A £3,000 side-hustle allowance: more generous than it looks?
A £3,000 side-hustle allowance: more generous than it looks? People making money from small side businesses will have more room to earn without paying income tax, following a Budget decision to triple the trading allowance. However, the figure relates to what you receive before expenses, not the profit you keep. Will the £3,000 allowance actually save you tax? Get the help you need with our Accounting Services The Budget announcement increases the trading allowance from £1,000 to £3,000 from 6 April 2027. It applies to qualifying trading and miscellaneous income, which can include selling products you make or providing services outside your employment. The Self-Assessment reporting threshold for this type of income will also rise to £3,000. The £3,000 is a combined figure across relevant activities, not a separate allowance for every side hustle. It is also distinct from the separate £1,000 property allowance, which is not being tripled. Suppose you sell handmade goods with annual takings of £2,500 and spend £600 on materials and selling costs. If you otherwise pay tax at 20%, the current £1,000 trading allowance can leave £1,500 of taxable income, producing a £300 tax bill if it is better than claiming your actual expenses. From 2027/28, the £2,500 takings would fall entirely within the new allowance, so there would be no income tax on that trade. The saving is £300, assuming your circumstances are otherwise unchanged. But if your sales are £5,000 and expenses £3,200, claiming actual expenses would leave £1,800 taxable, compared with £2,000 after deducting the flat £3,000 allowance. The higher limit should remove some small traders from the tax return system, although those required to file for other reasons will still need to submit a return. Anyone already trading should continue to use the £1,000 limit for 2026/27, keep sufficient records of income and costs, and compare the allowance with their actual expenses rather than assuming the larger headline figure will always give the best result. 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
Founders’ relief: a closer look
Founders’ relief: a closer look The Budget’s new Founders’ Relief sounds remarkably generous, offering a 10% capital gains tax rate on up to £10 million of gains from selling shares from April 2027. However, a closer look at the proposed qualifying conditions suggests that relatively few business owners will benefit. Why might the relief be so difficult to claim? Get more help for your business, with our Accounting Services Under the government’s proposals, an individual must have held at least 25% of the company’s ordinary shares when it started trading, or preparing to trade, held shares for at least five years and been UK resident for five consecutive tax years before the sale. The company must also have turnover of at least £10 million and at least 15 qualifying full-time employees in the accounting period before the disposal. These minimum requirements apply regardless of how quickly the business has grown. However, the biggest hurdle is the additional requirement to satisfy at least two of three growth and innovation tests. These involve average annual compound turnover growth of 25% over three consecutive accounting periods, equivalent growth in employee numbers, or at least £1.5 million of qualifying research and development expenditure on which relief has been claimed. Crucially, the turnover growth test requires sales of at least £10 million before the three-year growth period begins, while the employee growth test requires at least 15 qualifying staff at the outset. In other words, a company starting with £10 million of turnover would need to grow to approximately £19.5 million over three years. Growing from £1 million to £10 million, however impressive, wouldn’t satisfy that test. The qualifying growth period can fall within the ten years before the sale, but the company must still meet the separate £10 million turnover and 15-employee requirements immediately before disposal. Little wonder the government estimates that only around 600 individuals will qualify each year. With the lifetime limit for Business Asset Disposal Relief also falling from £1 million to £500,000 in April 2027, business owners contemplating a sale should be cautious about delaying it in the hope of securing the new relief. The detailed rules remain subject to consultation, but the proposed conditions suggest that relatively few businesses will qualify. 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
The Budget 2026
The Budget 2026 Chancellor of the Exchequer John Healey presented his first Budget on 28 October 2026, promising ‘Breathing Space now, Hope for the Future’. Contents Personal Tax Employment Business Capital Taxes Other Matters Rates and Allowances For more help see our Accounting Services Introduction Breathing space Mr Healey said he had rejected broad-based tax rises as families and businesses face rising energy costs. The Chancellor extended the VAT cut on domestic electricity and the 5p Fuel Duty cut to July 2027 and announced a £100 Household Energy Payment this winter for households in Council Tax bands A to D in England. For the high street, the Small Business Rate Relief threshold will rise so that a further 70,000 retail, hospitality and leisure businesses pay no business rates. Paying for it To fund this support, the Chancellor temporarily doubled the Bank Corporation Tax Surcharge. In addition, the Budget announced further increases to the rates of tax on property and savings income from April 2027. The lifetime limit for Business Asset Disposal Relief will be halved, although the planned cut to the cash ISA limit will not go ahead. For businesses, there is a further cut in the main rate Writing Down Allowance from 14% to 12% from April 2027. This funds an increase in the main rate First Year Allowance from 40% to 50% for expenditure incurred from 1 January 2027. Mr Healey said that ‘my choice in the Budget today is to give families and businesses some breathing space now, and to begin the radical reform of energy to reduce bills in the future’. back to the menu top If you would like any assistance with any of these points. Please Call Us on 0161 872 8671 Personal Tax Tax bands and rates The basic rate band remains at £37,700, with the higher rate threshold remaining at £50,270. The additional rate threshold remains at £125,140. The freeze of these thresholds will continue until 5 April 2031. The National Insurance contributions (NICs) Primary Threshold and Lower Profits Limit remain at £12,570. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 up to 5 April 2031 as well. Other employer NICs relief thresholds aligned to the Upper Earnings Limit will also be maintained at this level. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland. The additional rate for savings and dividend income will apply to the whole of the UK. Scottish residents The tax on income (other than savings and dividend income) is different for taxpayers who are resident in Scotland from that paid by taxpayers resident elsewhere in the UK. The Scottish Income Tax rates and bands apply to income such as employment income, self-employed trade profits and property income. The rates and bands for 2027/28 will be announced in the Scottish Budget. Scottish taxpayers are entitled to the same Personal Allowance as individuals in the rest of the UK. Welsh residents Since April 2019, the Welsh Government has had the right to vary the rates of Income Tax payable by Welsh taxpayers (other than tax on savings and dividend income). For 2026/27 the tax payable by Welsh taxpayers is the same as that payable by English and Northern Irish taxpayers. This will continue for 2027/28 subject to the Welsh Budget. The Personal Allowance The Income Tax Personal Allowance is fixed at the current level of £12,570 and will remain frozen until 5 April 2031. There is a reduction in the Personal Allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no Personal Allowance where adjusted net income exceeds £125,140. The government will increase the Married Couple’s Allowance from 6 April 2027 by the CPI rate for September 2026 of 3.5%. The government will increase the Blind Person’s Allowance from 6 April 2027 to £3,370. Tax on property income Property income is any income from letting land and buildings. Individuals have a Property Allowance. This exempts property income of £1,000 or less. Property income over £1,000 can be offset either by the £1,000 Property Allowance or by deducting relevant expenses. The government is increasing the rates of Income Tax applicable to property income by 2% from the previous rates announced at Budget 2025. The separate tax rates for property income from 2027/28 are: 24% for basic rate taxpayers 44% for higher rate taxpayers 49% for additional rate taxpayers. Comment The government has also legislated to allow the Scottish and Welsh governments to set their own rates of taxation for property income for 2027/28. It remains to be seen whether either government decides to do so. Tax on savings income Savings income is income such as bank and building society interest. The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of Income Tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers. Savings income within the allowance still counts towards an individual’s basic or higher rate band and so may affect the rate of tax paid on savings above the Savings Allowance. Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. This will remain at £5,000 until 5 April 2031. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000. From 6 April 2027, the government is increasing the previously announced 2% increase in the applicable tax rates by a further 2%. The basic rate will increase to 24%, the higher rate will increase to 44% and the additional rate will increase to 49%. Tax on
MONTHLY FOCUS: BUSINESS AND AGRICULTURAL PROPERTY RELIEF: WHAT DO THE NEW IHT RULES MEAN FOR YOU?
MONTHLY FOCUS: BUSINESS AND AGRICULTURAL PROPERTY RELIEF: WHAT DO THE NEW IHT RULES MEAN FOR YOU? The inheritance tax treatment of businesses and farms changed fundamentally from 6 April 2026. The amount that can qualify for 100% business property relief and agricultural property relief is now capped, potentially leaving families with a significant tax bill for the first time. What has changed, and what should business owners and farmers be doing about it? Find more help with our Accounting Services For many years, inheritance tax (IHT) was not necessarily the greatest concern for owners of qualifying businesses and agricultural property. Provided the relevant conditions were met, business property relief (BPR) and agricultural property relief (APR) could provide relief at 100%, without any overall monetary limit. That position changed on 6 April 2026. There is now a £2.5 million allowance for property that would otherwise qualify for 100% BPR or APR. Once that allowance has been used, qualifying property above it generally receives relief at 50% instead. This does not mean that every business or farm worth more than £2.5 million will face IHT at 40% on the excess. The continuing 50% relief means that the effective IHT rate on qualifying value above the allowance is normally 20%. Nevertheless, that can produce a substantial liability, particularly where most of the family’s wealth is tied up in a business or farm rather than sitting in cash. The changes mean that succession planning has become considerably more important. Business and farm owners need to think about what their assets are worth, who owns them, who will inherit them and whether lifetime transfers should form part of the succession plan. How does BPR work? BPR can reduce the value of qualifying business property when calculating IHT. Relevant business property can include a business or an interest in a business, unquoted company shares and, in certain circumstances, land, buildings and machinery used by a company controlled by the owner or by a partnership of which the owner is a member. There are detailed qualifying conditions. For example, businesses consisting wholly or mainly of dealing in securities, stocks or shares, dealing in land or buildings, or holding investments are generally excluded. Property will also normally need to have been owned for at least two years, although there are exceptions to this requirement. The important point for present purposes is that satisfying the conditions for BPR no longer necessarily means that the entire value escapes IHT. And what about APR? APR performs a similar function for agricultural property. Broadly, it can apply to agricultural land and pasture, together with qualifying farm buildings and certain other land associated with agricultural use. There are ownership and occupation conditions which must be satisfied. APR applies to the agricultural value of the property rather than necessarily its full market value. This distinction can be particularly important where agricultural land has development potential. In some circumstances, BPR may be available against value that is not covered by APR. Again, the precise qualifying conditions remain important. But even where property qualifies for 100% APR in principle, the new £2.5 million allowance must now be considered. What changed on 6 April 2026? Before 6 April 2026, there was no overall monetary cap on the amount of qualifying property that could receive BPR or APR at 100%. From 6 April 2026, the 100% rate is limited by a £2.5 million allowance. Qualifying value above the available allowance receives relief at 50%. The £2.5 million allowance is fixed until April 2031. Example Suppose Bill owns a heating and plumbing company worth £10 million and the shares qualify for BPR. Had Bill died before 6 April 2026, the entire £10 million could have qualified for 100% relief. Suppose instead that Bill dies after the new rules have taken effect. Assuming his £2.5 million allowance is fully available, the calculation in respect of the company is as follows. £ Value of company shares £10,000,000 100% BPR (£2,500,000) Remaining qualifying value £7,500,000 50% BPR (£3,750,000) Value subject to IHT £3,750,000 IHT at 40% £1,500,000 The effective IHT charge on the £10 million business is therefore £1.5 million, or 15% of its total value. That might sound relatively modest compared with the normal 40% IHT rate. The difficulty is that a £10 million business does not necessarily have £1.5 million sitting in its bank account. The same problem arises with agricultural property. A farm can be extremely valuable on paper while producing comparatively modest amounts of readily available cash. That is why the new rules are as much a cash-flow and succession issue as a tax issue. Can the tax be paid by instalments? There is an important concession for qualifying business and agricultural property. IHT attributable to property eligible for BPR or APR can be paid in ten equal annual instalments, interest free. This facility is available whether the property qualifies in principle for 100% or 50% relief. Returning to Bill, his £1.5 million IHT liability could therefore be paid as ten annual instalments of £150,000. That certainly makes the liability easier to manage, but it does not make it disappear. Bill’s successors still need to find £150,000 for the first instalment and then the same amount each year thereafter. Advance planning is therefore essential. A business that is likely to generate an IHT liability should incorporate the expected instalments into its longer-term cash-flow forecasts. There is another issue if the inherited asset is subsequently sold. The instalment facility can come to an end, causing the outstanding balance to become payable. A partial disposal can similarly accelerate a proportion of the outstanding liability. Simply knowing that the tax can be paid over ten years is therefore not a substitute for planning how it will actually be funded. Why have valuations become so important? Under the old unlimited 100% relief regime, obtaining a precise valuation was sometimes less critical. If an entire qualifying business was relieved at 100%, whether it was worth
Wise tax statement errors could affect 4,000 customers
Wise tax statement errors could affect 4,000 customers Around 4,000 UK customers of financial services provider Wise have been told that tax statements issued between 2021 and 2025 contained incorrect figures. The errors could have resulted in taxpayers paying too much or too little income tax and capital gains tax (CGT). What should affected customers check? Find more help with our Tax Services According to reports published on 8 October, the problem arose from software supplied by a third-party provider used in connection with Wise’s investment products. Incorrect calculations of investment income and capital gains were included in statements that customers could have relied on when completing their Self-Assessment tax returns. Wise says it identified the errors through its internal checks, has corrected the underlying software problem and has issued revised statements to affected customers. However, receiving an incorrect statement does not necessarily mean that a taxpayer paid the wrong amount of tax. The company is now discussing a possible bulk settlement with HMRC to cover tax shortfalls arising from the errors. It has also said that customers who overpaid tax will be compensated. The proposed settlement has not yet been finalised, so affected customers should not assume that any outstanding tax liabilities have already been resolved. Anyone receiving a corrected statement should compare it with the figures included in their original tax returns. Where the amounts differ, the next step is to establish whether the error actually changed the tax payable. Customers should also retain the original and corrected statements, together with any correspondence from Wise explaining the proposed arrangements. Taxpayers can normally amend a return within twelve months of the statutory filing deadline. For the 2024/25 tax year, this means amendments can usually be made until 31 January 2027. Different procedures apply to earlier years, including claims for overpayment relief where the relevant conditions and time limits are met. Affected customers should establish precisely what Wise intends to do on their behalf before making any corrections or payments, particularly where the company proposes to settle additional tax directly with HMRC. 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 text or scam? Check before you act
HMRC text or scam? Check before you act HMRC is contacting some taxpayers by text this week about overdue Self Assessment liabilities and is also sending updates about VAT registration applications. At the same time, it has expanded its guidance on spotting fake HMRC messages on social media. How can you tell whether a message is genuine? Check before You act, Get more Personal Tax Help HMRC is contacting some taxpayers by text this week about overdue Self Assessment liabilities and is also sending updates about VAT registration applications. At the same time, it has expanded its guidance on spotting fake HMRC messages on social media. How can you tell whether a message is genuine? HMRC’s guidance on genuine text messages confirms that, between 5 and 9 October 2026, some taxpayers may receive a text telling them that their Self Assessment tax is overdue. A genuine message will tell you to check your online account and go to GOV.UK. It will not ask for personal or financial information and will not contain a link to a website. Businesses waiting for a VAT registration application may also receive a text from HMRC from 5 October onwards. This might confirm that a query is being processed, provide an update on the application or ask the business to respond to an earlier email or letter. Again, the text will not ask for personal or financial details or contain a direct website link. HMRC has also updated its guidance on tax scams to cover social media more explicitly. HMRC says it will never use social media to offer a tax rebate or ask for personal or financial information. If you receive an unexpected message, do not rely simply on the sender name or branding. Instead, sign in to your HMRC account by going directly to GOV.UK and check whether the contact is genuine before responding. Suspicious texts can be forwarded to 60599 or reported to phishing@hmrc.gov.uk. If an account claiming to be HMRC approaches you on social media and you cannot verify it, do not reply or share any information. 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
Already paid CGT? Don’t pay it twice through Self Assessment
Already paid CGT? Don’t pay it twice through Self Assessment Taxpayers completing their 2025/26 Self Assessment return may need to include capital gains that have already been reported separately to HMRC, together with any capital gains tax (CGT) already paid. How could this lead to a double payment? Get more help with your Personal Tax. Anyone who made a UK property disposal return or used HMRC’s real-time CGT service during the 2025/26 year should check the details before completing the CGT pages of their Self Assessment return. A UK-resident individual who disposes of UK residential property and has CGT to pay will normally already have reported the disposal and paid an estimate of the tax within 60 days of completion. However, that does not remove the need to include the disposal again in the annual Self Assessment return where one is required. The return should show both the gain and the CGT previously charged. For UK property disposals, the total gain or loss is entered on the CGT summary pages together with the tax already charged and the reference number for the earlier property return. Similar boxes apply where a disposal was reported using HMRC’s real-time CGT service. This matters because the amount paid through the earlier reporting service is effectively a payment on account of the final CGT liability. If the earlier payment is omitted from the Self Assessment return, HMRC’s calculation may not give credit for it correctly and the taxpayer could appear to owe more tax than is actually due. The final CGT figure can also differ from the amount originally paid. A property return may have been completed before the taxpayer knew their final income for the year or before later capital losses arose, so the Self Assessment calculation effectively brings the position up to date. Anyone who reported a capital gain separately during 2025/26 should therefore keep the earlier return, payment details and reference number to hand when completing their Self Assessment return. The key is not simply to report the gain again, but also to ensure that credit is given for the CGT already paid. 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
Updated guidance on mandatory payrolling of benefits in kind
Updated guidance on mandatory payrolling of benefits in kind Much like the rollout of mandatory payrolling of benefits in kind, HMRC guidance on the matter is coming in dribs and drabs. What’s the latest? Check here for more help with your Payroll HMRC’s latest update includes two points on mandatory payrolling of benefits in kind. Mandatory payrolling is being phased in from 6 April 2027 and 6 April 2028, but employers can payroll benefits voluntarily if they wish. Currently, employers who voluntarily payroll benefits for income tax can continue to report and pay the employers’ Class 1A NI liability after the end of the tax year. That will no longer be the case from 6 April 2027. Even where non-mandated benefits are payrolled voluntarily, the associated Class 1A NI contributions need to be made in real time through payroll. It is tempting to payroll all benefits from 6 April 2027 for simplicity but doing so doubles your NI costs for 2027/28. This is because you must pay Class 1A NI for 2026/27 benefits by 6 July 2027, and on 2027/28 benefits through the payroll each month. The second update is that the list of exemptions has been extended to include globally mobile employees. It can be difficult to calculate and report benefits in real time when an employee is working overseas so such benefits can continue to be reported on form P11D after the end of the tax year. You must inform HMRC which employees are globally mobile if you want to use the exemption, and a dedicated form will be made available in November 2026. 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: STARTING TO THINK ABOUT VAT
MONTHLY FOCUS: STARTING TO THINK ABOUT VAT The VAT registration threshold has barely changed over the last decade. As a result, more businesses are having to register. In this Focus, we look at the key considerations for a business that needs to register, or one that may be considering doing so on a voluntary basis. Page Contents: Vat registration process Making Tax Digital: Record Keeping Output Tax: What should you charge? Input Tax: What can you reclaim? Make the most of Our Accounting Services REGISTRATION In this section we give an overview of the VAT registration process, including when your business must register, as well as situations where you don’t have to register, but may wish to anyway. What is VAT registration? VAT registration is simply the term given to the process by which a business informs HMRC of its requirement (or voluntary wish) to obtain a VAT number. Registration can be compulsory or voluntary. When does a business need to register? The main VAT registration test for an unregistered business is based on checking historic sales on a rolling twelve-month basis to ensure they have not exceeded £90,000. Where this is exceeded, your business must register within 30 days of the month end. HMRC will send you a VAT Registration Number and you will need to start charging VAT on your sales from the first of the next month. But there is also a second test to consider, namely that registration is required if taxable sales are expected to be more than £90,000 in the next 30 days alone. The registration date is the beginning of the 30-day period, i.e. immediately. This test ensures that large businesses have to register as soon as they start trading in the UK, e.g. a major overseas retailer opening a UK branch. Example French Perfume, a major retailer based in Paris, is opening its first UK store in London on 1 October 2026. Monthly sales are expected to be £200,000. The business will need to be VAT registered in the UK by 1 October 2023 because it knows its taxable sales in the 30 days thereafter will exceed £85,000. Can I register early? Your business can apply to be VAT registered as soon as there is an intention to make taxable sales in the future – there is no time limit regarding the date of the first sale. This is known as an intending trader application. HMRC might want proof of business intentions before accepting the registration, e.g. business plans, contracts with potential suppliers and customers etc. What income counts for the purposes of the tests? The key phrase is “taxable” sales and not “total” sales as far as VAT registration is concerned. This means that any sales made by your business which are exempt or outside the scope of VAT are excluded from the calculations. It is important to be clear about the difference between exempt, outside the scope and zero-rated sales because the latter are included in the calculations. However, in a bizarre twist to the rules, most services purchased from abroad by your business are also included as taxable sales as far as the threshold is concerned. These are known as “deemed supplies”. For example, if a firm of accountants has annual income of £80,000 from UK clients and uses the services of an India-based bookkeeper to help with its work, paying the Indian firm £11,000 each year, then its total taxable sales are £91,000, triggering compulsory registration. Additionally, if your business takes over a business as a going concern, you must take into account the annual taxable sales of the seller by treating them as your own sales for the previous twelve months. It may be possible to avoid registration if you can convince HMRC that exceeding the threshold was a “one-off” event, perhaps due to an unusually large order. However, in this Special Report we are assuming you are already registered (or wish to be). Why would I register voluntarily? Perhaps the most common reason for registering before hitting the threshold is where you are about to start spending money on a property, or incur other large expenditure in the setting up of the business and want to recover the input tax. In the absence of registration, the VAT would be an additional cost to your business. Being VAT registered may also give your business an air of respectability. You may want to register for VAT if you sell to other registered businesses which are fully taxable. They can recover the VAT which is charged to them. The costs of the business are reduced by the input tax, which it can recover. However, you probably won’t want to register for VAT if you sell mostly to the public, and charging VAT means that you either must increase your retail prices or reduce your profits. The same applies if you mainly sell to businesses that mainly make exempt supplies, or unregistered businesses. What VAT planning is possible when registering? It is possible for you to reclaim some of the VAT you incur before you register on the first VAT return (when you eventually do). VAT can be reclaimed on pre-registration purchases of both goods and services, but there are restrictions. VAT can be reclaimed: on goods if the purchase was incurred during the four years prior to registration on services if the purchase was made during the six months prior to registration. In both instances, there is a further condition that the goods or services must not have been fully “consumed” before the registration date. This might prove tricky with services, for example rent, which apply to specific periods. Stock items that have been sold will also be excluded. Can I backdate a registration to maximise recovery? HMRC’s VAT Notice 700/1 says “We may allow you to backdate your registration voluntarily by up to four years when you apply to register. This will allow you to claim back VAT as per the time limits
Loan Charge settlement offers begin to land
Loan Charge settlement offers begin to land HMRC has begun sending formal settlement offers to individuals and employers with outstanding Loan Charge liabilities, alongside detailed new guidance explaining how offers will be calculated and how long recipients have to respond. What’s the full story? Get more Accounting assistance with our Accounting Services HMRC’s new Loan Charge settlement guidance confirms that eligible taxpayers are now being contacted. Everyone will have at least 90 days to accept an offer, although many people with open enquiries or unresolved appeals will have longer. The settlement terms can substantially reduce what is payable. Subject to an overall maximum reduction of £70,000, HMRC recalculates the liability by reference to the years in which the disguised remuneration income was originally received, gives a reduction for promoter fees and then deducts a further £5,000. Late-payment interest, relevant IHT liabilities and most penalties attached to the original Loan Charge liability are generally excluded from the settlement amount. Where an employer should have accounted for PAYE and still exists, HMRC will normally try to recover the tax and NI from the employer first. The employee will also receive an offer but can generally wait while HMRC pursues the employer without losing the opportunity to settle. Anyone unable to pay the settlement amount immediately should contact their HMRC caseworker before accepting the offer. Payment plans of up to five years are available under the new terms, with longer arrangements possible depending on individual circumstances, although interest will be charged on instalments. The deadline in the settlement letter should not be ignored. In particular, some taxpayers whose Loan Charge liability is already final will have only 90 days to accept the new terms. If they do not, HMRC says it will pursue the full liability instead. 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