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.
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
The landscape of tax reporting has seen significant changes since the introduction of the P11D form in the 1960s. To modernise the reporting and payment of taxes on employment benefits such as private healthcare, HMRC introduced the voluntary payrolling of Benefits in Kind (BIKs) in April 2016. This system allows employers to process BIKs through the payroll, eliminating the need for employees to pay taxes on these benefits in arrears.
As confirmed in the 2024 Autumn Budget, HMRC will be mandating the payrolling of all BIKs, effectively removing the need for P11D forms entirely from April 2027. This significant shift is set to impact approximately four million employees, streamlining the collection of income tax and eliminating the delays caused by the current system.
Under the new approach, taxes on BIKs will be collected in real time, alongside regular pay.
Under the new framework, BIKs will be reported through the Full Payment Submission (FPS), which is submitted to HMRC on or before each pay date. Currently, the FPS includes two fields related to BIKs:
However, with the full transition to mandatory payrolling in 2027, it is expected that additional fields will be introduced to the FPS to capture a more detailed breakdown of BIKs. This change will require employers to maintain detailed and separate records of each benefit to ensure an accurate audit trail.
This transition may pose challenges for many businesses, particularly those without a dedicated payroll department. Graeme Witt MCIPP dip, manager of our payroll department, is available to help businesses navigate these changes. With over 20 years of experience in payroll services, Graeme and his team are well-equipped to guide your business through the complexities of payrolling BIKs and ensure compliance with all new regulations. If you would like to learn more or need assistance with the upcoming changes, feel free to reach out to Graeme for expert advice and support.
Filing a tax return is rarely anyone’s idea of an enjoyable activity, but accuracy is crucial to avoid costly penalties and unnecessary complications. Many taxpayers don’t realise that an inaccurate P60 can lead to significant tax issues and financial penalties down the line. This guide explains why precision matters when submitting your tax return and the critical role your P60 plays in this process.
A P60 is an end-of-year form that provides a summary of your financial situation for the tax year. Specifically, it details your total earnings for the tax year, the amount you’ve paid in National Insurance contributions, your Pay As You Earn (PAYE) income tax payments, your tax code and any changes during the year, as well as details of taxable benefits and deductions.
This information is compiled from your employment earnings or pension income for the relevant tax year. If the P60 comes from a pension scheme, it will identify the pension provider, but it won’t show your contribution frequency or amounts you pay into your pension.
Your P60 serves several important purposes. It acts as proof of tax payment by documenting how much tax you’ve paid during the year, and serves as official evidence of your annual earnings for income verification. The document is frequently requested when applying for mortgages, rental properties, loans, and other financial services for this reason. Additionally, it supplies crucial information needed for completing self-assessment tax returns if you’re required to file one.
As an employee, it’s tempting to assume all documentation provided by your employer is accurate. However, errors can and do occur. Your employer might unintentionally issue you with inaccurate documents, which will render your tax return incorrect if you’re required to file a self-assessment and your taxes are investigated.
HMRC takes the position that the ultimate responsibility for accurate reporting lies with the taxpayer. If you report incorrect information—whether it’s undeclared benefits, earnings or tax deductions—you could face penalties as a result of carelessness, even if the original error wasn’t your fault.
The accuracy of your tax returns is determined not just by the processes your employer adopts, but your own processes too. No matter the size of the business, whether it’s a team of hundreds or a solo individual, any company can be subject to an audit. The more discrepancies there are with your report, the higher the risk of an audit, so checking everything is correct will save you time and hassle later.
By keeping your records as accurate as possible, and supplying any documentation required by HMRC promptly, you can avoid the risk and save yourself the time of having to deal with an investigation which can be stressful.
Inaccuracies can mean that businesses miss out on deductions and could even end up overpaying, which will affect their profits. What’s more, submitting your return with accurate figures means you’ll have a better overview of how your business is performing and where it stands financially. This will help you make better, more informed decisions as your company grows.
Taking proactive steps to verify your P60 can save you significant headaches later. Compare the figures with your final payslip’s year-to-date totals for the tax year, which runs from 6th April to 5th April. You’ll also need to ensure your tax code is correct, as an incorrect code can lead to paying too much or too little tax.
Verify that your name, address, National Insurance number and employer details are correct, and take the time to review all deductions to confirm they match what you expect based on your circumstances. If you have more than one job or pension, you’ll receive a P60 from each source—make sure all are accounted for. If you notice any discrepancies, contact your employer immediately to request corrections, and keep records of these communications in case questions arise later.
With the increasing digitisation of tax processes, many employers now provide P60s electronically. These digital documents have the same legal status as paper versions but it’s important that you set up careful record-keeping processes. It’s recommended to save digital P60s in multiple secure locations and keep them for at least four years after the end of the tax year. For property income, self-employment, or complex tax affairs, you should retain records for at least 5 years to ensure you’re covered in case of any future audits from HMRC.
As we’ve explored, your P60 is an important document but it’s vital that you don’t assume the figures are automatically correct simply because they’ve been provided by your employer. Best practices include thoroughly reviewing all tax documentation before filing your return, consulting with a tax professional for complex situations, and keeping organised records of all tax-related documents. Remember, HMRC holds you responsible for accuracy (even if errors originated elsewhere), and filing early to allow time to address any issues that may arise.
Submitting your tax return can be daunting, especially if you’re unfamiliar with the requirements. Working with qualified tax professionals can ensure accuracy and minimise the risk of problems arising from incorrect information.
To find out more or to book the accounting and bookkeeping services of our tax investigation accountants, get in touch with Wellden Turnbull today.
As we welcome 2025, there are still 5.4m taxpayers who have yet to file their 2023/24 self assessment returns, compared to 5.7m who were yet to file at the start of 2024.
This year, 300,000 more people have ticked this task off their to-do list before entering the New Year, with many opting to submit their return during the Christmas break.
However, the clock is ticking for those who still need to file, as the 31 January deadline approaches. Despite the festive filers, millions remain at risk of leaving it until the last minute.
More taxpayers wanted to get their self assessment done and dusted before heading into 2025, with many using the week during Christmas to get organised.
HMRC has reported that 40,072 tax returns were filed over Christmas Eve, Christmas Day and Boxing Day – 14,303 more than the same period last year.
This increase can be down to Christmas Eve falling on a weekday. With many choosing work over last-minute shopping, 23,731 tax returns were filed on 24 December, compared to just 8,876 filed the previous year. More people were therefore able to enjoy the festivities without tax looming over their Christmas dinners.
On Christmas Day itself, 4,409 returns were submitted followed by 11,932 filed on Boxing Day.
Taxpayers clearly felt more organised this year, with New Year’s Eve and New Year’s Day seeing more returns filed than the year before.
HMRC revealed that 38,000 had squeezed theirs in before the bells rang on 31 December, which was 12,407 more returns filed than last year. A total of 310 submitted their return in the nick of time, filing between 23:00 and 23:59.
In the October 2024 Budget, the UK government announced an increase in HMRC’s late payment interest rates.
Starting from 6 April 2025, the rate will rise by 1.5 percentage points, pushing the interest on overdue tax to the Bank of England base rate plus 4%.
With current base rates around 5%, this would translate to an approximate 9% interest on late payments.
This change reflects the government’s push for tax compliance and efficient payment collection amidst efforts to address the tax gap and strengthen public finances.
With the increase in the interest, it is even more important we receive your tax returns and accounts information as soon as possible, so we can advise of any liabilities due.
Welcome to the 2024-25 Tax Rates
| Allowances | 2024/25 | 2023/24 |
| Personal Allowance (PA)* | £12,570 | £12,570 |
| Marriage Allowance† | 1,260 | 1,260 |
| Blind Person’s Allowance | 3,070 | 2,870 |
| Rent a room relief** | 7,500 | 7,500 |
| Trading income** | 1,000 | 1,000 |
| Property income** | 1,000 | 1,000 |
*PA is withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There is no allowance given above £125,140.
†The part of the PA that is transferable to a spouse or civil partner who is not a higher or additional rate taxpayer.
** If gross income exceeds this, the limit may be deducted instead of actual expenses.
| Rate bands | 2024/25 | 2023/24 |
| Basic Rate Band (BRB) | £37,700 | £37,700 |
| Higher Rate Band (HRB) | 37,701 – 125,140 | 37,701 – 125,140 |
| Additional rate | over 125,140 | over 125,140 |
| Personal Savings Allowance (PSA) | ||
| – Basic rate taxpayer | 1,000 | 1,000 |
| – Higher rate taxpayer | 500 | 500 |
| Dividend Allowance (DA) | 500 | 1,000 |
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
| Tax rates | 2024/25 | 2023/24 | ||||
| Rates differ for General/Savings/Dividend income | ||||||
| G | S | D | G | S | D | |
| Basic rate % | 20 | 20 | 8.75 | 20 | 20 | 8.75 |
| Higher rate % | 40 | 40 | 33.75 | 40 | 40 | 33.75 |
| Additional rate % | 45 | 45 | 39.35 | 45 | 45 | 39.35 |
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (mainly interest). Scottish taxpayers are taxed at different rates on general income (see below).
To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
The PSA taxes interest at nil, where it would otherwise be taxable at 20% or 40%.
Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £500 (2023/24 £1,000) of dividend income at nil, rather than the rate that would otherwise apply.
| Income tax – Scotland | 2024/25 | 2023/24 | |
| Starter rate | 19%(19%) | £2,306 | £2,162 |
| Basic rate | 20%(20%) | 2,307 – 13,991 | 2,163 – 13,118 |
| Intermediate rate | 21%(21%) | 13,992 – 31,092 | 13,119 – 31,092 |
| Higher rate | 42%(42%) | 31,093 – 62,430 | 31,093 – 125,140 |
| Advanced rate | 45%(N/A) | 62,431 – 125,140 | N/A |
| Top rate | 48%(47%) | over 125,140 | 125,140 |
Savings and dividend income are taxed at normal UK rates.
1% of child benefit for each £200 (2023/24: £100) of adjusted net income between £60,000 and £80,000 (2023/24: £50,000 and £60,000).
| Remittance basis charge | 2024/25 | 2023/24 |
| For non-UK domiciled individuals who have been UK resident in at least: |
||
| 7 of the preceding 9 tax years | £30,000 | £30,000 |
| 12 of the preceding 14 tax years | 60,000 | 60,000 |
| 15 of the preceding 20 tax years | Deemed to be UK domiciled | |
| Registered Pensions | 2024/25 | 2023/24 |
| Annual Allowance (AA)* | £60,000 | £60,000 |
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
*Usually tapered down, to a minimum of £10,000, when adjusted income exceeds £260,000.
The maximum tax-free pension lump sum is £268,275, unless a higher amount is “protected”.
| State pension (per week) | 2024/25 | 2023/24 |
| Old state pension | £169.50 | £156.20 |
| New state pension | 221.20 | 203.85 |
| 2024/25 | 2023/24 | |
| Individual Savings Account (ISA) | ||
| – Overall limit | £20,000 | £20,000 |
| – Lifetime ISA | 4,000 | 4,000 |
| Junior ISA | 9,000 | 9,000 |
| EIS – 30% relief | 2,000,000 | 2,000,000 |
| Seed EIS (SEIS) – 50% relief | 200,000 | 200,000 |
| Venture Capital Trust (VCT) – 30% relief | 200,000 | 200,000 |
| Employee | Employer | |
| Main NIC rate | 8% | 13.8% |
| No NIC on first | £242pw | £175pw |
| Main rate charged up to* | £967pw | no limit |
| 2% rate on earnings above | £967pw | N/A |
| Employment allowance per business** | N/A | £5,000 |
*Nil rate of employer NIC on earnings up to £967pw for employees aged under 21, apprentices aged under 25 and ex-armed forces personnel in their first twelve months of civilian employment.
**Some businesses do not qualify, including certain sole director companies and employers who have an employer’s Class 1 NIC liability of £100,000 or more for 2023/24.
Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
| Flat rate per week if profits below £6,725 (voluntary) | £3.45 |
| Class3: Flat rate per week | £17.45 |
| On profits £12,570 – £50,270 | 6% |
| On profits over £50,270 | 2% |
Employees with earnings above £123pw and the self-employed with profits over £6,725 (or who pay voluntary Class 2 contributions) can access entitlement to contributory benefits.
Taxable benefit: List price of car multiplied by chargeable percentage.
| 2024/25 & 2023/24 | ||
| CO2 g/km |
Electric Range miles |
All Cars % |
| 0 | N/A | 2 |
| 1-50 | >130 | 2 |
| 1-50 | 70 – 129 | 5 |
| 1-50 | 40 – 69 | 8 |
| 1-50 | 30 – 39 | 12 |
| 1-50 | <30 | 14 |
| 51-54 | N/A | 15 |
Then a further 1% for each 5g/km CO2 emissions, up to a maximum of 37%.
Diesel cars that are not RDE2 standard suffer a 4% supplement on the above figures but are still capped at 37%.
Chargeable value of £3,960 (2023/24: £3,960) if private use is more than home-to-work. Zero-emission vans charged at £Nil (2023/24: £Nil)
Employer provides fuel for private motoring in an employer-owned:
Car: CO2-based percentage from above table multiplied by £27,800 (2023/24: £27,800).
Van: £757 (2023/24: £757).
Employee contributions do not reduce taxable figure unless all private fuel is paid for by the employee (in which case there is no benefit charge).
| Employee’s own transport | per business mile |
| Cars first 10,000 miles | 45p |
| Cars over 10,000 miles | 25p |
| Business passengers | 5p |
| Motorcycles | 24p |
| Bicycles | 20p |
| 2024/25 | 2023/24 | ||
| Annual exemption amount | |||
| Individuals, estates | £3,000 | £6,000 | |
| Most trusts | 1,500 | 3,000 | |
| Tax rate – Disposals | Up to 30.10.24 | From 31.10.24 | |
| Individual up to Basic Rate Limit (BRL) | |||
| – Residential property and carried interest | 18% | 18% | 18% |
| – Other assets | 10% | 18% | 10% |
| Individual above BRL, trusts and estates | |||
| – Residential property | 24% | 24% | 28% |
| – Carried interest | 28% | 28% | 28% |
| – Other assets | 20% | 24% | 20% |
| Business Asset Disposal Relief (BADR)** | 10% | 10% | 10% |
*BADR is available on qualifying gains up to a lifetime limit of £1 million.
| Year to | 31.3.2025 | 31.3.2024 |
| Main rate (profits above £250,000) | 25% | 25% |
| Small profits rate (profits up to £50,000) | 19% | 19% |
| Marginal relief band (MRB) | £50k – £250k | £50k – £250k |
| Fraction in MRB (effective marginal rate) | 3/200 (26.5%) | 3/200 (26.5%) |
| Research and development relief | |
| Accounting periods beginning on or after | 1.4.2024 |
| R&D Expenditure Credit (RDEC) scheme* | 20% |
| R&D-intensive SMEs enhanced expenditure scheme** | 86% |
*Taxable expenditure credit for qualifying R&D.
**Additional deduction for qualifying R&D
R&D-intensive companies are those that have R&D expenditure constituting at least 30% of total tax-deductible P&L expenses plus capitalised R&D costs. Loss-making R&D intensive companies can claim a payable credit rate of 14.5% from HMRC in exchange for their losses (capped at £20,000 plus 3 x [PAYE & NIC]).
Previously, most SMEs used the enhanced expenditure scheme, but with a payable tax credit rate for losses of 10% (or 14.5%, from 1 April 2023, for those with R&D expenditure constituting at least 40% of total expenditure).
| Plant and machinery allowances | Year to 31.3.25 |
Year to 31.3.24 |
| Companies only | ||
| – First-year allowance (main pool) | 100% | 100% |
| – First-year allowance (special rate pool) | 50% | 50% |
| Annual Investment Allowance (AIA) | ||
| – expenditure up to £1m | 100% | 100% |
| New electric vans | 100% | 100% |
| Writing down allowance: main pool | 18% | 18% |
| Writing down allowance: special rate pool | 6% | 6% |
| Motor cars purchased | ||
| From 1.4.21 CO2 (g/km) |
Allowance | |
| New cars only | Nil | 100% |
| In general pool | up to 50 | 18% |
| In special rate pool | above 50 | 6% |
| Structures and buildings allowance | |
| Fixed deduction per annum | 3% |
ATED applies to ‘high value’ residential properties owned via a corporate structure, unless the property is used for a qualifying purpose. The tax applies to properties valued at more than £500,000.
| Property value | Annual charge to | |
| 31.3.2025 | 31.3.2024 | |
| £0.5m – £1m | £4,400 | £4,150 |
| £1m – £2m | 9,000 | 8,450 |
| £2m – £5m | 30,550 | 28,650 |
| £5m – £10m | 71,500 | 67,050 |
| £10m – £20m | 143,550 | 134,550 |
| Over £20m | 287,500 | 269,450 |
| Residential property (1st property only) | |||||
| SDLT – England & NI £000 |
Rate | LBTT – Scotland £000 |
Rate | LTT – Wales £000 |
Rate |
| Up to 250 | Nil | Up to 145 | Nil | Up to 225 | Nil |
| 250 – 925 | 5% | 145 – 250 | 2% | 225 – 400 | 6.0% |
| 925 – 1,500 | 10% | 250 – 325 | 5% | 400 – 750 | 7.5% |
| Over 1,500 | 12% | 325 – 750 | 10% | 750 – 1,500 | 10.0% |
| Over 750 | 12% | Over 1,500 | 12.0% | ||
A supplement applies for all three taxes where an additional residential property interest is purchased for more than £40,000 (unless replacing a main residence). It is also payable by all corporate purchasers. For SDLT, up to 30.10.24 the supplement is 3% of total purchase price; from 31.10.24 it is 5%. For LBTT it is 6%. LTT has specific higher rates in bandings: up to 180k: 4%, 180 – 250k: 7.5%, 250 – 400k: 9%, 400 – 750k: 11.5%, 750-1,500k: 14%, >1,500k: 16%.
For SDLT:
– First-time buyers purchasing a property of up to £625,000 pay a nil rate on the first £425,000 of the purchase price.
– A 2% supplement applies where the property is bought by certain non-UK residents.
– A rate of 17% (pre 31.10.24: 1%) may apply to the total purchase price, where the property is valued above £500,000 and purchased by a ‘non-natural person’ (e.g. a company).
For LBTT, first-time buyer relief increases the nil rate band to £175,000.
| Non-residential or mixed use property | |||||
| SDLT – England & NI £000 |
Rate | LBTT – Scotland £000 |
Rate | LTT – Wales £000 |
Rate |
| Up to 150 | Nil | Up to 150 | Nil | Up to 225 | Nil |
| 150 – 250 | 2% | 150 – 250 | 1% | 225 – 250 | 1% |
| Over 250 | 5% | Over 250 | 5% | 250 – 1,000 | 5% |
| Over 1,000 | 6% | ||||
| Standard rate (1/6 of VAT-inclusive price) | 20% | |
| From 1.4.2024 | Pre 1.4.2024 | |
| Registration level – Taxable turnover | £90,000 p.a. | £85,000 p.a. |
| Deregistration level – Taxable turnover | 88,000 p.a. | 83,000 p.a. |
| Annual taxable turnover to enter scheme | Up to £150,000 |
| Must leave scheme if annual gross turnover | Exceeds £230,000 |
If using FRS, the VAT paid by the business is a fixed percentage (based on business category) of ‘FRS turnover’ rather than the net of output tax over input tax. Input tax is usually not recoverable.
| Annual taxable turnover to enter scheme | Up to £1.35m |
| Must leave scheme if annual taxable turnover | Exceeds £1.60m |
| 2024/25 | 2023/24 | |
| Nil rate band (NRB)* | £325,000 | £325,000 |
| NRB Residential enhancement (RNRB)†* | 175,000 | 175,000 |
| Tax rate on death** | 40% | 40% |
| Tax rate on lifetime transfers to most trusts | 20% | 20% |
*Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused NRB and RNRB band may be claimed to increment the current NRB and RNRB when the survivor dies.
†RNRB is available for transfers on death of a main residence to (broadly) direct descendents. It tapers away at the rate of £1 for every £2 of estate value above £2m.
**Rate reduced to 36% if at least 10% of the relevant estate is left to charity. Unlimited exemption for transfers between spouses/civil partners, except if UK domiciled transferor and foreign domiciled transferee, where maximum exemption £325,000.
100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trading companies, qualifying unincorporated trading businesses and certain farmland/buildings.
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
| % of full death tax charge payable | 100 | 80 | 60 | 40 | 20 |
Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient.
| Payment dates | |||
| Self assessment | 2024/25 | 2023/24 | |
| 1st payment on account | 31 January | 2025 | 2024 |
| 2nd payment on account | 31 July | 2025 | 2024 |
| Balancing payment | 31 January | 2026 | 2025 |
| Capital Gains Tax* | 31 January | 2026 | 2025 |
| Other payment dates | |||
| Class 1A NIC | 19 July | 2025 | 2024 |
| Class 1B NIC | 19 October | 2025 | 2024 |
Corporation tax is due 9 months and 1 day from the end of the accounting period, unless a ‘large’ company paying by quarterly instalments.
| 2023/24 Filing deadlines | |
| Issue P60s to employees | 31 May 2024 |
| P11D, P11D(b) | 6 July 2024 |
| Self Assessment Tax Return (SATR) paper version | 31 October 2024 |
| Online SATR if outstanding tax to be included in 2025/26 PAYE code (if under £3,000) | 30 December 2024 |
| Online SATR | 31 January 2025 |
*A CGT return is due within 60 days of completion of sale of UK land and buildings by a non-resident and of sale of UK residential property with a tax liability by a UK resident. Any CGT payable is also due within 60 days.
| Rate per hour | From 1.04.24 |
From 1.04.23 |
| Aged 21* and over (National Living Wage) | £11.44 | £10.42 |
| Aged 21 – 22 | N/A | 10.18 |
| Aged 18 – 20 | 8.60 | 7.49 |
| Aged 16 – 17 | 6.40 | 5.28 |
| Apprentices | 6.40 | 5.28 |
*In 2023/24, the National Living Wage applied to those aged 23 and above.
You are advised to consult us before acting on any information contained herein.
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
| Main allowances | 2024/25 | 2023/24 |
| Personal Allowance (PA)*† | £12,570 | £12,570 |
| Blind Person’s Allowance | 3,070 | 2, 870 |
| Rent a room relief § | 7,500 | 7,500 |
| Trading income § | 1,000 | 1,000 |
| Property income § | 1,000 | 1,000 |
*PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £125,140 or more.
†£1,260 of the PA can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer, where both spouses were born after 5 April 1935.
§If gross income exceeds this, the limit may be deducted instead of actual expenses.
Rate Bands |
2024/25 |
2023/24 |
| Basic Rate Band (BRB) | £37,700 | £37,700 |
| Higher Rate Band (HRB) | 37,701-125,140 | 37,701-125,140 |
| Additional rate | over 125,140 | over 125,140 |
| Personal Savings Allowance (PSA) | ||
| – Basic rate taxpayer | 1,000 | 1,000 |
| – Higher rate taxpayer | 500 | 500 |
| Dividend Allowance (DA) | 500 | 1,000 |
BRB and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.
Rate Bands |
2024/25 | 2023/24 | ||||
| Rates differ for General, Savings and Dividend income within each band: | ||||||
| G | S | D | G | S | D | |
| % | % | % | % | % | % | |
| Basic | 20 | 20 | 8.75 | 20 | 20 | 8.75 |
| Higher | 40 | 40 | 33.75 | 40 | 40 | 33.75 |
| Additional | 45 | 45 | 39.35 | 45 | 45 | 39.35 |
General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (mainly interest). To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.
The PSA taxes interest at nil, where it would otherwise be taxable at 20% or 40%.
Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £500 (2023/24 £1,000) of dividend income at nil, rather than the rate that would otherwise apply.
1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.
| Income Tax – Scotland | Rate | 2023/24 |
| Starter Rate | 19% | £2,162 |
| Basic Rate | 20% | 2,163 – 13,118 |
| Intermediate Rate | 21% | 13,119 – 31,092 |
| Higher Rate | 42% | 31,093 – 125,140 |
| Top Rate | 47% | over 125,140 |
The Scottish rates and bands do not apply for savings and dividend income, which are taxed at normal UK rates. The Scottish rates for 2024/25 have not yet been announced.
| Remittance basis charge | 2024/25 | 2023/24 |
| For non-UK domiciled individuals who have been UK resident in at least: | ||
| 7 of the preceding 9 tax years | £30,000 | £30,000 |
| 12 of the preceding 14 tax years | 60,000 | 60,000 |
| 15 of the preceding 20 tax years | Deemed to be UK domiciled for tax purposes | |
| 2024/25 | 2023/24 | |
| Annual Allowance (AA) | £60,000 | £60,000 |
Annual relievable pension inputs are the higher of earnings (capped at AA) or £3,600.
The AA is usually reduced by £1 for every £2 by which relevant income exceeds £260,000, down to a minimum AA of £10,000.
The AA can also be reduced by £10,000, where certain pension drawings have been made.
For 2023/24 and 2024/25, there is no Lifetime Allowance (LTA) charge on high pensions savings.
The maximum tax-free pension lump sum is £268,275 (25% of £1,073,100), unless a higher amount is “protected”.
Taxable benefit: List price multiplied by chargeable percentage.
| 2024/25 and 2023/24 | ||
| CO2 emissions g/km |
Electric range Miles |
All cars % |
| 0 | N/A | 2 |
| 1-50 | >130 | 2 |
| 1-50 | 70 – 129 | 5 |
| 1-50 | 40 – 69 | 8 |
| 1-50 | 30 – 39 | 12 |
| 1-50 | <30 | 14 |
| 51-54 | N/A | 15 |
Then a further 1% for each 5g/km CO2 emissions, up to a maximum of 37%.
Diesel cars that are not RDE2 standard suffer a 4% supplement on the above figures but are still capped at 37%.
Where employer provides fuel for private motoring in an employer-owned car, CO2-based percentage from above table multiplied by £27,800.
Class 1 (Employees) |
Employee |
Employer |
| Main NIC rate | 10% | 13.8% |
| No NIC on first | £242pw | £175pw |
| Main rate charged up to * | £967pw | no limit |
| 2% rate on earnings above | £967pw | N/A |
| Employment allowance per qualifying business | N/A | £5,000 |
*Nil rate of employer NIC on earnings up to £967pw for employees aged under 21, apprentices aged under 25 and ex-armed forces personnel in their first twelve months of civilian employment.
Employer contributions (at 13.8%) are also due on most taxable benefits (Class 1A) and on tax paid on an employee’s behalf under a PAYE settlement agreement (Class 1B).
From 6 April 2024, self-employed people with profits above £6,725 are no longer required to pay Class 2 NICs, but will continue to receive access to contributory benefits, including the State Pension.
Those with profits under £6,725 can pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension. The amount is £3.45 per week.
| Flat rate per week | £17.45 |
| On profits £12,570 – £50,270 | 8% |
| On profits over £50,270 | 2% |
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.
Being a property landlord can be a stable source of income for many people across the UK, as they provide a service to renters. But earning money from being a landlord is a business like any other, and they are liable to pay tax on any form of income they generate. If you are a UK citizen and you own and rent a property somewhere across the UK, you will have to pay a category of landlord tax; this is unavoidable.
It can be easy to be confused by the rules around the taxation of landlords, and it may well be the case that, as a landlord, you are paying too much. Tax advice and management is a really important aspect of being a great landlord, as small changes can be the difference between a healthy profit and just scraping by.
Here we take a look at some important ideas for saving on tax and better tax management for landlords in the UK.
The first thing to say is that if you want to manage your tax as easily as possible, one option is to form a limited company that you use as a landlord. This can really help by first being able to separate your personal life and finances from those of your landlord finances. But it also has some important tax considerations.
Being a company allows you to offset your expenses against your profit, and it also gives you the option to have someone else manage elements of the property management. It’s a solution that might not be right for everyone, so it is worth discussing it with an accountant experienced in working with landlords.
It is the case that Capital Gains Tax is not usually paid when assets are transferred between spouses. This means that you may well be able to reduce your tax liability by moving some of your assets into the name of your spouse – this could allow you to make use of a lower tax band.
If your spouse’s tax bracket is lower than yours, you may also be able to pay less tax on your rental income as well. And, as long as the property doesn’t have a mortgage and you aren’t taking financial gain from it, you won’t need to pay stamp duty.
Landlords are sometimes criticised by tenants for failing to put enough investment into the upkeep of a property. In truth, investing in the properties can be extremely useful from a tax perspective –
not only in terms of renovating and refreshing the property, but also looking into the possibility of extending it.
Of course, it is important to take into account the maximum rental yield you are going to get from a property in the area. Overspending might result in a better tax situation, but you won’t be able to make up for it in terms of the cost of the project.
You might be used to managing long-term lets, and this can work for many landlords. But you may not have considered the potential benefits of short-term lets.
One of the major advantages of short-term lets is that it gives you the chance to regularly evaluate the value of the property. That means you can always get a rental yield that is sensible for the area. If you are locked into a long-term contract and the local area rises in popularity, this can mean that you are missing out on income.
Every landlord has different tax needs, and possibly the most valuable thing that you can do is speak to an accountant who has specific experience dealing with landlords and helping them to manage their taxes.
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.
