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Starting A Business – What Profits Are Taxed?

An unincorporated business pays tax on what is known as the `current year basis’. This means that, as a general rule, the profits for a tax year are taxed by reference to the profits for the 12 months to the accounting date that ends in that tax year. So, for example, if Joe has been[…] Read more »

PAYE Settlement Agreements

A PAYE settlement agreement (PSA) can be a useful tool. It enables an employer to agree with HMRC to meet the tax and associated National Insurance on the employee’s behalf on certain pre-agreed benefits and expenses. What can be included? A PSA is not suitable for all expenses and benefits and an item can only[…] Read more »

Mileage Payments

Employees and the self-employed alike often need to undertake business journeys and mileage payments are often made to cover the cost of fuel and, where the car used is the individual’s own rather than a company car, the associated running costs and an element of depreciation. However, all mileage allowance payments are not the same.[…] Read more »

Relief For Early Year Losses

Many businesses make losses in the early years as they struggle to become established. The tax system provides various ways for relieving losses generally, with additional help available where the loss is incurred in the early years. Option 1: relief for losses in early years of a trade Unincorporated businesses with losses in the first[…] Read more »

Let Property Campaign

The Let Property Campaign is an initiative by HMRC to encourage those with undeclared rental income to come forward and to bring their tax affairs up to date. In return, HMRC will charge lower penalties than those levied on landlords who wait to be found out. Who may benefit? There are many reasons why a[…] Read more »

Auto Enrolment Fines

There have been many examples of companies being fined for ignoring their Auto Enrolment duties. A recent case, saw a company ignore the Pension Regulator (TPR) and their Auto Enrolment duties, which ended up costing them £42,400. In this case summary, TPR stated that the company had a staging date of 1 May 2014, which[…] Read more »

Annual Investment Allowance

The annual investment allowance (AIA) is a capital allowance that enables a business to write off the cost of most items of plant and machinery in full against profits in the year in which the expenditure is incurred. What qualifies? The AIA is available for most items of plant and machinery. This includes capital items[…] Read more »

`Relevant Goods’ And The VAT Flat Rate Scheme?

The VAT flat rate scheme is a simplified VAT scheme, which allows small traders (turnover of £150,000 excluding VAT) to account for the VAT that they pay to HMRC by reference to a percentage of their VAT-inclusive turnover. Prior to 1 April 2017, the percentage (the flat rate percentage) depended only on the business sector[…] Read more »

Residence Nil Rate Band And Downsizing

The residence nil rate band (RNRB) is an additional nil rate band, which is available where a death occurs on or after 6 April 2017 (or, in the case of married couples and civil partners, the death of the second spouse/civil partner occurs after that date) and the property is left to direct descendants. The[…] Read more »

Making Money From Your Spare Room

Under the rent-a-room scheme, it is possible to earn tax-free income from letting out a furnished room in your own home to a lodger. You can even use the scheme if you run a bed-and-breakfast or a guest house. Rent-a-room is not available if the room is unfurnished, or if you let accommodation in a[…] Read more »