Tag: tax tip

(the rules are slightly different for sole traders) 

(These are generally deductible if they are wholly and exclusively for business purposes) 

1. Office rent 

2. Business rates 

3. Utility bills (electricity, water, gas) for the company 

4. Office cleaning 

5. Telephone (landline) invoiced to the company 

6. Mobile phone (business use) 

7. Internet costs for company premises 

8. Postage and courier fees 

9. Stationery 

10. Printing costs 

11. Business insurance (e.g., public liability, professional indemnity) 

12. Bank charges on business accounts 

13. Accountancy fees  

14. Legal fees (business-related) 

15. Advertising and marketing costs 

16. Website hosting and domain fees 

17. Social media advertising 

18. Search engine marketing (Google Ads, etc.) 

19. Business cards and brochures 

20. Software subscriptions (e.g., accounting software) 

21. IT equipment (computers, printers) 

22. Office furniture 

23. Repairs and maintenance of business equipment 

24. Travel expenses (train, bus, taxi for business trips) 

25. Mileage allowance for business journeys (HMRC approved rates) 

26. Parking fees (business-related) 

27. Congestion charges (business-related) 

28. Hotel accommodation (business trips) 

29. Meals during overnight business trips 

30. Professional training and courses (for ongoing business, but not training for new business) 

31. Membership fees for professional bodies 

32. Subscriptions to trade journals 

33. Uniforms (if required for work) 

34. Protective clothing (e.g., safety gear) 

35. Small tools and equipment 

36. Vehicle insurance (business use) 

37. Vehicle servicing and repairs (business use) 

38. Vehicle fuel (business use) 

39. Hire of vehicles for business 

40. Business-related software development costs 

41. Outsourced services (e.g., virtual assistants) 

42. Freelance contractor fees 

43. Employee wages and salaries 

44. Employer National Insurance contributions 

45. Employer pension contributions 

46. Staff training costs 

47. Staff welfare (tea, coffee, small refreshments) 

48. Business-related bank loan interest 

49. Depreciation (capital allowances on assets can be claimed instead) 

50. R&D costs (if eligible under HMRC rules) 

It’s nice to give clients gifts but, generally, these are not tax deductible and are treated in the same way as business entertaining. 

For a gift to be allowable for tax purposes it must be all of the following: 

• Value <£50 per individual per year 

• Not food, drink or tobacco or vouchers that can be exchanged for goods 

• Displays a conspicuous advert for your business 

You can also deduct the cost of free samples of your own goods given away as advertising. 

It is important that you carry out the following checks before paying dividends: 

1.Ensure that, after dividends are paid, the company will still be solvent. This means that you should prepare management accounts to check the profit available and to estimate the corporation tax due. 

2.Ensure that you pay the same dividend per share to ALL shareholders of the same class. If you wish to pay different amounts you will need to consider either a dividend waiver or different classes of shares eg A and B shares, sometimes known as ‘alphabet’ shares.  

3.Ensure that all dividends are paid into a bank account in the name of the shareholder. Eg a husband’s dividends can not be paid into their wife’s account but the can be paid into a joint account, or one in the husband’s sole name. 

4.Ensure that all dividend payments are accompanied by a minute from the board of directors and a dividend voucher. We have templates if you need them. 

5.It really isn’t good practice to take advance payments of dividends and wait until the year end to sort put dividends as we have seen too many clients with overdrawn DLAs and insufficient profits to clear these. I refer you to point 1! The overdrawn DLA can result in a benefit in kind on the ‘beneficial loan’ even if cleared before the year end.  

It’s often overlooked but, if you work from home because you don’t have other premises then you can claim an allowance for this. Even just using a corner of your kitchen table to do raise your invoices each week and check your bank (I hope you do this at least weekly!) means that you can claim £6pw.  

For sole traders the amount goes up depending on the average number of hours you do each week. 

Directors of a limited company can rent an office to their business. We recommend that they only do this for 5 days a week to avoid paying capital gains tax when they sell their home. The amount of rent can be set at the same level as the costs (we have a spreadsheet to help calculate this each year) so that there is no personal income tax to pay (although it should go on your tax return). 

I have a few friends and clients who are travelling with young children; either homeschooling or before they start school. If you are out of the country for 8 weeks you will need to reapply for Child Benefit (we used to have reciprocal arrangements with EU). 

Recently HMRC have been automatically stopping payments after just a month so something to be aware of.  

The special tax regime for furnished holiday lets is being removed so, in future, they will be treated as any property income: 

• Mortgage relief will be capped at 20% 

• Capital allowances will no longer be available for purchase of new furniture and fixtures. Only replacement relief 

• Business Asset Disposal Relief will no longer be available and no rollover relief for reinvested capital gains 

• Profits will no longer count as relevant earnings for pension tax relief 

• Income must be 50:50 UNLESS a Form 17 has been submitted beforehand showing unequal ownership. 

Do check if you’ve completed your personal tax return for 2024-25. Missing the deadline could cost you in penalties and late planning. 

If you’re a client then please pull your finger out and get the information over to us asap. 

If you’re not already a client and you need a hand then we even have a DIY Tax return webinar to guide you through it. The next one is 7pm on Wednesday 12 November so reply to this email if you’d like more information.  

We’ve also got a webinar on what you need to do to prepare for MTD if you are a sole trader or landlord with income (not profit) about £20,000pa 

The Cyber Resilience Centre for the South West has a Home Office funded course and other support for you to secure your business.  

Cyber Resilience Centre for the South West 

HMRC have long held the power to seize money from your bank accounts to recover tax debts over £1,000. They paused this during covid but last month HMRC announced that they would be resuming collections. 

We therefore recommend that, if you have tax debts outstanding, you contact HMRC to organise a Time to Pay option. There are further details of how to contact HMRC here 

If you cannot pay your tax bill on time: Setting up a payment plan – GOV.UK 

This must be done by the tax payer and not their accountant. 

HMRC have a new voluntary repayments scheme for individuals and business to return any pandemic scheme money with no questions asked. The window is open until December 2025 so, if you think you may have claimed too much covid support, we encourage you to contact us or to repay it now. 

You can make a voluntary repayment here before HMRC start using less comfortable tactics in the new year.  

Make a Voluntary Repayment of COVID-19 Funding – GOV.UK