Author: Glenn

When a trade ends, income doesn’t always stop. Post-cessation receipts can still arise, and knowing how they are taxed is crucial. Whether it’s Income Tax or Corporation Tax, the recipient—not necessarily the original trader—bears the responsibility.

There are special rules for the taxation of post-cessation receipts after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or Corporation Tax on the income. This person does not necessarily have to be the same one who was originally carrying on the trade.

The only factor to consider when determining whether these rules apply is whether the income qualifies as a post-cessation receipt. If it does, then, unless a territorial exclusion applies, the income is taxable for the recipient.

The legislation provides for the taxation of certain receipts arising from the carrying on of a trade which:

• are received after a person permanently ceases to carry on a trade;
• arise from the carrying on of the trade before the cessation; and
• are not otherwise subject to tax.

In addition to income meeting these conditions, the legislation specifically identifies other types of income treated as post-cessation receipts. There are also certain receipts, such as payments for the transfer of trading stock, which are specifically excluded from being classified as post-cessation receipts.

Benchmarking financial results involves comparing a business’s financial performance against industry standards or competitors. This process offers numerous benefits, helping businesses identify strengths, weaknesses, and opportunities for improvement.

Firstly, benchmarking provides a clear understanding of a company’s position in the market. By comparing key financial metrics such as profit margins, costs, and revenue growth with peers, businesses can identify performance gaps and areas needing attention.

Secondly, it aids strategic planning. With insights from benchmarking, businesses can set realistic targets and develop informed strategies to enhance profitability and efficiency. For example, if a competitor achieves higher profitability through lower overheads, a business might explore cost-reduction strategies.

Moreover, benchmarking promotes continuous improvement. Regular comparisons highlight trends and potential risks, enabling proactive decision-making. It fosters a culture of learning, as businesses adopt best practices from industry leaders.

Lastly, benchmarking can enhance investor confidence. Demonstrating performance in line with or better than industry standards reassures stakeholders of a business’s stability and growth potential.

Overall, benchmarking financial results is a powerful tool for driving competitiveness, efficiency, and long-term success in today’s dynamic business environment.

The UK is making significant strides in promoting gender equality within its top companies. According to the latest FTSE Women Leaders Review, women now occupy nearly 43% of board positions across FTSE 350 companies, totalling 1,275 roles. Additionally, women hold 35% of leadership roles, equating to 6,743 positions.

This progress indicates that the voluntary target of 40% women's representation by the end of this year is within reach for many businesses. Over 60% of FTSE 350 companies are close to achieving this goal, reflecting ongoing efforts to dismantle barriers and foster inclusive leadership.

Chancellor of the Exchequer Rachel Reeves emphasised the importance of this momentum, stating that while the UK leads in gender equality in boardrooms, continuous efforts are necessary to eliminate obstacles preventing women from ascending to decision-making roles.

Minister for Investment Baroness Gustafsson OBE highlighted the positive impact of female leadership, noting that strong female voices inspire change and add value throughout organisations.

Despite these advancements, challenges persist, particularly in increasing the number of women in top executive positions such as Chairs and CEOs. The government remains committed to collaborating with businesses to ensure equal opportunities for all, aiming to unlock economic growth and enhance living standards across the nation.

This concerted effort underscores the UK's dedication to fostering a diverse and dynamic business environment, recognising that inclusive leadership is key to driving innovation and economic success.

A complex celebrity case arose recently in which the First-tier Tax Tribunal (FTT) was asked to consider the application of the intermediaries’ legislation (IR35), otherwise known as off-payroll working, to payments made by Manchester United Football Club (MUFC) to Bryan Robson Ltd.

This appeal was in relation to determinations of income tax made under Reg. 80 of the PAYE Regulations and s31 of the Taxes Management Act (TMA) 1970  for personal appearances provided to MUFC by Bryan Robson Ltd. as a ‘global ambassador’ from 2015/16 to 2020/21. Those agreements included a licence for MUFC to exploit Mr. Robson’s “image rights” and required the former England star to make 35 personal appearances per year at MUFC’s request for a fixed sum. Although the image rights were not subject to the IR35 legislation and were left to be decided separately, and the additional tax due under the IR35 rules is to be determined.

This technical tax case highlights the intricate factors that determine employment status under IR35 and anyone providing such personal services, including freelancers, content creators, and contractors, has to demonstrate a high level of autonomy to be considered truly self-employed and present watertight contracts to the HMRC. 

HMRC together with the Department for Business and Trade (DBT) have launched a new consultation on e-invoicing to encourage its broader adoption among UK businesses and government departments. The consultation will run for 12-weeks and aims to cut paperwork for businesses and help improve productivity.

This is the first time that UK businesses have been invited to have their say on the government’s electronic invoicing (e-invoicing) proposals.

E-invoicing is the digital exchange of invoice information directly between buyers and suppliers. It could help businesses get their tax right first time, reduce invoicing and data errors, improve the accuracy of VAT returns, help close the tax gap and save time and money. It usually results in faster business to business payments, leading to improved cash flow and less paperwork.

HMRC provided the following example of where e-invoicing has improved cash flow. A UK NHS trust where e-invoices are ready for processing within 24 hours, compared to 10 days under paper invoicing. Their e-invoices are typically paid almost twice as quickly than paper invoices, with supplier queries reduced by an average of 15%.

Topics that the government is interested in exploring as part of the consultation include:

• different models of e-invoicing;
• whether to take a mandated or voluntary approach to e-invoicing, and what scope of mandate might be most appropriate in the UK and for businesses; and
• whether e-invoicing should be complemented by real time digital reporting.

With potential benefits like faster payments and fewer errors, e-invoicing could help UK businesses save time and money. If you are interested in sharing your thoughts, the consultation is open until 7 May 2025.