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Understanding Taxable Profit As a self-employed individual, your taxable profit forms the basis of your tax liability. You can reduce this taxable profit by deducting specific expenses incurred in the operation of your business. The fundamental guideline is that any expense must be incurred wholly and exclusively for business purposes to qualify for a deduction.
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Understanding Benefits in Kind (BIK) Benefits in kind (BIK) refer to goods and services provided to employees (or their family members) either for free or at a significantly reduced cost. The nature of these benefits and how they are provided can influence the tax and National Insurance Contributions (NICs) to be paid and the reporting
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Understanding Mandatory Payrolling Mandatory payrolling requires employers to manage taxable benefits provided to employees directly through the payroll system. This involves treating the taxable amount of the benefit as an additional salary and deducting the corresponding tax from the employee’s cash pay. By doing so, employers can bypass the need to report these benefits to
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VAT-registered businesses that use invoice accounting generally account for VAT when invoices are issued and received. HMRC has recently published new Guidelines for Compliance which set out their recommended approach to the compliance process to ensure that VAT is accurately declared by the business. The guidelines can be used to help establish an appropriate tax
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Over the past few years, tax enquiries aimed at identifying and correcting errors or deliberate under-reporting in tax returns have increased. HMRC generates substantial revenue from all compliance activities and although the exact proportion relating to tax enquiries is not always separately reported, the latest figures show that for 2023-24 the amount secured from all
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Expenses will be incurred in running a property business. To ensure that tax is not paid unnecessarily, all allowable expenses must be deducted when calculating the profits for that business. However, to avoid unwanted attention from HMRC, it is important to understand which expenses can be deducted, and which cannot. An expense is revenue in
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