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Encouraging private investment into small and medium-sized companies – government-endorsed tax incentives

For small companies, obtaining tax-efficient funding involves leveraging various schemes and incentives that minimise tax liabilities while maximising capital inflow. These schemes are designed to attract investment by offering tax reliefs to investors, making it more appealing for them to invest in small and growing businesses. There are several government-endorsed tax incentives that have been…Read More

Do you now need to pay tax on your dividend income?

The fall in the dividend allowance in recent years may mean that you now need to pay tax on your dividend income for the first time. The dividend allowance The dividend allowance was introduced from 6 April 2016. It is available to all taxpayers regardless of the rate at which they pay tax and in…Read More

Cash basis by default

For 2024/25 and later tax years, unless they elect otherwise, unincorporated businesses must prepare their accounts and calculate their taxable profit using the cash basis. This is a reversal of the position applying for 2023/24 and earlier tax years, where the accruals basis was the default, but traders who were eligible to use the cash…Read More

Post-cessation expenses – When and how are they allowable?

When an unincorporated business stops trading, accounts are prepared to the date of cessation. Where a limited company ceases trading, it is either registered as dormant or its directors can apply for the company to be struck off or go into liquidation, if the company is unlikely to be required again in the future. HMRC…Read More

NIC cuts and what they mean for you

As widely predicted, in his 2024 Spring Budget, the Chancellor announced a 2% cut in the main rates of Class 1 and Class 4 National Insurance contributions. We explain what employees and the self-employed will now pay in 2024/25. Employees The main rate of primary Class 1 National Insurance contributions, which are payable by employed…Read More

Extracting further profits in 2023/24

As the end of the tax year approaches, it is prudent for those operating their business as a personal or family company to review the profits extracted so far in the tax year and to consider whether it is beneficial to take further profits before the end of the tax year. There are various ways…Read More

NIC payable by the self-employed from April 2024

The self-employed have historically paid two classes of National Insurance – Class 2 and Class 4. However, this is set to change from April 2024 with the abolition of Class 2 National Insurance contributions. What are Class 2 contributions? The payment of Class 2 contributions has enabled a self-employed person to build up entitlement to…Read More

Get your overlap relief figure

If you are self employed or a member in a partnership and have unrelieved overlap profits, you will not be able to claim relief for those profits after 2023/24. Overlap profits are profits that have been assessed twice – either in the early years of a business or on a change of accounting date. From…Read More

Interest rates are high – Benefit from short-term loans from your company

The Bank of England has warned businesses and households that the cost of borrowing will remain high for at least the next two years and although taking out a bank loan is cheaper than a credit card, the interest rate on unsecured loans is at an all-time high of 5.7%. However, there is a source…Read More

Key person insurance – When can you claim a deduction?

The profitability or earning capacity of a business may depend on one person or on a small number of people. Where this is the case, the business may be seriously compromised if that person, or one of those persons, falls seriously ill or has an accident. To protect against financial loss should such a situation…Read More

Basis Period Reform and claiming overlap relief

If you are self-employed, the way in which your profits are taxed is changing. As a result of the changes, you only have a limited window in which to claim relief for any profits which were taxed twice when you started your business. Basis period reform For 2022/23 and earlier tax years, self-employed individuals, whether…Read More

5 reasons to file your tax return early

If you need to file a Self Assessment tax return for 2022/23, you have until midnight on 31 January 2024 in which to do this, as long as you file online. However, HMRC have been encouraging taxpayers to file their tax return early. Is this worthwhile and what are the benefits? Due a tax refund?…Read More

The implications of late VAT registration

VAT registration is compulsory for any UK established persons who are in business and make or intend to make taxable supplies should either one of the following tests are satisfied: Under the ‘historical test’, if taxable sales have exceeded £85,000 in any rolling 12-month period, the business must register within the next month after exceeding…Read More

Making tax-free mileage payments

If you have employees who use either their own car or a company car for business mileage, you can pay mileage allowances tax-free up to certain limit. However, if you pay more than the permitted amount, the excess is subject to Income Tax and liable to Class 1 National Insurance. The amount that you can…Read More

Repaying directors’ loans – Does the order matter?

Directors’ loans can be tricky from a tax perspective. Specific tax charges apply where loans to director shareholders of close companies (broadly those under the control of five or fewer shareholders) are not repaid by the corporation tax due date. This is nine months and one day from the end of the accounting period. Where…Read More

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