In the not-too-distant past, incorporation was synonymous with automatic tax savings. However, successive governments have eroded these tax benefits. With additional administration and costs, many directors are considering disincorporation. As ever, there are tax implications for both the company and individual. Asset transfer Whatever the reason for disincorporation, when a company with assets closes, HMRC generally treats the company as disposing of those assets to the dire

Many digital platforms and online marketplaces in the UK, such as eBay, typically consider a seller to be a trader if they list items frequently or in bulk, or if the individual is perceived as selling items with the intent to generate profit. Being classified as a trader leads to additional fees not applied to private sellers. In addition, if 30 or more sales transactions are completed or total sales exceed approximately £1,707 after fees, eBay and other similar platforms ar

Many employees see being allowed the use of their own company car as acknowledgement of their status in a company. While the employee will be taxed on the benefit, the tax charge is usually not as high as having to finance the car out of their own savings or taking out a loan. However, should the employer also offer to pay for all fuel (usually via use of a company fuel card), including for personal use, the employee could face a sizeable tax (and NIC) charge. Many company ca

One of the key requirements under Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is the need to keep digital records of income and expenses. A digital record is a record of income or an expense that is created and stored using software that is compatible with MTD for ITSA. There are different software options available. A landlord within MTD for ITSA can either choose a single software package that does everything or different software products that work tog

Unincorporated landlords who had combined property and trading income in 2024/25 of £50,000 or more must comply with Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) from 6 April 2026. This requires them to keep digital records and make quarterly returns and a final declaration to HMRC using MTD-compatible software. Where landlords jointly own a property, there are some points to note. Working out qualifying income A landlord is only within MTD from 6 April 20

From April 2026, many businesses may find that their business rates increase. This is as a result of the revaluation of properties for business rates purposes, and for businesses operating in the retail, hospitality and leisure (RHL) sector, the withdrawal of reliefs introduced in the Covid pandemic. Nature of business rates Business rates in England and Wales are charged on most non-domestic premises, including offices, shops, warehouses, factories, restaurants, pubs, hotels

Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will apply from 6 April 2026 to sole traders and unincorporated landlords with combined trading and property income in 2024/25 of at least £50,000. Under MTD for ITSA, traders and landlords must keep digital records and make digital returns to HMRC using MTD-compatible software. A digital record is a record of income and expenses that is created and stored in software that works with MTD for ITSA. Under MTD for

In difficult trading conditions, a sole trader may realise a loss rather than a profit. Where this is the case, it is important that the trader realises that they may be able to claim tax relief for that loss. There is more than one way in which this can be done, and the best route will depend on the trader’s other income and personal circumstances. The relief must be claimed. Option 1: against other income of the same or previous tax year Where the trader has other income, s

Employees often incur expenses in doing their job and they may be able to claim these back from their employer through the expenses system. Where an employer reimburses expenses, there may be tax implications to consider. Exemption for paid and reimbursed expenses A tax exemption applies to certain paid and reimbursed expenses. It is available if the expenses which are paid or reimbursed by the employer would be fully deductible from an employee’s earnings had the employee me

It is reasonable to assume that if a person pays too much tax, HMRC will automatically send the overpayment back to them. Unfortunately, this is not the case, and where a taxpayer is due a tax refund, they may need to claim it. Why an overpayment may arise There are various reasons why a person may pay more tax than they need to. For example, where a taxpayer is in Self-Assessment and makes payments on account, if their circumstances change and their income falls, they may ha

The 2025/26 tax year comes to an end on 5 April 2026. If you are thinking of selling assets that may realise a gain and have yet to use your 2025/26 capital gains tax annual exempt amount, it may be worth making the disposal before the end of the current tax year. All individuals have an annual exempt amount for capital gains tax purposes. Net gains for the year (after the deduction of allowable losses for the tax year) are free of capital gains tax where they are sheltered b

A new 40% first-year allowance (FYA) is to be introduced from April 2026. It will apply to main rate expenditure on new assets, excluding cars. Both companies and unincorporated business will be able to benefit. The new allowance will be available from 1 January2026 for corporation tax and from 6 January 2026 for income tax. From 1 April 2026 for corporation tax and 6 April 2026 for income tax the main rate of writing down allowance (WDA) is reduced from 18% to 14%. A hybrid

As far as benefits in kind are concerned, there were both winners and losers in the Budget. Winner – easement for plug-in hybrid electric vehicles Under the company car tax rules, the taxable amount depends predominantly on the list price of a car and its CO2 emissions. From 1 January 2025, new European Union and United Nations emissions standards were introduced which found the CO2 emissions for plug-in hybrid electric vehicles (PHEVs) to be higher than previously thought. N

All things being equal, receiving a pay rise which takes your income over £100,000 would be seen as a cause for celebration. However, all things are not equal, and as press reports attest, some people would rather turn down a promotion or cut their hours than take their earnings over £100,000. We explain why this is. Reason 1 – loss of the personal allowance Individuals have a personal allowance of £12,570, allowing them to earn £12,570 before they pay tax. However, once thei

During the Chancellor’s Budget speech, savers received the unwelcome news that the rate of tax on savings income is to increase and the cash ISA limit to fall. Both changes will take effect from 6 April 2027. Taxation of savings income The taxation of savings income is quite complex as a number of factors come into play. The first complication is the personal savings allowance, which is available to some taxpayers but not all. Basic rate taxpayers have a personal savings allo

In her tax-raising Budget on 26 November 2025, the Chancellor announced that the dividend ordinary rate and the dividend upper rate are to rise by two percentage points from 6 April 2026. This will affect director/shareholders in personal and family companies who extract profits in the form of dividends. How dividends are taxed Dividends have their own tax rates, which are lower than the standard income tax rates. Dividend income which is not sheltered by the personal allowan

A new council tax charge, the High Value Council Tax Surcharge (HVCTS), is to be introduced in April 2028. The charge, dubbed ‘the mansion tax’, will be a recurring annual charge. It will apply to owners of residential properties worth more than £2 million in 2026 and will be levied on the homeowner rather than on the occupier. Social housing will be outside the scope of the charge. Council tax, which was introduced in 1993, taxes domestic property to provide money to fund lo

Corporate landlords will not be hit by the property tax rises that will apply to unincorporated landlords from 6 April 2027; they will continue to pay corporation tax on their rental profits, the rates of which are unchanged. However, this does not mean that their shareholders are immune from the Budget tax rises. Where profits are extracted from a property company in the form of dividends, the recipient shareholders will be affected by the increases in the dividend tax rates

Unincorporated landlords pay income tax on the profits of their property rental business. This is currently at the normal income tax rates. However, this is set to change from 6 April 2027 when property income will have its own tax rates. The bad news is that the new property tax rates will be two percentage points higher than the current income tax rates. Current rates and new rates For 2025/26 and 2026/27, unincorporated landlords pay income tax on their rental profits at 2

An increasing number of people live on cruise ships. They sell or rent out their main residence and spend their days living on the waves. The benefits are various – no meals to get yourself, entertainment every night, different ports to discover, even your washing done. You can even own a ‘villa at sea’, allowing residency aboard a ship for the duration of its life (or a minimum of 15 years). But what are the tax implications, if any? Unfortunately, UK tax liability is primar