Ever wondered how your stake in your business is represented in your accounts?

The answer can be found at the bottom of your balance sheet. Simply put it is the value of your physical business assets less any liabilities; usually described as net assets.

But this is not the full story as there is a further intangible asset that is generally omitted from your accounts. It’s called goodwill. It is the extra value a buyer is willing to pay, over and above the net assets value of your business, for the rights to your customer lists and other non-physical assets that are generally left out of your accounts.

Ultimately, what you can sell a business for will be limited to what a buyer is willing to pay. But there is value in making a consistent estimate of what your business may be worth, especially if this exercise is undertaken annually, when your financial accounts are prepared.

In this way you will be able to see if the valuation is increasing or decreasing, and if increasing, is the increase at a sufficient rate to meet your planned future exit from your business?

Hopefully, many of you will already be monitoring your business value in this way, if not, please get in touch so we can figure out the best way to add this important indicator to your final accounts each year.

Two separate £1,000 tax allowances for property and trading income were introduced in April 2017. If you have both types of income highlighted below, then you can claim a £1,000 allowance for each.

The £1,000 exemptions from tax apply to:

• If you make up to £1,000 from self-employment, casual services (such as babysitting or gardening) or hiring personal equipment (such as power tools). This is known as the trading allowance.
• If your annual gross property income is £1,000 or less, from one or more property businesses you will not have to tell HMRC or declare this income on a tax return. For example, from renting a driveway. This is known as the property allowance.

Where each respective allowance covers all the individual’s relevant income (before expenses) the income is tax-free and does not have to be declared. Taxpayers with higher amounts of income will have the choice, when calculating their taxable profits, of deducting the allowance from their receipts, instead of deducting the actual allowable expenses.

You cannot use the allowances in a tax year, if you have any trade or property income from:

• a company you, or someone connected to you, owns or controls;
• a partnership where you, or someone connected to you, are partners; or from
• your employer or the employer of your spouse or civil partner.

You cannot use the property allowance if you:

• claim the tax reducer for finance costs, such as mortgage interest for a residential property; or
• deduct expenses from income from letting a room in your own home, instead of using the Rent a Room scheme.

The Employment Allowance benefits eligible employers by reducing their National Insurance liability. The current allowance is £5,000. An employer can claim less than the maximum if this covers their total Class 1 NIC bill.

The allowance is only available to employers that have employer NIC liabilities of under £100,000 in the previous tax year.

Connected employers or those with multiple PAYE schemes will have their contributions aggregated to assess eligibility for the allowance. The Employment Allowance can be used against employer Class 1 NICs liability. It cannot be used against Class 1A or Class 1B NICs liabilities. The allowance can only be claimed once across all employer’s PAYE schemes or connected companies. De minimis state aid rules may also apply in restricting the use of the allowance.

Employment Allowance claims need to be re-submitted each tax year. There are currently a number of excluded categories where employers cannot claim the employment allowance. This includes limited companies with a single director and no other employees as well as employees whose earnings are within IR35 ‘off-payroll working rules’.

The child benefit rates for the only or eldest child in a family is currently £25.60 and the weekly rate for all other children is £16.95.

Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child’s 16th Birthday. Under qualifying circumstances, the child benefit payment can continue until a child reaches their 20th birthday if they stay in approved education or training. A qualifying young person is someone aged 16, 17, 18 or 19 in full time non-advanced education or on unpaid approved training courses.

HMRC has just sent more than 1.4 million Child Benefit reconfirmation letters to parents whose child may be affected. The letters include a QR code which, when scanned, directs them to GOV.UK to update their claim quickly and easily online. This can also be done on the HMRC app.

Parents have until 31 August 2024 to tell HMRC that their 16-year-old is continuing their education or training, and their intention to continue receiving Child Benefit. No child benefit is payable after a young person reaches the age of 20 years.

HMRC’s Director General for Customer Services recently said:

‘Child Benefit is an important financial support for many families, so make sure you don’t miss out on any payments if your teenager intends to continue approved education or training. You can quickly and easily extend your claim online or via the HMRC app, just search ‘Child Benefit when your child turns 16’ on GOV.UK.’

Child benefit is usually payable for children who come to the UK. However, there are a number of rules which must be met in order to claim. HMRC must be notified without delay if a child receiving child benefit moves permanently abroad.

Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% (but see comments below) when you sell shares unless they are in a CGT free investment such as an ISA or qualifying pension. Your gain is usually the difference between what you paid for your shares and the amount received when you sold them.

There are special rules for working out the cost of your shares if you sell:

• shares you bought at different times and prices in one company;
• shares through an investment club;
• shares after a company merger or takeover; and
• employee share scheme shares.

If you only pay basic rate tax and make a small capital gain, they you may only be subject to a reduced CGT rate of 10%. Once the total of your taxable income and gains exceeds the higher rate threshold, the excess will be subject to 20% CGT. There is also an annual CGT exemption. In the current (2024-25) tax year you can make £3,000 of gains before paying any CGT. The limit in 2023-24 was £6,000. The allowance applies to each member of a married couple or civil partnership. 

The usual due date for paying any CGT you owe to HMRC on the sale of shares is the 31 January following the end of the tax year in which a capital gain was made. This means that CGT for any gains crystalised before 6 April 2025 will be due for payment on or before 31 January 2026.

The normal way to report a gain on the sale of shares is to complete the relevant sections of your Self-Assessment tax return in the tax year after the gain was made. When calculating your gain, you can deduct certain costs of buying or selling shares such as stockbrokers’ fees or Stamp Duty Reserve Tax when you bought the shares.