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Not all state benefits are tax-free! Some, like the State Pension and Carer’s Allowance, are taxable, while others, like PIP and Universal Credit, are not. Knowing the difference can help you stay on top of your tax responsibilities and avoid surprises. HMRC’s guidance outlines the following list of the most common state benefits on which Income Tax is payable, subject to the usual limits: Bereavement Allowance (previously Widow’s Pension) Carer’s Allowance or (in Scotland only) Carer Support Payment Contribution-Based Employment and...

Not every money-making hobby counts as a business for tax purposes. Knowing when a hobby crosses into trading territory is vital to avoid unexpected tax bills. If your side project is growing, it might be time to check your tax position and stay compliant. For instance, HMRC manuals provide the example of someone who enjoys repairing cars or selling stamps in their spare time. Whilst this might lead to making what’s known as taxable supplies, that alone does not mean the person is operating a business. It all depends on whether the activity...

If employees must work from home and their employer does not reimburse certain costs, they may be entitled to claim tax relief. Understanding the rules for household expenses, business travel, and equipment purchases is key to making a successful claim. Eligibility to claim tax relief applies when homeworking is a requirement of the role. This may be the case if an employee's job necessitates living at a distance from the office, or if the employer does not maintain a physical office. Tax relief is generally not available where homeworking is...

Dissolving a company ends its legal existence — but unresolved assets become property of the Crown under bona vacantia. Directors must act carefully to settle assets and liabilities before dissolution, avoiding costly mistakes and lost opportunities. Dissolving a company is a formal legal process that marks the end of its existence. While this process may seem straightforward, it is essential for directors and company officers to understand the legal and financial consequences that arise once a company is dissolved. In particular, in...

After a business closes, income can still arise. Post-cessation receipts must be properly reported and taxed under specific rules. Knowing what qualifies — and what does not — ensures businesses and individuals stay compliant with UK tax law. Under the legislation, the individual or entity who receives, or is entitled to receive, the post-cessation income is liable to Income Tax or Corporation Tax on that income. This recipient does not need to be the same person who originally carried on the trade. The key factor is whether the...

When claiming tax relief or capital allowances on R&D, it’s crucial to ensure activities meet strict statutory definitions. Understanding Section 437 ITA and DTI guidelines is key to securing legitimate tax benefits and avoiding costly mistakes. An activity is generally considered as R&D if it meets two key criteria: It is recognised as R&D under standard accounting practice; and It satisfies the specific conditions set out in the Department of Trade and Industry (DTI) guidelines. In addition, the definition of R&D for...

For many small business owners, getting access to funding feels like trying to squeeze water from a stone. Traditional banks have always been a bit cautious when it comes to lending to smaller enterprises, but over the past few years, it’s become even tougher. With the economic uncertainty lingering after Brexit, COVID-19, and a volatile global market, lenders are now scrutinising applications more closely than ever. Many businesses face a chicken-and-egg situation. They need funding to grow, but without strong turnover or solid security (like...

Cybersecurity might sound like something only big corporations need to worry about, but in truth, small businesses are increasingly in the firing line. In fact, many cyber criminals deliberately target smaller firms, knowing they often lack the resources and expertise to protect themselves properly. The most common threat is phishing. These are fake emails that look convincing, aiming to trick you or your employees into giving away passwords, payment details, or sensitive company data. Ransomware is another growing problem — hackers...

From April 2025, more low-income workers on Universal Credit can join Help to Save. Save up to £50/month and get a 50% bonus - up to £1,200 over 4 years. A simple way to build your savings. The eligibility rules for the Help to Save scheme were extended on 6 April 2025. This means that the scheme is now open to more than 550,000 across the UK. The scheme is now available to anyone working and receiving Universal Credit. The Help to Save scheme is intended to help those on low incomes to boost their savings. Eligible users of the scheme can...

Skip the phone queues. Your Personal Tax Account lets you manage everything from tax codes to refunds online. Quick, secure, and all in one place. If you haven’t signed up yet, now’s the time. Your Personal Tax Account (PTA) is a simple and secure way to manage your tax affairs online. If you want to complete tasks like checking your tax code, claiming a refund, or updating your details, this can all be done in one place. This offers a practical alternative to contacting HMRC by phone or post, helping you stay on top of your finances with...