All posts by Terry Harris

General

Budget date announced

Sep 11, 2025 by Terry Harris 0 Comments

The Chancellor of the Exchequer, Rachel Reeves confirmed, in a video message, that the next UK Budget will take place on Wednesday, 26 November 2025.

Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s speech in November.

HM Treasury is inviting written representations for the Autumn Budget 2025 from individuals, interested groups, MPs and organisations. Submissions should propose evidence-based policy ideas or comment on existing policies, with clear rationale, costs, benefits, and deliverability. The deadline for submissions is 23:59 on Wednesday, 15 October 2025.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). This forecast will be in addition to that published for the Spring Statement and fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.

The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

Source:HM Treasury | 08-09-2025
Corporate Governance & Regulation

16 years old – the minimum age for a company director

Sep 11, 2025 by Terry Harris 0 Comments

Thinking of starting a company at 16? Know the rules, risks and responsibilities before you take the leap.

The Companies Act 2006 does not set a minimum age for shareholders, meaning even minors can hold shares unless a company’s articles of association explicitly state otherwise. However, the minimum age for a company director in the UK is 16 years.

Directors carry significant legal responsibilities, including ensuring that company accounts and reports are accurate and filed on time with the relevant authorities. Even if the company is dormant, you must still submit confirmation statements and accounts annually without fail.

Setting up a company is generally straightforward, but being a director comes with serious ongoing responsibilities. These duties are not just formalities, and failure to meet them can lead to personal fines, disqualification or even imprisonment.

Even dormant companies must file annual accounts and confirmation statements regularly. While directors can delegate daily tasks, such as hiring an accountant or other professionals, they remain legally responsible for the company’s records, accounts, and overall performance.

Seeking professional advice before starting a company is highly recommended, especially for a 16-year-old unlikely to have all the necessary business knowledge.

Source:Companies House | 08-09-2025
Income Tax

What is the settlement legislation?

Sep 11, 2025 by Terry Harris 0 Comments

Thinking of gifting income to a spouse or partner? HMRC’s settlements rules may still tax it as your own.

The settlements legislation is contained in s.624 ITTOIA 2005. The legislation seeks to ensure that where a settlor has retained an interest in property in a settlement then the income arising is treated as the settlor’s income for all tax purposes. A settlor can be said to have retained an interest if the property or income may be applied for the benefit of the settlor, a spouse or civil partner.

In general, the settlements legislation can apply where an individual enters into an arrangement to divert income to someone else and in the process, tax is saved.

These arrangements must be:

  • bounteous, or
  • not commercial, or
  • not at arm’s length, or
  • in the case of a gift between spouses or civil partners, wholly or substantially a right to income.

However, there are a number of everyday scenarios where the settlements legislation does not apply. In fact, after much case law in this area, HMRC has confirmed that if there is no 'bounty' if the gift to a spouse or civil partner is an outright gift which is not wholly, or substantially, a right to income, then the legislation will not apply.

Source:HM Revenue & Customs | 08-09-2025
HMRC notices

How do HMRC define “wholly and exclusively” for tax purposes

Sep 11, 2025 by Terry Harris 0 Comments

Not sure if a business cost is deductible? HMRC’s ‘wholly and exclusively’ rule is the key test.

When deciding whether an expense is deductible or not it is important to bear in mind that the expenditure must be incurred wholly and exclusively for the purposes of your trade or employment. This is a difficult starting point as there is often a fine line to thread between deciding whether an expense meets this ‘wholly and exclusively’ rule.

In general, HMRC takes a slightly more relaxed view that a strict reading of the legislation would suggest. HMRC’s own internal manuals offers advice to HMRC inspectors to exercise care when applying the ‘wholly and exclusively’ test. The advice states that where there is an incidental benefit that does not, of itself, mean that the expenditure is disallowed.

The following example helps clarify this point. A self-employed consulting engineer may travel to exotic locations to advise on projects. The travel and the exotic locations may be benefits but where there was no private purpose they are incidental to the carrying on of the profession and the cost is allowable.

It is also possible to apportion part of an expense where necessary. For example, when considering the running costs of a car used partly for the purposes of the trade and partly for other purposes. HMRC’s position is that the costs associated with the business use of the car would be deductible.

Source:HM Revenue & Customs | 08-09-2025
Employee Benefits

Using your own car for work purposes

Sep 11, 2025 by Terry Harris 0 Comments

Using your own car or bike for work travel? You may be able to claim tax relief for business mileage.

If you are employed and spend your own money on items needed for your job, you may be eligible to claim tax relief on those expenses. However, you can usually only claim tax relief on items that are exclusively used for work purposes.

For example, you might be able to claim tax relief when using your own vehicle, whether it is a car, van, motorcycle or bicycle, for work-related travel. Generally, travel between home and your regular place of work does not qualify. However, if you travel to a temporary workplace or incur business mileage, tax relief is typically allowed.

Employers often reimburse mileage using a set rate per mile depending on the type of vehicle. HMRC publishes approved mileage rates that apply when employees use their own vehicles for business journeys. If your employer uses these rates, the reimbursement is not treated as a taxable benefit.

If you are reimbursed at a rate below the HMRC approved amount, you can claim tax relief on the difference through Mileage Allowance Relief. For cars, the rate is 45p per mile for the first 10,000 miles and 25p per mile thereafter. The rate is 20p per mile for bicycles and 24p per mile for motorcycles.

Additionally, there is a passenger payment of 5p per mile per colleague if you transport other employees during business journeys in a car or van.

Source:HM Revenue & Customs | 08-09-2025
Value Added Tax

When you cannot charge VAT

Sep 11, 2025 by Terry Harris 0 Comments

Not all goods and services carry a 20% VAT, knowing the right rate can save costly mistakes.

When a VAT-registered business issues an invoice to their customer, they must ensure that they charge the correct rate of VAT. Whilst most businesses in the UK charge VAT at the standard rate of 20% there are a number of different VAT rates and exemptions to be aware of. This includes the reduced VAT rate of 5% and the zero rate (0%).

There are two other categories that the supplies of goods and services can fall under:

  • Exempt – where no VAT is charged on the supply. Examples of exempt items include the provision of insurance, postage stamps and health services provided by doctors. If a business only sells VAT-exempt goods and services, they cannot register for VAT.
  • Supplies that are 'outside the scope' of the UK VAT system altogether. These supplies are beyond the realm of the UK VAT system, and you cannot charge or reclaim VAT on these supplies. Examples include goods or services you buy and use outside of the UK, statutory fees (such as the London Congestion Charge) and goods you sell as part of a hobby.

If a business has made an error in charging VAT, then this needs to be corrected. The timing and amount of an error can impact on how the issue is resolved.

There are also penalties if you charge VAT to your customers before you are officially VAT registered. VAT registration is only required for eligible businesses earning more than £90,000 per year although businesses under the threshold can voluntarily apply for a VAT registration.

Source:HM Revenue & Customs | 08-09-2025
Corporation Tax

How to pay corporation tax online

Sep 11, 2025 by Terry Harris 0 Comments

Paying Corporation Tax? Always use the correct reference or risk delays and penalties.

To pay Corporation Tax via online or telephone bank transfer, you can use either a UK or overseas bank account.

UK Bank Accounts

You can transfer funds using Faster Payments, CHAPS, or Bacs, either online or by calling your bank. Faster Payments usually reach HMRC on the same or next day (including weekends), CHAPS payments arrive the same working day if made within your bank’s cut-off time, and Bacs payments typically take up to 3 working days.

Use the account details provided in your HMRC ‘notice to deliver your tax return’ or reminder. If unsure, use one of the following:

  • HMRC Cumbernauld
    • Sort code: 08 32 10
    • Account number: 12001039
  • HMRC Shipley
    • Sort code: 08 32 10
    • Account number: 12001020

Overseas Bank Accounts

You can also pay from an overseas account using:

  • HMRC Cumbernauld
    • IBAN: GB62 BARC 2011 4770 2976 90
    • BIC: BARCGB22
  • HMRC Shipley
    • IBAN: GB03 BARC 2011 4783 9776 92
    • BIC: BARCGB22

You must ensure to include your 17-character Corporation Tax payment reference number for the correct accounting period. This reference changes each year so it is important to use the up-to-date reference number. Using the wrong one can delay your payment. You can find it in your company’s HMRC online account or on your ‘notice to deliver your tax return’ or on any reminders from HMRC.

Source:HM Revenue & Customs | 08-09-2025
Business Support

What insurance cover should a company consider?

Sep 8, 2025 by Terry Harris 0 Comments

Running a small business comes with plenty to juggle, and while insurance might not be the most thrilling task, it is absolutely essential. There is one policy you are legally required to have: employers' liability insurance (EL). If you employ anyone, EL covers legal and compensation costs if someone falls ill or gets injured at work. Missing it could cost you a hefty £2,500 per day in penalties.

Beyond what is required, there are a number of other smart protections to think about:

  • Public liability insurance (PL) protects against claims from members of the public, for instance, if someone has an accident at your premises or your team accidentally damages someone's property. Many clients or suppliers will require proof of this cover before doing business.
  • Contents and portable equipment insurance covers your essential business gear, such as furniture on-site or gadgets you take out (laptops, tablets, smartphones), in case of theft, fire, flood, loss, or damage.
  • Professional indemnity insurance (PI) is vital if you offer expertise or advice. It covers you if a client suffers a financial loss because of something you did or did not do. Many clients expect this sort of protection before hiring you.
  • Directors’ and officers’ liability (D&O) protects company leaders personally if there is a claim against them, such as breaches of health and safety laws, pension mismanagement, or financial errors.
  • Cyber liability insurance is increasingly important in the digital world. It helps cover the costs of data breaches or cyber-attacks, including claims, compensation, and even IT or legal support.
Source:Other | 07-09-2025
Income Tax

Are you selling goods or services on a digital platform?

Sep 4, 2025 by Terry Harris 0 Comments

From 2024, platforms like eBay, Vinted and Airbnb must report seller data to HMRC, so check your tax responsibilities.

If you sell goods or services on a digital platform it is important to understand your tax responsibilities. This can apply whether your sales are a part-time income source or your main income. Even casual selling online may mean you need to report earnings and potentially pay tax.

You may need to pay tax if you engage in activities on digital platforms like:

  • Buying and reselling items online or making things to sell (even as a hobby).
  • Providing services online, such as tutoring, repairs, food delivery, dog walking, or equipment hire.
  • Creating digital content, like podcasts, YouTube videos, or social media influencing.
  • Earning income by renting out property or land, like letting a holiday home, running a bed and breakfast, or renting out a parking space on your driveway.

Since 1 January 2024, digital platforms (such as eBay, Vinted, Etsy and Airbnb) have been required to collect and report seller data to HMRC. The first reports covered the period from 1 January to 31 December 2024, with information submitted to HMRC by 31 January 2025.

The same rules apply in 2025, meaning income earned this calendar year (January to December 2025) will be reported by 31 January 2026.

Platforms must report your information if either of the following applies:

  • You made 30 or more sales in the year.
  • You earned over €2,000 (about £1,700).

The digital platforms will also give you a copy of the data they send to HMRC, which can help when completing your self-assessment return.

If you are earning money online you should ensure you check your tax responsibilities. The rules are clear, and platforms are now required to report many types of earnings directly to HMRC.

Source:HM Revenue & Customs | 01-09-2025
Employment Law

Balancing access to justice and abuse of process

Sep 2, 2025 by Terry Harris 0 Comments

An extended civil restraint order (ECRO) was issued against a prolific Employment Tribunal (ET) litigant for presenting repeated and baseless claims.

A Mr. Khan has been described as a prolific litigant, having issued no fewer than 42 largely unsuccessful tribunal claims since 2017. These various failed claims have typically involved allegations of disability discrimination and a failure to make reasonable adjustments in recruitment processes. Many claims were struck out for having no reasonable prospect of success or simply as an abuse of process. Only two claims, levelled against solicitors' firms, were settled for "nuisance value payments" of £700 and £1,000. Mr. Khan has also made many unsuccessful applications to adjourn hearings, often on medical grounds, alongside numerous failed attempts to challenge ET decisions.

The High Court granted the claimants’ application for an ECRO, restraining the defendant from issuing or presenting claims or appeals related to job applications in the tribunal system without prior court permission for a period of three years. 

This decision strengthens the mechanisms available to safeguard judicial processes from abuse. It reaffirms that higher courts can step in to protect tribunals from those individuals who repeatedly file baseless claims or appeals without legal merit. This is crucial for preventing the system from being overwhelmed by vexatious litigation, ensuring that resources are available for legitimate disputes.

For individuals who represent themselves in court, while the judiciary strives to ensure fairness and assist unrepresented parties, the case firmly reiterates that procedural rules and the fundamental principles of legal merit still apply. It demonstrates that courts will not tolerate the deliberate misuse of legal processes. Thus, employers and their legal counsel should be wary of disgruntled employees with histories of spurious claims and seek to have baseless claims struck out on such grounds.  

Source:Tribunal | 01-09-2025