Author: Glenn

Many business gifts and hospitality costs are not tax-deductible under current rules.

Entertainment expenses including providing hospitality and business gifts are common, but the taxation of these expenses is strictly governed by HMRC.

For businesses carrying on a trade, HMRC legislation generally prohibits tax deductions for client entertainment. If an employee receives a dedicated allowance or is reimbursed specifically for entertaining clients, the expense is generally disallowed when calculating the employer's tax liability.

Meals consumed by the employee during valid entertaining occasions are typically not taxed separately. But if entertainment is deemed personal or social in nature for instance, entertaining personal friends or business acquaintances then the reimbursement becomes taxable income for the employee. Reciprocal business entertaining between business acquaintances that lacks a clear commercial purpose also falls into this category even if some business topics happen to be discussed.

Where an employer provides a round sum allowance not explicitly for entertaining, and the employee uses it for such purposes, tax liability may instead fall on the employee. This includes not only the direct cost of entertaining but also any incidental expenses such as transport or venue hire.

Entertainment includes hospitality and business gifts, except for free samples used to advertise to the general public. Gifts that clearly display an advertisement for the donor may qualify for a limited exemption. However, this exemption does not apply to gifts of food, drink, tobacco, or vouchers, and the total cost per recipient must not exceed £50 per year.

Anyone claiming an exemption for entertaining expenses should keep clear records detailing the amount spent, who was entertained and the business reason behind the expense to support any claim.

Shared home ownership offers a more accessible route to owning a home for those who cannot afford the full deposit or mortgage on a property that suits their needs. Under this scheme, buyers purchase a share of a property, typically between 10% and 75% of its market value and pay rent on the remaining portion to a housing provider.

The initial purchase can be funded through a mortgage or savings, along with a deposit usually ranging from 5% to 10% of the share. Over time, owners have the option to buy additional shares in the property through a process known as "staircasing," reducing the amount of rent paid to the landlord.

Shared ownership lets buyers get on the housing ladder with a smaller deposit and a part-rent, part-buy model.

Shared ownership properties can be new builds or resales and are often available through housing associations or local councils. For individuals with long-term disabilities, adapted homes may also be available through the scheme.

All shared ownership homes are leasehold, and buyers are typically responsible for service charges and ground rent.

Different rules apply in Northern Ireland, Scotland and Wales where alternative schemes, such as Right to Shared Ownership, may apply if you are currently renting.

Shared ownership can help individuals get on the ladder towards full home ownership making it a valuable option to consider.

New digital services have been launched that aim to make filing and managing tax returns quicker and less stressful.

These improvements are part of HMRC’s Transformation Roadmap, which sets out over 50 projects to modernise the UK’s tax system by 2030.

Among the new features are:

• improvements to the digital self-assessment registration and opt out processes;
• introducing enhanced on-screen messages to reassure taxpayers and reduce the need for them to chase progress on enquiries; and
• improving the late filing and late payment penalties online appeals process.

Commenting on the changes, the Exchequer Secretary to the Treasury, said:

The government is modernising the service that HMRC offers for British people and businesses. Our new payment plans for self-assessment will save people time and effort with their tax affairs and help them avoid making mistakes.

This new service forms part of our recently published HMRC Transformation Roadmap. We are going further and faster to reform HMRC, to make life easier for taxpayers and help deliver the economic growth at the heart of the Plan for Change.

More than 12 million individuals are expected to file a tax return this year. HMRC is encouraging early filing and flexible payment plans, including monthly or weekly Budget Payment Plans for taxpayers that need help to spread the cost of their tax bills. 

Taxpayers are also urged to update personal details, stay alert to scams, register for self-assessment or notify HMRC if they no longer need to file before key deadlines.

Before probate begins, you must estimate the estate's value to see if Inheritance Tax applies. This includes valuing the deceased person's money, property and belongings in order to determine if Inheritance Tax (IHT) is due. This process is important even if you are not sure that any tax will be due.

There is usually no IHT to pay if the estate is valued under £325,000 or if anything above this threshold is left to a spouse, civil partner, charity or amateur sports club. If the person was widowed or passed on their home to children or grandchildren, the threshold may be higher.

To estimate the estate's value, you'll need to account for:

• All assets owned at death (homes, bank accounts, valuables, vehicles, investments etc).
• Any gifts made in the 7 years before death.
• The value of any trusts where the person had a beneficial interest.

You can estimate values yourself or use HMRC’s Inheritance Tax Checker to guide you. The checker helps identify whether IHT is likely to be due, but it does not calculate how much tax is due or notify HMRC.

When valuing assets, include joint property, pensions, or overseas items and assess their market value on the date of death. For gifts, consider their value when given, especially if the deceased still benefited from them (e.g., living rent-free in a gifted home).

You will also need to consider debts and check whether full reporting of the estate to HMRC is required.

Items discovered lying on land or buried in the soil, such as antiques or historical objects, are treated as chattels for Capital Gains Tax (CGT) purposes. This remains true even if ownership is tied to the ownership of the land where the item was found. Since these objects were not intended to be permanently affixed to the land, they are not considered fixtures and are therefore treated as movable personal property.

As chattels, these objects may benefit from specific CGT exemptions. The chattels exemption generally applies to items with a predictable useful life of 50 years or less. Common examples of chattels include household furniture, artwork, antiques, silverware, motor vehicles, and machinery not permanently installed in a building.

Gains from the sale of chattels are exempt from CGT if the sale proceeds are £6,000 or less per item. If the proceeds are between £6,000 and £15,000, marginal relief may apply. In these cases, the gain is the lower of the actual gain or 5/3rds of the amount above £6,000. Where a set is sold the £6,000 limit applies to the set and there are special rules to sets that have been broken up and sold separately.