Expecting lower profits 2024-25 compared to 2023-24? You can ask HMRC to reduce your 31 July 25 tax payment on account. Act early to manage cash flow. Use your online account or we can handle it for you.

Self-assessment taxpayers normally pay their income tax in three instalments each year. The first two payments on account are due on 31 January during the tax year and 31 July after the tax year ends. These are each based on 50% of the previous year’s net income tax liability.

This means that the 31 January 2025 (now passed) and upcoming 31 July 2025 payments are both based on your 2023–24 tax liability.

A final balancing payment is due on 31 January 2026, once your actual tax bill for 2024–25 has been confirmed through your submitted tax return.

If you expect your income or profits for 2024–25 to be lower than for 2023–24, you can ask HMRC to reduce your 31 July 2025 payment on account. This can be done through your HMRC online account or by submitting form SA303 by post. You must provide a reasonable estimate of your expected tax liability.

If we are your registered tax agent we can undertake this election for you.

There is no limit to how many times you can apply to adjust your payments. However, if you reduce your payments too far and underpay, HMRC may charge interest or penalties on the shortfall.

You are not required to make payments on account if:

• Your net Income Tax liability for 2023–24 was less than £1,000, or
• At least 80% of your 2023–24 tax liability was collected at source (e.g. through PAYE).

If your taxable profits are likely to increase in 2024–25, there’s no need to notify HMRC in advance, but you should be prepared for a higher balancing payment in January 2026.

Buying a zero-emission electric car through your limited company could mean 100% tax relief in year one. Understand the capital allowances and boost your business’s tax efficiency with smart vehicle choices.

If you are considering purchasing a company car through a limited company, it’s important to understand the tax implications, especially the significant tax write-offs available for electric vehicles with zero emissions.

The tax treatment will depend on how the car is financed, but in most cases, the vehicle will be classified as a fixed asset, with tax relief available through capital allowances. Unlike other business assets, company cars do not qualify for the Annual Investment Allowance (AIA). Instead, they fall into specific capital allowance categories based on their CO₂ emissions and when they were purchased.

If you purchase a new and unused fully electric or zero-emission car, it qualifies for a 100% First Year Allowance (FYA). This means:

• You can deduct the full cost of the car from your company’s taxable profits in the year of purchase.
• The car must be brand new and registered as zero-emission to qualify.

If the car does not meet the criteria for 100% FYA, it will fall into one of the following categories:

• 18% Main Rate Allowance: Applies to cars with lower CO₂ emissions (but not zero). 18% of the car’s cost can be written off each year on a reducing balance basis.
• 6% Special Rate Allowance: Applies to cars with higher CO₂ emissions or certain second-hand vehicles. Only 6% of the cost is deductible each year.

Private pension contributions can attract up to 45% tax relief, if you know how to claim it. Use your £60,000 annual allowance wisely and carry forward unused relief from past years to boost your retirement savings.

You can usually claim tax relief on private pension contributions worth up to 100% of your annual earnings, subject to the overall £60,000 annual allowance. Tax relief is granted at your highest rate of income tax.

This means that if you are:

• A basic rate taxpayer, you receive 20% tax relief
• A higher rate taxpayer, you can claim 40% tax relief
• An additional rate taxpayer, you can claim 45% tax relief

For basic rate taxpayers, the 20% tax relief is typically applied automatically through your pension provider—no further action is needed.

If you pay higher or additional rate tax, you can usually claim the extra tax relief.

• An additional 20% on contributions corresponding to income taxed at 40%
• An additional 25% on contributions corresponding to income taxed at 45%

The tax rates and reliefs outlined above apply to taxpayers in England, Wales, and Northern Ireland. If you're based in Scotland, different income tax bands apply, which can affect the amount of tax relief available.

The annual allowance for tax-relievable pension contributions is currently set at £60,000. If you haven’t used your full allowance in the previous three tax years, you may be able to carry forward unused amounts, provided you were a member of a registered pension scheme during those years.

Not all VAT-free sales are the same. Understanding the key difference between zero-rated and VAT-exempt supplies could save your business money and prevent costly VAT mistakes.

It's important to understand the distinction between zero-rated and VAT-exempt supplies. While both may appear similar, because no VAT is charged on the sale, the implications for businesses are very different.

If a supply is exempt from VAT, it means no VAT is charged to the customer, and no output VAT is due. However, the downside for businesses is that they cannot reclaim any input VAT (i.e., VAT paid on purchases or expenses related to the exempt activity). This can make exempt activities more expensive to provide, particularly for businesses that incur significant VAT on costs.

Common examples of VAT-exempt supplies include:

• Insurance
• Finance and credit
• Education and training
• Fundraising events run by charities
• Health and welfare services
• Postal services
• Betting and gaming
• Subscriptions to membership organisations
• Selling, leasing, and letting of commercial land and buildings (though this exemption can be waived under certain conditions)

There are exceptions and detailed rules in most of these examples cited above. Whether a supply qualifies as being VAT exempt may depend on how it's structured and who is receiving the service.

The UK government has officially concluded its involvement with NatWest Group, formerly known as the Royal Bank of Scotland (RBS), by selling its remaining shares. This move ends nearly 17 years of public ownership that began during the 2008 financial crisis.

In 2008 and 2009, the government injected £45.5 billion into RBS to stabilise the bank, which at the time was one of the largest in the world, with over 40 million customers and operations in more than 50 countries. This intervention was deemed necessary to protect the UK economy and financial system from collapse, safeguarding millions of savers, businesses, and jobs.

Economic Secretary to the Treasury, Emma Reynolds, highlighted that bringing NatWest fully back into private ownership is a significant milestone for the UK banking sector post-financial crisis. She noted that the current government halted a planned retail share sale, which could have cost taxpayers hundreds of millions, opting instead to sell shares at market value to prioritise taxpayer interests.

To date, £35 billion has been returned to the Exchequer through share sales, dividends, and fees. While this is approximately £10.5 billion less than the original support provided, the Office for Budget Responsibility has indicated that the cost of inaction would have been far greater, potentially devastating people's savings, mortgages, and livelihoods, and undermining confidence in the UK's financial system.