The government agency that maintains the register of all incorporated and registered companies in the UK, Companies House, will soon be increasing their fees.

Companies House charges statutory filing fees for the registration and incorporation in the UK of companies, limited liability partnerships (LLPs), limited partnerships (LPs), community interest companies (CICs), and overseas companies.

From 1st May 2024, incorporation and maintenance fees will rise as part of the agency’s cost recovery efforts – the fees cover the cost of their services without profit.

Here’s how the cost of incorporating a company will be affected from May 2024.

New company incorporation costs

Depending on which channel you use, the cost of registering with Companies House currently ranges from £10–£40, but these fees will increase across the board.

While many business owners choose to set up their new company through a formation agent, the agent’s basic service only adds a small amount to Companies House fees, which means agent fees are also likely to increase from 1st May.

New confirmation statement costs

Every registered company, even dormant ones, must file an annual return with Companies House. This is known as a confirmation statement, confirming all the registered information about the company is correct and up to date.

The fee for filing a confirmation statement is £13
for online and digital software submissions, but will be drastically rising to £34. The cost of paper confirmation statements will also be increasing from £40
to £60 in May.

Companies must file and pay this fee once every 12 months, usually with the first filing, so there should be no further cost for this during the 12-month period.

A full list of Companies House fees and updates on changing costs are available on the government website. These price rises follow changes in several Companies House filing rules that were introduced from early March, which both existing and new companies should also take note of when dealing with Companies House.

With the possibility of prosecution and financial penalties for companies that fail to register, file, or pay correctly, it may be worth getting professional financial guidance from a company like gbac, with experienced accountants in Barnsley.

Call 01226 298 298
to speak to our team Monday to Friday, or email info@gbac.co.uk
and we will respond to your company finance enquiry as soon as possible.

HMRC is turning up the heat with increasing checks on tax compliance across the board.

They are particularly focusing on inheritance tax, undeclared dividends, and the profits from share sales, ensuring that everyone pays their fair share.

Both individuals and businesses must understand their tax obligations to avoid coming under scrutiny from HMRC.

In this blog, we will discuss the specific tax compliance checks that HMRC conducts, who could be affected, and what steps individuals and businesses can take to ensure their compliance.

What Checks are HMRC Doing and Who is Affected?

They are checking that relief claims – particularly those for business property relief – are valid.

They are also verifying that assets like unquoted shares and properties have been correctly appraised.

They are comparing reported company profits and reserve movements to identify undeclared dividends.

Their goal is to address tax evasion and ensure fair taxation on income from dividends.

They will be comparing data to identify discrepancies, ensuring capital gains tax related to share disposals is accurately reported and paid.

Actions to Take to Avoid Penalties from HMRC

For IHT Accounts:

Business property relief can offer 100% relief from IHT, but eligibility needs careful assessment, particularly if a business holds substantial cash or investment assets.

Look at this comprehensive HMRC guide to valuing an estate for IHT.

The IHT payment deadline is stringent, requiring payment within six months after the end of the month of death. This timeline is significantly shorter than those for most other taxes.

For Dividend Income:

For Share Disposals:

Expert Financial Advice to Ensure Compliance

To ensure compliance and avoid penalties for you or your business, it’s essential to maintain accurate financial records, respond promptly any enquiries from HMRC, and always seek expert financial advice when necessary.

If you’ve received a letter from HMRC or have any questions about your tax obligations, don’t hesitate to get in touch with us.

You can give us a call on 01226 298 298 or send us a message via our online contact form and we will get back to you as soon as possible.

A new rule for trusts will soon be coming into effect, which aims to simplify tax dealings for smaller trusts.

From 6th April 2024, trust beneficiaries will be able to receive up to £500 in income from the trust, without having to pay taxes on it.

However, there are some points that could be a little tricky to get your head around.

This straightforward guide will explain exactly what the £500 trust income exemption is, who it impacts, and how to navigate the changes effectively.

What is the £500 Trust Exemption Rule?

The new rule allows trusts to earn up to £500 in income without paying tax on it.

Sounds simple – but if your trust earns £501 or more, the entire income becomes taxable, not just anything over the £500 threshold.

This “all-or-nothing” approach requires careful planning to maximise the benefit.

Sharing Between Trusts

If the same person has established several trusts, they may need to divide this £500 exemption among all their trusts.

This shared exemption complicates things, especially for those who have set up multiple trusts for estate planning or family wealth management.

The Impact of Rising Bank Rates

When this exemption was first announced, it seemed quite generous, especially with lower bank rates.

However, with current rates now at 5.25%, the real value of this exemption has diminished, affecting how far your trust income can go without being taxed.

Interest in Possession (IIP) Trusts

IIP trusts usually pay 20% tax on income, except for dividends at 8.75%.

With the new exemption rule, smaller trusts won’t need to deal with tax returns or payments for incomes under £500. This will now go directly to beneficiaries, tax-free.

This change is particularly good news for beneficiaries who don’t pay taxes (because their income is below the taxable threshold).

They won’t need to go through the process of reclaiming taxes on the income they receive from the trust.

In other words, they can keep the full amount of income they receive – up to £500 – without having to worry about tax deductions.

However, basic rate taxpayers will need to account for this income on their tax returns.

Previously, the tax credit associated with trust income covered their tax liability, meaning they didn’t need to pay additional taxes on that income.

Discretionary Trusts

In a discretionary trust, taxes are paid at a rate of 45% on most income.

Dividends are the exception to this rule; they are taxed at a slightly lower rate of 39.35%.

This tax rate of 44% matches what an individual in the highest tax bracket would pay.

There used to be a £1,000 standard rate band where lower tax rates applied, but going forward, the £500 income exemption has replaced that band.

Here’s where it gets a little complicated.

Even if the trust qualifies for the £500 exemption, any money given to beneficiaries still comes with a 45% tax credit attached.

So, the trust needs to pay enough tax to cover this credit – which can lead to some pretty complex mathematics.

For the beneficiaries, though, things stay the same. They’ll still have a 45% tax credit on any income they receive from the trust, just like before.

Need Expert Advice on Trusts?

Whether you’re managing a trust or are a beneficiary, staying informed and seeking help when necessary is key to making the most of this new exemption rule.

Our experts are here to help you with all your trust and tax planning needs, providing bespoke solutions tailored to your unique situation.

For personalised advice on how the new trust exemption rules will affect you, get in touch with the knowledgeable team at gbac today.

You can give us a call on 01226 298 298 or send a message via our online contact form for a swift response.

As a trusted companion in Barnsley’s financial landscape since the 1970s, we’re all about breaking down complex finance talk into something you can understand and use.

With the Spring Budget 2024 announced by Chancellor Jeremy Hunt on 6th March, there’s a lot to unpack.

This budget is particularly noteworthy as it’s likely the last one before the next election. As you would expect from a pre-election budget, it focused heavily on the tax relief measures, including additional cuts to National Insurance Contributions (NICs) and a new savings bond.

Limited by financial constraints, the Chancellor couldn’t offer as many tax breaks as some backbench Conservatives would have liked.

Despite this, he achieved a few key political goals, including adopting a Labour policy to end the non-domicile tax rule that allowed some UK residents pay less tax on foreign income.

In this post, we’ll give you a clear understanding of what’s new and how it might affect your family or business, ensuring you’re well-equipped to navigate the changes.

What’s Changing with Child Benefit?

The High Income Child Benefit Charge (HICBC), a tax that affects families earning above a certain amount, is changing to help more people.

Here’s what it means for you:

Before, you’d start paying more HICBC tax if you earned over £50,000. Now, that starts at £60,000.

Plus, the HICBC tax rate is being cut in half until your income hits £80,000.

So, if you make between £60,000 and £80,000, you’ll still pay some HICBC tax, but not as much as before.

However, from April 2026, the income of your whole household will be considered.

It’s good news for your family if one partner has quite a high salary and the other has a very low income or doesn’t work at all. This is because your combined income could be less than £60,000.

However, if you’re both earning a moderate wage that currently falls below the new threshold of £60,000, your combined income could cause you to exceed this threshold. If you’re in this situation, you are likely to be worse off as a result of this change.

Paying Less National Insurance

Starting on 6th April 2024, there will be cuts to National Insurance Contributions (NICs), which is great news for both and self-employed people. Only those who don’t earn enough to pay National Insurance will be unaffected by this change.

Here’s a simple breakdown:

Changes to Capital Gains Tax on Residential Properties

Starting in the tax year 2024/25, if you sell a house or flat that’s not your main home, such as a rental property or a holiday cottage, the most Capital Gains Tax (CGT) you’ll have to pay on the profit (the money you make from the sale) will be 24%.

This is a decrease from the current CGT higher rate of $28. This change will make it less costly to sell these types of properties.

The reduced tax rate could motivate landlords and those with holiday homes to consider selling sooner rather than later, especially if they’re looking at much higher mortgage payments at the end of their fixed rate deal.

Similarly, those who own holiday cottages might want to sell before tax benefits are scrapped in April 2025.

A New Way to Save: The UK ISA

There’s also talk of a new type of savings account called the UK ISA, letting you save up to £5,000 more, on top of the usual £20,000 ISA limit. This is the first time that the ISA limit has changed since 2017/2018.

The catch is that your savings must be in UK shares or bonds. No timeline has been specified yet for this proposal, but it’s something to keep an eye on if you’re looking to save more.

We’re Here to Answer Your Finance Questions

At GBAC, we’re all about making finance simple and helping you and your business thrive. We know that every penny counts and every decision matters.

If you have any questions about how the Spring Budget 2024 might affect you, or would like advice on the best way to benefit from the new budget changes, get in touch with our knowledgeable and friendly team today.

You can give us a call on 01226 298 298 or send us a message via our online contact form for a swift response.

Thinking of moving to Scotland from another country in the UK? There are plenty of benefits to working or retiring in Scotland, not least the incredible landscapes and friendly people – but you should keep the tax differences in mind, too.

The Scottish Parliament has been deciding its own income tax bands and rates since 2017, which are separate from those applied in England, Wales, and Northern Ireland.

As a result, most Scottish taxpayers pay more income tax
than other taxpayers in the UK. With new tax changes coming in Scotland from 6th April 2024, it’s important to consider the tax cost before relocating to Scotland.

Income tax rates in Scotland

Those who live in Scotland pay income tax to the Scottish government on their wages, pensions, and other taxable income. The same tax on dividends and savings interest is applicable in Scotland as in the rest of the UK.

While Scotland also has a tax-free Personal Allowance
of £12,570 for annual earnings below £125,140, it has different tax rates with different thresholds than the tax bands used in England, Wales, and Northern Ireland.

Here are the 2024/2025 tax bands and rates in Scotland compared to the rest of the UK:

Tax Band

Annual Income

Scotland

Rest of UK

Scottish Starter Rate

£12,571 – £14,732

19%

UK Basic Rate

£12,571 – £50,270

20%

Scottish Basic Rate

£14,733 – £25,688

20%

Scottish Intermediate Rate

£25,689 – £43,662

21%

Scottish Higher Rate

£43,663 – £75,000

42%

UK Higher Rate

£50,271 – £125,140

40%

Scottish Advanced Rate

£75,001 – £125,140

45%

UK Additional Rate

£125,140+

45%

Scottish Top Rate

£125,140+

48%

Comparison to UK income tax rates

Scotland is introducing a new ‘Advanced’ tax rate from April 2024, which will charge 5% more than the tax bill for equivalent income in other UK countries.

As the Personal Allowance is tapered off on income between £100,000–£125,140, this income band will have a marginal rate of 67.5% compared to 60% elsewhere in the UK.

The Scottish ‘Top’ rate is also increasing from 47%
to 48% this year, compared to the highest rate being 45% in England, Wales, and Northern Ireland.

This means that the tax system in Scotland is tougher on earnings towards the top of the pay scale. For example, someone with an annual income of £100,000 moving to Scotland could see their tax bill increase by almost £3,350.

Towards the middle, someone earning £40,000 a year would see their tax go up by around £110. Whereas lower down the pay scale, someone earning £25,000 annually would be paying more or less the same basic rate.

Who is considered a Scottish taxpayer?

A person is liable for paying Scottish income tax if they live in Scotland full-time in their primary residence, live in Scotland part-time and stay at another home elsewhere in the UK the rest of the time, or do not have a permanent home but stay in Scotland regularly.

If you spend more time in Scotland than anywhere else during a tax year, even if your main residence is outside of Scotland, then you must pay tax in Scotland for that year.

It might be tricky to determine where your main address is if you have multiple homes – whether you own or rent them or live there for free – or if you travel frequently for work.

This is typically the address where you spend the most time and keep most of your possessions, the place where your family lives (if you have a spouse or civil partner), or the address you use for your accounts with financial or healthcare services.

If HMRC does not have the right address for you on record and you move to or from Scotland, you could be put on the wrong tax code and taxed at the wrong rate.

Get help with UK taxes

A guide to Scottish income tax is available on the government website, with more information on how the tax system works differently in Scotland.

Regardless of where they are in the UK, it’s essential for every earner to make sure they’re on the correct tax code for their income band and aware of how much tax they owe according to their current rate.

Of course, the last thing anyone needs when navigating a move across the UK is to misunderstand their tax situation – so if you need help managing your tax obligations when relocating to Scotland or anywhere else in the UK, get in touch with gbac.

We have a team of knowledgeable accountants in Barnsley who can advise you on UK tax matters – give us a call on 01226 298 298 or email info@gbac.co.uk
to learn more.

The stark financial crisis surrounding Birmingham City Council is a timely reminder of why it’s so crucial to get equal pay right the first time.

Many equal pay claims were made against Birmingham City Council starting from the early 2000s, but the public body tried to minimise its responsibilities – until 2012, when the UK Supreme Court ruled in favour of workers receiving financial compensation.

However, the mounting equal pay compensation bill over the decade since contributed to Birmingham City Council having to file for bankruptcy in September 2023.

On top of struggling to repay hundreds of millions of pounds a month, the council was still failing to address its discriminatory practices around equal pay, having to deal with multiple trade unions to address the ongoing problem.

With other councils across the country facing similar claims and compensation bills worth billions of pounds, overlooking equal pay rules is certainly a costly mistake.

Equal pay for equal work

All employers should already know that workers must legally receive equal pay for performing equal work, regardless of gender – but while this is initially a basic principle, there are some complications that can catch employers out.

For example, it also applies for associated employers, where one organisation has overall control or sets the pay rates and benefits for multiple entities. It also extends to holiday, overtime, sickness, and redundancy payments.

Pension funding, work-related benefits like company cars, performance-related pay rises or bonuses, and pension funding must also be provided on an equal basis.

Not just salaries, but all elements of an employment package should be equal – such as equivalent working hours and annual leave allowances. This includes part-time workers, apprentices, and agency workers as well as full-time employees.

The concept of ‘equal work’ is where things got tricky for Birmingham City Council, where the 2012 discrimination dispute arose over male-dominated roles receiving bonuses that female workers in assistant or hospitality roles didn’t receive.

Equal work doesn’t actually need to be exactly like-for-like – it counts if the work is of equal value or if the same level of skills, responsibilities, and effort is required, even if the roles seem very different (e.g. a warehouse worker vs a clerical worker).

Avoiding disputes over differences in pay

Differences in the terms and conditions of pay are allowed in some situations – such as one worker being more qualified than another, or employed in a different area with a difficult recruitment market – but this must not have anything to do with gender.

The best way for employers to prevent equal pay disputes from arising is to be as transparent as possible about their pay systems, for example, by:

In addition to the risk of owing significant back pay or damages following an equal pay claim, there is also the potential for significant reputational damage to the business – so the consequences of equal pay disputes can be far-reaching.

Bookkeeping for employers

More detailed guidance on equal pay is available to employers on the ACAS (Advisory, Conciliation and Arbitration Service) website.

In addition to ensuring that your business is paying employees appropriately in terms of minimum wage entitlement, it’s also crucial to pay employees fairly without enabling gender-based discrimination.

If you need assistance updating your pay systems, you should speak to gbac about our bookkeeping and payroll services. Get in touch to discuss streamlining your accounting systems with our accountants in Barnsley.

Until now, the Companies House registry has passively received the information that UK companies filed – but new reforms will implement a more active role for Companies House as a regulator to better maintain the register’s integrity.

Since the Economic Crime and Corporate Transparency Act (ECCTA) was passed into law in October 2023, the changes in the Act will begin to take effect in 2024.

There are several new measures that aim to clamp down on financial crime and improve the reliability of corporate data, which should help to make it easier to do business in the UK and support economic growth.

So, if you have a registered company, limited liability partnership (LLP), or limited partnership (LP) in the UK, these measures will affect you from 4th March 2024.

Registered office address

The new rules for ‘appropriate’ registered office addresses mean that every company must register an address where a person acting on the company’s behalf can receive documents and acknowledge deliveries.

PO Box addresses are no longer permissible, so any company using a PO Box as their registered address must change this or risk being struck from the register. The address of a third-party agent may be an alternative option.

Registered email address

It will now be a requirement for companies to provide a registered email address to Companies House. New companies must do this when incorporating and existing companies when filing their next confirmation statements.

The email address will not be published publicly, but Companies House will use it for communications regarding the company. Failure to supply an email address will be considered an offence by the company directors and result in a fine.

Lawful purpose

When incorporating a new company, the shareholders must confirm they are doing so for a lawful purpose. All businesses on the Companies House register have a duty to operate lawfully and must specify this on every confirmation statement.

Annual confirmation statements for existing companies will also include a declaration of lawful present and future activities from this March. If Companies House discovers that a company is acting unlawfully, it can take legal action against them.

What does this mean for businesses?

These changes coming into effect from 4th March 2024
are only the first in a series of measures that will give Companies House more proactive powers, which are expected to also come into force later in the year and include:

Existing companies will, of course, be affected, but it’s particularly important for new companies to follow the latest rules when registering. The details of changes to UK company law can be found on the official website.

If you have any concerns about how these developments will affect your company and which steps you might need to take, you can consult our accountants in Barnsley for financial guidance and digital accounting support.

Call gbac on 01226 298 298 or email your queries to info@gbac.co.uk
for help complying with the latest regulations for company accounts.

The start of this year saw a media storm around rumours that HMRC would be cracking down on online sellers in 2024, spreading concern amongst people who sell personal items and secondhand goods on sites like eBay, Depop, and Vinted.

However, the stories about a new ‘side hustle’ tax were completely false, fuelling unnecessary panic for the public and unfounded outrage against HMRC.

Here’s what is actually happening with income tax for sellers on digital platforms.

Digital platforms reporting to HMRC

What HMRC is actually starting to do in 2024 is introduce rules by the OECD (Organisation for Economic Co-operation and Development) for digital platforms to automatically report seller details if their sales exceed a certain amount.

In a bid to reduce tax avoidance, digital platforms must pass on to HMRC the details of any sellers who make at least 30 sales on their platform or earn the equivalent of €2,000
within a calendar year. The first reports will therefore not go out until January 2025, covering the 2024 calendar year.

Neither the OECD nor HMRC has an interest in minor sellers of secondhand items, as the rules target actual traders – people who buy and sell with the intention of making a profit. Earning profit from trading has always been taxable income.

This OECD reporting measure could impact 2–5 million businesses who trade via digital platforms, but this impact should only be small, as they will also receive a copy of their reports to help them submit accurate tax returns.

Annual tax-free trading allowance

The misleading information about a ‘side hustle’ tax may also have been building on the revelation for some social media influencers and side-gig resellers that income from social media is also taxable, as many found out for the first time after receiving tax warning letters from HMRC last year.

HMRC began sending out these warning letters because many young people who use social media or online sales platforms to earn income – either full-time or as a ‘side hustle’ – didn’t realise that this economic activity is taxable.

HMRC has been raising awareness that there is actually an annual trading allowance of £1,000. This allows individuals to earn up to £1,000 (before expenses) tax-free each year, whether this is from selling old goods online or making sponsored online content.

A similar allowance of £1,000 before expenses applies for property income, which means that rental income earned through sites like Airbnb and booking.com also falls within this scope – and will also be subject to the OECD reporting regime.

Help with income tax management

Information on the advent of digital platform reporting rules is available on the government website. It’s important to acknowledge that HMRC’s insight into income sources is continually expanding, and to inform yourself of the latest changes from reliable sources to avoid falling for media misinformation.

If you are an online trader, then you should already be registered with HMRC and submitting annual tax returns if your income exceeds the £1,000
allowance. The requirements are different for registered traders than for individuals who casually sell personal goods they no longer use every now and then.

If you aren’t sure what your tax obligations are based on your online selling activity, or you need help getting your accounts in order and submitting tax returns, we have a team of accountants in Barnsley who can assist you.

Call gbac on 01226 298 298 or send an email to info@gbac.co.uk to get started.

While most people welcome increased income, it can be a double-edged sword, resulting in more than just a higher income tax
bill. With tax bands frozen for several years, higher rate taxpayers should be looking at which reliefs are still available to them.

The new tax year in April will bring reduced allowances and frozen thresholds, so it’s essential to check whether a pay rise will affect the reliefs you’re entitled to as well as the rate of income tax you’ll pay, so you can keep your personal finances in order.

Marriage Allowance

If they earn below the £12,570 threshold for the tax-free Personal Allowance, the Marriage Allowance lets the lower earner in a couple transfer up to £1,260 of their annual allowance to their higher-earning spouse or civil partner.

However, this only applies if the recipient spouse is a basic rate taxpayer. If an income increase pushes them over the frozen threshold for higher rate tax, it will no longer be available and the lower-earning partner must cancel their claim.

To avoid having to do this, the higher earner could make enough pension contributions to keep their income below the £50,270
upper threshold for basic rate tax.

Child Benefit

The government pays Child Benefit at a weekly rate to parents who claim for their eligible children, which is the same amount regardless of the parents’ income.

However, the government starts to claw this back through the High Income Child Benefit Charge if either parent begins to earn more than £50,000
a year. Every £100 over this loses 1% of the benefit, until it is completely lost at £60,000.

Parents have to submit an annual tax return declaring this in order to pay the HICBC, but plans are in motion to make it possible for employees to pay through PAYE.

Again, either parent whose pay rise may affect Child Benefit entitlement could use pension contributions to lower their taxable income and retain eligibility.

Childcare

To support parents getting back to work, the government provides free childcare for those working at least 16 hours a week and earning less than £100,000 a year.

Currently, 15–30 hours a week of free childcare is available for 3–4 year olds, with 15 hours a week for 2–3 year olds starting in April and for 9 month–2 year olds from September. The schemes may differ in Scotland, Wales, and Northern Ireland.

If the parent claiming free childcare or their partner begins to earn more than £100,000 annually, they will no longer be eligible for tax-free childcare and must cancel it.

In this case, increasing pension contributions could once again help to keep their adjusted net income below the cutoff for free childcare support eligibility.

Savings tax trap

While basic rate taxpayers can earn up to £1,000 a year in tax-free savings interest, higher rate taxpayers can earn up to £500. Additional rate taxpayers have no savings interest allowance, as this is lost once annual income exceeds £125,140.

Even if the amount of savings doesn’t change, the tax on its interest could therefore increase if a basic rate taxpayer is pushed over the frozen higher rate threshold due to earning or receiving more income.

Aside from pension contributions, investing in an Individual Savings Account (ISA) can also help to mitigate this, as ISAs allow tax-free savings of up to £20,000 a year.

Tax, pensions, and savings advice

If you’re at risk of losing tax allowances and reliefs due to increasing income in the coming tax year, it could be worth looking into personal pension contributions.

The government website has more information about tax relief for private pensions, as making private contributions can be a tax-efficient way for higher earners to preserve their entitlement to the Marriage Allowance, Child Benefit, and free childcare.

For professional advice on managing personal tax liabilities and reliefs, why not get help from accountants in Barnsley? The team at gbac can provide a range of efficient financial services, so get in touch to find out more.