Salary transparency on recruitment

Salary transparency on recruitment A pay transparency survey has revealed that 70% of employers intend to share salary ranges with external candidates during recruitment ahead of the EU Pay Transparency Directive coming into force. Will this become a legal requirement? There is currently no legal requirement in the UK to include salary details, or salary bands, in job adverts. However, the following developments are of relevance: Get the Accountancy Services You Need here. Even if UK law on pay transparency during recruitment doesn’t change, if publishing salary ranges in job adverts starts to become the expected “norm” as a result of a cultural shift, then you may have to follow suit to ensure you continue to receive sufficient job applications from high-quality candidates. If you do include a salary range, also consider setting out information about your benefits package. Alternatively, you could state that salary information will be provided before interview to those candidates who are selected to progress to that stage.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

HMRC scrutinising directors’ loans

HMRC scrutinising directors’ loans HMRC has begun a new compliance campaign targeting company directors who owed their companies money. What’s the full story, and how should you respond? Warning letter HMRC says that it will shortly write to all directors that it has identified as having had one or more loans from their companies which were written off or released (waived) between April 2019 and April 2023. You’ll receive a letter if you didn’t report the details on your self-assessment tax return or notify HMRC by other means. The likelihood is that you’ll have further income tax to pay. For more Help see our Accounting Services Taxable income When a company writes off or waives a debt owed to it by an employee, director or shareholder it counts as taxable income. The write-off or release of a debt might be taxable as earnings or, in the case of a director who’s also a shareholder, as a distribution which is taxed in the same way and at the same tax rates as a dividend. The tax payable is lower for a written off or waived debt taxed as a distribution compared to the tax as earnings. Which of these applies depends on whether the debt arose by reason of your employment or because you’re a shareholder. If the debt arose by reason of employment, the company should have reported it and accounted for Class 1 NI. If it hasn’t your company might also be in hot water with HMRC. Action required If you’re already aware that you have overlooked reporting a written off or waived debt to HMRC, or become aware because you receive a letter from HMRC, you should report it in one of two ways. If the write-off/waiver occurred after 5 April 2023, amend your 2023/24 self-assessment tax return or, if it occurred earlier (or if it relates to 2023/24 but you didn’t complete a tax return for that year), use HMRC’s online disclosure service. Volunteering the information rather than waiting for HMRC to pressure you can reduce any financial penalty it might charge.   Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk If you would like any assistance with any of these points. Please Call Us on 0161 872 8671

New two-tier mileage rates for electric vehicles

New two-tier mileage rates for electric vehicles The amount that employers can reimburse staff for business travel in company cars changes from 1 September 2025. What are the new rates, and why is this update different to previous ones? Advisory fuel rates for company cars are updated by HMRC on a quarterly basis due to fluctuations in fuel prices. The rates determine the amount that can be paid to an employee using a company car for business mileage, or where an employee has to reimburse their employer for private journeys. Where HMRC’s rates are used, there are no income tax consequences for the employee. HMRC has now published the advisory rates applicable from 1 September 2025. The rate per mile will be: Get the Accounting Services you need here Engine size Petrol LPG 1,400cc or less 12p 11p 1,401cc to 2,000cc 14p 13p Over 2,000cc 22p 21p   Engine size Diesel 1,600cc or less 12p 1,601cc to 2,000cc 13p Over 2,000cc 18p The big difference this time is the introduction of a second electricity rate for fully electric cars. For 1 September, the two rates will be: 8 pence per mile for home charging 12 pence per mile for public charging     back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

Temporary workers – your pension obligations

Temporary workers – your pension obligations If you’re employing temporary workers for the summer season don’t forget that they have the same rights to join your workplace pension as permanent employees. What do you need to do? Pension auto-enrolment Workplace pensions have been around for over a decade. Despite this, every year some employers forget that temporary employees they take on, say during the summer period, have the same rights to workplace pensions as their full-time workers. Because of this HMRC is currently running a campaign to remind employers. Get more information on our Accounting Services Pages. Assess and advise If you’re an employer you must assess temporary staff for their right to be enrolled in your workplace pension scheme each time you pay them, even if they only work for you for a few days. If you don’t assess your employees for entitlement to join your workplace pension it can result in a warning from HMRC or The Pensions Regulator. This can escalate to a fine of £400 initially and then daily penalties of between £50 and £10,000. You can avoid having to assess your employees if they will work for you for no more than three months. Do this by using the auto-enrolment postponement procedure.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

Opt out of winter fuel payments by 15 September

Opt out of winter fuel payments by 15 September HMRC has issued new guidance on the winter fuel payments. What do you need to know? The winter fuel payment will be paid to state pension recipients this winter and is worth £200 per household, or £300 if you’re over 80. Find the Help you Need on our Accounting Services Pages Eligible pensioners will receive a letter in October or November, with the payment being made automatically in November or December. New details have been released on the eligibility criteria, including a useful tool to check whether your income is over the threshold of £35,000. If it is, you’ll still receive the payment, but it will be clawed back using the tax system. The tool will confirm how the payment will be recovered if applicable. If you’d prefer to opt out you can do so using this form, but it must be done before 15 September 2025.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

MONTHLY FOCUS: THE KEY TAX CONSIDERATIONS FOR A NEW BUSINESS

MONTHLY FOCUS: THE KEY TAX CONSIDERATIONS FOR A NEW BUSINESS In this monthly focus, we take a look at the tax matters that affect new unincorporated businesses in the first year, including dealing with HMRC, the choice of accounting basis, deductible expenses, and dealing with losses. Page Content:- BEFORE BUSINESS BEGINS WHEN TRADE COMMENCES THE FIRST TAXABLE PERIOD LOSSES   BEFORE BUSINESS BEGINS Starting up The first key tax date for any business is that on which it opens its doors to customers. HMRC refers to this as the date on which trade commences. It’s important because it’s the point from which HMRC starts to measure the profits and losses on which you’ll pay income tax and National Insurance (NI). However, no business starts overnight. At the very least you must decide what to call your business, make agreements with business partners as well as taking practical steps, such as setting up a bank account and a means of getting paid by your customers. The lead-in time for getting a business ready to trade can vary significantly; it might be just a few days if you’re setting yourself up as a consultant and working for just a few clients you already know, or it can last months if you’re starting a manufacturing business requiring premises and the installation of heavy machinery. It’s likely that every business will incur expenses before its trade commences. Without special rules some of these might not qualify for a tax deduction. More help for you Business – see Our Accounting Services What are the tax rules for pre-trading expenses? In a nutshell, the rule for pre-trading expenses allows you to claim a tax deduction for costs relating to your business if they would have qualified for a deduction had you incurred the expense after trading commenced. The rule says that pre-trading expenses are treated as if they were incurred on the first day business commences. You can claim a tax deduction for costs incurred up to seven years before your trade commences. For example, if your trade commenced on 1 May 2025 expenses back to 1 May 2018 can qualify. Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk Can a deduction be claimed for personal expenses? The general rule is that no tax deduction is allowed for expenses if they aren’t incurred “wholly and exclusively for the purpose of a trade”. That’s a reasonable and understandable restriction. However, there’s a unique angle to pre-trading expenses which can allow a deduction for costs that might originally not have been incurred with your business in mind. You might have spent money on an item long before you thought about starting a business, but if it was later used for your business and the expense was incurred within the seven-year time limit, the pre-trading rule allows you to claim a tax deduction for it. Pre-trading expenditure will mostly relate to equipment, for example a car, but the same rules apply to smaller and less obvious items. Example John was employed as a designer with a kitchen company. In early 2025 he decides to start his own furniture design firm which he’ll run from an office in his home. In late 2020 he bought new IT equipment and furniture for his home office, which he used almost entirely for private purposes. In mid-2022 he bought a stock of paper, ink cartridges and stationery for his private use. John can claim a tax deduction under the pre-trading expenses rule for the IT equipment and the paper, ink, etc. How much tax deduction can I claim? Naturally, the amount of tax deduction depends on the cost of an item. Consumables bought pre-trading specifically for your business will be unused when trading starts and so the tax deduction is equal to the cost. However, if the item is durable (for tax purposes this means something that can be used multiple times for a period of two years or more, this is referred to as capital expenditure), e.g. equipment, it might be used or unused or have been bought for the business or for another purpose. The tax relief is allowed for: the cost where the item was bought for the business and unused; or the “market value”, i.e. the amount you could expect to receive if you sold it to someone unconnected to you, of the item if it was previously used for a purpose other than for your business. Tax relief can be claimed for the market value of equipment etc. bought by someone else, for a private purpose, but which you start using for your business. For example, a computer bought for you as a gift which you later start using for your business. Does the pre-trade rule apply to all expenses? No. You don’t need to rely on the pre-trading rule to obtain a tax deduction for stock and materials bought before trade commences if they were purchased specifically for the business. Normally, general accounting rules mean that these types of cost are included as an expense in your first accounts anyway and the tax rules follow the accounting rules in this instance. What about services I pay for before trading? The same pre-trading rule applies to services as it does to goods. However, in practice it will only be relevant to purchases made specifically for your business. For example, if you take a lease on a retail unit with the intention of running your business from it, you’re unlikely to start trading there on the day you receive the keys; it might need fitting out or other work before you can use it. While your accountant might include the rent for this period, along with the fitting out costs, in your business’s first accounts, for tax purposes they are pre-trade expenses. Are there any NI issues to consider for pre-trading expenses? You don’t need to register to pay self-employed NI, Class 2 and Class 4, until after you have started trading. Class 4 NI is

Change to IHT on pensions proposals

Change to IHT on pensions proposals HMRC has published a policy statement announcing an important change to its plans to include pension savings in an individual’s estate for inheritance tax (IHT) purposes. What’s the full story? In her first budget last Autumn Rachael Reeves dropped a number of bombshells.   Find the Help You Need with Our Accounting Services. One of the biggest was her proposal to bring pension savings and death benefits within the scope of IHT from 6 April 2027. Currently, IHT only applies in very few circumstances. Where it does the pension companies may be responsible for calculating and deducting any IHT payable before passing the pension savings to the deceased’s beneficiaries. The Chancellor wanted to emulate this process when the new IHT rules were rolled out in 2027. In a policy paper published on 21 July the government announced that the responsibility for calculating and paying IHT on pension saving will rest with the personal representatives of an estate, e.g. executors, and not pension companies. Although the consultation on the proposed new rules, which is open to everyone, doesn’t close until 15 September it had already become clear that the Chancellor’s original proposal was unrealistic.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

Time off for fertility treatment?

Time off for fertility treatment? A survey by Fertility Matters at Work has revealed that more than one-third of employees undergoing fertility treatment have resigned or are considering resigning because of the physical and emotional toll. Is there a right to time off for fertility treatment? Employees have no specific statutory right to take time off work to undergo in vitro fertilisation (IVF) or other fertility treatment before the stage at which they are pregnant. However, as a minimum, you should treat time off for fertility appointments in the same way as any other medical appointments, e.g. if you allow up to two hours off work per medical appointment, you should allow at least the same time off for a fertility appointment, and if you pay staff for time off for medical appointments, you should do the same with fertility appointments. Find the Accounting Answers your looking for, with our Services. The intensive demands of IVF mean that more time off may be required, which you could allow the employee to take as a combination of paid leave, unpaid leave or holiday. You could also agree to a temporary informal flexible working arrangement, e.g. allowing them to make up the time, or to work from home if they live near their fertility clinic. You may also have contractual provisions in place governing paid or unpaid time off for fertility treatment, so make sure to check contracts and policies. If the IVF is successful and they remain pregnant, they have the same entitlements as any other pregnant employee, e.g. a right to paid time off for antenatal appointments, protection against pregnancy and maternity discrimination and a right to maternity leave. If the IVF embryo implantation fails, the employee’s pregnancy and maternity discrimination protection will end two weeks after the negative pregnancy test.  If they are then absent on medical grounds following their pregnancy loss, this would be sick leave. However, the Employment Rights Bill is being amended to extend a new statutory right to at least one week of unpaid bereavement leave to cover employees who suffer a pregnancy loss after less than 24 weeks of pregnancy in any way other than by a live birth, and this will include IVF embryo implantation failure.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

HMRC’s new compliance check service

HMRC’s new compliance check service HMRC has published a collection of videos and notes to help if you’re picked for a compliance check. Is HMRC’s new service worth a look or is it just official propaganda? What’s a compliance check?  Contrary to what you might have heard, a compliance check is not a tax enquiry. The latter is a review of a tax return that you’ve filed with HMRC, while a compliance check is a review of your current tax records. Sanctions, such as financial penalties for errors HMRC uncovers in a compliance check, are far less common than for a tax enquiry. A compliance check is aimed at making sure you’re on track to make a correct tax return. Get the Extra Assistance You Need, see our Accounting Services Don’t underestimate the likelihood of being picked for a check. HMRC carries out around 300,000 every year. The vast majority are made on businesses, especially those with employees or subscontractors. HMRC’s new service The compliance check service is primarily aimed at those without an accountant or tax advisor, but even if you do have one we think it provides useful information (click here for Further information). That said, the guidance is lightweight and comes across slightly condescending in places. Its best features are that it gives you an outline of what to expect, what happens at the conclusion of the check and what help HMRC can offer if you have issues which prevent you from engaging with the process properly, e.g. poor health or a disability. In practice, nearly all compliance checks for businesses start with a letter and questionnaire about the nature of your activity and how you do it, e.g. whether you have employees, use subcontractors and the records you keep. Take care in answering as it sets the tone for the check and largely determines what steps HMRC will take next, e.g. ask for documents, request to visit your premises or keep the check at a low level. If you’re unsure about answering, take advice from an accountant before responding.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk

Income sharing trouble for separated couple

Income sharing trouble for separated couple After a couple separated one spouse received income from letting the property she jointly owned with her estranged spouse. HMRC taxed all the income on her. Was it right to do so or should her spouse have been taxed on half the income? The facts of the case At the end of May 2025 the First-tier Tribunal (FTT) published its decision in the case of Alison Moss v HMRC (2025) (A v HMRC). The case was brought by A following her appeal against HMRC’s decision on a number of issues regarding the taxation of rental income. The main dispute concerned who was liable to pay tax on the income. A argued her estranged husband ought to be taxed on half of it as the property was jointly owned. HMRC believed A alone was liable. Find the Help you need, See our Accounting Services. Parting of the ways In 2015 A’s husband went abroad to work giving her authority (by a power of attorney) to make financial decisions in respect of the property. For whatever reason the couple permanently separated in 2016 but remained married. Because A’s husband made no financial provision for her she used the authority she had been given to generate income by letting it. A sold the property in July 2020. Joint asset joint income A’s main argument relied on the special rules that apply to joint income received for married couples. These say that irrespective of which spouse or civil partner is entitled to the income from a jointly owned asset, it will be taxed as if they were each entitled to half. Declare different interests in property Also, although a couple can declare and notify HMRC that they want to be taxed on income other than on a 50/50 basis, the declaration only allows attribution for income for tax purposes to be in proportion to their ownership share of the asset. For example, if a husband owns 75% of a property and his spouse 25%, they can jointly choose to notify HMRC that they wish to be taxed on income in those proportions. In this case such a declaration was not possible as A and her husband owned the property in equal shares. FTT decision In respect of A’s argument that her husband should be taxed on half the income, the decision for the FTT was simple to arrive at. While the judges expressed sympathy for the financial position A had been put in by her husband, the fact was that at the time the letting income started the couple were permanently separated and therefore, in accordance with tax rules, were not to be treated as married (or in a civil partnership) from the date of separation. The 50/50 rule ended on that date. Instead, the income was attributable however the joint owners decided and was taxed accordingly. Because A made the decision to let the property (the power of attorney gave her the authority) and received the income without any direction from her estranged husband, she was the sole recipient of the income and therefore taxable on all of it. The point the FTT judges made regarding the allocation of income by joint owners who are neither married nor in a civil partnership is important. If you own property with someone but you’re not a married couple or civil partners, you can allocate the income between you in whatever proportion you like and you’ll be taxed accordingly.   back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Get in Touch Want a financial consultation with no obligation? Call Dunhams Chartered Accountants now on 0161 872 8671 Or email paul.o’brien@dunhams.co.uk or andrew.edwards@dunhams.co.uk