Category: business

Avoiding common errors when computing business profits

HMRC produce a range of Toolkits for agents, which highlight errors commonly made in returns so that agents can take steps to avoid them. The business profits toolkit provides guidance on errors that are found in relation to business profits for small and medium-sized businesses. They are helpful to anyone computing taxable business profits. Risk…


A guide to using simplified expenses for small businesses

Certain unincorporated small businesses may choose to use the ‘cash basis’ when calculating taxable income, under which participants are taxed on the basis of the cash that passes through their books, rather than being asked to undertake complex and time-consuming calculations designed for big businesses. Whilst easing the administrative burdens of preparing ‘traditional’ accounts, using…


Just starting out in business? Here’s how you can get tax relief

Just starting out As long as HMRC can be satisfied that a business is being run on a commercial basis with a view to making a profit, they will usually allow taxpayers to claim tax relief for a trading loss in one tax year against other taxable income (for example PAYE income or a pension)…


A PSA on PSAs and how and why you can create them as an employer

PAYE settlement agreements A PAYE Settlement Agreement (PSA) enables the employer to pay the tax and National Insurance instead of the employee on those benefits and expenses included within the PSA. This can be useful to preserve the beneficial nature of the benefit, for example in respect of a Christmas or other function falling outside…


Wanting to employ a family member? Read this first #familybusiness #tax

Employing family members It is permissible for a business to claim a tax deduction for the cost of a reasonable wage paid to a family member who helps in the business. Their duties could, for example, include answering the phone, going to the bank, bookkeeping and other administrative tasks. The tax legislation specifies that ‘in…



Do you provide your employees with a van?

In this article, we explain the tax aspects of using a works van If an employee is able to use a work’s van for private use, which generally includes home-to-work travel, there will be a taxable benefit and a subsequent tax charge. From 6 April 2019, the flat-rate van benefit charge has risen from £3,350…


How to make your work’s summer barbeque tax-free!

A statutory exemption exists, which allows employers to meet the cost of certain social events for staff without triggering a liability to tax or NICs, providing certain conditions are met. The legislation refers to ‘an annual party or similar annual function’. Although HMRC does not seem to interpret this to mean that the same event…


Practicalities of forming a partnership

Although a partnership can be a simple and flexible way for two or more people to own and run a business, unlike limited company status, partners do not have any protection if the partnership fails. If one of the partners resigns, dies, or goes bankrupt, the partnership has to be dissolved, even though the business…


Minimising upheaval of an HMRC enquiry

Where a business receives an enquiry notification from HMRC, it does not always mean that something is wrong. Sometimes HMRC simply need some further information to ensure that a return is correct, for example, if the business recently received a lot of money, it would be reasonable for HMRC to ask where the funds came…