HMRC records that during 2023/24, VAT deregistrations outnumbered new registrations by approximately 35,000 – the vast majority due to the closure of the business. However, some businesses deregister because they are no longer required to be VAT registered. How and when a business can deregister and/or leave a particular scheme depends on the type of scheme. The main VAT schemes are the standard accounting, cash accounting, annual accounting and flat rate schemes. In addition

Companies become dormant for several reasons and not necessarily because the company may close down sometime in the future. Usually this is because the company has stopped trading and the directors want to keep the name, hold assets or intellectual property, or keep the company in reserve for the future. When a company ceases trading, many directors withdraw whatever monies remain in the bank account, not being mindful of any tax implications this action may have. Impact of c

At the beginning of July 2026, HMRC amended several pages of its Business Income Manual relating to business funding and specifically to the withdrawal of capital from unincorporated businesses (BIM45690 – Funding the business and BIM45700 –Withdrawal of capital from a business). HMRC says the changes give clearer context and remove unnecessary calculations – but many commentators believe that the way in which the text has been written restricts interest relief on borrowing u

The former tax regime for furnished holiday lettings (FHL) came to an end on 5 April 2025. Prior to this date, properties which qualified as FHLs were kept separate from other lets. This meant that where a loss was made on FHL, that loss could only be carried forward and set against future profits from the same FHL business. However, from 6 April 2025 onwards, FHLs are treated in the same way as other residential lets. This means that income and expenses from properties let a

From 6 April 2028, a new charge, the High Value Council Tax Surcharge (HVCTS) will apply to owners of residential property in England valued at £2 million or more. The new tax is commonly referred to as the ‘mansion tax’. The charge will apply in addition to the existing council tax charge. The government estimate that fewer than one per cent of properties will fall within the scope of the charge. Liability for the charge will fall on the homeowner rather than the occupier wh

Stamp duty land tax (SDLT) is payable on the purchase of a property in England or Northern Ireland. There are different rates for residential properties (with a 5% supplement applying to second and subsequent residential properties) and non-residential properties. The non-residential rates also apply to mixed-use properties. The starting point for residential properties is than for non-residential properties and the rates are higher and the rates applicable to residential pro

Mandatory payrolling is now being introduced in stages. From 6 April 2027 onwards, employers will be required to payroll: · company cars; · car fuel; · vans; · van fuel; and · medical benefits. For 2027/28, employers can opt to payroll all other benefits voluntarily, including taxable cheap employment-related loans and living accommodation benefits which cannot currently be payrolled. However, non-mandatory benefits can only be payrolled in 2027/28 if they have been registere

The High Income Child Benefit Charge (HICBC) claws back child benefit if the recipient and/or their partner earns more than the threshold. For 2026/27, the charge applies once adjusted net income exceeds £60,000. Where both the recipient and their partner have adjusted net income of more than £60,000, the charge is levied on the one with the highest income. The person liable to pay the charge may not be the person who received the child benefit. The charge claws back 1% of th

HMRC are changing the way that tax refunds are made to the majority of taxpayers who make a multi-year P800 tax refund claim. Claims must usually be made no later than four years from the end of the tax year to which the claim relates. Employees making a claim for a multi-year tax refund will need to request their repayment using HMRC’s digital services. They will no longer receive the repayment automatically by cheque. This change brings multi-year refunds in line with the w

HMRC send out a P800 tax calculation letter where a person who is employed and/or in receipt of a pension has overpaid or underpaid tax. They will not get a letter if they complete a Self-Assessment tax return instead; their Self-Assessment bill will be adjusted automatically. There are various reasons why a person may receive a letter, for example, because they were on the wrong tax code, they finished one job and started another in the same tax month, they started receiving

HMRC have issued a warning that not all tax advice online is accurate. ‘Finfluencers’ (financial influencers) often present tax advice as ‘quick wins’ without covering the rules. This can be misleading as people may take action without being aware of the risks or whether the featured ‘win’ is appropriate to their circumstances. HMRC have published guidance to help people avoid being caught out by bad tax advice. Spotting tax avoidance Tax avoidance usually involves artificial

VAT is often thought of as a relatively simple tax; if a business is VAT registered, 20% VAT is usually charged. However, in practice, the VAT system is more complicated. What is being supplied, who is doing the supplying/buying, where the supply takes place and whether particular conditions and evidence requirements are met determines whether a transaction is standard-rated, reduced-rated, zero-rated, exempt or outside the scope of VAT. Getting the distinction wrong can resu

By now the first quarter’s Making Tax Digital (MTD) submissions should have been made. However, by 12 August, just over 436,000 of the estimated 864,000 taxpayers affected had submitted their first quarterly update. Many taxpayers have questioned why the new system has been introduced, with some wondering whether it is simply a precursor to quarterly tax payments. HMRC has previously stressed that MTD quarterly reporting is intended to move record-keeping closer to real time

Not all taxpayers owe money – sometimes they are due a repayment. This may be for a number of reasons and the method by which that repayment is obtained varies depending on which type of tax the repayment relates to. The rules also differ depending on whether the repayment arises from an amended return, a claim or another form of tax adjustment. Different taxes have different deadlines by which a refund can be claimed. However, missing that deadline need not mean the refund i

The Property 118 Tribunal case concerned whether Scheme Reference Numbers (SRNs) issued in respect of two sets of arrangements were validly issued. The arrangements in question – the SIS and the CAR – were designed to incorporate a property business run by a husband and wife to take advantage of the fact a company can still deduct interest and finance costs incurred in relation to residential lets – the interest relief restriction for unincorporated residential landlords does

The way in which an unincorporated landlord receives tax relief for interest and finance costs depends on whether or not the property is a residential property. Relief for interest and finance costs incurred by unincorporated landlords in respect of residential lets is given as a basic rate tax reduction, whereas the interest and finance costs relating to non-residential properties are deducted in calculating the taxable rental profits. Where a property portfolio comprises bo

Where a personal company is run from the director’s home, the payment of rent by the company for the use of the space can be a handy way of extracting profits. However, to avoid HMRC scrutiny, the rent should be set at a commercial level. Company’s position The company can deduct the rent paid in calculating their taxable profits for corporation tax purposes. The director’s position If the home is owned solely by the director, they will be taxed on the rent received. However,

Over the summer, HMRC consulted on proposals for the timelier payment of income tax due under Self-Assessment (ITSA). Currently, taxpayers within Self-Assessment must pay their income tax and any Class 4 National Insurance by midnight on 31 January after the end of the tax year to which it relates. This means that income tax and Class 4 National Insurance for 2025/26 must be paid in full by midnight on 31 January 2027. If the tax and Class 4 National Insurance bill for the pr

A company tax return must be filed no later than 12 months after the end of the accounting period to which it relates. However, the corporation tax for that period is due earlier and must be paid by nine months and one day after the end of the accounting period. So, if a company’s accounting period is the year to 31 March 2026, they will need to file their company tax return by 31 March 2027. However, the corporation tax for the period is due by 1 January 2027. As the corpora

If you have a PAYE Settlement Agreement (PSA) in place for 2025/26, you will need to pay the tax and Class 1B National Insurance due under the agreement by 22 October 2026 if you make your payment electronically. However, if you pay by cheque, your cheque must reach HMRC no later than 19 October 2026. Before you can make the payment, you will need to work out what you owe and tell HMRC. If you have not already done this, you should do this without delay. This can be done onli