Author: Glenn

Married couples and civil partners may be able to pass on up to £1 million of their estate tax-free with the Residence Nil Rate Band. Claiming this transferable allowance could secure your family home for future generations. Make sure your estate planning takes this into account.

The Residence Nil Rate Band (RNRB) for Inheritance Tax is a transferable allowance available to married couples and civil partners when their main residence is inherited by direct descendants, such as children or grandchildren, after their death.

Currently, the maximum RNRB allowance is £175,000 per person, and it can be transferred to a surviving spouse or partner if unused. This is in addition to the existing £325,000 Inheritance Tax (IHT) nil-rate band. Together with the IHT limit, this allows married couples and civil partners to pass on property valued up to £1 million free of IHT to their direct descendants.

The RNRB is subject to tapering for estates valued over £2 million, even if the family home is left to direct descendants. For every £2 the estate exceeds the £2 million threshold, the additional allowance is reduced by £1. This means that, for large estates, the full amount of the RNRB could be entirely tapered away. This means that for estates valued over £2,350,000 for individuals or £2,700,000 for married couples, the RNRB would be reduced to nil.

The transfer of any unused RNRB does not occur automatically; it must be claimed from HMRC when the surviving spouse or civil partner passes away. Typically, the estate's executor will file the claim to transfer the unused RNRB from the estate of the first deceased spouse or civil partner. This transfer can also be made if the first spouse or civil partner died before the RNRB was introduced on 6 April 2017.

Could you save up to £1,260 in tax this year? If one of you earns less than £12,570, the Marriage Allowance lets couples transfer unused personal allowances. Don't miss out on this easy tax break!

The Marriage Allowance applies to married couples and civil partners where one partner does not pay tax or does not pay tax above the basic rate threshold for Income Tax (i.e., one partner must earn less than the £12,570 personal allowance for 2024-25).

The allowance allows the lower-earning partner to transfer up to £1,260 of their unused personal tax-free allowance to their spouse or civil partner. The transfer can only be made if the recipient (the higher-earning partner) is taxed at the basic 20% rate, which typically means they have an income between £12,571 and £50,270 for the 2023-24 tax year. For those living in Scotland, this would usually apply to an income between £12,571 and £43,662.

By using the allowance, the lower-earning partner can transfer up to £1,260 of their unused personal allowance, which could result in an annual tax saving of up to £252 for the recipient (20% of £1,260).

If you meet the eligibility criteria and have not yet claimed the allowance, you can backdate your claim to qualifying tax years for up to four years starting from 6 April 2020. This could provide a total tax saving of up to £1,260 for the tax years 2020-21, 2021-22, 2022-23, 2023-24, and the current 2024-25 tax year. If you apply now, you can backdate your claim, as well as for the current year. Applications for the allowance can be submitted online at GOV.UK.

Scammers are on the rise as the Self-Assessment deadline nears! HMRC warns that HMRC never emails or texts about tax refunds. Stay alert, report suspicious contacts, and protect your money from fraudsters.

Fraudsters are increasingly targeting taxpayers with scam emails as the deadline for submitting self-assessment returns for the 2023-24 tax year approaches. Between November 2023 and October 2024, HMRC received over 144,000 reports of suspicious contact, nearly 72,000 of which involved fake tax rebate claims. There has been a significant rise in scam emails compared to the previous year.

These scams often claim that taxpayers are entitled to a rebate or refund from HMRC and request bank or credit card details to process the non-existent refund. Fraudsters use various methods, including phone calls, text messages, and emails, and may even threaten victims with arrest or imprisonment if a fabricated tax bill is not paid immediately.

HMRC works to identify and shut down scams but continues to urge taxpayers to be vigilant and avoid falling victim. Remember, HMRC only contacts individuals due a refund by post—never via email, phone, text, or third-party companies. Legitimate organizations like HMRC and banks will never ask for your PIN, password, or bank details.

If you receive a suspicious email claiming to be from HMRC, forward it to phishing@hmrc.gov.uk. For suspicious texts, text 60599, and for fraudulent calls, report them via GOV.UK. If you have lost money, contact Action Fraud at 0300 123 2040 or report online. In Scotland, contact the Police on 101.

HMRC’s Chief Security Officer at HMRC, said:

'With millions of people filing their Self-Assessment return before January’s deadline, we’re warning everyone to be wary of emails promising tax refunds.

Being vigilant helps you spot potential scams. And reporting anything suspicious helps us stop criminal activity and to protect you and others who could have received similar bogus communication.

Our advice remains unchanged. Don’t rush into anything, take your time and check ‘HMRC scams advice’ on GOV.UK.'

Starting your own business is exciting but can be overwhelming if you’re not prepared. To help you navigate the journey, we’ve compiled a list of 10 key considerations that will set you up for success. Whether you’re launching a small business or a full-fledged enterprise, these steps will guide you toward building a solid foundation for your business dreams.

1. Define Your Business Idea

Before diving in, ensure your idea is viable. Ask yourself: What problem does my business solve? Who are my customers? Conduct market research to refine your offering and identify your unique selling point (USP).

2. Create a Business Plan

A solid business plan outlines your goals, target audience, financial projections, and operational strategies. This document not only serves as a roadmap but is also essential if you need to secure funding or investors.

3. Choose the Right Business Structure

Your legal structure—sole trader, partnership, or limited company—affects your tax obligations, personal liability, and regulatory requirements. Research which option aligns best with your vision.

4. Register Your Business

Ensure your business name is unique and not already registered. In the UK, you’ll need to register with HMRC or Companies House, depending on your chosen structure.

5. Understand Your Tax Obligations

Get familiar with taxes like Income Tax, Corporation Tax, and VAT. Keep accurate records and consider using accounting software or hiring an accountant to stay on top of deadlines and compliance.

6. Set a Realistic Budget

Financial planning is critical. Calculate your start-up costs, ongoing expenses, and expected revenue. Create a budget to ensure you’re financially prepared for the first 12 months of operation.

7. Open a Business Bank Account

Separate your personal and business finances. A dedicated business account simplifies accounting, helps with tax filing, and presents a more professional image to clients.

8. Build an Online Presence

In today’s digital age, having a strong online presence is non-negotiable. Create a professional website and set up social media profiles to showcase your products or services and engage with your audience.

9. Protect Your Business

Consider business insurance to protect against unexpected losses. Types include public liability, professional indemnity, and employer’s liability insurance if you plan to hire staff.

10. Comply with Legal and Regulatory Requirements

Depending on your industry, you may need specific licenses or permits. Also, ensure you adhere to health and safety regulations, data protection laws, and employment laws.

Conclusion: Set Yourself Up for Success

Starting a business can feel like a monumental task but breaking it down into these 10 key steps makes the process manageable. With careful planning and attention to detail, you can turn your entrepreneurial vision into a thriving reality.

Ready to take the first step? Give us a call, we can share the knowledge we have gained in supporting numerous businesses through the set-up process.

Small businesses across the UK can now access streamlined support and advice through the newly launched Business Growth Service, designed to simplify and enhance the way SMEs engage with government resources.

Simplifying Support for SMEs

Navigating government support has often been a challenge for small and medium-sized enterprises (SMEs). In 2023, only 26% of UK SME employers sought external advice, reflecting the complexity of available resources. The Business Growth Service aims to address this by consolidating support into a single, user-friendly platform.

Launching in 2025, the service will offer:

• Revamped Web Interface: A modern, intuitive website for easy navigation.
• Collaborative Development: Built in partnership with businesses and local governments.
• Localised Delivery: Tailored support to meet regional business needs.

Inspired by successful international business models, this service is part of the government’s broader strategy to boost SMEs' growth, productivity, and economic impact.

Reducing Administrative Burdens

Small business owners spend over 33 hours each month on admin tasks. The new service seeks to cut through bureaucracy, freeing up time for entrepreneurs to focus on growth and innovation.

Government Commitment to SMEs

The Business and Trade Secretary reaffirmed the government's dedication to SMEs stating that:

"This government’s Plan for Change will deliver economic growth, and for that to succeed we need SMEs right across the country to be exporting, hiring, and expanding."

Additional Measures Supporting Small Businesses

The Business Growth Service complements other initiatives, including:

• Financial Support: Programmes like Start Up Loans and Enterprise Finance Guarantee continue to offer capital access.
• Late Payment Crackdown: Strengthened measures ensure prompt payments to small businesses, improving cash flow.
• Regulatory Simplification: Reducing red tape to create a more business-friendly environment.

Looking Ahead

The Business Growth Service is a step-change in SME support, promising a centralized, accessible resource hub to help businesses navigate challenges and seize opportunities.

As the launch approaches, SMEs are encouraged to engage with the service’s development to ensure it meets their needs and supports their ambitions.