If you become liable to pay a tax or register for a tax that HMRC has not already been informed about, you must notify HMRC within the relevant time limit. Failing to do so can result in a financial penalty in addition to the tax and any interest due.

A failure to notify can arise in a range of situations, including when a business exceeds the VAT registration threshold, a company becomes liable for Corporation Tax or an individual first becomes liable to Income Tax when self-employment profits or investment income first arises. In some cases, businesses must also register before carrying out certain taxable activities.

HMRC calculates penalties according to the circumstances of the failure. Factors to be considered include whether the failure was deliberate, whether it was disclosed voluntarily before HMRC identified it, and how much assistance was provided during the disclosure process. Taxpayers who make an unprompted disclosure and fully cooperate with HMRC can often receive significantly lower penalties than those who wait for HMRC to discover the issue.

The level of penalty depends on the type of failure and the taxpayer’s behaviour. Penalties can range from a percentage of the tax liability that should have been reported, with lower penalties generally applying where a taxpayer makes a voluntary disclosure and cooperates with HMRC. Higher penalties can apply where the failure was deliberate or where HMRC discovers the issue before the taxpayer comes forward. In the most serious cases, penalties can be up to 100% of the tax due. HMRC will not normally charge a penalty where there is a reasonable excuse, provided the taxpayer notified HMRC without unreasonable delay after the reasonable excuse ended.

If you think you may have failed to notify HMRC of a tax liability, it is usually better to act promptly, and we would be happy to advise you. Coming forward voluntarily and providing complete information can reduce the level of any penalty and help resolve matters more quickly. 

Most people are aware that cash donations to a charity can qualify for tax relief. However, it is less well known that gifts of land, property and qualifying shares can also provide valuable tax advantages.

If you donate land, property or shares to a UK charity, or sell them to a charity for less than their market value, you may be entitled to both Income Tax and Capital Gains Tax (CGT) relief. However, Income Tax relief is not available for gifts to Community Amateur Sports Clubs (CASCs).

Income Tax relief is claimed by deducting the value of the qualifying donation from your total taxable income for the tax year in which the gift or sale is made. If you complete a self-assessment tax return, the claim is made in the ‘Charitable giving’ section. Those who do not file a tax return can contact HMRC directly to claim the relief, either as a repayment or through an adjustment to their tax code.

There is also no CGT to pay on qualifying gifts of land, property or shares made to charity. Where an asset is sold to a charity for less than its market value, any gain is calculated using the actual amount paid by the charity rather than the asset’s market value.

To support any claim, it is important to retain records showing that the gift or sale was made and accepted by the charity. If the charity asks you to sell the asset on its behalf before donating the proceeds, keep evidence of both the gift and the charity’s request, as this will help preserve your entitlement to tax relief and avoid any unnecessary tax liability.

If your personal details or circumstances change, you may need to tell HMRC as this could affect your tax position or entitlement to certain benefits.

You should notify HMRC if you get married or form a civil partnership, or if you divorce, separate or stop living with your husband, wife or partner. You should report these changes as soon as possible, as failing to do so could result in you paying too much tax or receiving a tax bill at the end of the year. If you receive Child Benefit, you must also tell HMRC separately about changes to your relationship or family circumstances.

If your spouse or civil partner dies, you should contact HMRC to report the death and any changes to your income following their death. You should also tell HMRC if you move home so they can update your contact details. HMRC is usually informed automatically if you legally change gender by applying for a Gender Recognition Certificate.

You must also tell HMRC about certain changes to your taxable income. Your employer or pension provider will usually report changes to your employment income or pension, but you must tell HMRC about other changes, such as starting or stopping income from self-employment or property, receiving taxable benefits such as State Pension or Jobseeker’s Allowance, getting benefits from your job such as a company car, or receiving income above your Personal Allowance.

You must also report other changes, such as receiving lump sums from selling shares or property that is not your main home, and income from inherited property, money or shares.

If you make self-assessment payments on account and expect a significant decrease in income, you should tell HMRC as it may be possible to reduce your payments. Keeping HMRC updated helps ensure you pay the correct amount of tax and receive any benefits or allowances to which you are entitled.

As a self-employed individual, whether a sole trader or partner, you must keep accurate records of your business income and expenses to back up your self-assessment tax return. You should also keep your personal income details up to date. Nominated partners will also need to keep partnership records.

You can also choose an accounting method. Since the 2024-25 tax year, the cash basis is the default. This means that you record income and expenses when money is received or paid. There will therefore be no Income Tax liability on monies not yet received. This is very different to traditional accounting where you record income and expenses by the date you invoiced or were billed.

Your records should detail all sales, income, business expenses and any grants received. If applicable you must also include VAT and PAYE records. Holding proof, such as receipts, bank statements and sales invoices, allows you to calculate profit or loss and present the records to HMRC if requested. You should ensure all your records are accurate and clearly identify business transactions.

You must retain your business records for at least 5 years after the 31 January submission deadline of the relevant tax year. For instance, if you sent your records for 2022-23 by the 31 January 2024 deadline then you must keep these records until at least the end of January 2029. If records are lost or destroyed, provide your best estimated figures and inform HMRC.

Maintaining diligent and accurate records for the specified period is vital for meeting your tax obligations and ensuring compliance with HMRC requirements.

Members of a Limited Liability Partnership (LLP) are normally treated as self-employed for tax purposes. However, special rules can apply where a member's terms of membership are more akin to the terms of an employee than a partner in a traditional partnership. These are known as salaried members.

The legislation applies a three-part test. A member will be treated as a salaried member for tax purposes only if all three conditions are met:

To fall within the salaried member rules, an individual must perform services for the LLP in their capacity as a member. Some LLPs will strive to ensure that at least one of the conditions set out above does not apply to ensure these rules do not apply.

In addition, the rules do not apply to:

The new rules will allow companies to raise more capital under the following schemes although investors will need to factor in reduced VCT Income Tax relief when assessing opportunities.

The Venture Capital Trusts (VCT) and Enterprise Investment Scheme (EIS) are designed to encourage private investment into trading companies. Both schemes help support business growth while at the same time encouraging individuals to fund these companies.

A number of changes to the schemes were announced at Budget 2025 and will apply from 6 April 2026.

The main changes are as follows:

These increases in annual, lifetime and gross assets apply only to qualifying companies that are not registered in Northern Ireland and are not engaged in trading goods, or in the generation, transmission, distribution, supply, wholesale trade, or cross-border exchange of electricity. These companies remain eligible under the current scheme limits.

These changes are designed to encourage larger investments into qualifying companies. Investors should be aware of the reduced VCT Income Tax relief available and ensure that investments still remain worthwhile.

While there are many state benefits available, it is not always clear which of these are taxable and which are tax-free.

HMRC’s guidance outlines the following list of the most common state benefits which are taxable, subject to the usual limits:

The most common state benefits that usually tax-free include the following:

If your business imports goods into the UK, it is important to be familiar with the Customs Declaration Service and to ensure that any duty payments are made correctly and on time to avoid delays, interest or penalties.

The Customs Declaration Service (CDS) is a specially designed IT platform used for completing customs declarations for businesses that import or export goods from the UK. All electronic import declarations must be submitted through the CDS.

When you import goods into the UK using the CDS, you must pay any tax due promptly. Payments should reach HMRC by the deadline, and if that falls on a weekend or bank holiday then the payment must arrive by the previous working day.

Late payments may result in interest charges and / or penalties. You will need your unique 16-character reference number starting with “CDSI,” which is specific to each declaration, to make a payment. Using the wrong number can delay the release of your goods.

Payment can be made online through your bank account or with a debit or corporate credit card (personal credit cards are not accepted). Online bank payments are usually instant but may take up to two hours to appear, while card payments are recorded on the date made.

Payments can also be made by bank transfer. CHAPS or Faster Payments usually arrive the same or next day, while BACS take about three working days. UK payments should go to HMRC’s Customs Duty Schemes account (sort code 08 32 10, account number 14077970). Overseas payments must be made in GBP. There are also options to pay by cheque, allowing three working days for delivery. If there are payment issues or further advice is required, you can contact HMRC’s National Clearance Hub.

The tax legislation requires the deduction of tax from yearly interest that arises in the UK. This typically refers to interest that is subject to Income Tax or Corporation Tax.

The legislation requires the deduction of tax from yearly interest, if:

The tax must be deducted by the person or entity making the payment at the savings rate in force for the tax year in which the payment is made. In practice, the main circumstances where tax is deducted are where a company makes a payment of interest to an individual or other non-corporate person, or where interest is paid by a person (individual, trustee or corporate) to another person whose usual place of abode is outside the UK.

However, some exclusions apply. For example, interest paid by deposit takers, interest paid to a bank or building society, interest paid from UK public revenues or under the former Mortgage Interest Relief At Source (MIRAS) scheme. Companies, local authorities and ‘qualifying firms’ (a firm which includes a company or local authority as a partner) are also exempt from the requirement to deduct tax from interest paid to certain recipients.

It is important to note that statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998, is not classified as yearly interest and does not fall under these rules.

The remittance basis of taxation for non-UK domiciled individuals (non-doms) was replaced with the new Foreign Income and Gains (FIG) regime from April 2025. This new regime is based on tax residence rather than domicile. Under the new rules, nearly all UK-resident individuals must report their foreign income and gains to HMRC, regardless of whether they had previously claimed remittance basis or are claiming relief under the FIG regime.

Former remittance basis users not eligible for the new FIG relief are now taxed on newly arising foreign income and gains in the same way as other UK residents. However, they will still be taxed on any pre-6 April 2025 FIG that is remitted to the UK.

A key feature of the new regime is the 4-year FIG relief. This is available to new UK residents who have not been UK tax resident in any of the 10 preceding tax years. These individuals can opt in to receive full tax relief on their FIG for up to four years. Claims must be made via a self-assessment return, with deadlines falling on 31 January in the second tax year after the relevant claim year. The FUG relief lasts for a maximum of 4 consecutive years starting from when a person first became a UK tax resident. Claims can be made selectively in any of the four years, but any unused years cannot be rolled over.

The types of foreign income which are eligible for relief includes:

An individual’s ability to qualify for the 4-year FIG regime will be determined by whether they are UK resident under the Statutory Residence Test (SRT).