Archive: 7th August 2025

Inheritance Tax

Who can claim the IHT residence nil rate band

Aug 7, 2025 by Terry Harris 0 Comments

With the Residence Nil Rate Band (RNRB), families can pass on up to £1 million without IHT

The RNRB is an additional £175,000 Inheritance Tax (IHT) allowance that applies when a person’s main residence is passed to a direct descendant, such as a child or grandchild, after their death. The allowance is available to married couples and civil partners, and it can significantly reduce the IHT liability on family homes.

The RNRB is separate from and in addition to the standard IHT nil-rate band of £325,000. When combined with the standard threshold, a married couple or civil partners can potentially pass on up to £1 million tax-free to their direct descendants. This figure is based on two individuals each having a £325,000 nil-rate band and a £175,000 RNRB.

Importantly, any unused portion of the RNRB from the first spouse or civil partner to die can be transferred to the surviving partner, provided a claim is made to HMRC when the second partner dies. This transfer is not automatic and must be claimed. This is usually done by the executor of the estate during administration.

The RNRB is subject to tapering for larger estates. For estates valued over £2 million, the RNRB is reduced by £1 for every £2 over the threshold. As a result, estates significantly exceeding £2 million may lose the RNRB entirely, even if the home is passed to direct descendants.

Source:HM Revenue & Customs | 03-08-2025
HMRC notices

Reclaiming duty moving goods to Northern Ireland

Aug 7, 2025 by Terry Harris 0 Comments

Businesses can reclaim duties on qualifying goods moved to or through Northern Ireland since 2021

The Northern Ireland Duty Reimbursement Scheme allows businesses to reclaim import duties paid on goods moved into Northern Ireland, provided specific conditions are met. It applies retrospectively, covering eligible goods moved from 1 January 2021 onward.

A claim can be made by importers of ‘at risk’ goods into Northern Ireland. Additionally, agents or representatives authorised to act on behalf of an importer can also make a claim. If you are not UK-based, you must appoint a UK-established agent to submit the claim.

You can claim for duty paid or deferred if:

  • The goods were sold, consumed or permanently installed in Northern Ireland.
  • They were moved from Northern Ireland to Great Britain.
  • They were exported outside the UK or EU.
  • You have sufficient evidence that the goods meet the qualifying conditions.

Claims may be made for full or partial consignments. For example, if 50 out of 100 ‘at risk’ goods meet the criteria you can reclaim duty on those 50.

There are deadlines for making a claim which are as follows:

  • By 30 June 2026 for goods moved between 1 January 2021 and 30 June 2023.
  • Within 3 years of duty notification for goods moved after 30 June 2023.

The full amount of duty can be claimed for goods moved from Great Britain (England, Scotland and Wales) to Northern Ireland. The difference between EU and UK duty rates (where the EU duty was higher than the UK duty) can be claimed for imports into Northern Ireland from outside the UK or EU countries.

This scheme guidance has been updated as the new arrangements set out in the Windsor Framework have now been implemented.

Source:HM Revenue & Customs | 03-08-2025
Stamp Duty Land Tax

Homebuyers warning

Aug 7, 2025 by Terry Harris 0 Comments

Properties needing repairs still count as homes and false claims to recover Stamp Duty Land Tax could mean big tax bills and penalties.

HMRC has issued a warning to homebuyers about rogue tax agents promoting false Stamp Duty Land Tax (SDLT) repayment claims, especially those based on the condition of properties. Following a recent Court of Appeal decision, it has been confirmed that properties requiring repairs remain liable for residential rates of SDLT if they retain the fundamental characteristics of a dwelling. This applies even if the properties are temporarily uninhabitable.

Some agents exploit this by misleading buyers into believing they can reclaim SDLT by arguing the property is “non-residential.” These agents often charge hefty fees and leave homeowners liable for repayment of the tax, penalties, and interest.

HMRC’s press release on the matter provides an illustrative example of a person who bought a house in London for £1,100,000 with his solicitor filing the SDLT return and SDLT being calculated at the residential rates (£53,750). The home required some modernisation and repair.

The homebuyer was then targeted by a repayment agent who claimed he could recover £9,250 in SDLT due to property repairs. The agent took a 30% fee, and the homebuyer received £6,475. Later, HMRC carried out a compliance check and found the property was residential all along. This meant that the homebuyer was left owing the full £9,250, plus interest and penalties, with the agent refusing to assist.

The case reinforces that a property’s poor condition does not alter its classification as a dwelling if it is structurally sound and previously used as a home. SDLT claims that are invalid can result in serious financial consequences for the buyer, who is ultimately responsible for the accuracy of any SDLT repayment submission.

We would be happy to help you consider where you are eligible to make a claim without incurring unnecessary fees or risks.

Source:HM Revenue & Customs | 03-08-2025
Corporate Governance & Regulation

HMRC to increase anti-money laundering fees

Aug 7, 2025 by Terry Harris 0 Comments

Fit and proper test fee to jump from £150 to £700 under HMRC’s proposed AML supervision changes

Many businesses are monitored by the Financial Conduct Authority (FCA) or certain professional bodies for Anti-Money Laundering (AML) purposes. However, HMRC is responsible for supervising more than 36,000 businesses in 9 business sectors. There are registration and annual fees that are charged for anti-money laundering supervision by HMRC. These fees have remained the same since May 2019, and HMRC is currently looking to increase the fees that they charge within the current fee structure to meet the costs of providing effective AML supervision.

HMRC plans to increase the premises fee from £300 to £400, representing a 33% increase since 2019. The reduced rate for small businesses will also increase from £180 to £200. Most affected businesses operate from a single premises.

The approvals fee, which ensures responsible individuals (BOOMs) are suitable for their roles, will remain unchanged at £40. However, the fit and proper (F&P) test fee, which applies to MSBs and TCSPs due to their higher risk profiles, will significantly rise from £150 to £700.

HMRC also plans to reintroduce an application fee of £400 for businesses newly registering or reapplying due to lapsed registration. Finally, the sanctions administration charge will be revised. While previously tied to the type of penalty, HMRC proposes a flat £2,000 charge for all types of sanctions, capped at the value of the penalty. A separate lower charge of £350 will still apply for specific regulatory failures.

These changes are open for comment until 29 August 2025, and it is expected that further information on when these new charges will be introduced will follow shortly afterwards.

Source:HM Revenue & Customs | 03-08-2025
Business Support

Employing family members in your business

Aug 4, 2025 by Terry Harris 0 Comments

Many small business owners turn to family members when looking to fill roles in their team. It can seem like a natural choice, offering trust, loyalty, and a shared sense of purpose. However, employing family in your business is not without its challenges, and it is worth considering the potential pitfalls before making that commitment.

One of the main risks is a lack of objectivity. Family relationships can cloud judgement when it comes to performance, discipline, or promotion. It may be harder to have honest conversations about underperformance or to apply the same standards as you would to non-family staff. This can lead to resentment among other team members and undermine morale.

There is also the risk of blurred boundaries. If work disagreements spill into personal life, or vice versa, it can strain family relationships. When personal loyalty and business interests conflict, it can create tension that affects both the family and the business.

Tax and payroll rules must also be followed carefully. HMRC requires that family members employed in a business must be paid a commercial rate for actual work done, and they must be treated in line with employment laws. Inflated pay, unclear job roles, or token positions can lead to problems with tax compliance and potentially trigger enquiries.

Succession planning can also become difficult. If some family members are involved and others are not, questions may arise about ownership, leadership, or fairness in the long term. This can be particularly sensitive when passing the business to the next generation.

In short, employing family can work well when there is clear structure, professional standards, and open communication. But it is essential to treat family members like any other employee, with roles, responsibilities, and expectations clearly defined from the start.

Source:Other | 03-08-2025
Business Support

The value of retaining profits to support cash flow and growth

Aug 4, 2025 by Terry Harris 0 Comments

For small businesses and growing companies alike, one of the most reliable sources of funding is often the profits they generate. While it can be tempting to extract earnings in the form of dividends, bonuses, or reinvestment elsewhere, there is a strong case for holding back a portion of those profits to strengthen the business’s financial position.

Retained profits are an internal source of finance. They can be used to fund working capital, smooth out seasonal cash flow fluctuations, and take advantage of growth opportunities when they arise. Unlike external borrowing, there is no interest to pay, no lengthy application process, and no exposure to changing credit conditions. Retaining profits also gives business owners more flexibility and independence when planning their future.

Maintaining a strong cash position helps protect the business during lean periods. Whether facing late customer payments, unexpected cost increases, or a sudden drop in demand, having cash in the bank can prevent a short-term problem turning into a crisis. This is especially valuable for businesses that operate in volatile sectors or rely on a small number of customers or suppliers.

Retained earnings can also be used to invest in assets, expand operations, hire new staff, or develop new products or services. These actions support long-term growth and build resilience into the business model. In some cases, retained profits can help improve the business’s credit rating, making it easier to secure funding if needed later.

While there is a balance to be struck between rewarding owners and reinvesting in the business, setting aside a proportion of profits each year creates headroom for growth and strengthens cash flow management. It is a disciplined approach that helps build a stronger, more sustainable business.

Source:Other | 03-08-2025