expensive. The no-entity model, made possible by an EOR, drastically cuts overhead costs. You avoid the high fees associated with entity setup, legal consultations, and ongoing administrative burdens. An EOR centralises tasks like payroll, benefits administration and HR management, freeing up your team to focus on strategic growth initiatives instead of manual paperwork.

Access to unrestricted talent pools

Why limit your talent search to one city or country? By partnering with an EOR, you can hire the best person for the job, wherever they are. This access to diverse skills, experiences and perspectives enhances innovation and makes your business more adaptable. You can respond faster to market changes and customer needs, giving you a powerful competitive advantage.

When do you still need to set up a local entity?

While the EOR model is a game-changer for many businesses, it’s not a universal solution for every situation. Certain business activities may still require you to establish a physical and legal presence.

For example, companies involved in industries like manufacturing, physical retail or certain regulated professional services often need local facilities, storefronts or specific licenses to operate. If your business model requires a physical footprint to produce goods or serve customers directly, setting up a formal corporate entity may be unavoidable. It’s essential to evaluate your long-term strategic goals and operational needs to determine the right path for your expansion.

Hire top talent anywhere with HeroForce 

In an era of digital connectivity, relying on an Employer of Record offers a compelling and powerful alternative to traditional methods of building a global team. It empowers you to grow faster, smarter and with greater confidence.

HeroForce is Employment Hero’s Employer of Record service. We enable you to hire talent in over 180 countries, simplifying your expansion while ensuring everything is done legally and ethically.

Whether you’re expanding into new markets or struggling to fill critical roles, we connect the best talent with the best employers.

Making Tax Digital (MTD) for Income Tax is being introduced in April 2026.

HMRC is again allowing limited exemptions, as it did with MTD for VAT seven years earlier. Some people are excluded automatically, while others can apply if they meet the required criteria. Such conditions are known as digital exclusion.

This FAQ breaks down who needs to adopt the new rules, who’s exempt, and how to apply for an exemption.

Here’s what we discuss:

Who has to follow the MTD for Income Tax rules?

MTD for Income Tax applies to individuals who currently file a Self Assessment tax return, such as sole traders and landlords.

It’s being phased in based on gross annual self-employment and property income, as follows:

• From 6 April 2026 for individuals with income over £50,000 for the 2024/2025 year.
• From 6 April 2027 for individuals with income over £30,000 for the 2025/2026 year.
• From 6 April 2028 the government has set out plans to introduce MTD for individuals with income over £20,000.

So, if your total qualifying income (from self employment and property) is above these thresholds, you’ll need to register before the relevant start date. HMRC will have written to you, or emailed, to inform you of this.

Can I opt out of MTD for Income Tax?

MTD for Income Tax is mandatory if you meet the criteria listed above, and HMRC says you must sign-up and follow the rules.

You must then sign-up to MTD, and use MTD-ready software.

The exceptions are if you meet one of the exclusion criteria set out by HMRC, as we discuss below. If these apply to you, you will continue to use Self Assessment.

Who is automatically exempt from MTD for Income Tax?

You’re automatically exempt if you:

• Have qualifying income below the threshold for a given year, or below £20,000
• File returns only as a trustee (including charitable trustees and some pension trustees)
• Have income only from foster care
• Do not have a National Insurance number for the relevant tax year (as at 31 January before the tax year)
• Act as a personal representative for someone who has died
• Are a Lloyd’s underwriter

How do I apply to opt out of MTD for Income Tax if I’m one of those exempted?

If you fall into one of the categories listed above, you should not be required to sign up to MTD. If HMRC contacts you saying you must join, contact them, or speak to your adviser, so they can correct your status.

What is digital exclusion under MTD for Income Tax?

According to HMRC, “digital exclusion” means it is not reasonable or practical for you to use MTD-compatible software.

You will need to apply for this exemption.

There are two main groups:

1. Religious exemption: If you’re a practising member of a religious society whose beliefs prevent you from using electronic communications or digital record-keeping.
2. Practical difficulty, as follows:
   • You have a physical or mental condition that makes digital tools difficult or impossible to use.
   • You live in a remote location with no reliable internet or mobile access.
   • Your age or digital literacy makes it genuinely unreasonable for you to maintain digital records, even with help.

How do I apply for digital exclusion from MTD for Income Tax?

You can apply by calling or writing to HMRC Self Assessment: General Enquiries.

If writing, include the title: “Making Tax Digital for Income Tax digitally excluded application”

In your application, include:

• Your name, address, and National Insurance number
• Details of how you currently complete your Self Assessment
• Whether you use an accountant or agent (and what they do)
• An explanation of why you believe you’re digitally excluded
• Any supporting evidence (e.g. medical letter, proof of no internet access)

Can someone else apply on my behalf for an exemption from MTD for Income Tax?

Your accountant, or a trusted friend or family member can apply for an exemption on your behalf.

You’ll need to authorise them first by contacting HMRC in writing or over the phone.

When should I apply for digital exclusion from MTD for Income Tax?

It’s advisable to apply well before MTD applies to you:

• For 2026: apply now to ensure HMRC processes your request in time.
• For 2027: apply from summer 2026.
• For 2028: apply from summer 2027.

HMRC aims to respond within 28 days, though it may take longer if information is missing from your application.

Bear in mind that, as each April approaches, HMRC’s phone lines will be increasingly busy not only with people calling about MTD, but also those needing help with ongoing Self Assessment completions.

What evidence will HMRC need to grant an exemption from MTD for Income Tax?

HMRC will expect a clear, reasonable explanation supported by evidence where possible, such as:

• A doctor’s note confirming a medical condition.
• A letter from a broadband provider or local authority confirming no network service in your area.
• A description of your religious beliefs and how they prevent digital record-keeping.

Do I need to keep digital records if I’m exempt from MTD for Income Tax?

If HMRC grants you an exemption, you’ll continue using the normal Self Assessment process, filing an annual tax return in the usual way.

Therefore, the requirement to keep digital records will not apply and you can continue to keep records of any kind provided they meet HMRC’s requirements.

This isn’t to say that doing so is a good idea, however: digital record via accounting software keeping provides significant advantages, from automation and AI assistants, to simply having a better understanding of your cash flow position.

What happens if my application to be exempted from MTD for Income Tax is rejected?

If HMRC rejects your request, you (or those making the application on your behalf) have 30 days to send a written appeal.

The refusal letter you receive from HMRC will provide specific details including the address to send your appeal to.

You or those applying on your behalf should include your reasons and any new evidence that supports your case.

The letter is the start of an appeal, just like any other with HMRC, potentially moving onto an HMRC internal review and ultimately a tribunal if no mutually acceptable decision is reached.

I have a disability but HMRC says I’m not exempt from MTD for Income Tax. What next?

If HMRC doesn’t grant you an exemption, you may still be able to manage MTD using accessible accounting software.

Look for tools with:

• WCAG 2.1 or 2.2 AA compliance
• Strong screen reader compatibility (e.g. JAWS, NVDA, VoiceOver)
• Keyboard navigation and adjustable contrast, font, and colour settings

You might also qualify for funding through the Access to Work scheme to help cover assistive software or technology costs.

Are seasonal businesses exempt from MTD for Income Tax?

Seasonal or part-time businesses are not excluded if they meet the MTD criteria and HMRC says they must use MTD.

For example, a business that operates only during the Summer may have little or no income for the rest of the year. But MTD for Income Tax is determined based on the total gross qualifying income earned over the entire tax year.

Once your income falls below the threshold for three consecutive tax years, you can apply to HMRC to exit the MTD system. This time period delay is designed to avoid businesses with inconsistent income from constantly going in and out of the system.

If I’m excluded from MTD for VAT, am I automatically excluded from MTD for Income Tax?

If you’re digitally excluded from MTD for VAT because of digital exclusion and your circumstances haven’t changed, you should contact HMRC by phone or in writing to confirm the same exclusion for MTD for Income Tax.

If your VAT exemption was due to insolvency, however, this doesn’t extend to Income Tax.

I usually file paper returns for Self Assessment. Does that mean I’m exempt from MTD for Income Tax?

Filing paper returns in the past doesn’t automatically make you exempt.

HMRC won’t grant an exemption from MTD for Income Tax just because you prefer paper.

Does HMRC accept temporary illness as a reason for exemption from MTD for Income Tax?

If a temporary health condition (e.g. recovering from surgery) or major life event (like a recent bereavement) makes digital filing unreasonable, you can apply for an exemption. HMRC reviews all requests on a case-by-case basis.

This type of exemption is generally temporary, and HMRC may require you to start following MTD once your circumstances improve.

Am I exempted if I can’t afford MTD for Income Tax’s requirements?

Cost alone isn’t a valid reason for exemption. However, it might support your claim when combined with other factors like age or health issues.

The good news: HMRC-approved software providers are expected to offer free or low-cost versions for eligible small businesses and landlords.

As of publication of this article, there’s only one: Sage Individual is Sage’s free, easy to use cloud accounting software designed for sole traders and landlords to manage income, expenses, and MTD for Income Tax submissions in one place.

Can I apply for exemption from MTD for Income Tax if I live abroad but file UK Income Tax?

If you’re a non-resident with UK self-employment or property income that exceeds the threshold, MTD for Income Tax applies to you, just like with a UK-resident taxpayer.

You can still apply for a digital exclusion exemption if you genuinely can’t access digital tools abroad, but residency alone isn’t enough to exclude you.

Can my accountant manage MTD for Income Tax for me?

Yes, your accountant can:

• Submit your quarterly updates
• Prepare and file your end-of-year declaration
• Sign you up for MTD for Income Tax

However:

• You remain legally responsible for accuracy.
• You must keep digital records of all income and expenses.
• You need to authorise your accountant correctly with HMRC. You should start a dialogue immediately with them about this.

Can a family member or friend do MTD for Income Tax for me?

Yes, in the following ways:

• They can register as a “trusted helper”, but they’ll have limited access and can’t file or submit on your behalf.
• To give them full access, they must register as a tax agent and be authorised by you. This adds significant complexity.
• You can also appoint someone as an intermediary to deal with HMRC on your behalf, but it does not grant them full access like a registered agent.

What if I don’t follow MTD for Income Tax when I should?

If you don’t follow the MTD rules when you’re required to, HMRC can issue penalties under its points-based system.

Each time you miss a quarterly update, or tax return, you’ll receive one penalty point. Once you accumulate four points, you’ll be charged a £200 fine. Furthermore, you’ll be charged interest on the amount you owe.

Additional penalties also apply if you make late payments.

HMRC offers free live and recorded webinars, along with short instructional videos, to help taxpayers understand MTD (including choosing compatible software).

HMRC also funds several community and voluntary organisations to help people who have difficulty using online services. Groups like the Good Things Foundation offer free, local support and training for individuals facing digital exclusion or barriers to accessing HMRC services.

Are there any other criteria for exemption for MTD for Income Tax?

Businesses under a deputyship, as appointed by the Court of Protection, are permanently exempt from MTD.

This builds on the Spring Statement 2025 announcement that individuals who have a lasting or enduring Power of Attorney in place are also exempt. (This is a specific exemption group defined by HMRC and it isn’t necessarily the case that all Power of Attorney cases are always exempt from the digital requirement.)

Final thoughts

MTD for Income Tax marks a major shift in how self employed taxpayers and landlords interact with HMRC, but not everyone will need to make the change.

If you think you might be excluded, apply early, keep records of your correspondence, and seek help from your accountant or HMRC’s support services. Or speak to your accountant or bookkeeper so they can act on your behalf.

By taking action now, you’ll know exactly where you stand and avoid unnecessary stress when MTD for Income Tax comes into effect.

For many sole traders and landlords, the April 2026 start date for Making Tax Digital (MTD) is approaching fast.

Recent government announcements introduce a welcome “soft landing” period with penalty relief, designed to smooth your transition to digital recordkeeping and quarterly submissions.

This article will break down these crucial HMRC MTD for Income Tax updates, explaining how to take advantage of the MTD for Income Tax soft landing period. We also take a look at how the new penalty point system works.

Here’s what we cover:

Key provisions: What penalty delays have HMRC announced for MTD for Income Tax?

The latest updates that arrived with the 2025 Autumn Budget bring welcome clarity and flexibility, designed to make your initial steps with MTD for Income Tax significantly more manageable.

1. First-year penalty relief for quarterly updates

HMRC has confirmed that, for taxpayers mandated for MTD for Income Tax from April 2026, late submission of the first four quarterly updates will not attract penalty points, provided other conditions are met.

These cover quarterly updates due on:

• 7 August 2026—covering the period 6 April 2026 to 5 July 2026
• 7 November 2026—covering the period 6 July 2026 to 5 October 2026
• 7 February 2027—covering the period 6 October 2026 to 5 January 2027
• 7 May 2027—covering the period 6 January 2027 to 5 April 2027

The periods above will run from the 1st of each month if you’ve previously arranged with HMRC to use calendar months for your basis period, as some businesses have in order to match with their VAT stagger.

This penalty relief does not apply to your end-of-year MTD tax return for 2026/27, which is due by 31 January 2028. Penalties will apply for late submission of this final, annual declaration.

To be clear, once you’ve started MTD for Income Tax, from year two onwards penalties will apply for late submission of quarterly updates for the following dates and beyond:

• 7 August 2027—covering the period 6 April 2027 to 5 July 2027
• 7 November 2027—covering the period 6 July 2027 to 5 October 2027)
• 7 February 2028—covering the period 6 October 2027 to 5 January 2028)
• 7 May 2028—covering the period 6 January 2028 to 5 April 2028)

Furthermore, the government has not confirmed if the soft landing period will apply to those starting MTD for Income Tax in April 2027 (for the £30,000 gross qualifying income threshold), or April 2028 (for the £20,000 gross qualifying income threshold). We may learn more as those dates approach, but nothing is certain.

What this means for those starting MTD for Income Tax in April 2026: This provision offers a crucial grace period.

It’s your opportunity to learn the ropes of MTD-compatible software, refine your digital recordkeeping processes, and understand the quarterly submission routine without the immediate pressure of penalty points.

Just remember that HMRC still expects you to maintain digital records from April 2026 and submit quarterly updates.

So, think of it as an opportunity to iron out any creases in your new system.

2. Extended grace period for late payments

During your first year in the new penalty system, HMRC will, in the first year, allow up to 30 days before late payment penalties arise under the new regime, although interest on unpaid tax may still run.

What this means: This enhanced grace period provides invaluable flexibility for your cash flow management. As you adapt to potentially new ways of monitoring your tax liability, it allows you a little more time to ensure funds are available without incurring immediate penalties.

3. Deferrals and exemptions for specific groups

Recognising unique circumstances, some taxpayer groups will have their start date deferred or be permanently exempt from MTD:

• One-year deferral (until April 2027): This applies to recipients of trust and estates income, individuals who use averaging adjustments, those eligible for qualifying care relief, and non-UK resident foreign entertainers or sportspeople. If you fall into one of these categories, and are theoretically required to use MTD as of April 2026, you should continue to meet your existing Self Assessment obligations as usual until April 2027.
• Permanent exemptions: Businesses under a deputyship, as appointed by the Court of Protection, are now permanently exempt from MTD. This builds on the Spring Statement 2025 announcement that businesses who have a Power of Attorney are also exempt. If you fall under these criteria, you have clarity on your permanent exclusion from MTD requirements.

4. Policy and guidance updates

The journey to full MTD implementation is ongoing, so staying informed is key:

• Legislation for the MTD for Income Tax updates will be introduced in the Finance Bill 2025-26.
• HMRC guidance will be updated shortly to reflect the new penalty easements and deferrals.
• HMRC will soon provide an update on its plans to resolve the last few restrictions preventing certain taxpayers from signing up for mandatory MTD.

Why you should embrace MTD for Income Tax’s benefits now

Some may find the idea of quarterly updates onerous, but the core design of MTD is to provide you with a much clearer, more real-time understanding of your financial position.

Embracing MTD offers significant benefits that can genuinely transform your business’s financial health and decision-making.

• By regularly updating your digital records and making quarterly updates, you gain a live snapshot of your income, expenses, and crucially, your approximate tax liability. This eliminates the end-of-year scramble and the dreaded surprise tax bill.
• Improved cash flow management: When you know roughly how much tax you’ll owe, you can put money aside consistently. This allows for far better financial planning, so you aren’t guesstimating your tax bill and risking a shortfall when it comes to buying a new van, investing in equipment, or simply covering personal expenses.
• Accurate, up-to-date financial data also empowers you to make smarter business decisions. You can identify trends, understand your profitability throughout the year, and react promptly, rather than waiting for your accountant to crunch numbers months later.

The risks of ignoring quarterly updates for MTD for Income Tax for the first year

It’s not unnatural to think that, because there’s no penalties for late submission, you can simply ignore the first four quarterly updates, and simply file a digital tax return on 31 January 2028.

While the penalty relief offers you flexibility, Chris Downing—Director of Accountants and Bookkeeping at Sage and a former accountant—offers a warning against postponing your MTD preparations:

“Firms shouldn’t mistake the soft landing for a free pass. The compliance obligations are still in force—digital recordkeeping, timely quarterly updates, and the full MTD Tax Return by January 2028. All the soft landing does is give you space to make mistakes safely. Ignoring that opportunity simply concentrates the risk later.”

If you use the penalty easement to deliberately skip updates or do a superficial job of record-keeping, you will also cheat yourself out of vital benefits:

• You lose real-time visibility of your business, undermining the core advantage MTD offers for your cash flow and business planning.
• Delaying the inevitable learning and compliance merely pushes the problem down the road. You’ll still have to switch to digital records and make sense of the system eventually, likely under more pressure. By then, the penalty-free soft landing period will have ended.
• Grappling with a new system at the last minute significantly increases your risk of making errors or missing deadlines. Once the soft landing period concludes, the standard penalty regime takes full effect. Why not use this current grace period to master the system and build confidence, rather than deferring the pain and inviting potential penalties?

Understanding the new penalty system for MTD for Income Tax

It’s important to have a clear grasp of the penalty points system, which will be rolled out not only for MTD users but also for all Self Assessment taxpayers from April 2027.

Under the new system, simply filing a return late no longer triggers an automatic fine.

Instead, you’ll receive one penalty point every time you miss a submission deadline. This penalty applies only to the particular tax for which you’ve made the error. For example, if you miss an update for MTD for Income Tax, you might get penalty points. If you also miss a tax return date for VAT, you might also get points—but the two systems and points tallies are entirely separate.

Once you accumulate a certain number of these points—known as your personal points threshold—HMRC will then issue a £200 financial penalty. Every subsequent late submission will then incur an additional £200 charge.

Your points threshold depends on how often you’re required to submit returns.

Businesses that file more frequently have more opportunities to make mistakes, so their threshold is higher. For example, if you file annual tax returns, you’ll receive a penalty at two points. For quarterly filers, the penalty is issued at four points, and monthly filers have a threshold of five points.

These penalty points don’t stay on your record indefinitely. They expire after a period of good compliance, provided you’ve also submitted any outstanding returns. The length of this good compliance period also varies by your filing frequency. If you file annual tax returns, you’ll need to file on time for 24 months to clear your record. Quarterly filers must file on time for 12 months, and monthly filers need to file on time for 6 months.

Overall, this new system is designed to be more forgiving of genuine, one-off mistakes, giving you a chance to improve. However, it still takes persistent lateness seriously.

Preparing for MTD: What you should do now

Your first step is to determine your MTD start date.

Confirm if your business is mandated for April 2026 or April 2027 (based on the MTD thresholds), or if you qualify for a deferral or permanent exemption. This will set your personal timeline.

Evaluate your systems. Are you still using spreadsheets or a basic accounting system to manage your income and expenses? Assess how digital-ready your current methods are and identify what changes are needed.

Explore MTD-compatible software. Begin researching available software solutions that integrate with MTD for Income Tax. Many providers offer specific tools for sole traders. Consider trialling different options to find one that fits your workflow best.

Consider voluntary sign-up: You don’t have to wait until April 2026, and can choose to voluntarily sign up for MTD now. This offers an excellent dry run opportunity. By starting early, you can become familiar with digital record-keeping and quarterly submissions, gaining valuable experience and confidence with the new system—and you’ll still benefit from the soft landing period across 2026 and 2027 (if you are in the 2026 mandation cohort and the current easements remain in place). This early start is a fantastic way to refine your processes before mandatory adoption, ensuring you’re well-prepared from day one.

Don’t hesitate to consult an accountant or tax advisor for professional advice. They can provide tailored guidance, help you choose and implement the right software, set up your new digital systems, and help you create a strategic plan for a smooth transition during the soft landing period.

Final thoughts

The MTD for Income Tax journey for April 2026 is clearly defined, but the latest government update has transformed the transition. But this MTD soft landing isn’t a delay—it’s a vital opportunity. With new flexibility around penalties and payment deadlines for 2026, sole traders and landlords now have a unique chance to prepare effectively.

By proactively preparing your digital systems, and potentially even opting for a voluntary “dry run” now, you can transform the challenge of MTD into an opportunity. Embrace this extra time to plan ahead, seek expert advice, and transition to digital record keeping with confidence. Ultimately you will benefit from a clearer, more efficient view of your business’s finances.

Expanding your business into new markets is a powerful growth strategy. But hiring talent globally introduces a maze of new employment laws, payroll complexities and risks. Many businesses turn to partners like a Professional Employer Organisation (PEO) or an Employer of Record (EOR) like HeroForce to help navigate this.

While both services handle HR functions, they operate differently and the distinction is critical. Understanding the difference between a PEO and an EOR can be the key to unlocking seamless global growth while protecting your business from significant risk.

This guide breaks down the differences and explains why an EOR is the smarter, safer way to build your global team.

What is a Professional Employer Organisation (PEO)?

A Professional Employer Organisation (PEO) offers outsourced HR services like payroll processing, benefits administration and compliance assistance. When you partner with a PEO, you enter into a co-employment relationship.

In this model, the PEO becomes the administrative employer for your staff, while you remain the day-to-day employer responsible for managing their work and performance.

The catch? To use a PEO in a new country, your business must have its own local legal entity established there. This requirement adds significant cost, time and administrative burden to your expansion plans, often defeating the purpose of seeking a simple solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) offers a more direct and secure path to hiring international talent. An EOR allows you to hire employees in another country without needing to set up a local entity.

The EOR acts as the legal employer for your team members in that country. They handle all aspects of the employment relationship, from contracts and payroll to taxes, benefits and adherence to local labour laws. You still manage your employees’ daily tasks, projects and performance, maintaining full operational control.

By taking on the full legal responsibility, an EOR eliminates the complexities and risks of global employment, empowering you to hire the best talent, anywhere.

Key differences: PEO vs. EOR

Understanding the key differences between PEO and EOR will help you to determine which solution is right for your business. We’ve developed a comparison table below to help to decide. 

Feature	Employer of Record (EOR)	Professional Employer Organisation (PEO)
Local entity	Not required. The EOR uses its own entity.	Required. You must set up your own legal entity.
Employment model	EOR is the sole legal employer.	Co-employment model. You and the PEO share liability.
Risk and liability	EOR assumes full legal employment liability.	Liability is shared, creating a “co-employment” risk.
Best for	Global expansion and hiring talent in new countries.	Outsourcing HR for existing employees in a country where you have an entity.
Compliance	Compliance management handled by the EOR.	Compliance support, but ultimate responsibility is shared.
Speed	Hire and onboard talent in days.	Slow process due to entity setup requirements.

The co-employment risk and why it matters

The co-employment model used by PEOs is one of the biggest differentiators—and a source of significant risk. In a co-employment arrangement, both your company and the PEO are considered employers. This shared status means you also share legal liability for employment matters.

If the PEO makes a mistake with payroll, misinterprets a local law or fails to provide statutory benefits, your business can be held responsible. This exposes you to potential fines, legal disputes and reputational damage in a foreign jurisdiction.

An EOR eliminates this risk. As the sole legal employer, the EOR takes on 100% of the employment liability. They are the ones responsible for ensuring every contract is compliant, every payslip is accurate and every local regulation is met. This clear division of responsibility gives you peace of mind and lets you focus on running your business.

Why an EOR is the smarter choice for global growth

For businesses looking to scale with confidence, an EOR provides a clear advantage. It’s a model built for speed, simplicity and security.

1. Avoid the cost and complexity of entity setup

Establishing a legal entity in a new country is a monumental task. It can take months, sometimes even over a year, and cost tens of thousands of dollars in legal and administrative fees. It requires navigating unfamiliar corporate laws, tax systems and banking regulations.

An EOR bypasses this entire process. You can tap into their existing global infrastructure to hire talent immediately. This saves you an enormous amount of time and money, allowing you to be agile and responsive to market opportunities. Instead of waiting to get set up, you can have your first international employee onboarded in a matter of days.

2. Minimise risk with watertight compliance

Global employment laws are complex and constantly changing. From termination rules and leave entitlements to mandatory benefits and data privacy, staying compliant across multiple countries is a full-time job. A single misstep can lead to severe penalties.

A trusted EOR partner has teams of local experts that live and breathe the employment laws in their respective countries. They ensure every aspect of employment is handled, from drafting contracts to managing statutory contributions and navigating complex termination procedures. This reduces the compliance burden from your shoulders.

3. Hire the best talent, no matter where they are

The modern workforce is global. Restricting your hiring to your local market means missing out on a world of exceptional talent. An EOR breaks down geographical barriers, giving you the freedom to hire the perfect candidate for the role, regardless of their location.This allows you to:

• Access specialised skills: Find experts in their field who may not be available in your home country.
• Build a diverse team: Foster innovation and a stronger company culture with a globally diverse workforce.
• Retain top performers: Keep valuable employees who need to relocate, ensuring you don’t lose institutional knowledge.

When a PEO might still make sense

While an EOR is the strong solution for global expansion, a PEO can still be useful in specific situations. If your business already has an established legal entity in a country and simply wants to outsource HR administration for your existing employees there, a PEO can be a viable option.

In this scenario, you are not looking to expand, but rather to streamline operations in a market where you are already established. However, for any business looking to enter a new market, the EOR model is unequivocally the faster, safer and more efficient choice.

Scale confidently with Employment Hero

Hiring great people is the foundation of business growth. Don’t let borders and bureaucracy stand in your way. An Employer of Record removes the barriers to global hiring, transforming a complex challenge into a simple, streamlined process.

Our HeroForce EOR service empowers you to hire top talent across the globe without the risk and administrative headache. We handle the complexities of international employment so you can build your dream team and scale your business with confidence.