Author: f28admin

Corporation Tax when you sell business assets

Posted on by f28admin

A limited company usually pays Corporation Tax on the profit, known as a chargeable gain, when it sells or otherwise disposes of a business asset.

Business assets can include land and property, equipment & machinery and shares. The rules also apply to most unincorporated associations and foreign companies with a UK branch or office. Sole traders and business partners usually pay Capital Gains Tax instead when they sell business assets.

To calculate a chargeable gain, companies normally deduct the amount originally paid for an asset from its sale proceeds. Certain costs associated with buying, selling or improving the asset, such as legal fees and Stamp Duty, can also be deducted. Market value may need to be used where an asset is given away or sold for less than its market value in order to benefit the buyer.

For assets acquired before December 2017, companies can usually use the Indexation Allowance to reduce the gain for inflation up to December 2017. The allowance does not apply to disposals after December 2017 for the period after that date.

Capital losses can generally be deducted from chargeable gains but cannot be used to reduce trading income or other profits. Losses may also be restricted where capital allowances have been claimed. Different rules apply to intangible assets such as intellectual property and goodwill. 

Source:HM Revenue & Customs| 28-09-2026

Share scheme returns – penalties are now being issued

Posted on by f28admin

Employers operating employee share schemes may now be receiving penalties from HMRC for failing to submit their employment related securities (ERS) end of year returns on time.

ERS schemes are used to provide employees with shares, options and other securities as rewards or incentives. Employers must submit an annual ERS return for every scheme registered with HMRC, including a nil return where there have been no reportable events. The deadline for 2025-26 returns was 6 July 2026.

A £100 late filing penalty is automatically issued where a return was not submitted by the deadline. If the return remains outstanding three months after the deadline, a further £300 penalty applies. Another £300 penalty applies if it is still outstanding six months after the deadline. HMRC may also charge daily penalties from nine months after the original deadline.

Employers who have received a penalty must still submit the outstanding annual return or nil return. This also applies where a penalty is being appealed. If a scheme has ceased, the employer must enter the final event date and submit the return for the tax year in which the scheme ended.

Source:HM Revenue & Customs| 28-09-2026

Company distribution rules and share buybacks

Posted on by f28admin

HMRC has been consulting on proposals to modernise the tax rules governing distributions and repayments of capital from companies. The consultation was published on 23 June 2026 and closed on 14 September 2026.

The proposals look at the treatment of ‘new consideration’ and ‘repayments of capital’, distributions from non-UK companies and the interaction between the distributions and loans to participators regimes. They also include reforms to demergers, Purchase of Own Shares (POS) relief and the Transactions in Securities (TIS) rules. The consultation focuses on situations where the shareholder is within the charge to Income Tax. The proposals are not intended to directly affect corporate shareholders.

Currently, where a company carries out a reduction or return of share capital, the amount received by a shareholder is generally treated as a distribution to the extent it exceeds the capital originally contributed. However, existing rules allow for various arrangements usually involving holding companies and share reorganisations to extract value while paying CGT rather than Income Tax.

HMRC proposes to address this by ‘freezing’ the amount of capital attributed to shares in future holding companies at the amount originally subscribed for the investment. This could mean that more of a payment from a share buyback or other return of capital is treated as a taxable distribution rather than a capital receipt. The government recognises that the proposal might potentially lead to unfair outcomes in certain circumstances.

Concerns have been raised by parties including the ICAEW about the potential impact on companies of the proposed changes, including those relating to reductions of share capital. HMRC will analyse the consultation responses before deciding whether to proceed and may consult further on specific reforms.

Source:HM Revenue & Customs| 28-09-2026

HMRC publishes latest deliberate tax defaulters list

Posted on by f28admin

HMRC has published an updated list of deliberate tax defaulters. The list includes individuals, businesses and companies, detailing the amounts on which penalties are due and the exact penalties charged.

The details of a tax defaulter will be held on HMRC’s website for a maximum of 12 months from the date they are first published and are not stored within the National Archives.

The current list of deliberate tax defaulters (published on 24 September 2026) includes a Northampton-based business support company with an undeclared tax bill of over £9.1m and penalties of over £4.4m, alongside a retail sales company based in Nelson with an undeclared tax bill of almost £4.7m and penalties of almost £3.3m. There were also many smaller penalties listed for local trades and businesses, such as takeaways, convenience stores, letting agents, dog breeders, and mechanics.

A deliberate defaulter is defined as a person who incurs a relevant penalty for either deliberate errors in their tax returns or deliberately failing to comply with their tax obligations.

HMRC is legally permitted to publish these details where they have carried out an investigation, the person has been charged one or more penalties for deliberate defaults, and those penalties involve tax exceeding £25,000. Taxpayers who make an unprompted disclosure, or a satisfactory fully prompted disclosure, are not affected by these publication rules.

Source:HM Revenue & Customs| 28-09-2026

Need proof of UK tax residence?

Posted on by f28admin

HMRC has updated its guidance on how individuals and organisations can apply for a certificate of residence or letter of confirmation to prove UK tax residence.

A certificate of residence can be used to claim tax relief in another country where UK residents pay tax on foreign income. It confirms to the overseas tax authority that the applicant is UK resident. A certificate can be issued where there is a double taxation agreement with the country concerned and the applicant is entitled to treaty benefits.

A letter of confirmation may instead be appropriate where there is no double taxation agreement or proof of UK residence is required for another purpose. The overseas tax authority decides whether relief from foreign tax can be granted.

The online service is available to individuals and sole traders, companies, partnerships, trusts, charities, public bodies, pension schemes and collective investment schemes. Agents can also apply directly on behalf of taxpayers.

Applicants need to provide details including the country the certificate is required for, the relevant double taxation agreement, type of income and period covered. A future date cannot be requested.

Further information is required where a tax return has not yet been filed, including days spent in the UK days during the tax year or years where a certificate is required. 

Source:HM Revenue & Customs| 28-09-2026

Voluntary National Insurance contributions could be reformed

Posted on by f28admin

The government is considering changes to the voluntary National Insurance contributions (NICs) system following a call for evidence published earlier this year.

Voluntary NICs allow individuals to fill gaps in their National Insurance record where they have not built up a qualifying year through compulsory contributions or National Insurance credits. They can help individuals build entitlement to the State Pension and, depending on the class paid, certain contributory benefits.

The call for evidence considered whether the current system delivers fair outcomes, how voluntary NICs interact with National Insurance credits and whether changes are needed to eligibility, pricing and access. The government also sought views on partial-year gaps, information and guidance, and contributions for periods spent abroad. The call for evidence closed on 15 September 2026. The feedback to the document will help inform the government’s consideration of possible future reforms.

Changes have already been put in place restricting access to making Voluntary NIC for people living or working outside the UK. Since 6 April 2026, voluntary Class 2 NICs can no longer generally be paid for periods abroad. New applications for voluntary Class 3 NICs for periods abroad now require either 10 continuous years of UK residence or 10 qualifying years of National Insurance contributions, subject to specific exceptions and transitional arrangements.

The changes do not prevent qualifying individuals from paying voluntary NICs for tax years before 2026-27. Existing overseas Class 3 payers can also continue to make contributions under transitional rules.

Source:HM Government| 28-09-2026

Ready for the October employment law changes?

Posted on by f28admin

Several employment law changes are approaching that businesses need to understand. The first arrives on 1 October 2026, when the normal period in which an employee can bring a claim to an Employment Tribunal increases from three months to six months.

The change has a practical consequence for employers. Employment records relating to disputes, disciplinary action and other workplace issues may remain important for longer, making accurate record keeping increasingly valuable.

Further changes follow on 30 October when employers will be required to take “all reasonable steps” to prevent sexual harassment of employees. They will also have an obligation not to permit employees to be harassed by third parties.

The changes form part of the continuing implementation of the Employment Rights Act 2025, with further measures following during 2027.

For businesses, preparation should involve more than updating the staff handbook.

Consider whether managers understand how to recognise and respond to inappropriate behaviour. Review how employees can raise concerns and whether complaints are recorded and investigated properly. Businesses dealing directly with customers, contractors and other third parties should also consider situations in which their employees could experience inappropriate behaviour from people outside the organisation. Training may be appropriate, particularly for managers and supervisors.

Employment law is continuing to change, and businesses do not need to become experts in every new provision. They do, however, need procedures that reflect their responsibilities. A useful starting point is therefore to review employment policies, management training and record-keeping arrangements before the October changes take effect.

Source:Other| 27-09-2026

Could better workplace health reduce staff losses?

Posted on by f28admin

When an employee develops a health problem, the consequences can extend far beyond a few days of absence. The Government published an update to its Keep Britain Working programme on 23 September, setting out plans for what it describes as Britain’s first Workplace Health System.

The scale of the problem is substantial. Around 300,000 people with health conditions leave employment each year, while approximately 2.8 million working-age people are economically inactive because of ill health or disability.

The Government argues that earlier intervention could help more people remain at work rather than waiting until health problems have developed into long-term absence.

There is a useful lesson here for individual employers.

A business may understandably concentrate on managing sickness absence once an employee has already been away for a significant period. Earlier conversations can sometimes be more productive. Managers should know how to respond when someone begins struggling with their workload or health. Relatively simple adjustments to hours, duties or working arrangements may sometimes help an employee remain productive.

Return-to-work arrangements also deserve attention. Government figures suggest that someone absent for four to six weeks has a 96% chance of returning to work, whereas fewer than half of those absent for a year return. 

For smaller businesses, losing an experienced employee can be particularly disruptive. Recruitment costs are only part of the problem. Knowledge, customer relationships and productivity can disappear with them.

Workplace health should therefore not be viewed solely as an HR matter. Supporting employees effectively can also be part of protecting the skills, experience and resilience of the business.

Source:Other| 27-09-2026

Could your area introduce a tourist tax?

Posted on by f28admin

Mayors and local leaders in England are to be given powers to introduce an overnight visitor levy, creating a new charge for people staying in short-term visitor accommodation.

The government announced the plans on 10 September 2026 following a consultation which closed on 18 February 2026. The levy will be optional, with mayors and leaders of Foundation Strategic Authorities able to decide whether to introduce it and how the money raised should be spent.

The charge will be based on a percentage of the accommodation cost rather than a fixed amount. The government says this approach is intended to avoid placing a disproportionate burden on people taking cheaper holidays. Local leaders will also have flexibility to provide exemptions, and temporary accommodation and shelters or refuges will not be subject to the levy.

Hotels and other accommodation providers will be responsible for paying the levy to the relevant strategic authority or mayor. The government says it will work with providers to make the system as straightforward as possible to administer.

Revenue could be used to support local priorities such as public transport, high streets, cultural attractions, public spaces and tourism infrastructure. However, the precise rate, exemptions and spending priorities will be determined locally in consultation with local businesses and residents.

Legislation will be introduced to establish the levy, with the government expecting mayors and Foundation Strategic Authorities to set out spending plans by early 2028. The levy represents an additional cost for visitors, but the amount and whether it applies will depend on where they stay.

Visitor levies are already being introduced elsewhere in the UK. A visitor levy in Edinburgh came into effect on 24 July 2026 and Cardiff Council is expected to introduce a visitor levy from 1 April 2027.

Source:Other| 21-09-2026

Benefit payrolling rules clarified for overseas employees

Posted on by f28admin

HMRC has clarified how employers can handle benefits in kind for globally mobile employees as mandatory payrolling is introduced from April 2027.

Under the new rules, most benefits in kind will have to be reported through payroll rather than on annual P11D forms. The first phase, starting on 6 April 2027, covers company cars, vans, fuel and medical benefits. Other benefits will generally follow from 6 April 2028, although loans and employer-provided accommodation are excluded and remain voluntary.

HMRC has now confirmed that employers will be able to choose to exclude globally mobile employees from mandatory payrolling from 6 April 2027. A new online service is expected to be launched in November 2026 for employers to choose this option. Where globally mobile employees are excluded, employers should continue using the existing year-end reporting arrangements, including forms P11D and P11D(b).

The change recognises the additional difficulties employers can face when calculating benefits for employees who work across different countries or move during the tax year. HMRC is expected to publish more detailed guidance on the changes later this year.

Employers with globally mobile employees should review their arrangements ahead of the changes and consider whether excluding these employees from mandatory payrolling would simplify their reporting. If you need help understanding the new rules or reviewing your payrolling arrangements, we can help.

Source:HM Revenue & Customs| 21-09-2026

Check your State Pension forecast now

Posted on by f28admin

A new press release from HMRC is highlighting the fact that almost 7 million UK adults could be heading towards retirement without knowing how much State Pension they may be entitled to. New research has found that around one in eight adults (12.5%) have never checked their State Pension forecast. 

Those aged 45 to 54 are more likely than any other age group to have never checked their forecast, despite this being an important time for retirement planning. However, it is important that people of all ages check their State Pension forecast regularly rather than leaving it until retirement is approaching.

The State Pension forecast shows when someone can claim their State Pension, how much they could receive and whether there are ways to increase their entitlement. It can also be used alongside a National Insurance record to identify gaps in contributions or credits.

Where there are gaps, some people may be able to pay voluntary National Insurance contributions. However, paying voluntary contributions does not always increase the State Pension, so the forecast and National Insurance record should be checked before making a payment.

The forecast can be checked through the free HMRC app or online via GOV.UK. If you have never checked your State Pension forecast or it has been a long time since you did so, it could be worth taking a few minutes to find out what your State Pension position looks like.

Source:HM Revenue & Customs| 21-09-2026

HMRC contacting trusts over tax return errors

Posted on by f28admin

HMRC is contacting some trustees after identifying possible errors in recent Trust and Estate tax returns relating to the type of trust being reported.

The latest HMRC compliance campaign focuses on trusts where box 8.15 of the Trust and Estate Tax Return was ticked to indicate that the trust is not an accumulation or discretionary trust. HMRC says its records suggest that some of these trusts may in fact fall within this category and could therefore have been taxed at the wrong rates.

Accumulation and discretionary trusts generally pay Income Tax at special rates of 39.35% on dividend-type income and 45% on other income, compared with lower rates for many other trusts. Some discretionary trusts are exempt from the special trust rates.

Trustees receiving a letter should review each relevant tax return and respond to HMRC by 2 November 2026. If the returns are correct, HMRC should be told. If additional tax is due for 2024-25, the return should be amended and the tax paid. Earlier years may require a voluntary disclosure to be made. There may be interest to pay and, depending on the circumstances, a penalty may also be due.

Trustees should also check that the trust's details on the Trust Registration Service remain accurate. HMRC requires trustees to keep relevant information up to date, including changes to beneficiaries.

If you receive one of these letters we can help you review your position and advise on the appropriate action.

Source:HM Revenue & Customs| 21-09-2026

HMRC sending 1.8m Simple Assessment letters

Posted on by f28admin

Some taxpayers have already started to receive Simple Assessment letters from HMRC for the 2025-26 tax year, with a further tranche due to be sent between October and December 2026.

Simple Assessment is used where HMRC cannot collect income tax through PAYE or self-assessment. The PA302 letter sets out HMRC’s calculation of the tax due, based on information it holds. Common examples include tax due on pension income, savings interest, dividends or if the taxpayer has a second source of income that has not been taxed. It can also apply where someone has received more tax-free allowance than they were entitled to, or where the amount owed cannot be collected through a tax code, typically £3,000 or more.

HMRC began sending letters to working-age taxpayers from 30 June 2026, followed by letters to pensioners from 12 August. A second tranche, relating to bank and building society interest (BBSI) data, is expected to be issued between October and December 2026. In some limited cases, taxpayers may receive more than one letter for 2025-26.

Tax can be paid in full or by instalments, with the deadline depending on when the Simple Assessment letter is received. For the 2025-26 tax year, letters received before 31 October 2026 require payment by 31 January 2027. Letters received on or after 31 October 2026 require payment within three months of the date of the letter. 

HMRC expects to issue around 1.8 million Simple Assessment letters for the year. Taxpayers receiving a letter should check the calculation carefully against their own records and contact HMRC if they believe any information is incorrect or the assessment should be withdrawn. 

If you receive a Simple Assessment letter and are unsure whether the calculation is correct, what you need to pay or what action you should take, please contact us. We can review the assessment and help you understand what it means and how to deal with it.

Source:HM Revenue & Customs| 21-09-2026

UK carbon border tax starts January 2027

Posted on by f28admin

Businesses importing certain carbon-intensive goods into the UK will face a new carbon tax from 1 January 2027, when the Carbon Border Adjustment Mechanism (CBAM) comes into effect.

CBAM will apply to specified goods imported from outside the UK in the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors. The tax is intended to put a comparable carbon price on imported goods to that paid by UK manufacturers. Not every product within these sectors is covered, so businesses will need to check the relevant commodity codes. This should help ensure that these UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.

The person liable for CBAM will generally be the importer named on the customs declaration. Businesses importing CBAM goods will need to keep records, including information about the weight and emissions associated with the goods, and may need to register with HMRC.

A £50,000 threshold applies when determining whether registration is required. Businesses must monitor both a forward-looking test of expected imports over the next 30 days and a backward-looking test looking at the value of relevant imports over the preceding 12 months. If a person meets either test, they become liable to register.

The first CBAM accounting period will run from 1 January to 31 December 2027, with the first return and payment due by 31 May 2028. From 2028, accounting periods will transition to a quarterly cycle. For CBAM goods imported during the first calendar year of CBAM the backward looking test is only required to 1 January 2027.

Businesses importing potentially affected goods should check their position now and make sure they have the necessary records and systems in place before CBAM takes effect.

Source:HM Government| 21-09-2026

Is your business ready for a cyber incident?

Posted on by f28admin

Cyber security is sometimes treated as a problem for large organisations with specialist IT departments. In reality, smaller businesses can be particularly vulnerable because they often have fewer resources available to detect an attack and recover afterwards.

The Government continues to strengthen its approach to cyber resilience, including the planned Cyber Security and Resilience Bill. However, individual businesses can take several practical steps now.

Start by asking what would happen if staff could not access the accounting system, customer records or email tomorrow morning.

Backups are essential, but having a backup is not enough. Businesses should periodically test whether important data can actually be restored.

Access controls also matter. Multi-factor authentication should be used wherever possible, particularly for email, banking, accounting software and other systems containing sensitive information.

Employees remain another important line of defence. A convincing email asking for an urgent payment or a change of bank details can bypass sophisticated technology if the recipient acts without checking it independently.

Businesses should therefore have simple procedures for verifying unusual payment requests and any change to supplier bank details. It is also worth preparing for what happens after an incident.

Keep contact details for IT support, insurers and other key advisers somewhere that can be accessed if the main computer network is unavailable. Decide who will take responsibility for communicating with staff, customers and suppliers.

Cyber security does not require every business owner to become a technology expert. However, it does require preparation.

A short discussion about what the business would do if its systems became unavailable can quickly expose weaknesses that are relatively inexpensive to correct today. The aim is not to guarantee that a cyber-attack will never succeed, but to ensure that one incident does not bring the entire business to a halt.

Source:Other| 21-09-2026