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Did you know we can already prepare and calculate your tax liability for 2024/2025? This makes it easier to plan what you will be paying to HMRC in July 2025 as part of the prepayment, and then in January 2026 as the final payment.

We always start with our retainer client self-assessment returns first, but if you are ready to send us your information, please do. We love being prepared and getting the dreaded 'tax' out of the way!

As we approach the new financial year, we want to remind you of an important update regarding the minimum wage rates.

Effective from 1st April 2025, the minimum wage rates will be increasing.

The UK government is rolling out a significant change in the way self-assessment tax returns are filed, known as Making Tax Digital (MTD). This initiative aims to modernise the tax system, making it easier for individuals and businesses to keep on top of their tax affairs.

As we step into the new financial year, I thought it would be beneficial to discuss the Corporation Tax rates in the UK due to the recent changes. 

This information will help you plan and manage your finances more effectively. Additionally, if you have multiple companies, it's important to know how group relief can be utilised to optimise your tax liability.

If you're a VAT-registered business in the UK (accrual or cash basis VAT registration), you might be wondering when you can charge 0% VAT on your goods and services.

Let's break it down so you can get a handle on when you can apply this zero-rated VAT and how it works.

As we approach the end of the tax year, I wanted to remind you to review your pension contributions to ensure you're making the most of your yearly allowance for tax purposes. Topping up your pension funds before the deadline can help benefit from the tax and also help with your future.

The annual allowance is the maximum amount you can contribute to your pension pots in a tax year (from 6 April to 5 April) before you must pay tax. For the tax year 2024 to 2025, the standard annual allowance is £60,000. This includes contributions made by you, your employer, and any third parties.

As we step into the new year, it's time to remind you that the self-assessment tax deadline is fast approaching. By the end of January 2025, you need to have paid your self-assessment tax for the tax year 2023-2024. If you haven't yet sent us your information, don't worry. We've been keeping records and have reached out to those of you who we believe need to provide additional details. However, if you haven't heard from us and would like us to file your self-assessment, please get in touch as soon as possible.

As we approach the self-assessment deadline, it's essential to understand the various ways you can pay your self-assessment bill. Whether you prefer online methods or more traditional manual options, there are several ways to ensure your payment reaches HM Revenue and Customs (HMRC) on time. Additionally, using your Government Gateway account can streamline the process and provide you with valuable tools for managing your tax affairs.

I wanted to remind you of an important issue that might affect your tax return if you claim Child Benefit Tax Credit. Child Benefit is a payment made to parents or guardians to help with the cost of raising children. If you or your partner receive Child Benefit, it's important to report this on your Self-Assessment tax return, especially if your income is over £60,000. This is because you may be subject to the High Income Child Benefit Charge (HICBC).

As we approach the self-assessment tax return deadline, we want to remind you of an important detail that can often be overlooked: your student loans. If you have a student loan, it is crucial to include this information in your tax return to ensure accurate calculations and avoid any potential issues with HMRC. When you file your self-assessment tax return, HMRC needs to know if you have a student loan so they can calculate the correct amount of repayment.

Recently, HMRC issued a new policy paper detailing the evidence required to claim PAYE (P87) employment expenses. This change is crucial for anyone looking to claim tax relief on employment expenses (like home office expenses, insurance or memberships etc), and I am here to help you navigate these new requirements. From 14 October 2024, HMRC will require all taxpayers who wish to claim PAYE employment expenses to use a P87 form and provide supporting evidence to prove their eligibility before the claim can be processed.

With the growing popularity of cryptocurrencies, it's crucial to understand how these assets are treated by HM Revenue and Customs (HMRC) and why you need to disclose them in your yearly self-assessment. HMRC requires that any income or gains from crypto assets, including digital wallets and crypto accounts, be disclosed in your self-assessment tax return. This includes exchange tokens (such as Bitcoin), non-fungible tokens (NFTs), and utility tokens.

If you are leaving the UK to live in another country, you need to notify HMRC about your change in residency status. You must fill out Form P85 ("Leaving the UK – getting your tax right") to inform HMRC about your departure. This helps them determine your tax residency status and handle your tax affairs correctly. The form asks for details like your departure date, whether you're leaving the UK permanently or temporarily, and information about your income.

If your business turnover falls below the VAT deregistration threshold, it may be time to consider deregistering for VAT. Deregistration can simplify your accounting processes and reduce administrative burdens. A business that no longer makes taxable supplies must notify HMRC within 30 days. In this case, the business ceases to be a taxable entity and must submit a request to deregister. If you don’t let HMRC know you are no longer making taxable supplies, you can get a penalty.

As we head into the 2024/2025 tax year, it’s crucial to understand how dividend income is taxed in your Self-Assessment return if you're receiving dividends - particularly in Scotland. Whether you're a sole trader, shareholder, or director of a limited company, knowing how dividends are taxed can help you plan effectively and maximise your income. In Scotland, dividend income is taxed separately from other income such as salary, wages, or savings interest.

Prepayments to HMRC in the UK, also known as "payments on account," are advance payments towards your tax bill for the next tax year. If you're registered for self-assessment and your tax bill was more than £1,000 in the previous year, you usually need to make these payments. HMRC does not require payments on account if your last self-assessment bill was less than £1,000, or if 80% or more of your tax was collected at source.

Rent a Room Relief is a tax relief that could significantly reduce your tax liability if you rent out a furnished room in your home. Rent a Room Relief is a scheme offered by HMRC, allowing you to earn up to £7,500 per year tax-free by renting out a furnished room in your primary residence. This relief is designed to encourage people to make the most of their unused space, providing a little extra income without the burden of additional tax.

As a sole trader, your business is your livelihood. Whether you're a consultant, a freelancer, or a small business owner, the income you earn is directly tied to your ability to work. But have you considered what would happen if, due to an unforeseen illness, injury, or accident, you were suddenly unable to work? Without a backup plan, your income could disappear, leaving you and your family in a critical financial situation.

I have had a few requests lately for advice on purchasing an electric car as a limited company and I thought I’d do a blog about it to help our clients understand. Historically, buying a car through your limited company was a NO NO, because of the additional benefit in kind tax that you will have to pay on the personal use element.

Do you have a government gateway account for your own personal tax affairs and/or your business?

If not, I would encourage all our clients to get an account and request access to all their tax profiles. This will give you much better oversight of your tax affairs, and you can plan to ensure that your taxes are paid on time. It can also save you from having to phone HMRC and spend a lot of time on the phone, when you could have resolved it quickly and easily through your online account.