Where a taxpayer has been made bankrupt, their Unique Taxpayer Reference (UTR) expires at the end of the tax year in which they were made bankrupt. They cannot use that UTR to file Self-Assessment tax returns for later tax years. Instead, they must re-register for Self-Assessment and obtain a new UTR if they continue to trade after the tax year in which they were made bankrupt or if they need to complete a Self-Assessment tax return for any reason after that tax year. The old

A taxpayer may need to contact HMRC if they have a query about their tax affairs. There are various ways in which this can be done. HMRC’s digital assistant Taxpayers can ask HMRC’s digital assistant for help by visiting the Gov.uk website at www.tax.service.gov.uk/ask-hmrc/chat/self-assessment. If the digital assistant is unable to answer the question, the taxpayer can ask to be transferred to a webchat with an HMRC advisor if they are available. X HMRC will answer queries v

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 the standard rate of 20%. However, from 25 June 2026 to 1 September 2026 inclusive, a temporary reduced rate of 5% will apply to qualifying c

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 payment on account is 50% of the tax and Class 4 National Insurance liability for the previous tax year. The payments must be made by 31 January in the tax year

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 to extract a person’s bank details by telling them that they are entitled to a tax refund. This should set warning bells ringing – HMRC will never phone someone to tell the

Landlords running an unincorporated property business obtain relief for interest and finance costs incurred in relation to residential lets (including holiday lets) as a tax reduction. The tax reduction is 20% of the lower of the: · interest and finance costs; · the profits of the property business for the tax year (after any brought forward losses); and · adjusted total income (income after losses and reliefs that exceeds the personal allowance). The deduction cannot create

The cash basis is the default basis of accounts preparation for landlords with annual rental income of £150,000 or less running unincorporated property businesses. Under the cash basis, income is only recognised when received and expenses are only recognised when paid; there is no need to account for debtors and creditors or prepayments and accruals. Simpler rules also apply to capital expenditure. Under the accruals basis, expenses can only be deducted in calculating taxable

A landlord will need to consider whether it is better to pass on an investment property during their lifetime or on their death. Here, we look at the associated tax implications. On death Where a landlord dies, any investment properties that they have will form part of their estate at death and, unless they are sheltered by the nil rate band, inheritance tax (IHT) will be payable at the rate of 40%. However, there will be no capital gains tax to pay. The property benefits fro

In the last few months, some taxpayers who possibly have had no dealings with HMRC previously have been receiving letters headed ‘Simple Assessment’. The letters are being sent to those taxpayers whose outstanding tax liabilities cannot be collected automatically through the Pay As You Earn (PAYE) system or who do not complete a self-assessment tax return. A simple assessment is issued when HMRC already holds sufficient information to calculate a taxpayer’s liability, but can

VAT-registered businesses can generally reclaim VAT on goods and services purchased for business purposes. However, for a claim to succeed HMRC requires valid evidence to support those claims. In most cases, this means retaining a valid VAT invoice, but what is the situation should a full VAT invoice not be issued? An invalid VAT invoice A VAT invoice must contain specific information, including the supplier’s details, a unique sequential number, the VAT registration number,

Having made the big decision to start a self-employed business, there will be countless decisions and administrative tasks to attend to. Informing HMRC of the new venture may not be high priority, particularly where income is uncertain. However, failure to do so and in time can lead to penalties, including possible backdated obligations. When is registration required? The key threshold is the ‘trading allowance’, currently £1,000 of gross trading income per tax year. There is

Employers must make statutory payments to employees who meet the eligibility criteria. This includes statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP), statutory shared parental pay (SSPP), statutory parental bereavement pay (SPBP), and statutory neonatal care pay (SNCP). From 6 April2026 onwards, all employees are entitled to statutory sick pay (SSP) from the first day of their sickness absence. For all statutory payments other than S

HMRC publish mileage rates for petrol, LPG and diesel and electric cars. The rates are known as the advisory fuel rates and are updated quarterly with effect from 1 March, 1 June, 1 September and 1 December. The rates are fuel-only rates, which can be used either to reimburse employees for fuel used for business travel in a company car or where an employee needs to repay the cost of fuel used for private journeys in a company car. For petrol, LPG and diesel cars, the rate dep

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 reimburse these costs without the employee being taxed on the amount reimbursed. For the exemption to apply, the employee must

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. This is done by means of a director’s loan account. Where the director’s loan account is overdrawn there may be tax consequences for the director and

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 £60,000. Once adjusted net income reaches £80,000, the charge is equal to the child benefit for the year. Where this is the case, rather than receiving the child benefit only to pay it b

As for unincorporated trading businesses, the cash basis is the default basis of accounts preparation for landlords running an unincorporated property business. However, unlike traders, landlords can only use the cash basis if their rental receipts calculated under the cash basis are £150,000 or less for the tax year. Landlords who are not eligible for the cash basis must prepare their accounts using the accruals basis (also known as traditional accounting). Landlords who are

Where a business is run through a personal or family company, the directors/shareholders will need to extract profits if they are to be used personally. There are various ways in which this can be done, and popular options include paying a small salary and extracting further profits as dividends. However, where the business is run from home or from property owned by the directors/shareholders, a further option is for the company to pay rent. This can be advantageous. Company’

The property allowance is essentially an additional personal allowance for income from property. It allows individuals to enjoy property income of up to £1,000 each tax year free of tax and without the need to report it to HMRC. Where income from property is more than £1,000, the allowance can be deducted instead of actual expenses. However, there are some exclusions. Property income of less than £1,000 Where income from property is less than £1,000, it falls wholly within th

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 investment, property acquisition or a new business venture. Importantly, the loan must comply with the loa