The special tax regime for furnished holiday lettings came to an end on 6 April 2025. From that date, furnished holiday lettings are treated in the same way as other residential lets and form part of the same property rental business. As a result of the changes, the UK property pages of the 2025/26 Self-Assessment return (SA105) have been simplified and there is now only one section for all UK property income where previously there was a separate section for furnished holiday

Stamp duty land tax (SDLT) applies where a property in England or Northern Ireland is sold for valuable consideration. There are different rates for residential properties and non-residential properties. Non-residential properties include: · commercial property; · property that is not suitable to be lived in and cannot be made suitable (for example, where there is a high risk that the property will collapse); · forests; · agricultural land that is part of a working farm or us

A chargeable gain may arise on the disposal of a residential property which has not been the owner’s only or main residence throughout. This may be the case where the property is a second home or an investment property which has been let out. Unlike other capital gains, residential property gains are not reported in the capital gains tax pages of the Self-Assessment return which must be submitted no later than 31 January after the end of the tax year. Instead, separate rules

Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is now a reality for individuals who had combined trading and property income of at least £50,000 in 2024/25. They will now need to keep their records digitally and file their first quarterly return by 7 August 2026. The quarterly updates are sent to HMRC digitally using software that is compatible with MTD for ITSA. Quarterly updates must be submitted for each source of self-employment income and each source of

The 2025/26 Self-Assessment tax return must be filed online by midnight on 31 January 2027. However, you do not have to wait until the deadline is approaching to file your return and there can be advantages in filing early. Before filing your return, it is important to check that you have all the information you need. If you have employment or pension income to include on your return, you may need to wait until you have your P60. You should have that by 31 May 2026. Likewise,

Where a business is operated through a limited company, profits need to be extracted if they are to be used personally. Where the personal allowance remains available, it is generally beneficial to pay a salary equal to the personal allowance and to extract any further profits needed outside the company in the form of dividends. In a family company, there may be a number of shareholders. Paying dividends is not as straightforward as paying a salary or a bonus as there are com

Individual Savings Accounts (ISAs) are tax-free savings accounts. There are four different types of ISAs: · cash ISAs; · stocks and shares ISAs; · innovative finance ISAs; and · lifetime ISAs. Individuals must be at least 18 to invest in an ISA. Cash ISAs may be with a bank or building society or with National Savings and Investments. Stocks and shares ISAs can include shares in companies, unit trusts and investment funds, corporate bonds, government bonds and long-term asset

The Employment Allowance is a very valuable allowance which allows eligible employers to reduce their secondary Class 1 National Insurance bill by up to £10,500 in 2026/27. The allowance is not given automatically and must be claimed. Who can claim Employers can claim the allowance if they are a business or a public body and they do less than half their work in the public sector. However, the allowance is not available to companies which only have one employee liable for seco

Convention has it that in times of high interest rates, borrowing from your company is invariably more tax efficient than borrowing from other sources such as a bank. However, this may not always be the case. If the loan cannot be repaid within nine months and one day after the company's accounting year end, the company will be liable for a tax charge equal to the dividend upper rate (35.75%). Without this charge, the director could borrow money from the company indefinitely

While the rules regarding VAT compliance may appear straightforward at first glance, there are several common pitfalls that can lead to problems which, if not rectified, can lead to penalties. Some of the more frequent VAT traps that small businesses face are detailed below: Late registration One of the more common ‘traps’ is failing to register for VAT on time. Registration is required once taxable turnover exceeds the VAT threshold (£90,000) within a rolling 12-month period

For many years, employees required to work from home could claim tax relief for additional household expenses incurred personally, even where not reimbursed by their employer. This relief recognised that certain expenses (e.g. increased heating, electricity or business-related telephone use) arose directly from the performance of employment duties. However, the relief was tightly defined and was not available where homeworking was undertaken by personal choice or for convenie

The tax code is fundamental to the operation of PAYE. It is made up of letters and numbers which take account of the allowances that you receive and also any deductions from those allowances, for example, to collect underpaid tax. If you have received a tax code for the 2026/27 tax year, it is important that you understand what it means and check that it is correct. The number in the tax code tells the employer or pension provider how much tax-free pay you are entitled to for

Where an employee is provided with a company van that is available for private use, a tax charge may arise under the benefit in kind legislation. However, this will not always be the case. Unlike company cars, where a van benefit charge does arise, it does not depend on CO2 emissions. Instead, it is a set amount. If fuel is provided for private use in the van, a fuel benefit charge may also arise. Electric vans The van benefit for a zero-emission van is nil, regardless of the

Where first year allowances, such as the Annual Investment Allowance or full expensing, are not claimed in respect of capital expenditure on plant and machinery, or not claimed in full, relief is instead given by way of writing down allowances (WDAs). The rate at which the allowance is given depends on whether the expenditure is main rate expenditure of special rate expenditure. Special rate pool Expenditure is allocated to the special rate pool where it relates to integral f

When an employee works from home, they may incur additional costs as a result, such as higher gas and electricity bills. The tax system offers some help where the employer meets some or all of these additional costs. However, the relief that was previously available where employees met these costs themselves is withdrawn from 6 April 2026. Expenses reimbursed by the employer No tax liability arises where an employer makes a payment to an employee in respect of reasonable hous

As announced at the time of the 2025 Autumn Budget, the ordinary and upper dividend tax rates are increased by two percentage points from 6 April 2026. The additional dividend rate remains unchanged. The increase will affect those with investments in shares who receive dividend income and also shareholders in personal and family companies who extract profits by way of dividends. All taxpayers, regardless of the rate at which they pay tax, receive a dividend allowance. This is

The non-resident landlords scheme (NRLS) is a tax deduction scheme for taxing UK rental income of non-resident landlords. Where the let is managed by a letting agent, the letting agent must deduct tax from the landlord’s UK rental income and pay it over to HMRC. Where there is no letting agent, the obligation to deduct tax and pay it over to HMRC falls on the tenant if the tenant pays rent of more than £100 per week to a non-resident landlord. In certain circumstances, the no

The Annual Tax on Enveloped Dwellings (ATED) is a tax on residential property owned by a non-natural person, such as a company, which is valued at £500,000 or more, unless an exemption applies. Where a property is within the charge to the ATED, the amount payable depends on the value of the property. Properties are revalued every five years for the purpose of the charge. The 2026/27 charge is based on the value of the property on 1 April 2022 or, where the property was acquir

Where a landlord lets a residential property (including from 6 April 2025 onwards, a furnished holiday let), they are not entitled to tax relief when they purchase domestic items, such as furniture, furnishings, household appliances, and kitchenware. Instead, relief is given for the cost of replacing the item. For the relief to be available, four conditions must be met. Condition A is that the individual or company seeking to claim the relief is carrying on a property busines

Starting in self-employment can feel daunting. There may be a website to create, a business bank account to open, pricing to set and possibly premises to secure. In the midst of these priorities, many new sole traders overlook a key requirement – registering with HMRC. Failing to register on time can lead to penalties, including possible backdated obligations. Is registration mandatory? Registration becomes mandatory when gross income exceeds £1,000 in a tax year. Termed the