Author Archives: accounts

Taxable company benefits

As an employee, you pay tax on certain company benefits, such as cars, accommodation, and loans. Your employer calculates the tax you owe and deducts it through Pay As You Earn (PAYE). The amount of tax depends on the type and value of the benefit.

Some company benefits are tax-free, including childcare support and meals provided in canteens. Cash payments, however, are treated as earnings and are always subject to tax and National Insurance contributions.

Other taxable benefits you will pay tax on include the following:

Medical Insurance

You usually pay tax on the cost of the insurance premiums if your employer pays for your medical insurance. However, some health benefits are tax-free, including medical insurance while you are working abroad and annual check-ups.

Loans

You may have to pay tax on low-interest or interest-free loans from your employer if the loan is more than £10,000. The tax is calculated on the difference between the interest rate you pay and the official rate of interest set by the Bank of England. You could also be liable for tax if your employer lends money to one of your relatives.

Living Accommodation

If you (or one of your relatives) lives in accommodation provided by your employer, you may need to pay tax. The calculation depends on whether the accommodation costs are more than £75,000. You might not have to pay tax if the accommodation is provided so you can perform your job or do it more effectively, for example, agricultural workers living on farms.

Source:HM Revenue & Customs | 15-12-2025

Student jobs paying tax

Students that work may need to pay Income Tax and National Insurance. Employers are required to calculate the amount of tax they need to pay on the basis that the students would be working for the rest of the tax year.

This means that an overpayment of income tax can often occur when a student or temporary worker earns more than their monthly tax-free allowance of £1,048 but over the course of the tax year earn less than their annual allowance. For example, a student only working over the summer and / or Christmas period and earning more than £1,048 a month may not have exceeded the current £12,570 tax free personal allowance. Students (and other temporary workers) are not required to pay any Income Tax if their earnings are below the tax-free personal allowance, currently £12,570.

A refund of overpaid tax can be requested online or using form P50 entitled Claim for repayment of tax. You can check your eligibility to make a claim for current or past tax years at https://www.gov.uk/claim-tax-refund/y

A refund claim for the current tax year can only be made if you meet the necessary conditions. Any students that are continuing to work for the rest of the tax year in part-time jobs should consider waiting until the end of the tax year in order to make a claim.

Source:HM Revenue & Customs | 15-12-2025

Could you claim the Small Pool Allowance?

Writing-down allowances (WDAs) are a type of capital allowance that let you deduct a percentage of an asset’s value from your taxable profits each year. In some cases, you may be able to claim more relief using other capital allowances, such as the Annual Investment Allowance or first-year allowances.

There are two rates of WDA for plant and machinery. To calculate them, you first group your expenditure into separate pools:

  • the main pool – this includes expenditure on most items – the rate is 18%; and
  • the special rate pool includes special rate expenditure including long-life assets, integral features, certain thermal insulation and some cars – the rate is 6%.

Assets are grouped into pools, and WDAs are applied to the balance of each pool after adding new purchases, deducting disposal and accounting for any private use.

The Small Pools Allowance provides an alternative to WDAs. If the balance in the main or special rate pool is £1,000 or less, you can claim the entire amount in one year rather than applying the WDA percentage. The Small Pools Allowance cannot be used for single-asset pools and is prorated for accounting periods shorter or longer than 12 months. You can choose between claiming WDAs or the Small Pools Allowance, where possible, but cannot claim both.

Source:HM Revenue & Customs | 15-12-2025

Selling your UK home and living abroad

If you live abroad and sell your UK home, you may have to pay Capital Gains Tax (CGT) on any gain made since 5 April 2015. Only the portion of the gain made after 5 April 2015 is liable for tax. One of the most commonly used and valuable exemptions from CGT is Private Residence Relief (PRR), which applies when a property has been used as your main family home. Investment properties that have never been your main residence do not qualify for any CGT relief.

For non-UK residents, PRR can still apply, but there are additional conditions. You may not have to pay CGT for any tax year in which you, your spouse, or civil partner spent at least 90 days in the UK home, provided you meet the necessary conditions and nominate it as your only or main home when reporting the sale to HMRC.

Certain parts of the property, such as areas let out, used exclusively for business, or grounds larger than 5,000 square metres, may reduce the relief. You also automatically receive relief for the last nine months of ownership (or 36 months if you are disabled or in long-term care). 

Regardless of whether any tax is due, you must submit a Non-Resident CGT (NRCGT) return and pay any CGT within 60 days of the sale. Penalties apply if the return is late or tax is unpaid by the deadline. Even if there is no CGT to pay the return must still be submitted by the deadline.

Source:HM Revenue & Customs | 15-12-2025

Extension of FYA for zero-emission cars and charge points

An extension of First-Year Allowances (FYA) for zero-emission cars and charge points was announced as part of the recent Budget measures.

This means that the 100% FYA for qualifying expenditure on zero-emission cars, and electric vehicle (EV) charge points will now be available until 31 March 2027 for Corporation Tax purposes, and until 5 April 2027 for Income Tax purposes. This one-year extension to the current reliefs means that eligible businesses can continue to deduct 100% of the cost of these assets from their taxable profits in the year the expenditure is incurred until the relief expires.

The FYA for cars was introduced from 17 April 2002 for low CO₂-emission vehicles, including electric cars, and was then restricted to zero-emission cars from April 2021. The FYA for electric vehicle charge points was introduced in November 2016. Both of these allowances are intended to support the UK’s move towards cleaner vehicles.

According to HMRC’s figures, this measure is expected to benefit around 13,000 incorporated businesses and 6,000 unincorporated businesses by continuing to offer 100% tax relief in the year the expenditure is incurred for qualifying expenditure on zero-emission cars and EV charge points.

Source:HM Revenue & Customs | 15-12-2025