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If breeding and selling animals has turned into a source of income for you, you need to make sure your earnings are declared correctly to HM Revenue & Customs (HMRC).

You can earn up to £1,000 annually from casual trading or self-employment without needing to report it.

However, once your income exceeds this threshold, you will need to register for Self-Assessment, report your earnings, and pay any tax owed.

What happens if HMRC suspects undeclared income?

HMRC may send out a One to Many (OTM) letter, urging individuals to review their tax affairs.

Ignoring these letters can lead to penalties or an investigation.

Making a voluntary disclosure

HMRC’s online disclosure service allows you to report any undeclared income and settle your tax bill.

Once you notify HMRC of your intention to disclose, you will have 90 days to provide the necessary details and pay any outstanding tax.

If you have already received a letter from HMRC, your disclosure will be treated as ‘prompted,’ which may result in higher penalties than if you make a voluntary disclosure.

Registering for Self-Assessment

If your income from animal sales regularly exceeds £1,000, you will need to register for Self-Assessment.

This means filing an annual tax return and reporting all your earnings, including income from animal sales.

Responding to an HMRC letter

Receiving correspondence from HMRC can be intimidating, but ignoring it is not an option.

If HMRC does not receive an adequate response, they could launch an inquiry into your tax affairs, leading to penalties or, in severe cases, criminal charges if fraud is suspected.

If you believe you may have inadvertently committed tax fraud, it is essential you speak with a tax adviser at the earliest opportunity.

Need help with your tax obligations when selling animals? Contact us today.

From 1 April 2025, the National Minimum Wage will rise to £12.21 per hour (an increase of 6.7 per cent), meaning rising employment costs for businesses.

For graduates, higher earnings can trigger student loan repayments, a factor you should consider when managing your payroll.

Graduates start repaying their student loans when their income exceeds specific thresholds, depending on the loan type.

The repayment rate is nine per cent on any income above these thresholds:

• Plan 1 – £24,990 per year
• Plan 2 – £27,295 per year
• Plan 4 – £31,395 per year
• Plan 5 – £25,000 per year
• Postgraduate Loans – £21,000 per year (six per cent repayment rate)

Although the responsibility for repaying loans lies with employees, you have an obligation as the employer to accurately calculate the loan repayments.

Combined with Income Tax and National Insurance contributions, those who earn above the threshold can face an effective tax rate of up to 37 per cent.

Many graduates may not realise this, and overtime could trigger loan deductions and increase the amount of tax paid.

As such, you must be prepared to answer any questions that arise from your employees on this topic.

What employers can do to support employees

You can play a proactive role in reducing confusion and ensuring your payroll processes handle these changes effectively.

• Educate your workforce – Help employees understand how overtime impacts their earnings and may trigger student loan repayments.
• Provide reassurance – Clearly explain to employees how and why deductions were made, preventing any confusion or negative reactions.
• Review overtime policies – Assess how extra hours affect payroll and employee earnings.

If you are looking for advice on payroll management, tax planning, or handling student loan repayments, our team is here to help.

Contact us today to ensure your business stays ahead of these changes.

HM Revenue & Customs (HMRC) has recently issued One to Many (OTM) letters to private equity businesses and estate agents.

These letters can be sent to any business and usually highlight HMRC’s focus on compliance, urging you to review your practices.

What are One to Many letters?

OTM letters are not threatening and do not target one specific business.

They are sent to multiple businesses simultaneously regarding a specific topic, urging recipients to review their compliance and act where necessary.

These letters typically outline what HMRC expects, the steps to rectify potential issues, and the consequences of non-compliance.

While OTM letters are not formal investigations, they should not be ignored.

They are an opportunity for you to identify and address potential compliance issues before HMRC takes further action.

Failing to respond adequately could lead to penalties, inquiries, or, in serious cases, criminal investigations.

How should you respond to an HMRC One to Many letter?

If you receive one of these letters, here are some key steps to follow:

• Remain calm – The letter often serves as a precautionary prompt for action
• Read carefully and understand the content of the letter
• Review your business’s records and procedures

If the letter highlights a potential issue, act promptly to correct it.

This may involve updating your procedures, registering for relevant schemes, or making a voluntary disclosure to HMRC.

Ignoring an OTM letter can lead to investigations, penalties, or legal action.

Even if you have not received an OTM letter, it is a good idea to regularly review your compliance with tax and regulatory obligations.

Need support with HMRC correspondence?

If you have received an OTM letter or need help reviewing your compliance, our team of experts is here to assist.

Received a OTM letter? Speak with us today for advice on how to deal with it.

In January, the Government unveiled its Artificial Intelligence (AI) Opportunities Plan, outlining how the UK hopes to shape the AI trajectory by driving economic growth, enhancing public services, and creating new job opportunities while ensuring AI benefits society.

While there is still a lot we do not know about the full capabilities of AI, we do know how revolutionary it has been in handling everyday business tasks through automation.

Using AI to streamline your business operations

We have seen small businesses leveraging AI to help with the following:

• Identifying and addressing inefficiencies – Analyse where slowdowns or challenges occur in your operations. Whether it is delayed approval processes, repetitive administrative tasks, or inventory management that consumes too much time, AI can streamline these areas to improve efficiency.
• Improving customer engagement – Use AI-driven tools to personalise customer experiences, from targeted marketing to AI chatbots that respond immediately to routine customer queries. This can improve satisfaction and free up your team for more complex issues.
• Resource allocation and cost reduction – Are your resources being underutilised or overburdened? AI can suggest optimal staffing levels and help you make more informed budgeting decisions. It can also identify areas where costs can be reduced without compromising quality.

As you can see, there are countless opportunities to capitalise on AI to streamline your everyday operations and ensure your employees can focus their efforts where they will have a greater impact.

Why you should still be cautious in AI implementation 

Despite AI offering many benefits, public perception in the UK remains mixed.

Over a third of the population fears AI’s impact on society and the job market, with many associating it with robots taking over human jobs and creating widespread unemployment.

As the UK continues pushing AI integration, it is important to remember that the technology is still largely unregulated.

You should avoid inputting sensitive information, such as customer details or financial records, into AI tools unless you know how your data will be stored and used.

Always check the tool’s privacy policy to ensure it complies with data protection regulations – you do not want to breach data protection laws inadvertently.

AI is a powerful assistant but not a replacement for human judgement.

Always review AI-generated content and outputs to ensure quality, accuracy, and appropriateness, as this is not guaranteed due to the lack of regulation to hold it accountable for misinformation.

Speak to our team about potential tax reliefs, allowances and funding opportunities to help you invest in AI safely and effectively.

No matter how well-prepared you may think you are, things will not always go to plan.

It could be a sudden shift in the market, supply chain disruptions, unexpected repairs to your office or equipment, or even a personal emergency.

That is why having a budget that accounts for the unknown is essential.

How to budget effectively

Here are some of the strategies to help you build a budget that is proactive:

• Build a contingency fund – Set aside some of your income for those unplanned moments. The amount you save will depend on your business’s expenses and profits. If you are unsure how much to put aside, speak to an accountant.
• Review your budget regularly – Make it a habit to periodically review your income, expenses, and savings goals to ensure you are on track. This allows you to adjust for any changes without derailing your entire plan.
• Categorise your costs – Sort your costs into categories like operational expenses, marketing, payroll, and overheads. This will help you quickly spot areas where you may be overspending or where savings could be redirected into more critical areas.
• Avoid unnecessary spending – It can be tempting to buy new gadgets or upgrades but do not let these purchases compromise your financial security.

While you cannot always predict what lies ahead, that does not mean that you cannot prepare for it.

By budgeting effectively, you can ensure your business remains resilient in the face of uncertainty and proceeds to grow with confidence.

Contact our expert accountants now to secure a budget that prepares you for anything.

Despite repeated calls for reform, the Government has shown little support for tackling chronic late payments, leaving businesses to fend for themselves.

One effective solution is to tighten your credit control policies to manage the issue.

Strengthening credit control

A solid credit control system helps you keep payments on track.

Here are some ideas on how you can improve yours:

• Run credit checks before offering payment terms.
• Issue invoices as early as possible, ensuring they are clear and detailed – you do not want to leave any chance for confusion or dispute.
• Automate reminders to chase up payments before they become overdue.

If a customer repeatedly pays late and ignores your attempts to contact them about these payments, it could be worth pursuing legal action or alternative methods to solve the issue.

You may also have to consider removing them as a client.

Reviewing your payment terms

Many overlook the importance of having clear payment terms. Make sure yours:

• Set out payment deadlines and penalties for late payments.
• Define accepted payment methods and any upfront deposit requirements.
• Are reviewed regularly to keep up with changes in business and law.

Being upfront about these terms from the start helps avoid disputes and makes expectations clear.

The risk of doing nothing

If you fail to address the chronic late payment issue, it will damage your business’s reputation.

Suppliers and partners might start doubting your reliability, and if you are waiting on payments, you might struggle to pay your own bills on time.

This kind of domino effect can create serious financial problems, potentially leading to you needing to close your business.

With little Government support, you need to be proactive.

If you are facing cash flow issues due to persistent late payments and would like guidance on improving your credit control, please speak to our team.