Paying dividends without sufficient retained profits is one of the most common mistakes made by company directors. Dividends can only be paid if the company has enough distributable profits available. Another frequent issue is failing to prepare the required paperwork. Every dividend payment should be supported by the appropriate documentation, including board minutes and dividend…
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Receiving dividends from a UK limited company can be a tax-efficient way to take income, but dividend payments are still subject to tax. The amount of tax you pay depends on your total taxable income and the current dividend tax rates. Dividends can only be paid from company profits after Corporation Tax has been accounted…
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One of the biggest misconceptions about Making Tax Digital is that HMRC gains full access to your bank accounts or accounting system. In reality, HMRC only receives the tax information required for reporting through MTD-compatible software. Making Tax Digital does not mean your business is under constant monitoring. Its purpose is to improve the accuracy…
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Transitioning to Making Tax Digital can be more challenging than many businesses expect. The five most common mistakes are leaving the transition until the last minute, using software that isn’t MTD-compatible, failing to maintain digital records, submitting inaccurate financial data, and not seeking professional advice. Any of these mistakes can lead to delayed submissions, unnecessary…
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Significant changes to Employer National Insurance Contributions (NICs) came into effect on 6 April 2025 and continue to apply during the current tax year. These updates affect payroll costs and should be taken into account by all UK employers. The Employer National Insurance rate increased from 13.8% to 15%, while the Secondary Threshold—the point at…
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The end of the tax year is the ideal time to review your finances and ensure your tax affairs are in order. Taking the time to check everything in advance can help you avoid errors, maximise available tax reliefs, and prepare for your upcoming tax return. It’s important to ensure that all income and expenses…
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Setting up a Limited Company in the UK is a straightforward process when you have the necessary information prepared. Providing accurate details from the start helps avoid delays and ensures your company is registered correctly with Companies House. To register your Ltd, you will typically need proof of identity and address for each director, your…
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Preparing your documents in advance will make the Self Assessment process quicker, more accurate, and help reduce the risk of delays or errors. Providing complete and accurate information allows us to calculate your tax liability correctly and submit your return on time. In most cases, you will need details of all income received during the…
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If your income exceeds £50,000 during the current tax year, it does not mean you must switch to Making Tax Digital (MTD) immediately. HMRC determines whether you fall within MTD based on your gross income from self-employment and/or property income in the previous tax year. This is the figure used to decide whether MTD becomes…
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Registering for VAT does not always mean your business has exceeded the £90,000 threshold. In some cases, voluntary registration can be a smart business decision. For example, if most of your clients are VAT-registered businesses or you regularly purchase goods and services with VAT, you may be able to reclaim some of that VAT. Before…
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