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When a sole trader transfers their business to a limited company, a chargeable gain may arise on the assets transferred. As the connected person rules apply, the gain is calculated by reference to the market value at the date of transfer rather than the sale proceeds, if any. However, where rollover relief on the transfer…Read More
Many people are taking on a side hustle to make ends meet. This can take various forms, such as selling items online, providing services or creating content. You may need to tell HMRC about your income if your trading income (from all sources including any other self-employments) is more than £1,000. The £1,000 limit is…Read More
Businesses which give away free gifts or samples need to be aware of the VAT implications to ensure that they account for VAT correctly. Gifts Where a business makes a free gift, they do not receive any consideration in return. If input tax has been incurred in relation to that gift which can be recovered,…Read More
Employer’s Class 1 National Insurance is a significant cost for employers, being charged at 15% on earnings over the relevant threshold. However, there are some steps that employers can take to reduce their bill. Claim the Employment Allowance The Employment Allowance is a valuable allowance which reduces an employer’s secondary Class 1 bill by up…Read More
The approved mileage allowance payments (AMAP) system allows employers to make tax-free mileage allowance payments to employees who use their own vehicles for work. The payment is tax-free as long as it does not exceed the ‘approved amount’. This is the number of business miles in the tax year multiplied by the approved rate for…Read More
Pension contributions benefit from tax relief. However, the amount of the relief is capped at the lower of 100% of earnings (or £3,600 where this is higher) and the available annual allowance. Annual allowance The annual allowance is set at £60,000 for 2026/27. However, it is reduced where both adjusted net income exceeds £260,000 and…Read More
On 21 May 2026, the Chancellor announced a temporary reduction in the rate of VAT applied to children’s meals and admission to certain attractions. It does not apply to sporting activities. The measure is intended to help families over the summer holiday period. Children’s meals and tickets to attractions currently are liable for VAT at…Read More
On 21 May 2026, the Chancellor announced a temporary reduction in the rate of VAT applied to children’s meals and admission to certain attractions. It does not apply to sporting activities. The measure is intended to help families over the summer holiday period. Children’s meals and tickets to attractions currently are liable for VAT at…Read More
Taxpayers within Self-Assessment must make payments on account towards their next tax and Class 4 National Insurance bill if the tax that they owed for the previous tax year was £1,000 or more, unless they paid more than 80% of the tax that they owed for that year outside Self-Assessment, for example, under PAYE. Each…Read More
HMRC use a range of communication methods, as do fraudsters. Consequently, it can be difficult to be certain that a call, email, letter or text which seems to come from HMRC actually does. How then do you tell if the communication is genuine? Phone calls Scammers may pretend that they are from HMRC and try…Read More
The High Income Child Benefit Charge (HICBC) is a tax which claws back child benefit where the recipient or their partner has adjusted net income of £60,000 or more in the tax year. The charge is equal to 1% of the child benefit for the year for every £200 by which adjusted net income exceeds…Read More
Over time, companies may accumulate substantial cash reserves. Whilst funds are commonly extracted through salary, dividends or pension contributions, another possibility is to incorporate a second company and transfer funds using an intercompany loan. How does it work? The first company lends excess cash to the second company, usually for valid business purposes such as…Read More
When a company pays a dividend, all shareholders holding the same class of shares must receive dividends in proportion to their shareholdings. To pay dividends at different rates, a company must either issue different classes of shares with distinct dividend rights or vary the proportions held by shareholders. Alphabet shares are commonly used to provide…Read More
Where an employee works at home, they may incur additional household expenses as a result, such as additional heating and lighting costs, the cost of business phone calls on a home phone, additional insurance costs and additional cleaning costs. Reimbursed by the employer The tax legislation contains a dedicated exemption which allows the employer to…Read More
In a personal or family company, there are often transactions between the company and the director(s). For example, the company may meet personal expenses on the director’s behalf, or the director may loan money to the company to help cash flow. It is important to keep track of transactions between the director and the company.…Read More