What are Depreciation and Capital Allowances?

4 Oct 2024 | Tax

Depreciation: Is an accounting term for spreading the value of a fixed asset (vehicle or equipment etc.) over its useful life.  Spreading the cost is fairer and more accurate than deducting it all from the Business’s Profit in the year of purchase.  i.e. Depreciation...

What is the Personal Allowance?

23 Aug 2024 | Tax

Every person who is resident in the UK is given a personal allowance each tax year. It operates as follows: The personal allowance is the amount of income you can receive before paying tax – and it generally increases each tax year. For the 2024/25 tax year, it is...

What is the marginal rate of tax?

18 Jul 2024 | Tax

The marginal rate of tax paid is “the percentage of tax paid on earnings for the next pound earned.” What that means is that if you earn £50,270 your marginal rate of tax is 40% because for the next pound that you earn, you will be paying tax at 40%.  Below are the...

How do I register for CIS (the Construction Industry Scheme)?

18 Jun 2024 | Tax, Construction

The Construction Industry Scheme (CIS) is a government tax scheme that applies to payments made to self-employed subcontractors and businesses operating within the UK construction industry. Under the scheme, contractors must deduct tax from payments to subcontractors...

What is Business Asset Disposal Relief (Entrepreneurs’ Relief)?

1 Jun 2024 | Tax

Business Asset Disposal (‘BAD’) Relief (formerly Entrepreneurs’ Relief) is a reduced rate of Capital Gains Tax that applies when ones sells certain business assets; or all/part of a business; or more than 5% of shares in a small company in which you work or hold...

What is s.455 tax on overdrawn Director’s Loan accounts?

10 May 2024 | Tax

This tax is the result of an overdrawn Director’s Loan Account (DLA).  Here is a brief explanation of how they can arise; the implications, and what to do. An overdrawn Director’s Loan Account (DLA) can often arise accidentally when a Director/shareholder takes money...