Author Archives: accounts

Expenses for the self-employed

If you are self-employed, knowing which everyday costs you can legitimately claim can make a real difference to how much tax you end up paying.

The question of which costs you can claim against your self-employed business is a common one. If you are self-employed it is important to be aware if an expense is allowable or not. Any allowable costs can be used to reduce your taxable profit.

HMRC lists the following office expenses as being allowable:

  • office costs, for example stationery or phone bills
  • travel costs, for example fuel, parking, train or bus fares
  • clothing expenses, for example uniforms
  • staff costs, for example salaries or subcontractor costs
  • things you buy to sell on, for example stock or raw materials
  • financial costs, for example insurance or bank charges
  • costs of your business premises, for example heating, lighting, business rates
  • advertising or marketing, for example website costs
  • training courses related to your business, for example refresher courses

If you work from home, you may also be able to claim a proportion of your costs for things including heating, electricity, Council Tax, mortgage interest or rent and internet and telephone use. You will need to adopt a fair and reasonable approach to apportioning your costs, such as by reference to the number of rooms used for business purposes or the proportion of time you work from home.

Source:HM Revenue & Customs | 12-01-2026

Creative Industry Corporation Tax reliefs

If your business works in film, TV, games or the arts, Creative Industry Tax Reliefs could reduce your Corporation Tax bill and may even generate a payable tax credit.

Creative Industry Tax Reliefs (CITR) are a range of UK Corporation Tax reliefs designed to support companies operating in the creative sector. The reliefs allow qualifying companies to increase the amount of allowable expenditure when calculating their taxable profits, thereby reducing the Corporation Tax they are required to pay. Where a company is loss-making, it may be possible to surrender those losses in exchange for a payable tax credit.

CITR covers a wide variety of creative activities. Reliefs are available for film, animation, high-end television, children’s television and video game production, as well as for theatre, orchestra performances, and museums and galleries exhibitions. More recently, the Audio-Visual Expenditure Credit and the Video Games Expenditure Credit have been introduced, offering an alternative credit-based system for eligible productions.

To qualify for CITR, films, television programmes and video games must meet specific cultural criteria. This is usually achieved by passing a formal ‘cultural test’, which assesses various factors such as content, setting and the nationality of key personnel. Alternatively, a production may qualify through an internationally agreed co-production treaty. Meeting these requirements allows the production to be certified as a British film, British programme or British video game.

Certification is administered by the British Film Institute (BFI) on behalf of the Department for Culture, Media and Sport. The BFI can issue an interim certificate while production is ongoing, followed by a final certificate once the project has been completed. This certification is a key requirement for claiming the relevant tax reliefs.

Source:HM Revenue & Customs | 12-01-2026

What is the advance tax certainty service?

If your business is planning a major UK investment, HMRC’s new advance tax certainty service could give you binding clarity on the tax position before you commit.

HMRC has recently published draft guidance on the new advance tax certainty service as part of the government’s Corporate Tax Roadmap at the Autumn Budget 2024, where the Chancellor set out plans for a new HMRC service to give major investment projects clarity on how tax law will apply in advance. As part of the Autumn Budget 2025 measures last November, it was confirmed that the new service is expected to open in July 2026.

Under the new advance tax certainty service, businesses investing at least £1 billion in the UK over the lifetime of a project can apply for a formal, binding position from HMRC on how various taxes will be applied to their specific circumstances. This applies to taxes such as Corporation Tax, VAT, Stamp Taxes, PAYE and the Construction Industry Scheme.

Unlike existing clearance routes, the advance tax certainty service is designed specifically for large and complex projects where uncertainty over tax outcomes could otherwise discourage investment. HMRC clearances issued through this service will bind the tax authority for up to five years subject to full initial disclosure of all material facts. The clearance may then be renewed for a further five years unless a material change in the law, or a court decision that clarifies its application, means that the prior clearance is no longer correct.

This service is intended to provide those investing significant amounts in the UK, confidence that the tax treatment of a project will not later be challenged.

Source:HM Treasury | 12-01-2026

MTD for Income Tax – what’s required from April 2026

From April 2026, Making Tax Digital for Income Tax (MTD for IT) will become mandatory for many self-employed persons and landlords, marking a significant change in how they manage their tax affairs. The new regime is designed to modernise the tax system by requiring taxpayers to interact with HMRC through an online tax account, rather than relying solely on an annual self-assessment return.

Initially, MTD for IT will apply to individuals with qualifying income of more than £50,000 a year from self-employment and/or property. From 6 April 2027, the scope will widen to include those with income between £30,000 and £50,000. Alongside this, a new points-based penalty system will be introduced for the late filing and late payment of MTD for IT liabilities.

Under MTD for IT, affected taxpayers will need to keep digital records of their income and expenses using compatible software. Instead of reporting everything once a year, they will be required to send quarterly updates to HMRC, providing a summary of their business or property income and costs. These updates are not tax bills, but they are intended to give HMRC a clearer picture of income throughout the year. A final declaration will still be required after the end of the tax year, with any tax due payable by 31 January following the year end.

Qualifying income is a key concept under MTD for IT. It is broadly the total income earned in a tax year from self-employment and property income, including income from multiple trades or rental properties. Other sources of income reported on a tax return, such as employment income under PAYE, dividends, pensions or partnership income, does not count towards this threshold.

If you are unsure how MTD for IT will affect you, or would like any support preparing for the change, we would be happy to help.

Source:HM Revenue & Customs | 12-01-2026

Pre-tax year end planning

Pre-tax year end planning is one of the most practical and controllable ways for UK businesses and higher rate taxpayers to reduce unnecessary tax exposure. Unlike long term restructuring, it focuses on decisions that can still be influenced before 5 April or, for companies, before the accounting year end. When done properly, it is not about aggressive schemes, it is about making sure allowances, reliefs and timing opportunities are not wasted.

Why timing matters

The UK tax system is sensitive to timing. Income, expenses, capital purchases and pension contributions can fall into one tax year or the next depending on when action is taken. Once the year end passes, many opportunities disappear completely.

For higher rate taxpayers, this can be particularly costly. Income drifting just over a threshold can trigger higher marginal rates, loss of allowances or reduced reliefs. Pre-year end planning allows income levels to be reviewed and steps taken to mitigate sharp jumps in tax, rather than reacting after the event.

Key benefits for businesses

For owner managed businesses, year-end planning often centres on profit extraction and investment decisions. Reviewing results before the year end allows directors to consider whether profits should be retained, extracted as salary or dividends or redirected into qualifying expenditure.

Capital allowances are a common example. If a business plans to invest in plant or equipment, bringing expenditure forward into the current year can accelerate tax relief and improve cash flow. Pension contributions made by the company can also be an efficient way to extract value, reducing corporation tax while building long term personal wealth.

Stock levels, bad debts and provisions also deserve attention. A timely review can ensure profits are not overstated simply because adjustments were overlooked.

Value for higher rate and additional rate taxpayers

Individuals paying tax at higher or additional rates face some of the steepest marginal tax charges in the system. Pre-tax year end planning can help smooth income and preserve reliefs.

Pension contributions are often central. Personal contributions can attract higher rate relief, while also reducing adjusted net income, which can help protect allowances that taper away at higher income levels. Charitable giving under Gift Aid can have a similar effect.

For those with investment income, reviewing disposals before the year end can allow better use of annual exemptions or losses, rather than triggering avoidable capital gains tax.

Source:Other | 11-01-2026