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

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 of a business – generally referred to as ‘incorporation relief’ – is claimed, some or all of the gain can be deferred, reducing or eliminating the immediate

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 for all trading income – not for each source. You may also need to sell an item and make a capital gain. Normal tax rules apply – there are no special rules f

Getting around a city by bus, car or taxi can be frustrating, with traffic congestion often making journeys slow and unpredictable. Travelling by bicycle can be quicker, cheaper and better for the environment. If you run your own limited company, buying a bicycle through the company can also be a tax-efficient way of providing transport for commuting and business travel. However, there are tax rules to consider. Option 1: The company buys the bike The simplest approach is for

In November 2025, the government announced a joint strategy involving HMRC, the Insolvency Service and Companies House to crack down on what is termed ‘contrived insolvencies’ i.e. company closures engineered to avoid paying tax through the use of so-called ‘phoenix companies’. The measures signal a tougher approach to directors who repeatedly abandon companies with unpaid tax liabilities before starting near-identical businesses. What is ‘phoenixing’? Phoenixing is where a c

Whether you sell unwanted items on eBay or Vinted, rent out a property on Airbnb, freelance through online platforms, drive for a delivery app, earn money as a content creator, gardener, babysitter or even hire out personal equipment, it is important to understand when this extra income needs to be reported to HMRC. The government has announced plans to increase the self-assessment reporting threshold for trading income from £1,000 to £3,000 within the current parliament, by

The Community Infrastructure Levy (CIL) is a charge which can be levied by local authorities on new development in their area. The levy will only apply in an area where the local authority has consulted on and approved a charging schedule which sets out its levy rates and has published the schedule of rates on its website. Scope Most developments which create net additional floor space of 100 square metres or more or which create a new dwelling are potentially with the scope

Incorporation relief is a valuable relief that allows landlords to postpone the capital gains tax bill that may otherwise arise when transferring an unincorporated property business to a limited company. The relief, which is no longer given automatically and must be claimed, applies where the business is transferred to a company wholly or partly in exchange for shares. To the extent that the gain relates to shares received in exchange, it can be rolled over such that the base

Different taxes have different rules, and it is important to consider the full picture. Looking at one tax in isolation may lead to an unexpected bill. Most people are aware of the capital gains tax rule which allows spouses and civil partners to transfer assets or a share in an asset between them at a value which gives rise to neither a gain nor a loss – the transferee simply takes on the transferor’s base cost. This can be handy when putting a house or a flat into joint nam

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, the business must account for VAT on the cost value of the gift unless the gift is a business gift. Business gifts A gift is a business gift if it is made in the course of

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 to £10,500 a year. The allowance is capped at the employer’s secondary Class 1 liability for the year where this is less than £10,

Mandatory payrolling was due to come into effect from 6 April 2027. However, it has now been announced that the introduction will be phased in, with mandatory payrolling only applying to benefits in kind in phase one from 6 April 2027, with all remaining benefits in kind (with the exception of taxable cheap loans and living accommodation benefits) being brought within mandatory payrolling from 6 April 2028. From the same date, employers will be able to opt to payroll taxable