From 1 May 2025, HM Revenue & Customs (HMRC) reduced its road fuel scale charges, reflecting a drop in fuel prices.
Company car VAT – Avoiding mistakes when applying the fuel scale charge
Blogs
Mandatory payrolling delayed to 2027 – Time to prepare, not to forget
The Government has confirmed that the mandatory payrolling of benefits in kind (BIK) and taxable employment expenses will now be introduced from April 2027, a year later than initially planned.
How to claim a Self-Assessment tax refund during the HMRC phone line pause
HM Revenue & Customs (HMRC) has recently temporarily suspended telephone and webchat services for Self-Assessment repayment requests.
How to maximise tax relief on losses to offset higher employment costs
The recent rise in employers’ National Insurance Contributions (NICs) to 15 per cent will lead to a 60 per cent increase in NIC costs for a business employing minimum wage staff, according to the Centre for Policy Studies.
With no new business reliefs announced in the Spring Statement and prices continuing to rise, many businesses could face growing losses.
In a period of economic uncertainty, it is essential to make the most of the tax reliefs available on your losses.
Trading loss
If your business makes a loss from trading, the disposal of a capital asset, or on property income, then you may be able to claim relief from Corporation Tax by offsetting your loss against income from the same tax year.
You can also offset losses against capital gains you have made in the same tax year.
This may only be done after you have offset losses against your income first.
If you make a trading loss and it cannot be used in the same year, you may be able to carry it back to earlier accounting periods.
Losses on qualifying shareholdings
If you have shares in an eligible business that has failed, you may be able to offset losses against your income.
This means you could receive tax relief of up to 45 per cent on your loss.
However, you need to make sure that your loss meets the strict conditions required by HM Revenue & Customs (HMRC), as not all losses are eligible for tax relief.
Business closure
No one wants to be forced to close their business.
Unfortunately, higher employment costs may mean that some businesses are simply unable to continue.
If you make a loss in your final 12 months of trading, you can also offset this against your profits from the previous three tax years to reduce your liabilities.
Mitigate your losses with our tax team.
Business owners need to make the most of the tax reliefs available to them, including those related to losses.
Our tax advisors can help you claim tax relief on losses and recover much-needed funds.
Need help claiming tax relief on losses? Contact our tax specialists today.
How HMRC treats cryptoassets disposed of by businesses
Cryptoassets make up a growing portion of the market, and businesses are increasingly looking to take advantage of these digital currencies.
If your business carries out activities involving the exchange of cryptoassets, then you are liable to pay tax on them.
However, understanding how HM Revenue & Customs (HMRC) treats cryptoassets for tax purposes can be tricky.
Here is what you need to know about how HMRC taxes cryptoassets for corporates.
Disposal of cryptoassets
Disposal of cryptoassets includes selling tokens for money and exchanging tokens for a different type of token.
Using cryptoassets to pay for goods or services, or giving away cryptoassets to another person, also counts as a disposal.
Disposal of cryptoassets is usually treated by HMRC as capital disposal gains or losses rather than profits or losses.
This means that, if you hold exchange tokens as an investment in your business, you are liable to pay Corporation Tax (CT) on any gains resulting from disposal.
However, in exceptional circumstances where your business regularly buys or disposes of cryptoassets, HMRC may classify your profits as subject to Income Tax and National Insurance (NI), rather than CGT.
Even if the profit or gain is within your tax-free allowance, you must still report it to HMRC.
Under HMRC rules, transactions concerning currency used as legal tender are exempt from Value Added Tax (VAT).
However, HMRC does not consider cryptoassets to be money or currency.
This means that cryptoassets are liable for VAT.
HMRC also does not consider the trading of cryptoassets as gambling.
Airdrops and mining
If your business receives an allocation of cryptoassets as part of an airdrop (for example, a marketing campaign), any future disposal will be subject to CGT.
In all cases, income from mining cryptoassets is subject to Income Tax.
Where mining activity is deemed to be a trading activity by HMRC, then any income will be regarded as trading income. Otherwise, it will be treated as miscellaneous income.
The latter will not be liable for Class 4 NI contributions and will be classed as unearned income for student loan repayments.
It is important to note that costs for mining activities do not count toward allowable costs in respect of tokens.
Taxes on cryptoassets – do not get caught out
Taxing cryptoassets is a complex process, but while it may be tempting to bury your head in the sand, you mustn’t ignore the issue.
Failure to declare gains or income from cryptoassets could get you in trouble with HMRC, while misunderstanding which kind of tax you are liable for could lead to costly errors.
If your business is involved in cryptoassets, you must seek expert tax advice from a specialist.
HMRC is closing its free Company Tax Return service
HM Revenue & Customs (HMRC) will permanently close its free service for submitting Company Tax Returns and annual accounts on 31 March 2026.
Built over a decade ago for simpler businesses, the platform no longer meets modern digital standards.
Companies must now move to commercial filing software to remain compliant.
This software provides more modernised features, including:
- Error checks before submission
- Filing to both HMRC and Companies House in one step
- Alerts, reminders and built-in support.
Make the switch before it disrupts your next deadline
The changes are not due to take place until next year, but if you prepare now, it allows you to test the new system, reduce the risk of errors and late filings, and avoid any last-minute scrambles before the deadline.
If you haven’t already, you should review your current processes, choose HMRC-compatible software, and set up your system well ahead of time.
You do not need to notify HMRC or Companies House when you switch.
Prepare for the deletion of old tax returns
After 31 March 2026, you will no longer be able to access previously filed returns or amend them online.
You should download and store at least three years of records. Any changes after this date must be made using software or by post.
If appointed as your agent, we will be able to action this on your behalf.
Dormant companies still have duties
Even if your company is inactive, you must file annual accounts with Companies House.
Corporation Tax may not apply, but that does not remove your reporting obligations.
This includes:
- Charities
- Flat management companies
- Amateur sports and community clubs
Joint owners of Furnished Holiday Lets prepare for increased taxes
With the abolishment of the specific tax considerations for Furnished Holiday Lets (FHL) from the beginning of the current tax year, owners need to prepare for higher tax bills.
Given that couples and joint owners of FHL benefited from specific considerations, they may find themselves uniquely impacted by the changes.
To avoid being hit with a surprise bill, it is worth understanding the changes and what can be done about them.
How have the Furnished Holiday Lets rules changed for jointly held property?
Part of the tax relief afforded to FHLs was the application of taxation based on the share of the income that each individual in the partnership received.
In some cases, where one individual paid Income Tax at a higher rate than the other, it resulted in them receiving lower shares of the income, which would reduce the overall tax bill.
However, shares of the property will now be divided 50:50 by default.
This could result in a higher rate of tax being paid on the income, particularly if one individual pays a higher rate for Income Tax.
To avoid the division remaining at the 50:50 split, joint owners of FHL can use HM Revenue & Customs’ (HMRC) Form 17 to ascribe the specific split of income.
To ensure that Form 17 is accepted, evidence will need to be provided of the division of shares by using a declaration or deed.
Form 17 will not, by itself, change the ownership split of the property, but it can inform HMRC if the division of shares is not the default 50:50.
Be aware that income from the property is taxed in line with the designation of Form 17 from the date that it was signed by the last spouse or civil partner to sign it, and it needs to reach HMRC within 60 days.
Any submissions after this will be invalid, and any income before the form is signed will not be covered by the form.
If you have been affected by the abolition of the FHL tax reliefs, please contact us today.
Beware tax avoidance scheme promoters – HMRC cracks down with new powers
Recent Government estimates suggest that as much as £1.8 billion is lost every year due to tax avoidance schemes.
That money, designated to fund schools, hospitals and other essential services, is in part, leading the Government to borrow more than expected.
As a result, HM Revenue & Customs (HMRC) is being given additional powers to crack down on tax avoidance and protect the public purse.
What new powers will HMRC have?
The focus of the reforms centres on an expansion of the Disclosure of Tax Avoidance Scheme (DOTAS).
A new hallmark – a specific feature or condition used by HMRC to identify tax avoidance schemes that must be disclosed – will be introduced to explicitly catch the schemes that are slipping under the radar of existing hallmarks.
This will be combined with a stricter liability offence if someone fails to notify arrangements under DOTAS.
Whether the avoidance scheme is effective or not will have no bearing on the illegality of engaging with it, and being caught will result in an unlimited fine and up to two years in prison.
HMRC will also be given the power to determine the penalty directly, leaving promoters the option to appeal to a tribunal should they feel unjustly served by the decision.
Both a Universal Stop Notice (USN) and a Promoter Action Notice (PAN) will be enacted, ensuring that those promoting and enabling schemes, or those working with promoters, stop immediately upon receiving the notice.
These stop notices form part of the targeted action that is being taken against legal professionals who provide advice and support promoters.
Time to act
HMRC want to make it clear that any involvement with tax avoidance schemes will no longer be tolerated.
As such, the onus is on you to ensure that you report any suspected attempts at tax avoidance immediately, lest you feel the consequences of collusion.
Is your remuneration strategy still tax-efficient in 2025/26?
Business owners who pay themselves through a combination of salary and dividends should revisit their remuneration strategy this tax year.
With Income Tax thresholds frozen until 2028 and a lower dividend allowance rate of £500, a strategy that once worked may now cost more than it saves.
How should you be paid as a director?
A salary of £12,570 uses the full Personal Allowance and qualifies you for National Insurance (NI) credits without triggering personal Income Tax or employee NICs.
This regular salary combined with dividends, where payable, and a generous pensions scheme, could help you to reduce the amount of Income Tax that you are liable to pay.
If your company qualifies for Employment Allowance, which has now increased to £10,500, even employer NICs can be mitigated.
Lower salaries of around £6,500 may suit directors with other sources of NIC credits or pension plans, while avoiding employee contributions altogether.
Dividends
You need to remember that any dividend income above £500 will be taxed at the dividend tax rate of 8.75 per cent, 33.75 per cent or 39.35 per cent, depending on your marginal rate of Income Tax – basic, higher and additional, respectively.
While dividend tax rates remain lower than Income Tax rates, the reduced allowance – introduced in the last few years – means higher effective rates for many than they have previously experienced in the past.
However, a carefully planned director’s remuneration strategy, which incorporates dividends, can still help to minimise an individual’s annual tax bill.
When dividends cannot be paid to directors
Your company’s profitability and your shareholding will determine how much dividends you can pay yourself, as dividends can only be paid from retained profits after Corporation Tax.
As long as you have made profits in the past, and those accumulated profits exceed any accumulated losses, then distributable reserves exist to pay dividends.
If these conditions are not met, then you may be limited to drawing a normal salary.
Setting your remuneration strategy
A blend of salary and dividends remains one of the most popular ways for directors to pay themselves, but achieving the most tax-efficient approach now involves carefully adjusting your income to reduce the amount of earnings that fall within higher tax bands.
You should speak to an experienced tax adviser to ensure your strategy aligns with the latest thresholds, minimises your tax liabilities, and allows you to keep more of your income.
Capital allowances: Full Expensing vs AIA vs Writing-Down Allowances
Capital allowances allow businesses to claim tax relief on money invested in assets like machinery, equipment, or certain vehicles used commercially.
There are a variety of capital allowances available, including:
- Full Expensing
- Annual Investment Allowance (AIA)
- Writing-Down Allowances (WDA)
The allowance that your business is eligible for depends on what you buy, how much you invest, and how your business is structured.
Full Expensing
Full Expensing allows companies to deduct 100 per cent of the cost of qualifying plant and machinery assets from taxable profits in the year of purchase.
This applies to new assets only and is available to limited companies subject to Corporation Tax.
It is an ideal option if you are looking for immediate relief or using the investment to improve cash flow.
Annual Investment Allowance
The AIA offers a similar benefit but is more widely available to sole traders, partnerships, and limited companies.
This allowance allows for 100 per cent relief on qualifying expenditure up to £1 million per year.
Unlike Full Expensing, AIA can apply to both new and used assets, though exclusions can apply to assets such as leased items.
Writing-Down Allowances
WDAs apply to any expenditure that exceeds the AIA threshold or when assets are not eligible for Full Expensing or the AIA.
These allowances offer tax relief spread over several years, typically at a rate of relief against profits of 18 per cent for main pool items and six per cent for special rate pool items, like integral features or solar panels.
How to claim capital allowances
Capital allowances must be claimed within your tax return and can be set against your business’s taxable profits. Eligible items must be used in your business, not for personal use.
There are additional schemes, such as Enhanced Capital Allowances, which can be used for “eco” investments, which may also be useful to certain businesses.
For a full list of qualifying items and further guidance on how to claim, please visit gov.uk/capital-allowances or speak to your tax adviser.