The only time there are UK income tax or capital gains tax implications on bringing money into the UK is if the money brought in represents income or gains that arose while an individual was a UK tax resident, but which have not been subject to UK tax because he elected to be taxed on the remittance basis.
Robin John is a chartered accountant and chartered tax advised and a director of Wellden Turnbull. The above is for guidance only and may not be relied upon without taking further advice.
Lifetime gifts that are not exempt (for example, gifts to spouse or charities) and are not “potentially exempt” (gifts made to an individual where the giver survives for at least 7 years) are subject to inheritance tax at the lifetime rate of 0% on the first £325,000 and 20% thereafter.
The amount of the gift is the amount by which the giver’s estate has reduced because of the gift (which may not be the same as the value of the gift that has been made).
Robin John is a chartered accountant and chartered tax advised and a director of Wellden Turnbull. The above is for guidance only and may not be relied upon without taking further advice.
Companies House have brought in some significant changes for all company directors, People with Significant Control (PSCs), and those filing on behalf of entities (such as Wellden Turnbull).
From the Autumn, those mentioned above, will have to verify their identity with Companies House. This is part of the new requirements as part of the Economic and Corporate Transparency Act, which aims amongst other things, to improve the reliability of information held at Companies House.
You may have already had a letter from Companies House advising you of the changes.
If you are an existing company director or PSC of a UK company, or member of an LLP, it will be mandatory for you to have your ID verified. When you verify your identity, you’ll get a unique personal code, which is unique to you as an individual, not as a company.
If you need to incorporate a new company all directors must be verified before you incorporate.
If you wish to add a new director to an existing company, all directors (including the new director) must be verified to process the change at Companies House.
You can already voluntarily verify your identity, this was brought in from April 2025.
From Autumn 2025, identity verification becomes mandatory for directors and PSCs at the point of incorporation or appointment.
There will then follow a 12 month transition period for existing directors and PSCs, which will end in Autumn 2026.
Importantly, from Autumn 2025, we will need all directors/PSCs codes before we can file the company’s confirmation statement.
There are three main ways to verify your identity:
Our recommendation is firstly to use the Companies House service. Several of our staff and Directors have used it, and it is relatively simple and straight forward to use, and takes around 10 minutes.
We will not be providing a verification service as an ACSP, but if you struggle to use the Companies House service, we are happy to arrange a meeting for you to come in where we can sit with you and go through it together. We will charge our time costs for this service.
You can verify online if you have the identity documents or information required. This route uses GOV.UK One Login to verify your identity and is free of charge.
You’ll need one of the following types of photo ID:
GOV.UK One Login will ask you some simple questions to find the best way for you to verify your identity online. Depending on your answers, you’ll then be guided to verify using a GOV.UK mobile phone app or in your web browser.
We generally find it best to sit in front of a laptop/desktop, but then have a mobile phone with a camera ready to take photographs of your ID. The service wants to take an image of the live document, and of you. It does not want to use an existing photograph on your phone. You may need to move to find somewhere without glare if there are considerable reflections when you try to take a photograph.
Depending which form of ID you use, a common question that is asked whilst using the service is often how long you have been living at your current address, so we would recommend having that answer to hand.
You won’t be able to make any filing at Companies House, or incorporate a new company/entity.
You & your company may also be committing an office and may have to pay a financial penalty or fine, and you may be disqualified as a director.
The changes in company size thresholds will come into force on 6 April 2025. This will mean some companies will fall out of the compulsory audit regime, and no longer must prepare strategic reports and cash flow statements. More companies will be able to prepare their accounts using the simpler, disclosure-minimal micro-entity reporting standards (FRS 105).
Note, there are no changes to the employee number thresholds. Only the monetary thresholds are changing.
The changes come into effect for accounting periods starting from 6 April 2025, so the first full year-ends impacted will be those with a year-end of 30 April 2026.
The size thresholds will be as follows:
| Threshold | Micro | Small | Medium | Large |
| Prepare accounts under: | FRS 105 | FRS 102 (Section 1A) | FRS 102 | FRS 102 |
| Audit? | Not required | Not required | Compulsory | Compulsory |
| Turnover | Up to £1m (previously £632,000) | Up to £15m (previously £10.2m) | Up to £36m (no change) | Over £36m (no change) |
| Gross Assets | Up to £500,000 (previously £316,000) | Up to £7.5m (previously £5.1m) | Up to £18m (no change) | Over £18m (no change) |
| Employee Numbers | Up to 10 (no change) | Up to 50 (no change) | Up to 250 (no change) | Over 250 (no change) |
In order to ascertain what accounting standards companies are able to prepare their accounts under, companies have to meet two out of the three size thresholds in two consecutive years. There is a transitional provision that allows preparers to assume that the new thresholds have been applicable in the previous financial year, when ‘looking back’ to determine company size.
Please be aware, there are complexities with companies within groups, who need to consider the size of the group as a whole, as well as the stand-alone company size to determine audit requirements.
Please be aware, that there are significant changes to how leases are accounted for under FRS 102 for periods beginning on or after 1 January 2026. This will stop the distinction between operating leases and finance leases, and bring many leased assets onto the balance sheet, where previously there were simply expensed. Only short-term and low value assets will remain ‘off balance sheet’. This will increase the gross assets for many small and medium sized entities, and could therefore impact the accounting standards available to them. Please read our blog on the topic here.
There are no changes for lease accounting for micro-entities.
If you are one of the company’s that will be moving out of the audit regime, company’s can still voluntarily have an audit of their financial statements.
For more information on the changes to company size thresholds, or to discuss the benefits of an audit, please contact one of our directors at info@wtca.co.uk.
Our team of accountants is also available to assist with compliance, tax planning, and audit requirements, ensuring your business is fully prepared for the upcoming changes.
How to be tax efficient as a company director in 2025/26
With the changes announced in the Chancellor’s Autumn 2024 budget now coming into effect, it is important for businesses and individuals to plan their tax affairs in a tax efficient way. Tax planning has become even more crucial in an environment where tax thresholds are constantly shifting and the political landscape ever changing. One key area of focus for owner-managed businesses and SMEs will be determining the most tax efficient directors’ salaries to optimise both the director’s and company’s tax position. The Chancellor announced several changes last Autumn that will affect limited company directors in the upcoming 2025/26 tax year. This blog will provide ways to navigate these new legislative changes.
Key Changes
The 2024 Autumn Budget introduced the following changes:
What is the most tax efficient salary?
For the tax year ending 5 April 2026, the tax efficient salary topped up with dividends approach continues to be tax efficient. The optimum level of salary and dividends will depend on the company’s and director’s personal circumstances. The most common circumstances are given below.
Scenario 1a: Sole director with no employees
This scenario will mean that the company is not eligible for the employment allowance.
Here an annual salary of £5,000 is paid; as the company will not qualify for the employment allowance, this salary is set at the second threshold. No income tax or national insurance liabilities will arise but, as the salary is below the Lower Earnings Limit of £6,500 this will not be a qualifying year for state pension purposes for the director.
The remaining remuneration from the company will then be in the form of dividends. The director could take £45,270 in the year to take their level of income up to £50,270, being the top of the basic rate band. This assumes that the director has no other taxable income.
Scenario 1b: Sole director with no employees
In this scenario a salary of £6,500 is paid. Whilst a small employer’s NIC liability of £225 arises, no income tax or national insurance liabilities arise for the employee and the director will earn a qualifying year for state pension purposes.
As in scenario 1b, the remainder of the director’s remuneration can then be paid as dividends.
Scenario 2: More than one director or employee
Depending on the particular circumstances, if the company has multiple directors or employees, the company may then be eligible for the employment allowance.
In this instance a salary of £12,570 is paid. No income tax or national insurance will be payable by the employee or employer (on the basis that the employment allowance covers the employer’s NICs). This will also be a qualifying year for state pension purposes and the higher salary means greater corporation tax relief for the company.
The balance of the director’s remuneration can then again be paid in dividends.
Next Steps
To prepare for these changes, you should consider:
Summary
Overall, the most tax efficient directors’ salary is very much dependent on your company’s circumstances. The particular level of salary and dividends will be dependent on the number of directors/employees as well as other factors such as whether the company is entitled to the employment allowance and what rate of corporation tax the company pays.
Get in touch
If you need further guidance on the changes and how they will impact your business, please contact us at: info@wtca.co.uk
Amendments to FRS 102 which come into effect for periods commencing on or after 1 January 2026, will have a considerable impact on how leases are accounted for lessees. The accounting for lessors is unchanged.
Currently, leases are split between operating leases and finance leases, with operating lease payments taken straight to the P&L, and finance leases capitalised.
This distinction is being removed, meaning far more leases will be recognised in the balance sheet of companies, like they currently are with finance leases. A right-of-use asset is recognised and depreciated, and a corresponding lease liability is recognised and interest charged over the lease term.
There are a couple of exemptions, namely low-value assets (not leases) or short-term leases (12 months or less). So leased laptops, phones and small items of furniture are likely to still be expensed, but 12 month+ car hire agreements and property rentals are all required to be capitalised going forward.
There are no changes to lease accounting for micro-entities under FRS 105.
The recognition of right-of-use assets will increase many companies’ gross assets. This could move some entities from being small to medium and could impact their audit requirement.
Rent expenses will be replaced with depreciation of the right-of-use asset, and there will be increased interest expenditure from the unwinding of the lease liability.
Overall the expense will still be the same over the life of the lease, but it’s likely that more expenditure will be recognised in earlier periods as the finance liability is unwound.
Firstly, you should look at what leases your company has and split them into exempt leases and non-exempt leases. For the non-exempt leases that now must be capitalised, consider the information required to account for the changes:
No, FRS 102 does not allow the restatement of comparatives, so adjustments will be taken to reserves at the beginning of the first year under the new standard. This is practically a bit easier, but will mean a lack of comparability between say the 2026 and 2025 figures, where one will have a right-of-use asset and the other will not.
If you need further guidance on the changes and how they will impact your business, please contact one of our directors: info@wtca.co.uk
The changes in company size thresholds first introduced by the Conservative government are expected to come into force on 6 April 2025. This will mean some companies will fall out of the compulsory audit regime, and no longer must prepare strategic reports and cash flow statements. More companies will be able to prepare their accounts using the simpler, disclosure-minimal micro-entity reporting standards (FRS 105).
Note, there are no changes to the employee number thresholds. Only the monetary thresholds are changing.
The size thresholds are expected to be as follows:
| Threshold | Micro | Small | Medium | Large |
| Prepare accounts under: | FRS 105 | FRS 102 (Section 1A) | FRS 102 | FRS 102 |
| Audit? | Not required | Not required | Compulsory | Compulsory |
| Turnover | Up to £1m (previously £632,000) | Up to £15m (previously £10.2m) | Up to £36m (no change) | Over £36m (no change) |
| Gross Assets | Up to £500,000 (previously £316,000) | Up to £7.5m (previously £5.1m) | Up to £18m (no change) | Over £18m (no change) |
| Employee Numbers | Up to 10 (no change) | Up to 50 (no change) | Up to 250 (no change) | Over 250 (no change) |
In order to ascertain what accounting standards companies are able to prepare their accounts under, companies have to meet two out of the three size thresholds in two consecutive years.
Please be aware, there are complexities with companies within groups, who need to consider the size of the group as a whole, as well as the stand-alone company size to determine audit requirements.
Please be aware, that there are significant changes to how leases are accounted for under FRS 102 for periods beginning on or after 1 January 2026. This will stop the distinction between operating leases and finance leases, and bring many leased assets onto the balance sheet, where previously there were simply expensed. Only short-term and low value assets will remain ‘off balance sheet’. This will increase the gross assets for many small and medium sized entities, and could therefore impact the accounting standards available to them.
There are no changes for lease accounting for micro-entities.
If you are one of the company’s that will be moving out of the audit regime, company’s can still voluntarily have an audit of their financial statements.
For more information on the changes to company size thresholds, or to discuss the benefits of an audit, please contact one of our directors at info@wtca.co.uk.
Our team of tax investigation accountants is also available to assist with compliance, tax planning, and audit requirements, ensuring your business is fully prepared for the upcoming changes.
In most businesses an element of business travel is involved, employees and employers can be confused about how to reimburse employees (or even themselves) for the fuel they use to travel for business purposes. The guidance I am outlining below only applies to employees using their own cars – company cars have different rules. We are also only dealing with fossil-fuelled cars here (including hybrids) rather than purely electric vehicles (which include electric cars with a small petrol motor to charge the battery to get you home such as the BMW i3).
Wellden Turnbull Limited is a professional firm of accountants in Surrey. We specialise in Small and medium-sized businesses and have a number of specialities including Tax planning, Statutory compliance, and day-to-day business assistance. If you require assistance with this or any other subject area please contact either me or one of my team for tailored advice.
This is a tax-deductible expense, which makes (I will use a Limited Company for my examples) up part of the taxable profit at the end of a year – importantly this means that you do not need to make any claims to HMRC in order to get the tax deductions.
In order to get the corporate tax deduction, HMRC requires you to use the official mileage rates. The way to do this is a simple formula:
<miles travelled> x <mileage rate> = <amount to reimburse to employee>.
For example, if I travel 100 miles in a car, I would claim 45 per mile which would mean I would be reimbursed £45 and the company would get a taxable deduction of £45.
Most people who are office-based will find that the above example will apply. Some people, such as mobile workers, or salespeople may travel significant distances every tax year (6 April – 5 April). If it is the case that they travel over 10,000 miles then every mile over 10,000 must be reclaimed at 25p per mile rather than the higher 45p per mile.
If your company is VAT registered then you may be able (there are certain conditions which mean you cannot reclaim the VAT) to reclaim the VAT on the mileage reclaim. In order to reclaim VAT, in most circumstances, a VAT receipt for fuel will be required alongside the claim.
You will not be entering this VAT receipt into your accounting records, nor will you reclaim the VAT detailed on that receipt. This is evidence that the fuel used has been purchased ‘VAT paid’.
Frustratingly, the VAT element is not as simple as the Corporate tax deduction. HMRC says that only a certain element of the 45p (being the fuel element, as the whole amount is a combined fuel and wear and tear allowance) is within the scope of VAT – meaning you can claim it back in your VAT return.
You, again, will need a different set of VAT mileage rates from HMRC (https://www.gov.uk/government/publications/advisory-fuel-rates/advisory-fuel-rates-from-1-march-2016)
This is to calculate the VAT element of the mileage reclaim – 45p/25p is considered the Gross (or total including VAT) amount of the reclaim.
Furthermore, you will need more information about your car, specifically the cylinder size (usually the engine size but be careful as manufacturers can sometimes round 1,990cc to 2l when advertising) and fuel type (Petrol/Diesel/LPG).
I will use 2 examples here: one petrol and one diesel.
Petrol Car – 1.4l (1,390cc)
If I travel 100 miles in this car, I apply for (with a VAT receipt) and receive my reimbursement of £45 – nothing more to do from an employee/director side here.
The company records this a little differently:
For completeness, here is the same example with Diesel cars:
Diesel Car – 2.2l (2,100 cc)
If I travel 100 miles in this car, I apply for (with a VAT receipt) and receive my reimbursement of £45 – nothing more to do from an employee/director side here.
The company records this a little differently:
HMRC have outlined what they consider to be acceptable tax deductions for mileage reimbursements. That does not mean you cannot pay whatever rate you choose (if you pay less then you may have an issue with staff going forward, so I would recommend you consider these to be the minimum rates). You can pay more generous rates, however, you will only get a tax deduction on the proportion of those rates as detailed above. depending on the number of miles and additional generosity, you and your employees may have other tax issues to consider.
The general guidance above is given without prejudice, and should not be taken as advice that applies to your circumstances. Every company/business is different and there are complexities in the rules that I have not covered. Wellden Turnbull Limited accepts no responsibility as to how you use or apply the information above.
All of the points I have outlined above are for guidance on the principles only, the rates used were up to date on the day of writing but you should refer to official sources for up-to-date rates. The advice given is based on the tax rules at the date of writing and may not be updated.
If you want to share my guidance, please feel free to do so using the original link to my website and give me credit for the work.
24/10/2017 – Oli Spevack FCCA ACA, Partner
Wellden Turnbull Limited,
Munro House,
Portsmouth Road, Cobham,
Surrey KT11 1PP
E: o.spevack@wtca.co.uk
D: 01932 584 439
T: 01932 868 444
HMRC are changing their penalty regime for late submissions of VAT returns from VAT periods starting on or after 1 January 2023. There will now be penalties for late submission, even if no VAT is due to HMRC.
The new regime works on a points-based system. For each VAT return you submit late, you will receive one late submission penalty point. The penalty points build up, and once you reach a threshold, you’ll get a £200 penalty, and a further £200 penalty for each subsequent late submission.
For Quarterly VAT returns – its 4 points within 12 months
For Annual VAT returns – its 2 points within 24 months
For Monthly VAT returns – its 5 points within 6 months
You can ‘reset’ your points back to zero if you submit your VAT returns on time (the next 12 months for quarterly, 24 months for annual, and 6 months for monthly).
If you pay your VAT late, there will be penalties depending on how late you are at paying the VAT, as well as interest:
If you are struggling to pay your VAT, it is highly recommended to set up a payment plan with HMRC, to reduce the penalty period.
HMRC won’t be charging a first late payment penalty for the first year from 1 January 2023 until 31 December 2023 if you pay in full within 30 days of your payment due date.
From 1 January 2023, HMRC will charge late payment interest from the day your payment is overdue to the day your payment is made in full. This is at the Bank of England base rate plus 2.5%.
To find out more, go to https://www.gov.uk/guidance/prepare-for-upcoming-changes-to-vat-penalties-and-vat-interest-charges
If you are interested in learning more about our bookkeeping and accounting services or any aspect of business finance and payments, get in contact with the experienced team at Wellden Turnbull today.
Whether you run a physical store or an ecommerce business, the checkout process is one of the most vital steps in a customer’s journey. It is the last thing that the buyer thinks about before they make a purchase, and it can be also be an unfortunate opportunity for your sale to fall at the final hurdle.
In ecommerce, customers abandoning their cart at the checkout stage is a frustratingly common experience. Logic dictates that the way to remedy this is to simplify the page and provide all the necessary information – but this could be overlooking a fact that many customers abandon their cart simply because they don’t see an opportunity to pay the way that they want to.
Indeed, a range of new payment methods have arisen in recent years, driven primarily by a boom in fintech products. This can be attributed as a part of the move towards a cashless economy – many young people are now eschewing physical forms of payment such as cash and cheques in favour of technology-based solutions.
But is it a good idea for your business to adopt these payment methods and offer them to customers? Here we take a look at the range of new alternative payment methods available and examine the pros and cons of using them.
Arguably the most well-known alternative payment method is PayPal – it is the one that you are most likely to already accept other than card payments through your website. However, in recent years a number of new alternative payment methods have gained prominence.
Two popular examples are Google Pay and Apple Pay – both of which function as digital wallets. Users add cards or other funds to their digital wallets, and this money can then be used to pay for any services that offer this payment method.
Another brand gaining traction is Klarna. Klarna functions as an alternative to a credit card. Users pay for products and services with Klarna and then owe Klarna the money. Unlike a credit card, however, Klarna’s debt is interest-free (at least in the short-term) and credit checks are not required to use it.
A major benefit of alternative payment methods is trust. When new customers visit your website there can be a lack of trust. Customers need to feel safe and secure when they are making a transaction, and it still the case that many hesitate at the idea of entering card details into an unfamiliar website. However, if they see that you offer a payment method that they trust, they can feel happy to complete the purchase.
Increasing choice also gives customers the control over their finances and choices, allowing them to make the right decision when they are buying something.
One downside with using alternative payment methods is the complexity of the system, especially when it comes to tracking all your payments. It can be sensible to work with experienced business accountants who have a firm understanding of alternative payment methods and how to track financial information.
There are other issues – integration can be a challenge, especially if you are not used to working with these sorts of technology. Alternative payment methods need to be integrated seamlessly into the checkout page of your website, and as many of these methods are still adaptive and changing technology there is the potential for confusion for customers.
There is also the risk that poorly integrated payment methods don’t work correctly and leave you with a headache to sort them out.
The beauty of these types of payment methods is that they can often be combined for even greater convenience. Xero integrates with Stripe for seamless Apple Pay and Google Pay payments, enabling invoices to be paid easily.
It’s ideally suited to website transactions for customers to pay using their digital wallets, but businesses can also benefit when sending invoices to clients via Xero with payment links for a quick and effective way to get paid.
When you connect Stripe to your Xero account, you’ll have a ‘Pay Now’ button appear on your invoices so customers can pay with credit or debit card, Apple Pay, or Google Pay on their mobile device. Connecting these two accounts takes the work out of chasing outstanding payments – with Auto Pay, businesses can set up and receive recurring payments for repeat customers, for prompt payments that means customers don’t need to keep track of invoices.
What’s more, every Stripe transaction is accounted for and reconciled with a single click, and visible within Xero using the Stripe feed. Payments are automatically matched to the right invoice and account, which makes for clearer visibility and reduces credit control since fewer customers will need to be contacted regarding late payments.
If you are interested in learning more about our bookkeeping and accounting services or any aspect of business finance and payments, get in contact with the experienced team at Wellden Turnbull today.
