HMRC has started a new campaign targeting sole traders and partnerships, checking that expenses claimed in self-assessment returns are properly adjusted for private use. If you’re self-employed, it’s worth paying attention; mistakes can trigger unnecessary questions or even penalties. The focus is on disallowable expenses (especially costs that are partly personal). Think cars, phones, and similar items where you use them for both business and private purposes. For example, if you spend £2,200 on car costs and only 8,000 of the 14,000 miles are business, HMRC expects you to adjust the private portion proportionally. It’s not just cars and phones, either. Business entertainment, travel, or marketing expenses can also come under scrutiny if they include personal use. The safest approach is to be clear and consistent in your calculations and records. Tips to stay on HMRC’s good side: Keep detailed records for items like mileage or phone use. Don’t just copy last year’s figures. If you account for private use before filling in your tax return, explain it in the additional information section. HMRC accepts reasonable estimates where precise calculation is tricky (for example, home office costs or phone use). Using simplified expenses for homeworking can help avoid disputes. In short, make sure you understand HMRC’s rules on private use, check each tax return carefully, and adjust expenses appropriately. Unsure or just want a friendly, helping hand? Give Rustrick Accountants a call on 01622 738165 !

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If you provide employees with a company van (or fuel for private use) the benefit-in-kind charges are going up again next tax year. These charges are increased annually in line with the Consumer Price Index, and the 2026/27 figures have now been confirmed. The benefit applies if an employee: Has a company van available for private use Receives fuel for private journeys in a company van Receives fuel for private use in a company car It’s worth noting that the van charges are fixed flat rates, while company car fuel uses a multiplier system. Here’s how the numbers compare:

Late January can hit hard—especially if you suddenly realise you need to file a tax return but haven’t even told HMRC yet. Don’t worry, you’re not alone. This happens more often than you think, particularly if you’re a first-time filer or returning to Self Assessment after the Christmas break! Usually, HMRC expects you to let them know you’re liable for Income Tax or Capital Gains Tax by 5 October following the end of the tax year. If you miss the 5 October deadline, you could face penalties, but if you act quickly you can significantly reduce them. So, if it’s late January and you realise you’ve missed the notification deadline, the most important thing is to act immediately: Register for Self Assessment online as soon as you can. Work out your tax liability and pay it by 31 January. If you haven’t received your Unique Taxpayer Reference (UTR) yet, you can still use your National Insurance number. Paying the tax you owe on time can reduce the risk of penalties, as HMRC will base fines on any ‘potential lost revenue.’ Any HMRC penalties will depend on: How late your notification was Whether your disclosure was prompted by HMRC or unprompted Whether the failure was deliberate The penalty will be 0% if the notification was unprompted and not deliberate, but it could be up to 100% of the tax due for “deliberate concealment”. You might avoid penalties entirely if you have a reasonable excuse, weren’t deliberately late, and notified HMRC without unnecessary delay! Once you’re registered, submit your tax return as soon as possible to avoid more late filing penalties. Remember, the deadline is the 31st January after the tax year or three months after HMRC issues the notice. If you’ve filed your tax return before, don’t create a new account. Doing so can delay processing and mess up your tax calculations. Instead, reactivate your existing Self Assessment record by calling the Agent Dedicated Line or completing form SA1. If you have received a late tax return notification, don’t panic! Give Rustrick Accountants a call on 01622 738165 and the friendly team will sort it out for you and reduce the penalties by as much as possible

Changes to Business Property Relief

It’s very common for parents to help their kids get a business off the ground, but when it comes to taxes, things can get a bit tricky! Normally, if a business buys equipment for trade, it can claim a capital allowance (CA) to reduce taxable profits. For most purchases, you can use the annual investment allowance (AIA) to claim up to £1 million in the year of purchase. If the AIA doesn’t apply, the deduction is spread over several years as a writing down allowance (WDA). To qualify, the owner of the equipment must use it in their business. So if the parent has bought the equipment for their child’s business, the usual rules for capital allowances don’t apply. So, if you want a tax benefit from helping a family member, you need to do a bit of planning such as:  Treating the repayments as rent for use of the equipment, under a formal agreement. Transferring ownership of the equipment, so they can claim the capital allowance himself. Without doing either, neither the parent nor the child gets a deduction! Helping your children with a business is generous, but it can easily backfire tax-wise if you don’t plan carefully. If you are thinking of getting involved or want to get some advice before you start, give Rustrick Accountants a call on 01622 738165 and we will happily chat through the best steps for you

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If you sell a property for more than you paid for it, the difference is liable to Capital Gains Tax (CGT). In 2025/26, you will be liable to 18% CGT when your income and gains fall in the basic rate band. You will be charged up to 24% if it is over the basic rate band. This actually works out as you paying a mixed rate, i.e 18% and 24%, and the difference in these rates can reduce the CGT bill on the sale of assets. Before your CGT exemption is deducted from your gains, any capital losses you’ve made in the same year are deducted alongside any capital losses from earlier tax years (that you haven’t already used against gains). In addition, the first £3,000 of any capital gains you make in 2025/26 is exempt. Remember, this renews every tax year and is the allowance per person, so if the asset you’re selling is joint with your spouse, the exemption increases to £6,000. Before any sale, a married couple or civil partners can change the proportion of the property they own to double up on these annual exemptions, reduce tax rates and use available capital losses to minimize the tax payable on gains from property. This can get complicated, give the team at Rustrick Accountants a call today to chat through things on  01622 738165  and see if you can save today!