Tips & Articles

Recently, HMRC issued a new policy paper detailing the evidence required to claim PAYE (P87) employment expenses. This change is crucial for anyone looking to claim tax relief on employment expenses (like home office expenses, insurance or memberships etc), and I am here to help you navigate these new requirements. From 14 October 2024, HMRC will require all taxpayers who wish to claim PAYE employment expenses to use a P87 form and provide supporting evidence to prove their eligibility before the claim can be processed.

With the growing popularity of cryptocurrencies, it's crucial to understand how these assets are treated by HM Revenue and Customs (HMRC) and why you need to disclose them in your yearly self-assessment. HMRC requires that any income or gains from crypto assets, including digital wallets and crypto accounts, be disclosed in your self-assessment tax return. This includes exchange tokens (such as Bitcoin), non-fungible tokens (NFTs), and utility tokens.

If you are leaving the UK to live in another country, you need to notify HMRC about your change in residency status. You must fill out Form P85 ("Leaving the UK – getting your tax right") to inform HMRC about your departure. This helps them determine your tax residency status and handle your tax affairs correctly. The form asks for details like your departure date, whether you're leaving the UK permanently or temporarily, and information about your income.

If your business turnover falls below the VAT deregistration threshold, it may be time to consider deregistering for VAT. Deregistration can simplify your accounting processes and reduce administrative burdens. A business that no longer makes taxable supplies must notify HMRC within 30 days. In this case, the business ceases to be a taxable entity and must submit a request to deregister. If you don’t let HMRC know you are no longer making taxable supplies, you can get a penalty.

As we head into the 2024/2025 tax year, it’s crucial to understand how dividend income is taxed in your Self-Assessment return if you're receiving dividends - particularly in Scotland. Whether you're a sole trader, shareholder, or director of a limited company, knowing how dividends are taxed can help you plan effectively and maximise your income. In Scotland, dividend income is taxed separately from other income such as salary, wages, or savings interest.

Prepayments to HMRC in the UK, also known as "payments on account," are advance payments towards your tax bill for the next tax year. If you're registered for self-assessment and your tax bill was more than £1,000 in the previous year, you usually need to make these payments. HMRC does not require payments on account if your last self-assessment bill was less than £1,000, or if 80% or more of your tax was collected at source.

Rent a Room Relief is a tax relief that could significantly reduce your tax liability if you rent out a furnished room in your home. Rent a Room Relief is a scheme offered by HMRC, allowing you to earn up to £7,500 per year tax-free by renting out a furnished room in your primary residence. This relief is designed to encourage people to make the most of their unused space, providing a little extra income without the burden of additional tax.

As a sole trader, your business is your livelihood. Whether you're a consultant, a freelancer, or a small business owner, the income you earn is directly tied to your ability to work. But have you considered what would happen if, due to an unforeseen illness, injury, or accident, you were suddenly unable to work? Without a backup plan, your income could disappear, leaving you and your family in a critical financial situation.

I have had a few requests lately for advice on purchasing an electric car as a limited company and I thought I’d do a blog about it to help our clients understand. Historically, buying a car through your limited company was a NO NO, because of the additional benefit in kind tax that you will have to pay on the personal use element.

Do you have a government gateway account for your own personal tax affairs and/or your business?

If not, I would encourage all our clients to get an account and request access to all their tax profiles. This will give you much better oversight of your tax affairs, and you can plan to ensure that your taxes are paid on time. It can also save you from having to phone HMRC and spend a lot of time on the phone, when you could have resolved it quickly and easily through your online account.

Anlo Assist is for anyone who has struggled to understand HMRC on tax residency (let’s be honest - who hasn’t?!) Are you worried that you might be due tax in two (or more) jurisdictions and unsure where you are tax resident? Does your uncertainty leave you worried that you are not acting on your tax obligation in the United Kingdom?

Renting out a property can be extremely rewarding, but it can also cost a lot of money, especially initially. Luckily, a lot of expenses can be claimed as allowable expenses which Buy-to-Let (BTL) landlords can deduct from their profits and so decrease their taxable income, minimising their tax bill. Many BTL property investors invest in property as an additional income or business, and yet fail to keep a proper record of their expenses. This can leave them overpaying on income tax either in their self-assessment or in their company accounts.

It’s July, notable for day-long sunshine, high temperatures and tax payments! Sadly only one of those seems to apply to the UK this year, and it’s not the beautiful summery weather…

The 31st July marks the final date for your tax prepayment if you are self employed and submit a self-assessment return. There are two exceptions to this rule; if your last self-assessment tax bill was £1,000 or less, or, you have already paid more than 80% of your outstanding tax bill.

The rules allowing you to claim tax relief on expenses connected with your employment are extremely restrictive. You are denied tax relief on almost all types of expenses that are not ultimately paid by your employer.

This is because, as an employee, you must show that any expenditure is incurred wholly, exclusively, and necessarily in performing the duties of your employment.

In the rapidly evolving world of business, staying ahead of the curve means embracing tools and technologies that streamline operations and drive growth.

As your accountants, we're always on the lookout for ways to help you achieve greater efficiency and success while reducing your admin overheads and stress!

Long service awards are a great way for employers to recognize and reward the dedication and commitment of their employees. It seems like such a long time to work for a business, but as a director of a company I realised yesterday that I have been working for Anlo for 15 years already 😊.

Time really does fly when you are having fun 😊

It’s been some years since we last looked at the basics of Value Added Tax (or VAT for short) so we thought that a recap would be useful for businesses who may not have had to deal with it previously.

VAT is a system that taxes what people spend and is administered by HMRC. The consumer pays VAT on the item that they buy, but businesses act as agents for collecting the VAT paid by the consumer.

You can now file your self-assessment for 2023/2024. If you haven’t already, please get in touch and we will help you. Filing a self-assessment tax return can seem daunting, but with the right documents and information at hand, the process becomes more streamlined.

Let’s look at the essential documents you will need to file your self-assessment:

Tax planning is an integral part of financial management for any household, and for married couples in the UK, there’s a valuable strategy that can help optimise tax liabilities – transferring a portion of the personal allowance between spouses.

Often when a company recommends a product or service, you’ll find yourself asking - what’s in it for them? In this case the answer is better service at an excellent better price. Now, you know that we love Xero; it’s incredibly well-featured and constantly evolving to meet the demands of small to medium enterprises but it’s not always the most appropriate option for some companies.

On the 1st of May this year, Companies House is increasing its fees across the board. Some of these changes are quite substantial. As a consequence, for our clients on retainer for whom we manage their Companies House information and filing, we have no choice but to increase our retainer fee to reflect these increases.

Running a business comes with a multitude of responsibilities, and one of the most crucial aspects is managing your employees' payroll.

Whether you're just starting out or have been in business for a while, understanding how payroll works in the United Kingdom is essential to ensure compliance with regulations and maintain smooth operations. Let's break it down into simpler terms, starting with the basics.

In January, we had the pleasure of engaging with a group of dynamic individuals, each with their unique businesses, seeking clarity on how to maintain comprehensive accounting records. 

Here's a distilled version of their queries and some practical advice for seamless record keeping:

I thought it would be nice to write about something other than tax and year-ends. Yes, they’re important, and yes I’ll continue to write about them, but a change, they say, is as good as a rest. (Personally, I’m not sure about that, but whatevs…)

As thoroughly modern accountants we have wholeheartedly embraced technology, you may have noticed this! In addition to our client-facing systems we use technology ourselves to stay on top of our business.

Many of you are considering rewarding yourselves, as directors, and your dedicated employees with gift vouchers. This gesture not only boosts morale but also demonstrates appreciation for the hard work and commitment throughout the year.

But  - it's crucial to understand the tax implications of such gifts to ensure compliance with HMRC regulations and to optimise tax efficiency for both your company and its recipients.

As we trundle towards the end of the UK tax year, you shouldn’t just be turning your thoughts to tax returns and just how much HMRC are going to demand from you! There are personal benefits to be had if you’re in a position to take advantage of them, and one of the biggies is pension contributions.

Below we’ve listed a number of exceptionally good reasons to consider contributing to your pension before the end of the tax year.

As an accountant working closely with various businesses and individuals across the UK, one question that frequently arises is whether specific expenses can be claimed as tax-deductible. One such expense that generates curiosity among clients operating through Limited Companies is the purchase of reading glasses (I wear glasses myself and I can’t work without them).

So let's explore if you can claim reading glasses as a tax-deductible expense, in line with HM Revenue and Customs (HMRC) guidelines.

Remember, for all expenses claimed, you should keep detailed records, including dates, the purpose of the trip, and receipts. Personal expenses or costs incurred for non-business-related activities cannot be claimed. Also, travel to and from work is not in the production of income and can’t be claimed as a business expense.

Just as you thought that you had made it to the end of January and that you could forget about government rules and regulations for a day or two, Companies House comes rocketing out of left field with a whole slew of new regulations. Oh joy!

These only apply to those of you who conduct your business as a limited company and are therefore obliged to adhere to the rules laid down concerning entries on your company records.

By: Esmerelda Doman

On the 16th of January 2024, Annja presented a workshop at EGG in Edinburgh on the subject of tax self assessment. Now this isn’t always a subject that brings joy, however her enthusiasm for all things accountancy won the day!

Important: Remember to file your self-assessment before the end of January 2024, and it’s always better to do this before Christmas. Those who file their return before 30 December may also have the option of paying any tax owed through their PAYE tax code thereby spreading the cost.

Filing early also means that if customers owe money, they have plenty of time to explore which of the payment options available is best for them.

Remember to file your self-assessment before the end of January 2024, and it’s always better to do this before Christmas. Those who file their return before 30 December may also have the option of paying any tax owed through their PAYE tax code thereby spreading the cost. Filing early also means that if customers owe money, they have plenty of time to explore which of the payment options available is best for them.Here are expenses that you should not forget about or miss when you have a limited company or your self-assessment

I watched the funniest show at the fringe last week, called the Drag-queen Accountant. It was a lovely show and very funny.

I love when people can laugh at how bizarre their profession can be. Hope everyone had a great time at the fringe.

PAYE and how it affects HMRC on a monthly basis

I know, I know – taxes and payroll can be a bit mind-boggling, but fear not! I'm here to break it down and make it painless.

So, let's unravel the mysteries of PAYE, ensure your payments are on point, and even sprinkle in some details about that sweet thing called Employment Allowance.

Today, we're diving into a topic that might seem a bit overwhelming at first glance, but trust me, it's not as scary as it sounds: getting VAT registered in the United Kingdom.

Now, I know what you're thinking – taxes and paperwork, ugh! But don't worry, I'm here to guide you through the process and make it as painless as possible.

We hope all our lovely clients and community are having a lovely summer. We have been busy with lots of exciting stuff:

• Annja and Esmerelda did non-executive director training through the ICAEW and it was really insightful; one of our blogs is about that 😊

• Annja also ran the Edinburgh Half Marathon and it was a lot of fun in the sun, although legs were heard to complain afterwards!

• International Coaching week was a great success. We got great reviews and one from Christine Smith stood out:

We had a lovely day in London, walking around and listening to all the fabulous vendors and going to the webinars.

The main focus this year was on the cloud accounting software companies expanding their report offerings and also making payment integration easier and quicker.

Because of the training we did this month, we thought it will be a good idea to remind our clients that as directors of their limited companies, what their roles are.

Strategic Decision-Making:

Directors of small limited companies play a crucial role in shaping the strategic direction of the business.

Filing a self-assessment tax return can seem daunting, but with the right documents and information at hand, the process becomes more streamlined.

Let’s look at the essential documents you will need to file your self-assessment:

One area that often goes overlooked is special capital allowances available to Limited Companies for tax purposes. If you are intending on investing in your business by purchasing capital assets i.e. machinery, renovating a building etc., please contact us and we will assist you in understanding these allowances.

In this blog post, we will explore the various types of special capital allowances that can be claimed:

Happy new tax year our lovely Anlo community. Everyone worked hard to get all the 2021/2022 tax returns submitted and paid on time.

We start a new tax year, and working towards getting financials and returns calculated early so that we stay on the good side with HMRC but also have some time to do some cashflow planning.

If your situation has changed or you have moved or have new contact details, please get in touch so that we can update your details where it is appropriate.

We can start your personal tax return as early as the 6th of April, so if you want to be an early bird, then send your information on 😊

I don’t know what else to say other than I have really missed taking the time to write this newsletter. Sitting down and writing our company newsletters was like writing to friends and telling them about things that can make their lives easier.

I can only apologise for being so quiet, and I promise to write more 😊

So here goes….

The corporation tax rate will change from 19% to 25% from the 1st of April 2023 for companies that make a profit over £250 000.

A small profits rate (SPR) has been introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%.

When I initially heard about this change, I did not think it will affect most of my clients as I help SME’s. But then they brought in this in between rate (as below), and I honestly don’t know what this means and there is NO guidance on what this ‘in between’ rate will be.