Archive: 24th March 2025

Business Support

How to Approach Your Bank for a Business Loan

Mar 24, 2025 by Terry Harris 0 Comments

Asking your bank for a business loan can feel daunting, but it doesn’t have to be. With the right preparation, you can give yourself the best possible chance of getting a positive outcome.

Start with a clear purpose
Banks want to know why you need the money. Are you looking to grow, cover short-term cash flow gaps, or invest in new equipment? Be specific. A well-defined reason gives your request more weight.

Get your figures in order
Before approaching the bank, make sure your accounts are up to date and accurate. Be ready to provide recent financial statements, cash flow forecasts, and details of any outstanding debts. Banks want to see that you understand your numbers and can manage repayments.

Create a solid business plan
A clear, realistic business plan is vital. It should outline what your business does, your market, how you make money, and your plans for growth. Include how the loan will help, and how you intend to pay it back. This builds trust and shows that you’ve thought things through.

Know your credit position
Check your business and personal credit scores in advance. If there are issues, be ready to explain them. Banks will always consider risk, so transparency is important.

Be realistic and professional
Ask for a sensible amount based on your business size and turnover. Approach the meeting professionally—treat it like pitching to an investor. Be confident but open to questions.

Consider alternatives
If your bank says no, ask for feedback. You could explore government-backed schemes like the British Business Bank or look into alternative lenders and credit unions.

Preparation, clarity, and confidence go a long way when asking your bank for support.

Source:Other | 23-03-2025
Business Support

How Small Businesses Can Survive a Recession

Mar 24, 2025 by Terry Harris 0 Comments

Recessions can be tough on small businesses, but they do not have to spell disaster. With some smart thinking and a bit of planning, many firms can keep going and even emerge stronger once the economy picks up. Here are some practical ways to stay afloat when times are hard.

1. Cut back on unnecessary spending
Now is the moment to go through all your costs. Cancel anything you no longer use, negotiate better deals with suppliers, and look for savings wherever you can. Every bit helps.

2. Focus on what you do best
Stick to your most profitable products or services. When money is tight, it makes sense to concentrate on the parts of the business that bring in the most value.

3. Build strong relationships with customers
Your regular customers are more important than ever. Stay connected, offer good service, and look for ways to add value. People are more likely to stick with businesses they trust.

4. Keep an eye on cash flow
Having enough cash to cover the basics is vital. Chase late payments, offer discounts for early payment if it helps, and try to agree flexible terms with suppliers.

5. Find new ways to earn
Could you offer something new? Sell online? Reach a different group of customers? Exploring extra income streams can give your business a welcome boost.

6. Stay in the public eye
It may be tempting to cut back on marketing, but staying visible is key. Use low cost tools like email newsletters, social media, and local events to keep your name out there.

7. Look after people
A business is only as strong as the people behind it. Support your team and yourself. Good morale and clear communication can make a big difference during uncertain times.

A calm, steady approach and some flexibility can go a long way in helping your business come through a recession in good shape.

Source:Other | 23-03-2025
Income Tax

Claiming professional fees and subscriptions

Mar 20, 2025 by Terry Harris 0 Comments

Did you know you may be eligible for tax relief on professional fees and subscriptions? If your membership is required for your job and the organisation is HMRC-approved, you could claim back tax for up to four years. Find out if you qualify and how to apply.

You may be eligible to claim tax relief on certain professional fees and subscriptions, provided they meet specific criteria:

  • Professional Membership Fees: Tax relief can be claimed on membership fees that you are required to pay in order to perform your job. These fees must be necessary for the fulfilment of your professional responsibilities.
  • Annual Subscriptions: You can also claim tax relief on annual subscriptions to approved professional bodies or learned societies, provided that your membership with these organisations is relevant to your profession.

Tax relief cannot be claimed, in the following cases:

  • Life Membership Subscriptions: Tax relief is not available for life membership fees, even if they are for professional bodies or societies.
  • Fees Not Paid by You: You cannot claim tax relief on professional membership fees or annual subscriptions if they have been paid by someone else, such as your employer.
  • Non-approved Organisations: Tax relief is not available on fees paid to professional bodies or organisations that are not officially recognised by HMRC.

You can claim tax relief for the current tax year as well as for the four preceding years, allowing you to potentially recover tax paid in previous years if you have not yet done so.

When making a claim, you must provide evidence of payment for each professional fee or subscription, such as receipts or other supporting documentation that clearly indicates the amounts paid. A claim can be made from the following link https://www.tax.service.gov.uk/claim-tax-relief-expenses/what-claiming-for

If you are registered for self-assessment you must submit your claim through your tax return rather than using the separate claims service.

Source:HM Revenue & Customs | 17-03-2025
Income Tax

Rental business mortgage relief

Mar 20, 2025 by Terry Harris 0 Comments

Since April 2020, landlords can no longer deduct mortgage interest as an expense. Instead, tax relief is capped at 20%. This change affects UK and non-UK resident landlords, trustees, and partnerships but excludes companies. Learn how this impacts your tax bill.

In April 2017, new rules were introduced that limited the tax relief on mortgage costs for residential landlords to the basic rate of tax. This restriction on finance costs was phased in over several years and was fully implemented by 6 April 2020. As a result, all finance costs, including mortgage interest on rented properties, are no longer allowed as expenses. Any available tax relief is now capped at the basic tax rate of 20%.

Finance costs includes interest on mortgages, loans (including those for furnishings), overdrafts, alternative finance returns, mortgage fees, and other related costs, such as discounts, premiums, and disguised interest. However, no relief is granted for capital repayments of a mortgage or loan.

You will be affected by this restriction if you are:

  • A UK resident individual letting residential properties in the UK or abroad.
  • A non-UK resident individual letting residential properties in the UK.
  • An individual letting residential properties in a partnership.
  • A trustee or beneficiary of trusts liable for Income Tax on residential property profits.

The finance cost restriction does not apply if you are a:

  • UK resident company
  • Non-UK resident company

These entities will continue to receive relief for interest and other finance costs in the usual manner.

Source:HM Revenue & Customs | 17-03-2025
Value Added Tax

VAT if you sell your business

Mar 20, 2025 by Terry Harris 0 Comments

When selling a business, the Transfer of a Business as a Going Concern (TOGC) rules can allow the transaction to be VAT-free if key conditions are met. This prevents unnecessary VAT charges and ensures compliance with HMRC. Learn how TOGC applies to your sale.

A TOGC is defined as "neither a supply of goods nor a supply of services” meaning it falls outside the scope of VAT and no VAT would be charged on the sale.

For the TOGC rules to apply, all of the following conditions must be satisfied:

  • The assets must be sold as part of a business that is operating as a "going concern." This means the business must be actively running, not just an 'inert aggregation of assets'.
  • The purchaser must intend to use the assets to carry on the same type of business as the seller.
  • If the seller is a taxable person, the purchaser must either already be a taxable person or become one as a result of the transfer.
  • If only part of the business is sold, it must be capable of operating independently.
  • There must not be a series of immediately consecutive transfers.
  • Additional conditions apply to transactions involving land.

The TOGC rules can be complex, and both the seller and buyer need to ensure they comply with all the conditions. These rules are mandatory, so it's crucial to establish whether a sale qualifies as a TOGC from the outset. For example, if VAT is charged incorrectly, the buyer cannot recover it from HMRC and would need to seek reimbursement from the seller.

Source:HM Revenue & Customs | 17-03-2025
HMRC notices

Records you must keep if self-employed

Mar 20, 2025 by Terry Harris 0 Comments

If you are self-employed as a sole trader or a partner in a business partnership, you are required to maintain suitable business records as well as separate personal income records for tax purposes.

For tax compliance, these business records must be kept for at least five years from the 31 January submission deadline of the relevant tax year. For instance, for the 2023-24 tax year, where online filing was due by 31 January 2025, you must retain your records until at least the end of January 2030. In some situations, such as when a return is filed late, you may be required to keep the records for a longer period.

As a self-employed individual, you should keep a record of the following:

  • All sales and income
  • All business expenses
  • VAT records if you're VAT registered
  • PAYE records if you employ anyone
  • Records of your personal income
  • Details of any grants received if you claimed using the Self-Employment Income Support Scheme (SEISS) due to coronavirus

You don't necessarily need to keep the original physical records. Most records can be stored in an alternative format, such as scanned copies, as long as they can be retrieved in a readable and uncorrupted format.

If any of your records are lost or unavailable, you must attempt to reconstruct them. If the figures are estimated or provisional, you must inform HMRC accordingly. Failing to keep proper or accurate records can result in penalties.

Source:HM Revenue & Customs | 17-03-2025
Capital allowances

Tax liability if you sell a business asset

Mar 20, 2025 by Terry Harris 0 Comments

When selling assets on which capital allowances were claimed, you may need to adjust your taxable profits with a balancing charge or allowance. Understanding these rules ensures you don’t face unexpected tax liabilities. Learn how to handle asset disposals correctly.

Typically, the value of the asset sold is considered to be the amount for which it was sold. However, if the asset was given away, no longer used, or sold for less than its market value, then the market value should be used.

If you initially claimed 100% tax relief on the asset, the business is required to add back the difference between the sale price and the original value to their taxable profits. This adjustment is known as a balancing charge. A balancing charge ensures that a business does not receive more tax relief than it was entitled to on the purchase of the asset. Essentially, the balancing charge operates in the opposite manner to a capital allowance, increasing the amount of profit on which tax is due.

If writing down allowances were used initially, you may face either a balancing charge or a balancing allowance.

There are specific rules that apply when calculating a balancing charge, particularly in the following cases:

  • If you originally claimed a super-deduction or special rate first-year allowances.
  • If you claimed full expensing or 50% first-year allowances.

In the year your business closes, instead of claiming capital allowances, you must enter a balancing charge or balancing allowance on your tax return.

Source:HM Revenue & Customs | 17-03-2025
Income Tax

Requesting evidence of earnings

Mar 20, 2025 by Terry Harris 0 Comments

If you're self-employed, lenders may require an SA302 and tax year overview as proof of earnings for mortgages or loans. These documents verify income declared on your self-assessment tax return and are easily accessible via HMRC. Learn how to obtain them.

The use of these forms has become more widespread since mortgage regulations began requiring self-employed individuals to provide verifiable evidence of income. The SA302 serves as proof of income for the last four years of self-assessment tax returns.

The SA302 document provides a detailed breakdown of the income reported on the taxpayer’s self-assessment tax return, including commercial versions of the tax return. Meanwhile, the tax year overview confirms the tax due based on the return submitted to HMRC, showing any payments made, and cross-referencing the Tax Calculation with HMRC’s records.

Self-assessment taxpayers can request an SA302 tax calculation through HMRC’s online service. After submitting an online tax return, it typically takes around 72 hours for the documents to become available for printing.

Most lenders will accept an SA302 printed directly from online accounts or from the commercial software used to submit tax returns. HMRC has been actively working with the Council of Mortgage Lenders and its members to expand the number of lenders willing to accept self-serve copies of these documents as valid proof of income.

Source:HM Revenue & Customs | 17-03-2025
Business Support

Why Adequate Business Insurance is Essential for Small Businesses

Mar 17, 2025 by Terry Harris 0 Comments

For small business owners, especially those operating as sole traders or in partnerships without limited liability, having adequate business insurance is not just a safeguard—it’s a necessity. Without the legal protection of a limited company structure, personal assets such as your home and savings are directly at risk if the business faces legal claims or financial losses.

One of the most critical types of cover is public liability insurance, which protects against claims if a customer or third party suffers injury or property damage due to your business activities. Similarly, professional indemnity insurance is crucial for service-based businesses, covering legal costs if clients claim negligence or poor advice.

Additionally, employers’ liability insurance is a legal requirement if you have staff, protecting against employee injury claims. Business interruption insurance can be a lifeline in unexpected disruptions, ensuring you can recover lost income and continue operations.

Without the right insurance, a single lawsuit, accident, or unforeseen event could financially devastate a small business owner. The cost of insurance is minimal compared to the potential consequences of being uninsured. Therefore, securing comprehensive business insurance is a vital step in protecting both your livelihood and personal assets.

Source:Other | 16-03-2025
Business Support

Business Advice: An Investment, Not a Cost

Mar 17, 2025 by Terry Harris 0 Comments

Flexible planning is essential for adapting to uncertainty, responding to challenges, and seizing new opportunities. The world is unpredictable, and rigid plans can quickly become outdated. Whether in business or personal life, flexibility ensures resilience and long-term success.

Unexpected events such as economic shifts, technological advancements, or personal changes can derail strict plans. A flexible approach allows for quick adjustments without having to start over. Businesses, for instance, benefit from adapting to market trends or supply chain disruptions, ensuring they remain competitive.

Opportunities often arise unexpectedly. A business that initially planned to operate solely in physical stores but later noticed a surge in online shopping must be able to pivot. Those who rigidly stick to their original plans may miss out on growth.

Managing risks is another advantage of flexible planning. If a strategy is not working, adjustments can be made rather than continuing down an unproductive path. This is particularly important in business, where adapting marketing tactics or reallocating resources can make a significant difference.

Innovation thrives in flexible environments. Companies that allow for iterative development and experimentation can improve products and services based on real-time feedback rather than relying on outdated assumptions.

Employee morale and productivity also improve when people are empowered to adapt. A rigid plan can create stress, while flexibility fosters a more dynamic, responsive workplace.

Customer satisfaction depends on adaptability. Consumer preferences change, and businesses that adjust their offerings accordingly are more likely to retain loyal customers.

Ultimately, flexible planning ensures better resource allocation, the ability to respond to competitive pressures, and the freedom to evolve with changing circumstances. Rather than being a sign of weakness, flexibility is a strategic advantage that helps individuals and organisations thrive in an ever-changing world.

Source:Other | 16-03-2025