Business owners

If an employee uses a work’s van for private use, which usually means home-to-work travel, there’s a taxable benefit and a subsequent tax charge.

VAT registered businesses with VATable turnover above the VAT registration threshold of £85,000 are required to comply with the requirements of MTD for VAT from the start of their first VAT accounting period beginning on or after 1 April 2019.

Under the self-assessment system, a taxpayer is required to make payments on account to HMRC – advance payments towards the eventual tax and National Insurance liability for the given year.

The cash basis is a simpler way of working out taxable profits compared to the traditional accruals method. The cash basis takes account only of money in and money out – income is recognised when received and expenses are recognised when paid.

The non-cumulative nature for calculating National Insurance Contributions (NICs) makes it possible to manipulate earnings to reduce the overall amount payable.

Many small businesses are run from home. Where a business is run from home, household costs will be incurred which are attributable to the business.

Providing a business is being undertaken on a commercial basis with a view to making a profit, it is generally possible to claim relief for trading losses.

HMRC commonly find errors in relation to directors’ loan accounts when making routine reviews of company tax returns. Here we look at the importance of maintaining proper records of cash and non-cash transactions between the company and the directors.