As a long-established world financial centre, the UK enjoys a unique political and economic environment, which has attracted large number of people from all over the world every year who move to the UK to seek better economic conditions. Moreover, with limited land resources available for development and cumbersome administrative regulations controlling land, the UK’s property market has long been in a state of undersupply.  Therefore, many investment enthusiasts are keen on investing in UK properties. But beware! There are risks involved! Just like the protagonist of the story we’re about to tell today, who after ten years of property investment, unfortunately ended up with a negative asset! He even considered returning the house keys to the bank to escape the loan… 1. Is a rental property investment still a negative asset after 10 years? Mark (an alias) and his wife purchased a property in 2007 for £155,000 and paid a deposit of £35,000, leaving a mortgage of £120,000. However, soon after, the economic recession hit, and its value plummeted to £75,000! That’s a direct loss of £80,000! Initially, they were on an interest-only mortgage, but three years ago, the couple switched to a repayment mortgage in an attempt to reduce their debt. During this time, they had rented out the property for £500 per month, trying to repay the mortgage with the rent. However, as the bank mortgage interest rates rose to 8.74% (£949.07 per month), the monthly rent was insufficient to cover the debt. Additionally, because the property was rented out, the couple had to rent a separate place for themselves, gradually leading to financial strain, and the property becoming a negative asset. Some might ask, why not switch to a lender with lower rates? Because they’re in a negative asset situation, they were not able to switch lenders. Mark felt deeply distressed about this and even considered returning the keys to the bank to avoid paying the loan.. 2. Does returning the keys to the bank mean no more repayments? Originally, Mark hoped to make a fortune through property investment. However, with the economic downturn causing property depreciation and the rise in bank interest rates, Mark gradually found it impossible to bear the high mortgage pressure. So, if he returns the keys to the bank, can he stop repaying the loan? Unfortunately not! The property Mark resides in is located in Northern Ireland, where property prices peaked in 2007 but sharply declined from 2008 onwards. Therefore, Mark missed the best investment opportunity. Currently, they still have a £94,000 loan remaining, and returning the keys to the bank will not absolve them of any outstanding responsibilities. With the mortgage exceeding the property value, many lenders may offer alternative solutions to existing clients. They might offer slightly lower rates, but this may mean agreeing to early repayment fees. 3. Property investment tips In the long run, the value of UK real estate is still steadily increasing. Even amidst market fluctuations, real estate remains one of the reliable investment options for the future. If you’re looking to make quick money, the real estate market might not be suitable for you. However, if you engage in it for the long term, real estate can provide stable income and healthy returns over time. The key is to make wise purchases, conduct research to find areas with strong demand and price growth opportunities. Let’s take a look at some tips for property investment that you need to pay attention to! 1. Acquire all information about the UK real estate market and various investment strategies Before investing, analyse the latest market trends and forecasts, or consult professional tax experts to determine the best investment areas and property types. 2. Develop an investment plan Determine your investment goals and the strategies you want to adopt Identify your budget, preferred locations, and property types Develop a timeline for finding and purchasing investment properties to keep yourself on track 3. Find suitable investment properties Look for properties with strong rental demand and capital appreciation potential Negotiate the best price to maximize your investment return 4. Prepare investment funds Explore your financing options to determine whether a mortgage or cash is suitable for you. Compare rates and terms to find financing that fits your budget and investment timeline. 5. Effectively manage property assets If you decide to invest in buying property for rent, you’ll need to devise appropriate marketing strategies to attract quality tenants, handle the leasing process, and oversee ongoing maintenance and repairs to keep the property in good condition. In conclusion, the three key elements of property investment are: Finding properties with higher potential returns Sensible investment Effective management For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

The well-known restaurant chain Ping Pong has replaced its 12.5% service charge with a new optional 15% ‘brand’ charge.  Previously, 90% of the service charge went directly to employees. The chain stated that it intends to use the brand charge as an alternative to raising menu prices and will review all constructive feedback before making a final decision on whether to keep the charge in June, after which it will decide whether to enforce the charge, raise menu prices or both. It’s important to note that just three months ago, new legislation mandated that businesses must give 100% of any tips/service charges to employees. The chain stated that although the service charge is no longer applicable, they have increased employees’ basic wages by 19% (from £10.42 per hour to a minimum of £12.44 per hour, £1 higher than the new statutory minimum wage) claiming this will “match the additional income they previously received through service charges.  They have also stated that customers can still choose to leave cash tips (though many no longer carry cash!). 1. Origins of tipping There’s a common story that tipping in the UK originated from a restaurant in 18th-century London, where the owner placed a small bowl on the table at the restaurant’s entrance, with a sign hanging in the middle of the bowl saying ‘To Insure Prompt Service’ (i.e. TIPS). In order to receive prompt and quality service, customers often chose to put change into the bowl. Whether this is true or not is debatable – you may want to check out this . 2. When should you pay tips? Taxis There is no requirement in the UK to tip taxi drivers because taxi fares are often not whole numbers. If paying in cash, you can also ask the driver to ‘keep the change’ as a tip.  If you take a pre-booked minicab or the driver helps you with luggage during airport transfers, it might be reasonable to give £2-3 as a tip. Otherwise, if you’re taking a black cab, 10% is usually appropriate. Restaurants This is the most common situation where tipping is appropriate. Some à la carte restaurants may directly include a 10-15% service charge on the bill, so if you see a ‘service charge’ on the bill, you don’t need to add an additional tip. Another form of tipping is when some restaurants prepare a container or a small wallet, placing the bill inside, allowing customers to leave a cash tip when paying the bill. Except for fast-food restaurants, where tipping is generally not required, most restaurants either charge a service fee directly, or allow customers to decide the amount of the tip when paying the bill. Hotels In the UK, when staying at a hotel, such as for luggage carriers who help you or doormen who actively help you call a taxi, it’s common to give £1-2 as a tip to show appreciation. If you feel the room cleaning service is done well, you can also leave £1-£2 as a tip on the table or under the pillow for the housekeeping staff before checking out. However, most hotels in the UK include a service charge in your final bill, so you don’t have to give an additional tip. 3. Should automatic tipping be scrapped? In the UK, tipping is mostly done as a gesture of gratitude and appreciation for service.  This is also an important source of income for most service industry personnel. In response to Ping Pong’s decision to remove their service charges, Bryan Simpson, the lead organiser of Unite’s hospitality division, stated: ‘Ping Pong’s decision to effectively deny workers tips by cynically changing the service charge to a ‘brand charge’ in order to circumvent the new fair tips legislation is one of the most blatant examples of tips theft that we’ve come across as the union for restaurant and bar workers’ Public opinion on tipping has always been mixed. On one hand, removing service charges reduces the income of service industry personnel, naturally leading to opposition from employees.  Consumers may also be worried that the lack of tips will make staff less motivated, and in turn they might be unable to enjoy good service. On the other hand, is there something to be said for ensuring a proper basic wage rather than relying on customers to pay additional fees in tips? For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

We’re now in a new tax year.  If you were employed in the previous year, have you checked your P60? When you apply for a mortgage, loan, or encounter any situation requiring proof of your tax records, if you cannot provide a P60, or you provide an incorrect one, you’re likely to face some trouble.  It’s therefore vital that you check. 1. What is a P60? Throughout the tax year, HMRC will closely monitor and record your statutory wages, tax payments, National Insurance, and any benefits you receive. The P60 form is a document that records this information and is issued as part of your annual tax settlement—it can be seen as a final tax receipt provided by the tax authorities when the tax year closes. Employees generally receive the P60 document at the end of the tax year (early April).   Your employer must provide you with the P60 by the 31 st May of the following tax year at the latest. If they haven’t done so by that date, you should request it from them. Alternatively, you can obtain your P60 information online by creating a personal tax account on HMRC. If you changed jobs during the tax year, you will only receive the P60 from your current employer at the end of the tax year. If you resign after the end of that tax year, your former employer will give you a document called P45, which is similar to P60 and serves as a different form of tax receipt. The difference is that P45 is used to record your income and tax status for the year before leaving that job. 2. What personal details are included in the P60? Generally, HMRC will issue a P60 template which is then filled out by the employer. Regardless of who the employer is, the P60 form has the same format and includes the following information: Payments made Tax deductions Employee NI contributions Statutory deductions included in the salary, such as: Statutory Maternity Pay (SMP) Statutory Paternity Pay Statutory Shared Parental Pay Statutory Adoption Pay Student Loan and Postgraduate Loan deductions Tax code at the end of the tax year Employee name National Insurance number Employer’s PAYE reference number Employer’s name and address 3. Why do you need a P60? The P60 serves as an annual statement of your tax.  You therefore need to ensure that the information on it is accurate. Living in the UK, it can be very helpful, for example, if you think you have paid too much tax, you can use the P60 to check. If you want to apply for a loan, you need it as proof of income. Or if you are applying for tax relief, the relevant department needs to use it to serve as financial proof of eligibility. After receiving the P60, you should keep it as evidence of your income and tax status for at least four years. This way, for whatever reason, when you need to prove your tax identity to HMRC or need to resolve some issues, you will have enough evidence to address any problems and confirm your tax identity. At the same time, employers also need to keep these records and retain copies for three years after issuing the employee’s P60. 4. If your P60 information is incorrect, what should you do? After receiving the P60, you must carefully check every detail on it. If your details are incorrect, you can contact your employer or HMRC directly to correct the details. If it has already been submitted to HMRC, then you need to contact HMRC directly to correct your information. If you believe you have paid more tax than you should have, and HMRC has not contacted you to inform you that you will receive a refund, you can submit a self-assessment form to claim these refunds. We want to remind everyone that while HMRC may be able to automatically detect and correct some tax errors, correcting any issues with the P60 is usually the responsibility of the taxpayer themselves, so taking swift action to avoid any penalties is crucial. 5. Can self-employed individuals obtain a P60? Since the P60 is issued by employers, if you are self-employed, you may not receive a P60. If you need to provide four years of income for a mortgage application or other purposes, self-employed individuals can use the SA302 document, which you can download from the HMRC website 72 hours after submitting your tax return. 6. Guidelines for Employers  Employers must strictly comply with P60 form rules and must issue a P60 to each employee no later than the 31st May. If you miss the deadline of May 31st, you may face fines. If the P60 remains outstanding, HMRC may impose an initial fine of nearly £300, plus daily interest fines of around £60. Whether HMRC decides to impose fines typically depends on the reason for the initial delay in the form being issued. The longer the delay, the greater the likelihood of being fined. However, if the delay is due to updating or correcting errors, you can appeal to HMRC to cancel the fine. 7. How do employers issue P60s? This depends on how your payroll is managed. If you have an accountant handling payroll, they are likely to be able to issue these forms for you. If you manage payroll yourself, then you are responsible for producing P60s. You can distribute P60s in paper or electronic form according to your and your employees’ preferences. If you use accounting software, this is likely to help you issue P60s quickly and is a very efficient way to manage this task. Companies with fewer than 10 employees can use HMRC’s Basic PAYE Tools, which is a free payroll software.  HMRC’s software not only helps you generate P60s and other forms but also assists in calculating taxes and National Insurance contributions. If you prefer using paper materials, you can order P60 forms from HMRC, but these forms may take several working days to arrive, so be sure to order them well before the May 31st deadline. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

Many British companies are likely familiar with Research and Development (R&D) tax relief, which is a very beneficial tax allowance for small and medium-sized enterprises. Typically, companies that aim to develop new technologies or products face significantly high investment costs. If eligible, such companies can reduce their tax expenditures by applying for R&D tax relief and reinvest the remaining funds into further research and development efforts. However, HMRC has discovered that among a large batch of past applications, many companies simply did not qualify, and some were even suspected of fraudulent behaviour, resulting in significant losses for the nation.  Subsequently, HMRC decided to launch an in-depth investigation into all previous applications. If any are found to be ineligible, repayment notices will be issued. This move has caused widespread panic, with reports suggesting that many small and medium-sized companies in the UK have begun receiving such notices. One start-up employer mentioned that the HMRC demanded repayment of £49,000 in taxes! 1. An unexpected tax repayment request? Recently, a British start up named Ocushield faced trouble. The founder Dhruvin Patel stated that his company had developed a new lighting product between 2020 and 2021. According to R&D tax relief regulations, the product qualifies as an innovative technological product eligible for funding. In 2022, Mr. Dhruvin successfully applied to the tax authority and received a tax relief of up to £49,000. However, in January 2023, he received a notice demanding repayment of this amount. The tax authorities claimed they re-evaluated his application and found similar products already in the market, rendering it ineligible for R&D tax relief. This move left Dhruvin utterly confused! He had already invested all the money into product development, so where would he find the funds to repay? More importantly, the founder was adamant that the product he developed is innovative and indeed qualifies for the application! It’s been reported that the dispute has now been submitted to the courts for further adjudication.  The BBC has additionally reported that thousands of UK companies are affected, with many small businesses already receiving notices. It’s understood that the R&D tax relief was introduced in 2000 to assist start-ups in funding new projects. Yet, there is evidence that many companies have abused this policy.  Data from HMRC shows that during the most severe period of the pandemic in 2020-21, errors and fraud in small business tax relief led to losses of over £1 billion. 2. Which companies qualify? Research and Development (R&D) tax relief primarily supports companies working on scientific innovation projects. If your project fits the definition of R&D for tax purposes and you’re a UK company liable for corporation tax, you may apply for cash or corporation tax relief through the R&D tax relief scheme. In the current rules, the structure of this relief benefits both profitable and loss-making companies. For profitable companies, it reduces their tax liabilities by an average of 25% of their qualifying R&D expenditure. For loss-making companies, the R&D claim enhances the losses produced. This can be surrendered for a cash credit. The credit is dependent on the company’s previous and future profits. Alternatively, the losses generated by R&D activities can be surrendered to HMRC for cash. 3. What constitutes a ‘qualifying’ R&D project? According to HMRC, qualifying work for R&D tax relief must be part of a specific project that seeks to achieve an advance in science or technology. The work cannot fall under the following categories: Arts Humanities Social sciences, including economics Additionally, the project must be relevant to your company’s industry, whether existing or intended based on the project’s results. When applying, you must explain how the project: Seeks an advancement in the field Must overcome scientific or technological uncertainty Attempts to overcome the uncertainty Demonstrates why professionals in the field can’t readily solve it Utilizes specialised personnel in the field and explains the scientific or technological uncertainty involved 4. What expenditure qualifies for tax relief? You may claim relief on certain costs incurred from the beginning to the end of the project: Consumables, such as fuel, materials, power, and water Clinical trial volunteers’ payments for pharmaceutical industry projects Data licenses and cloud computing costs for accounting periods beginning on or after 1 st April 2023 External workers’ costs from providers like employment agencies. Staff costs, including bonuses, wages, pension fund contributions, and national insurance contributions Software license fees and a reasonable portion of software costs used during R&D activities Subcontractor costs, where you can claim 65% of the qualifying R&D costs paid to subcontractors, or 100% if the subcontractor is connected with your company However, there are expenditures you cannot claim relief on, such as capital expenditure, land costs, costs related to patents and trademarks, and rent or business rates. 5. What types of tax relief are there? Before the 1st April 2024, there are two types of R&D tax relief depending on your company’s size and whether your project is subcontracted or grant-funded, or both. SME R&D Tax Relief: This is available for small or medium-sized enterprises that meet certain criteria, providing an enhanced tax deduction of 230% on qualifying R&D expenditure. R&D Expenditure Credit: Available to large companies and SMEs, this credit allows companies to claim a payable tax credit as a percentage of their qualifying R&D expenditure. Applying for R&D tax relief in the UK can significantly offset your research and development costs. However, it’s crucial to understand the rules thoroughly before applying and to keep detailed records of all R&D evidence and related costs. Based on our experience, some examples that may trigger re-investigation include: Incorrect claims for SME R&D tax relief, when not eligible Misreporting subcontractor and grant costs Excessive staff costs claimed Inclusion of consumables not used or transformed during R&D Insufficient evidence to support the claim Projects better suited for commercial advancement rather than scientific or technological advancement Companies unable to explain complex technical or engineering terms, leading tax officials to misunderstand the true nature of their activities Foreign companies with subsidiaries in the UK not understanding UK regulations Taxpayers not thoroughly checking claims or providing accurate information Fraudulent claims If you’ve recently received a repayment demand but are certain of your eligibility, you may need to gather further evidence and appeal to HMRC. If you’re unsure about your eligibility or how to proceed with an R&D tax relief claim, get in touch with TB Accountants for more advice and support. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

In this day and age, more and more people are choosing not to get married. However, in terms of tax, married couples can enjoy many tax advantages, especially when concerning inheritance tax. Currently, individuals are required to pay inheritance tax when they inherit property exceeding £325,000. 1. Tax relief between couples Married couples usually do not need to pay any inheritance tax when transferring wealth between them. The unused portion of the tax-free allowance of the first deceased partner can be added to the estate of the surviving partner, thus increasing the threshold for taxation. When it comes to inheritance tax for married couples and civil partners, typically no fees are required. If you are married or in a civil partnership and your spouse or civil partner leaves their entire estate to you, regardless of its value, this provision applies. 2. Transferring tax allowances Married couples can also transfer their individual tax-free allowances. Since 2007, a deceased partner or civil partner can transfer the unused proportion of their inheritance tax-free allowance to the surviving partner or civil partner. This means that when you die, the unused inheritance tax-free allowance of your deceased partner can be transferred to your own unused allowance (£325,000). This can be either their entire unused £325,000 allowance, or any portion thereof. There are two scenarios: In the first scenario, if the deceased partner leaves their entire estate to the surviving partner, the tax-free allowance will be fully transferred to the spouse. After the transfer, your own tax-free threshold will double, reaching a total of £650,000. In the second scenario, if the deceased partner leaves part of the estate to other beneficiaries, using a portion of their tax-free allowance, you can only claim that part of the £325,000. For example, Mr. C dies leaving an estate worth £600,000. He leaves £130,000 to his children and the rest to his wife, Mrs. A. At the time, the personal tax-free threshold is £325,000. So, the £130,000 left to the children would use up 40% of the threshold (£130,000 ÷ £325,000 x 100), leaving 60% of his personal tax-free allowance unused. When Mrs. A dies, her personal tax-free threshold remains at £325,000. So, her available threshold will increase by the percentage of the unused allowance (60%), reaching £520,000 (£325,000 x 60% + £325,000). If Mrs. A’s estate is valued at less than £520,000, the inheritors of these properties will not have to pay inheritance tax, but the portion exceeding £520,000 will be subject to inheritance tax. 3. Main residence exemption Married couples can also benefit from the Main Residence Nil Rate Band (MRNRB). This band supplements the existing individual inheritance tax-free allowance, reducing the estate’s value subject to the full 40% tax rate. This rule applies to people who died on or after the 6th April 2017. Under this rule, if your estate includes a property left to direct descendants (children, grandchildren, and stepchildren), which was your main residence at some point during your life or intended to be, you can apply for the MRNRB. From April 2020, the MRNRB increased to £175,000, and for the tax year 2023/2024, it remains the same. From 2024 onwards, this band will increase in line with the Consumer Prices Index and inflation. This means the inheritance tax threshold you can claim rises to £500,000 (£325,000 + £175,000). If a married couple jointly owns a family home and wishes to leave it to their children, the total exempted inheritance tax will be £1,000,000. Please note that if this allowance is transferred between spouses, the value of the transferred allowance will depend on the second spouse’s death rather than the first. 4. How can married couples utilise wills? Before the current inheritance tax rules came into effect, married couples could use wills to ensure that their tax-free allowances were not wasted. Even though the latest inheritance tax rules have been introduced, wills can still be used to ensure that your wealth and assets are distributed according to your wishes after you pass away. In a will, you can arrange to gift an amount or assets not exceeding the tax-free threshold to someone other than your partner when the first person dies. Alternatively, you can establish a trust in your will for the benefit of the surviving spouse. However, not everyone needs these arrangements. For example, if it involves absolute trusts, these arrangements might disadvantage you. Additionally, if the tax-free allowance has been used up when the first spouse dies, any increase in the tax-free allowance will be lost, which might happen between the deaths of the first and second spouse. 5. Inheriting a partner’s ISA investment In the UK, many people use ISAs for savings and investments. So, when someone dies, their estate includes all their money, property, real estate, and other assets, including the funds in their ISA accounts. Surviving spouses benefit from additional protection available from such accounts. Since 2014, widowed civil partners and spouses can reinvest the investments and cash held in their deceased spouse’s ISA, allowing them to benefit from interest growth and dividends tax-free. This allowance is called the APS or Additional Permitted Subscription. Please note that not every ISA provider allows this allowance. So, if you want to utilise this policy, it’s best to consult with the provider before transferring these additional deposits to ensure they accept the practice. If your service provider doesn’t allow it, you can opt to open an account with another provider that does. 6. What if a partner dies without leaving a will? If your partner dies without leaving a will, the rules of intestacy apply. If you are in a civil partnership or marriage without children, they effectively leave all their estate to you, and you won’t have to pay any inheritance tax. By law, the first £250,000 of the estate will go directly to the spouse, and the rest will be split in half, with half going to the spouse and half to the children. Similarly, if your half is tax-exempt, but the other half is taxable, and their tax-free allowance is used up, you will use their portion of the tax-free allowance. It’s essential to note that if you are not in a civil partnership or married, the rules of intestacy in will inheritance will not apply to you, and you will not have inheritance rights. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

If you’ve been employed by one than one employer in the UK, you would have received a P45 document after the end of your previous jobs.  But what is a P45? 1. What is a P45? Whenever anyone is employed by a company in the UK, their employer will register them with HMRC in order to pay the relevant taxes and National Insurance contributions. At the end of employment, the employer must provide a P45 form which shows detailed information about the employee’s income and previous tax paid.  This is so that any new employer can easily follow up to declare the correct income tax information to HMRC. 2. What does a P45 look like? There is no standard format for P45.  Each one is slightly different, but all formats will contain important information such as employee name, address, salary, national insurance number, and tax code. The P45 form is usually divided into four parts—1, 1A, 2, and 3, with the first part being sent to the tax office, 1A being retained by the employee, and parts 2 and 3 being given to the new employer. In general, the purpose of issuing P45 is to report changes in the employee’s employment status to HMRC to ensure accurate taxation.  At the same time, it can also help employees transition into new jobs, or claim benefits during periods of unemployment. 3. When do you receive a P45? Generally speaking, employees can receive the P45 on the day of resignation, but if for some reason you have not received it, you can request it from your employer. The P45 has always previously been in paper form, but now it can also be generated electronically. If you are an employer, you have a legal obligation to issue this P45 form to employees who are leaving. Generally, your company’s payroll software can handle this operation for you. You can also use HMRC’s free PAYE tool, which can directly help you calculate taxes and national insurance, and help you issue forms such as P45. Even if an employee is dismissed by an employer, they still have the responsibility to issue a P45 form to the employee. 4. What if the employer refuses to issue a P45? If the employer refuses to issue a P45, or there are delays in receiving a P45, the employee needs to communicate with them immediately about the situation. In some cases, the delay may be due to administrative errors or technical issues and can be resolved through communication. However, if the employer unreasonably refuses to provide the necessary documents, some measures can be taken to resolve the issue, such as reporting the issue to HMRC. HMRC has protocols for such situations, and they can intervene on your behalf. If you have tried to obtain the document from the employer and it has been refused, it’s best to gather evidence in case you need to prove to HMRC that the employer has violated legal obligations. 5. Validity period of P45 The P45 is valid throughout the tax year in which it is issued. For example, if you receive a P45 in January 2024, the validity period of this tax form is only until the end of March 2024, before the new tax year begins in April. In some cases, if an employee resigns in the previous tax year, the P45 can still be used until May 24th. This means that if there is a change in the tax year between resignation and starting a new job, you will need to use an entry checklist instead. 6. Importance of P45 In terms of employment and taxation, the P45 is crucial for both employees and employers. For employees, P45 provides basic information about income, taxation, and employment status in the UK, which is essential for future job opportunities. It can prove to new employers your previous income and tax situation. At the same time, P45 provides necessary details to HMRC, ensuring that you are taxed correctly in your new job, ensuring you receive accurate wages, and avoiding any potential penalties due to incorrect tax calculations. If you cannot find a job immediately, during unemployment, you can also use the P45 form to apply for jobseeker’s allowance or tax refunds. For employers, obtaining and reviewing a new employee’s P45 is equally important. By accessing the employee’s P45, employers can verify the employee’s previous work experience and any relevant tax codes, as well as understand how much tax the employee has paid so far. This ensures that they classify employees correctly for wage purposes and avoid potential errors or penalties associated with incorrect tax reliefs. 7. What if there are errors on the P45? When you receive a P45 document from your employer, it’s best to check the information listed on it. If you find any errors, you should immediately contact your employer’s human resources department and request them to correct the details. If you believe that the tax code provided is incorrect, you should contact HMRC. If you find a job while updating the document and cannot provide the P45 form to your new employer—don’t worry, this will not affect your employment. However, as mentioned above, you may need to complete an entry checklist form with the assistance of your new employer. Provide this document to your new employer once all your P45 information is updated. 8. Some advice for prospective employers from TB Accountants Many employers often ask us – can they hire new employees without P45? In short, the answer is yes, you can hire employees without P45. Sometimes, the new employees you hire may not have a P45 for various reasons, such as being a graduate with no previous employer, waiting for the previous employer to issue a P45, or the new employee having previously only worked part-time. If your new employee arrives without a P45, you need to have the employee fill out an entry checklist (formerly known as the P46 form) and enter the information into your payroll system. If your payroll software does not generate the necessary checklist, you can find it on the government website. This way, you can temporarily use a temporary tax code for this employee until HMRC notifies you of the new code, or until the employee provides their P45. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

Companies House can now utilise their new powers to inspect and supervise company registration names.  If misuse or non-compliance is detected, Companies House now has the authority to reject applications. Additionally, Companies House can also issue requests for a company to change its name – failure to comply can constitute a crime! So, what are the new rules? 1. New rules on company names Identical names Your company name cannot be identical to existing names already registered with Companies House. ‘Identical’ does not only mean the exact same name, but also if it is substantially similar.  For example, even if your company name differs by just one word, symbol or character (e.g. ‘+’), it will still be considered ‘identical’. Similarly, if one word, symbol or character in your company name resembles another name, it may also be deemed identical.  For example: ‘Hands UK Ltd’, ‘Hand’s Ltd’ and ‘Hands Ltd’ would all be considered identical. If you want to register an identical name, it’s only possible in specific circumstances: Your company and the existing name belong to the same group You have written confirmation that the company does not object to your new name Cannot be too similar to existing company names registered with the Companies House (see below for the similarity restriction) Similar names Certain names may be considered too similar. For example, Easy Electrics For You Ltd and EZ Electrix 4U Ltd would be considered too similar. Companies House will contact you if they believe your chosen name is too similar to another. Offensive names Company names cannot be offensive and should not contain any words that may constitute a crime. Accreditations Company names cannot refer to government or administrative bodies without obtaining prior permission. For example, if you want to use ‘Accredited’ in the name, you must obtain permission from the appropriate governing/regulatory body. Other regulations: Other prohibitions also apply: Sensitive words/expressions Certain characters, punctuation and symbols Naming rules also apply depending on your company type: Limited companies can end with ‘Limited’ or ‘LTD’ (in Wales this can be ‘Cyfyngedig’ or ‘CYF’) Public limited companies can end with ‘Public Limited Company’ or ‘PLC’ (in Wales this can be ‘Cwmni Cyfyngedig Cyhoeddus’ or ‘CCC’) Different rules apply to charities – the company name may not need to include ‘Limited’.  This applies if your company is a registered charity and the company’s articles require that it: Promotes and/or regulates business, arts, science, education, religion, charity or other professions Cannot pay dividends to shareholders Requires shareholders to contribute to the company’s assets during membership/within one year of ceasing to be a shareholder 2. What are the new powers of Companies House? According to the Economic Crime and Corporate Transparency Act, all companies must comply with existing legal rules when naming their companies. Additionally, the new regulations expand the legal content and strengthen the management of company name verification processes. In addition to the legal requirements mentioned earlier, if the Companies House discovers the following situations when a company is naming itself, the application can be refused: The name is intended to promote fraud The name consists of or contains computer code The name may give the impression that the company has connections with foreign governments or members, including two or more countries or regions (or their governments), international organisations If an existing company name falls into any of the restricted categories, Companies House will issue a notice and allow 28 days for a change to be made.  Companies House also reserves the right to automatically assign a new name to the company if a change is not made within 28 days.  This can be, for example, a generic company number. 3. A word from TB Accountants In recent years, the UK has been continuously updating laws to enhance corporate transparency and combat crime. We fully expect that more reforms will be implemented in the future. If you inadvertently overlook these rules or fail to comply with them, the consequences can be severe! To prevent legal risks for your business, before submitting a company formation application to the Companies House, you can check if your chosen company name can be registered. Most importantly, we highly recommend that you consult with a qualified accountant as soon as possible to handle and address these issues for you. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

A man was reported as being refused entry to a Tesco supermarket due to suspicions of potential theft because his attire was too unkempt! What’s going on here? It turns out that the man didn’t pass Tesco’s anti-theft system.  How did they determine that the man was a valid suspect? 1. Hotspots for theft Many stores across the UK have become hotspots for theft as well as robbery.  Last August, there were multiple incidents of store robbery on London’s Oxford Street, leading to violent clashes between the London police and dozens of youths. And retail department stores are hotspots for theft and robbery, often being ‘visited’ from time to time, and sometimes even involving attacks on retail staff. In September last year, 88 retail industry leaders from Tesco, Santander Bank, Boots, WH Smith, and others jointly wrote to senior officials of the England and Wales police, urging them to support a plan to combat shoplifting. Their main request was to establish a new aggravated offense nationwide, namely, more severe penalties for assaulting or abusing retail staff. They also called for police to record all retail crime incidents and allocate more resources to address the issue of shoplifting. According to the British Retail Consortium, the UK retail industry now loses up to £1 billion a year due to stolen goods, and the shoplifting rate reported by convenience stores has reached its highest level in ten years. 2. Tesco’s ‘facial recognition’ solution The Tesco supermarket we’re talking about today is located in Bristol, where the average house price exceeds £400,000! Generally speaking, theft should be relatively rare in such concentrated affluent areas. However, due to the poor economic environment in recent years, many residents’ incomes have shrunk, leading to an influx of thieves into this store. To reduce theft and maintain the supermarket’s property and safety of personnel, Tesco has closed the glass doors of the supermarket and implemented a ‘facial recognition’ system.  If you want to enter the supermarket for shopping, you must first pass through the surveillance camera at the entrance. If the staff determine you as safe through the camera feed, then the glass door will open, and you can enter the supermarket for shopping. The supermarket also removed all shopping baskets from the entrance to prevent thieves from having enough space to fill up items and then flee. The man mentioned at the beginning was refused entry because the staff saw him riding a bicycle in a hurry to the supermarket on the surveillance video, then casually threw the bicycle aside at the supermarket entrance, plus his untidy appearance. Supermarket staff stated that although it was impossible to rule out misunderstandings, there was no other practical way of preventing theft without imposing access controls. 3. How can shops in the UK avoid theft? Keep the store clean Keep the product display tidy, reserve wide aisles, ensure clear visibility so that employees can clearly see the actions of each customer, and prevent shoplifting from being committed unnoticed. Electronic tagging Mark your items with electronic item monitoring tags, and correctly install certified anti-theft terminals (and tagging systems) at the entrance of the store.  According to data provided by the police, thieves generally target places without such equipment. Mark key areas You can mark areas that are relatively easy to be stolen in the supermarket, install surveillance cameras, or instruct employees to pay special attention to those areas to prevent thieves from taking advantage of vulnerabilities. Ensure multiple employees work simultaneously Having multiple employees on duty at the same time will make thieves feel wary, reduce the occurrence of theft, and if encountering robbers with violent behaviour, it is also convenient to protect the personal safety of the staff, avoiding the situation where one employee works alone and is isolated and helpless. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

A recent study by Canada Life revealed that due tax code errors, UK employees have so far overpaid approximately £5.8 billion in taxes. Nearly a third of British adults found that their tax codes were incorrect upon reviewing their payslips, while nearly a fifth never checked their tax codes at all. Understanding and verifying your tax code is crucial to avoid overpayment! 1. What is a tax code? Your tax code is assigned by HMRC and indicates how much tax your employer or pension provider should deduct from your income. It consists of numbers and letters, typically found near your National Insurance number on your payslip.  The most common tax codes for the 2024-25 tax year is 1257L, but variations will exist depending on your personal circumstances. 2. What are the tax codes? Here are the tax codes used by HMRC: L: Entitled to the basic personal allowance M: Marriage allowance recipient (10% of partner’s allowance) N: 10% of personal allowance transferred to partner T: Other calculations for personal allowance OT: No personal allowance or starting a new job without providing tax details BR: Income taxed at the basic rate D0: Income taxed at the higher rate D1: Income taxed at the additional rate NT: No tax payable on this income In addition, there are also a few emergency tax codes (W1, M1, X).  These are temporary codes used in special situations until the correct details are provided to HMRC. 3. Will my tax code change? HMRC may update your tax code automatically if: You receive income from additional work or pensions Your state pension amount changes Your employer reports changes in work benefits You claim marriage allowance or other forms of tax relief 4. What if my tax code is incorrect? If you notice an error in your tax code, you should contact HMRC immediately. HMRC will change your tax code to the appropriate one for your situation and then notify your employer and/or pension provider. 5. Applying for a tax refund If you overpaid taxes due to an incorrect tax code, you may be eligible for a refund. You must notify HMRC so that they can adjust your payroll deductions or issue a cheque for overpayments from previous tax years. Claims must be made within four years, meaning any overpayments for the 2020-21 tax year must be claimed by the 5th April 2025. 6. Advice from TB Accountants At TB Accountants, we highly recommend that you check your tax code regularly to ensure that HMRC is making the correct deductions. It is your responsibility, not your employer’s, to ensure that your tax code is accurate.  If you have any concerns, we recommend that you contact a qualified financial advisor or accountant for further assistance. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

Have you heard of ‘salary sacrifice’ pensions? This type of occupational pension is aimed at helping individuals save on tax contributions whilst also contributing to their pension. Let’s find out more! 1. What is ‘salary sacrifice’? A salary sacrifice arrangement equates to tax savings for employees. Employees agree to reduce their monthly salary, with the sacrificed amount paid directly into their occupational pension by the employer. Consequently, the employee’s taxable income decreases, and the sacrificed salary can grow tax-free in the pension fund. This arrangement also reduces the employer’s National Insurance contributions, which can then be potentially used to reinvest into employee pensions. Example: Consider the case of Mr W, a manager earning £50,000 annually. Regular Occupational Pension: Mr W contributes £2,500 (5% of salary), and the employer contributes £1,500 (3%) The total pension contribution is £4,000 Mr W’s PAYE and NIC: £11,477.60 Net annual salary: £36,022.40 Employer’s NIC: £5,644.20 Salary Sacrifice Pension: Mr W sacrifices £2,500, reducing the annual salary to £47,500 Employer adds the sacrificed £2,500 plus their £1,500 contribution to the pension Total pension contribution: £4,000 PAYE and NIC: £11,177.60 Net annual salary: £36,322.40 Employer’s NIC: £5,299.20 2. Employer Benefits Employers save on National Insurance contributions, and savings increase as more employees are hired. For example, with 50 employees each earning £50,000 and sacrificing 5% of their salary, an employer can save £17,250 annually. 3. How do Employers Gain from this? The main benefits are: Increased take-home pay due to reduced taxes Higher pension contributions Compound growth of pension savings over time The potential drawbacks are: Restricted for low-income employees if the salary falls below the National Minimum Wage May affect income-related benefits and statutory pay calculations 4. Implementation Employers should contact payroll or pension providers to offer this scheme. Employee consent is needed, typically through contract adjustments. Salary sacrifice arrangements often ‘win-win’, saving money for both employers and employees. However, it’s crucial for employees to understand the pros and cons before opting in, especially higher-rate taxpayers or those concerned about future financial implications such as mortgage applications. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

‘Hard water’ contains a large amount of minerals, such as calcium and magnesium, which form a thin film on the hair, making it difficult for moisture to penetrate, resulting in dry and brittle hair, ultimately leading to hair loss. And how hard is the water in the UK? Presumably, many people have heard of it. Many international students and workers, upon moving to the UK, are deeply distressed. Moreover, it’s not just about the water being hard – it also rains for almost 10 months a year! Why is the water quality in the UK so hard? 1. Chemical makeup of water The ‘hardness’ of water is determined by the concentration of dissolved magnesium and calcium ions in the water. In the UK, water sources mainly come from groundwater and rivers, which pass through many geological and soil layers, thus containing higher levels of magnesium and calcium ions, leading to higher water hardness. 2. Geological Conditions Most parts of the UK are located below limestone formations, which are rich in calcium and magnesium. When water passes through these formations, it dissolves a certain amount of calcium and magnesium, increasing the water hardness. 3. Natural environment In areas with less rainfall, the concentration of dissolved minerals in the water increases due to evaporation, resulting in increased water hardness. Therefore, the hardness of water in the UK is mainly due to the high content of magnesium and calcium ions in the water source, as well as the combined effects of geological, soil, and environmental factors. Let’s take a look at the PPM measurement. PPM is the unit of water hardness, which refers to the concentration of calcium and magnesium ions in the water. 1 ppm represents 1 milligram per litre (mg/L) of calcium carbonate in water, so we can use PPM indicators to measure water hardness: 0 – 50 PPM – Soft water 51 – 100PPM – Moderately soft water 101 – 150PPM – Slightly hard water 151 – 200PPM – Moderately hard water 201 – 275 PPM – Hard water 276 – 350 PPM – Very hard water England mostly consists of hard water areas, while Scotland has mostly soft water. Compared with the granite areas in the north and west of England, the chalk and limestone areas in the south and east of England release more minerals into the water as it flows. Therefore, the water quality in the south and east of England is much harder than in other parts of the UK. The town with the hardest water in the UK? Ipswich! The hardest water in the UK is undoubtedly in Ipswich! This is a town in Suffolk, eastern England. Data from the local water department shows that the calcium carbonate content in the water in this town is the highest in the UK, reaching 423 milligrams per litre! 4. What can you do? There are a few solutions if you want softer water, whether it’s for washing your hair or for consumption: Install a filtered shower head to soften hard water Use a water filter for drinking water Purchase bottled water for drinking If you’re living in the UK, there are lots of things you need to take care of – your residence, employment, and importantly, tax! If you need advice on any tax-related issues, contact TB Accountants for professional advice. For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .

It’s crucial to remember that no matter what business you run, you need to fully comply with your tax obligations – they are applied very strictly! Recently, a High Court judge in the UK imposed severe penalties on a restaurant owner in West Sussex. In 2007, Shafique Uddin opened a restaurant in Worthing and became the sole director of the company. However, from April 2010 to January 2017, he submitted inaccurate tax returns, resulting in an underpayment of a total of £320,000 in taxes. The restaurant eventually went into liquidation on the 11th April 2017, prompting an investigation by the Insolvency Service. It didn’t take long for investigators to uncover years of tax evasion by Shafique.  The High Court ordered the revocation of his business license for eight years. This is one of many cases where business owners have been prosecuted for underreporting taxes. Many businesses may underestimate the importance of accurate tax reporting, whilst others are simply unfamiliar with tax regulations and do not know what taxes are involved in running a business. When you decide to open a store or start a company in the UK, the types of taxes you pay and how you pay them will depend on the structure of your business. The tax obligations for a sole proprietorship differ slightly from those of a limited company or a partnership. So, what are the most common tax obligations you should be aware of as a business owner? 1. Corporation Tax If your business is a limited company, the employer must pay corporation tax on the company’s profits, including profits from trading and from selling investments or assets. The current corporation tax rate is 19%. If you are a sole trader or a partner, this tax does not apply. You need to register for this tax within three months of starting your business and submit a corporation tax return to HMRC detailing your company’s income, tax allowances, and any other relevant deductions. Remember, HMRC is not responsible for helping you calculate the correct amount of corporation tax! It is your responsibility to ensure you pay the correct tax, so keeping accurate company accounts and submitting tax returns on time is essential. If you delay paying taxes or provide inaccurate information, you may be fined by HMRC or, in severe cases, have your business license revoked, as seen with the business owner at the beginning of this article. 2. Value-Added-Tax (VAT) If your taxable turnover exceeds £90,000 (as of the 2024/25 fiscal year) you must register for VAT. Smaller businesses under the threshold can also voluntarily register to take advantage of certain tax benefits. After registering for VAT, you must charge VAT on all taxable products and services. You will then need to submit quarterly VAT returns to HMRC, and pay VAT. However, you can also reclaim any VAT you’ve paid on products/services purchased for your business as input tax.  This is one of the reasons why some smaller businesses trading under the threshold may still voluntarily apply for VAT. 3. Business rates If you rent a shop or other premises for your business, you will need to pay business rates. If you work from home and use only a small part of the property for business (e.g. one room), you might not need to pay business rates, but if most of the property is used for business (e.g. a shop with living space above), you may have to pay them. The amount you pay is based on the value of your property, so if commercial property prices in your area increase, so might your business rates. Small businesses can get take advantage of business rate relief, which may reduce or eliminate their bill. This applies to properties used for charitable purposes, properties in enterprise zones, some pubs, and some agricultural buildings. 4. Employee taxes Income Tax and National Insurance (NI) Income tax is generally paid by individuals as employees, so business owners don’t pay income tax for the business itself. However, if you are a director of a limited company, you will have a fixed salary, and if your income exceeds the personal allowance (£12,570 for 2024/25), you will have to pay income tax and NI contributions. The amount of income tax you pay will depend on your tax band. Remember, other income, such as dividends, savings interest, or capital gains, will also be added to your income and may push you into a higher tax band. Company directors pay income tax is paid through the company’s PAYE system, along with any NI contributions. Sole traders pay income tax based on business profits and must submit a self-assessment tax return to HMRC. Employer’s National Insurance If you employ staff, you must pay employer’s NI contributions on their wages, known as ‘secondary Class 1 NI contributions’. You must also pay NI on most employee benefits (e.g. company cars, private health insurance etc.). 5. Dividend Tax Directors can receive income in two ways: through salary or dividends. Dividends are subject to dividend tax, with the first £2,000 tax-free. Beyond this, dividends are taxed at different rates: 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers, and 39.35% for additional rate taxpayers. Dividends must come from profits, and all dividend payments must be recorded and declared, even if you are the sole shareholder. Summary As a business owner, the taxes you pay can vary based on your specific circumstances.  The information outlined provides a general framework of the potential tax obligations.  It’s important to ensure that you do not engage in underreporting, which could be considered tax evasion and a criminal offence! If you plan to run a business in the UK, hiring a professional accountant is recommended to work out the best tax strategies for circumstances, and ensure that you’re fully compliant. If you need assistance, contact TB Accountants for more help! For individuals and businesses looking for UK taxation services, use our contact form  to get in touch for more information. Get in touch with us at info@tbgroupuk.com  or for a free one-to-one consultation.  This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact  TBA Group  via  email  or  WhatsApp .