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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

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

Pension payments – What tax relief is available?

To encourage pension savings, tax relief is available on contributions made to registered pension schemes. However, there are limits on the contributions that can qualify for relief, and punishing tax charges can apply if these limits are exceeded. Limit 1 – 100% of relevant earnings Tax relief on private pension contributions is capped at 100%…Read More

Dividend Planning

The Chancellor’s recent mini-Budget and subsequent U – turns threw a number of spanners into the works as far as profit extraction strategies are concerned. Initial revisions to profit extraction strategies in the light of the mini-Budget announcements now need to be revised. Rates For 2022/23, the dividend allowance is £2,000. Where dividends are not…Read More

Five ways to save inheritance tax

Inheritance tax is often described as a voluntary tax. While most of us do not know in advance when we are going to die, there are steps that you can take to reduce the amount of inheritance tax on your estate. Here are five suggestions. Leave everything to your spouse or civil partner The inter-spouse…Read More

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