HLAS

While participation in Making Tax Digital for Income Tax Self Assessment (MTD ITSA) isn't mandatory until at least April 6, 2026, certain individuals can opt into HMRC's pilot testing. The beta testing of MTD ITSA was reintroduced by HMRC on April 22, 2024. Currently, HMRC has listed just five software products as compatible with MTD, with an additional 21 in various stages of development. The currently compatible products include: 123 Sheets, Intuit QuickBooks Online, Sage Accounting, SE_Reports, and Self Assessment Direct. Each product must meet HMRC's minimum functionality standards. If your current accounting software isn't listed, it may soon gain [...]

Traveling from home to an employee’s regular workplace doesn't qualify for tax relief, known as "ordinary commuting." Moreover, if the employer reimburses the journey's costs, those costs become taxable. There are exceptions, particularly when the employer covers the cost of the employee traveling home safely in a taxi late at night. On the other hand, traveling to a "temporary workplace" is considered a qualifying business journey, and if the employer reimburses the costs, there's no taxable benefit. It's worth noting that associated subsistence costs, such as overnight hotel accommodations, are also tax-free. HMRC Booklet 490 offers detailed guidance on employee [...]

HMRC have confirmed that the official rate of interest for employee and directors’ beneficial loans remains at 2.25% for 2024/25, despite a Bank of England base interest rate of 5.25%. This means that where the employer lends an employee more than £10,000, the taxable benefit would be the difference between 2.25% and the amount paid on the outstanding loan.

If you're contemplating lending money to, or investing in shares of, an unquoted trading company, there's always a risk of losing your investment, as with many investments. However, there's potential tax relief for the lender if certain conditions are met, particularly if the loan is used entirely for the company's trade purposes and not for money lending. Capital Loss on Shares in an Unquoted Trading Company This relief comes in the form of a capital loss that can offset gains in the same or future tax years. To claim this relief, the principal amount of the loan must have become [...]

Since it was decided in 2017, landlines across the UK are being updated by telecom companies to new digital technology using an internet connection. The switchover should be complete by December 2025. The old analogue system, referred to as Public Switched Telephone Network (PSTN), has reached end of its serviceable life, and telecom companies are now finding it difficult to source the parts they need to continue maintaining it. The new digital phone lines work using a VoIP service, and you will need to switch to a VoIP service to continue using your landline. The digital connection should allow businesses [...]

Growing a business often requires capital. If you don’t have that capital personally or already in the business, then one option is to get finance from a bank. What types of finance are available? How can you present a request to a bank and have it accepted? We will endeavour to answer those questions in this article. Common types of finance Financing can usually be broken down into 3 main areas: loans, leases, and hire purchase. Loans are usually provided by a bank and could be as simple as an agreed overdraft or a fixed term loan. There are often [...]

HM Revenue and Customs (HMRC) have updated their guidance on what qualifies as ordinary commuting and private travel for tax purposes to include hybrid or flexible working. Generally, where an employee works at home as an objective requirement of the job, then HMRC will usually accept that the employee is entitled to tax relief for the expenses of travelling from their home to another workplace, such as the office, when this is in performance of the duties of their job. Usually, HMRC will only accept that working at home is an objective requirement of the job if facilities that an [...]

The so-called Micawber principle, as stated by Wilkins Micawber in Charles Dickens’ novel David Copperfield, says: “Annual income twenty pounds, annual expenditure nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.” This widely used quote on personal finance is just as relevant for business finance. For any business to be successful and sustain itself over the long term, it must make a profit, i.e. revenue must exceed costs. Increasing profit is therefore a primary objective for businesses that are looking for sustainable growth and success. But is improving profitability as simple [...]

Recent surveys of UK business owners show us to be under pressure. This is no surprise. As a business owner, you’re constantly juggling multiple responsibilities and facing a myriad of challenges. While there are countless strategies for success, it’s equally important to be aware of potential pitfalls that could derail your efforts. In this article, we’ll explore seven common mistakes that business owners should avoid at all costs. Ignore financial management One of the biggest mistakes a business owner can make is neglecting proper financial management. Failing to keep accurate records, monitor cash flow, and budget effectively can lead to [...]

The Labour party has published their plan to close the tax gap – the gap between tax owed and tax paid – which is estimated at £36 billion. The plan broadly proposes to do this by boosting tax compliance. Labour plan to be able to raise up to an additional £5 billion a year as a result of their proposed measures. They anticipate that £1 spent on compliance activity will result in £9 of revenue and so reckon they will need to invest £555 million per year to achieve £5 billion of revenue. Some of the measures they propose introducing [...]