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Notes on tax, profit, and a more valuable business.
Short, plain-English reads for owner-managed UK businesses. No jargon walls, no filler.
Brown envelope from HMRC? What the letter means and what to do
Most brown envelopes from HMRC are routine: a tax code notice, a P800, a Simple Assessment bill or a reminder to file. Open it the day it arrives, check it is genuine, find the deadline, and get advice before you answer any questions HMRC asks.
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ISA rules: the £20,000 allowance and the new cash ISA limit from April 2027
You can put up to £20,000 a year into ISAs. From 6 April 2027, under 65s can put no more than £12,000 of that into a cash ISA, so this tax year is the last chance to put the full £20,000 in cash.
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How should you respond to an HMRC enquiry letter?
Answer exactly what HMRC has asked, accurately, completely and within the deadline. Sending more than the enquiry needs can raise new questions, even if you did nothing wrong.
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Do UK residents pay tax on overseas income and gains?
Yes. UK residents are taxed on their worldwide income and gains as they arise, even if the money never comes to the UK. The main exception is the 4-year foreign income and gains regime for people new to the UK.
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Minimum wage rates and employment law changes for employers in 2026
The minimum wage for workers aged 21 and over has been £12.71 an hour since April 2026, sick pay now starts from day one, and since 1 October staff have six months to bring most tribunal claims.
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Does £100,000 turnover mean you have to register for VAT?
Not automatically. It depends on exactly what you sell. A dentist's check-ups are exempt while teeth whitening is standard rated, and building work can be 0%, 5% or 20%.
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Do you need to register for VAT if you sell gold bullion and jewellery?
Not always. Investment gold is exempt from VAT, and exempt sales do not count towards the £90,000 registration threshold, so a business turning over £100,000 can still be below it.
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Companies House identity verification: directors are now being prosecuted
Every company director and person with significant control now has to verify their identity with Companies House, and the first directors have been convicted and fined for acting without doing it.
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How much time can you spend in the UK after you move abroad?
It depends on your UK ties. Under the Statutory Residence Test, someone who was UK resident in any of the previous 3 tax years can spend fewer days here the more ties they keep, and 183 days or more makes you UK resident automatically.
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Business expenses on a personal card: can you still claim?
A genuine business cost paid on a personal card can still go into the accounts, but only if your accountant knows about it. Keep the receipt and flag the payment so it is recorded.
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When does a gift to staff become taxable?
A staff gift is taxed when it fails a trivial benefit condition and no other exemption applies. Bikes, uniforms, one mobile phone and a yearly medical check have their own exemptions.
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New limited company deadlines: accounts and tax return
A limited company files annual accounts, a Company Tax Return and a confirmation statement, and pays Corporation Tax. The first year has its own deadlines, including 21 months for first accounts.
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What tax planning should you do before 5 April 2027?
The 2026 to 2027 tax year ends on 5 April 2027. Before then, check your dividend allowance, pension contributions, ISA, Capital Gains Tax exempt amount and any planned business sale.
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Are you UK tax resident if you spend 183 days in the UK?
Yes. Under the Statutory Residence Test, spending 183 days or more in the UK in a tax year makes you UK resident for that year. HMRC says no other test needs to be considered.
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Can your company pay for a medical check-up tax free?
Yes, within limits. HMRC exempts one health screening and one medical check-up per employee in a tax year. Checks connected to medical treatment are not covered.
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Is gym equipment tax deductible through your company?
It depends on who the equipment is for and how it is used. Kit at home for a director's own use is a weak claim, while a workplace gym open to all staff can fall within a tax exemption.
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Can you use a director's loan to buy something personal?
Yes, a company can lend a director money for a personal purchase, but it gives no tax relief. Loans over £10,000 and loans left unrepaid after the company's year end can both lead to tax charges.
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Is a £12,570 salary plus dividends always the best split?
No. Salary and dividends are taxed at different rates in each band, so the standard split suits some levels of drawings and not others. The answer comes from a calculation on your own figure.
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When are Making Tax Digital quarterly updates due?
The quarterly update for the period ending 5 October is due by 7 November. It has to go through compatible software, and each income source needs its own update.
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Do you have to register for VAT if you go over £90,000?
Not always. If your taxable turnover went over £90,000 only temporarily, you can apply to HMRC for an exception from registration. If HMRC refuses, it will register you for VAT.
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Can I put this through the business as an expense?
It depends on the purpose of the cost more than the item. An expense is allowable when it is wholly and exclusively for the business, so one purchase can pass in one business and fail in another.
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Do exempt sales count towards the VAT threshold?
No. The £90,000 VAT registration threshold is tested against taxable turnover, which leaves out exempt sales. Zero-rated and reduced-rated sales are taxable, so they do count.
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Moving to Dubai: when do you stop being UK tax resident?
Not on the day you fly. UK residence is set for each tax year by the Statutory Residence Test, which counts days, and the year you leave is only split if you meet the conditions.
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How much should a director pay themselves? Work backwards
Start with the monthly amount you need personally, then choose between salary, dividends and a director's loan to reach it. The right mix depends on that figure and on what the company can pay.
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What if you pay personal costs on the business card?
Personal spending on the business card is charged to your director's loan account. It then has to be repaid or cleared with extra salary or dividends, and those carry tax of their own.
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Which taxes apply when you buy or sell a property?
Up to six: Stamp Duty Land Tax, Capital Gains Tax, Income Tax, National Insurance, VAT and Inheritance Tax. Which of them arise depends on the property and what you do with it.
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What do you need to file your Self Assessment tax return?
The online deadline for the 2025 to 2026 return is 31 January 2027. You need your income, expenses, pension and charity payments, dividends, interest and any gains to hand.
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How does tax planning change as your income rises?
Each Income Tax band has its own planning points, from Marriage Allowance below £12,570 to the loss of the Personal Allowance between £100,000 and £125,140. Pensions feature in most of them.
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Business travel meals: subsistence or entertainment?
Reasonable meals while travelling or working away on business are subsistence, which a company can usually deduct. Once the meal is about hosting someone, it is entertainment and the rules tighten.
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Is a work trip with leisure time a taxable benefit?
A purely business trip has no personal tax cost for staff. Where a trip includes non-work activities, the private element can be a taxable benefit, which a PAYE Settlement Agreement can cover.
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Limited company or sole trader if you take all the profit?
If you draw every pound the business makes, a limited company often leaves you with less take-home than a sole trader on the same profit. Its advantages lie in liability and retained profit.
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Stamp duty on £300,000: how much you pay on a £300k house
A home mover pays £5,000 stamp duty on a £300,000 house in England or Northern Ireland. First-time buyers pay nothing and an additional property costs £20,000.
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Starting a side hustle while employed: sole trader or limited company?
If you already earn well from a job, a side hustle's profit lands on top of your salary as a sole trader. Put it through a limited company and the starting point is very different.
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Your company made a capital loss. Here is what you can do with it
A company capital loss goes against capital gains in the same accounting year, and anything left over carries forward indefinitely. What it will never do is reduce your trading profits.
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Made a loss? You can carry it back and reclaim the corporation tax you already paid
Made a loss this year? A trading loss can be carried back against the previous 12 months of profit, so corporation tax you have already paid can come back to you as cash.
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Sold a business car? Your tax bill depends on how you claimed the running costs
Sell a car you have used in the business and the tax position turns entirely on whether you claimed Capital Allowances or Mileage Allowance. One method can add tax on the sale. The other never does.
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Rented out your home before selling? You may still owe no capital gains tax
You do not need to pay any capital gains tax on the sale of your house, if it has been your main home the whole time you owned it. Rent it out first, and the rules change, unless you know the exemption that can bring the whole gain back into relief.
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Can you give your staff a phone without creating a taxable benefit?
One phone per employee, on a contract in the company's name, is exempt from income tax and National Insurance. Change either of those two facts and the treatment changes with it.
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Laptop tax relief: repairs, new MacBooks, and the Annual Investment Allowance
Your laptop can cut your tax bill, but repairs and a brand-new machine are treated differently. Here is how each one works for an agency owner, and why the Annual Investment Allowance usually gives you the full relief upfront.
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VAT when your agency has overseas clients
Do you put VAT on an invoice to a client in the US or the EU? For most agency services the answer turns on where your client belongs, not where you are.
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You live abroad but own a UK agency. Where does the tax land?
You can live overseas and still own a UK marketing agency, but the company's tax and your personal tax are two separate questions. Here is how they split, in plain terms.
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The 60% tax trap, and why agency owners keep hitting it
Between £100,000 and £125,140 of income, an odd quirk of the UK system taxes every extra pound at an effective 60 percent. Here is why it happens, and why agency founders hit it so often.
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How to choose a tax adviser for your marketing agency
Searching for a tax adviser for your UK marketing agency? Here is how to judge one on specialism, credentials, and planning, and what genuinely good looks like.
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How to reduce your agency's corporation tax (legitimately)
Legitimate ways a UK marketing agency can bring its corporation tax bill down, what actually reduces taxable profit, and why dividends do not.
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Selling stocks and shares as an agency owner: the tax, in plain English
Sell shares at a profit and the taxman wants a slice. Here is what capital gains tax, dividend tax, and Business Asset Disposal Relief actually mean for an agency owner, plus the one shelter most people underuse.
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Tax avoidance vs tax evasion: which one is illegal?
Most people think tax avoidance is illegal. It is tax evasion that is illegal. Here is where the line sits, what HMRC means when it uses the word avoidance, and why proper planning is the route that survives scrutiny.
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AI replaced his bookkeeper. It cost £20k in extra tax.
One agency owner automated his bookkeeping with AI. It treated expenses as income and left his accounts unbalanced, pushing his tax bill around £20k too high.
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Set up in Dubai and pay no tax? Optimise your UK position first
Before you move your agency to Dubai for a zero-tax life, get your UK position efficient first, and understand the UK rules that can follow you abroad.
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If capital gains tax rises, what should agency owners do?
There is speculation that capital gains tax could be aligned with income tax rates. Nothing is confirmed, but if you plan to sell assets soon, it is worth planning now.
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Three tax moves for agency owners in 2026/27
Three straightforward, legitimate moves for UK agency owners this tax year: a salary set to your allowance, tax-free company interest, and your ISA allowance.
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Why you should not use Claude for your taxes
AI is brilliant at sounding certain. Tax is the one place where confident and wrong is the most expensive combination there is.
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Can you put Wimbledon or football tickets through your limited company?
Whether match tickets are an allowable expense comes down to one question: who is coming with you. Same seat, different guest, completely different tax treatment.
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Three tax reliefs most marketing agency owners never look at
SEIS, R&D tax credits and EMI share schemes. Three reliefs written into law that agency owners routinely leave alone, usually because nobody ever told them the conditions.
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Is travelling to your own office a business expense?
Travel to your normal place of work is not a business expense, and a temporary office can quietly become your normal one. Two numbers decide it: 24 months and 40%.
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Profitable on paper, empty in the bank: where did your agency's cash go?
An invoice becomes income the day you raise it, not the day it clears. Which means you can owe tax on money that is still sitting in a client's account.
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Can you reclaim the VAT on your agency's laptops, cameras and chairs?
If your agency is VAT registered, the VAT on business equipment is usually recoverable. Private use and the Flat Rate Scheme are the two things that cut the claim down.
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Can too much cash in your agency cost you Business Asset Disposal Relief?
Business Asset Disposal Relief only applies if your company is a trading company. Let cash and investments build up and HMRC can argue it is not, which changes the rate you pay when you sell.
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The VAT Flat Rate Scheme: worth it for an agency, or not?
If your agency is VAT registered but your VATable costs are minimal, the Flat Rate Scheme can leave cash in the business. If you are caught by the limited cost business rules, it does the opposite.
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Can you claim back VAT from before you were VAT registered?
Not while you are unregistered. But once you register, VAT on goods you still hold can go back four years and VAT on services six months, with some costs blocked either way.
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Can you close your agency, take the cash, and start again?
Shutting the old company, leaving the tax bill behind and reopening under a new name is a plan HMRC has already legislated against. Here is what actually happens if you try it.
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If your agency has employees, do not miss the £10,500 National Insurance relief
Employment Allowance lets eligible employers cut their employer's National Insurance bill by up to £10,500 a tax year. There is one trap that stops most one-person agencies claiming it.
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Your agency's subcontractors: are they really subcontractors?
A lot of agencies hire subcontractors while treating them like employees. If the reality looks like employment and you are not running payroll, HMRC can come asking.
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Pre-trading expenses: what can you claim before you start trading?
Qualifying pre-trading expenditure from up to seven years before trading began can be claimed, if it would have been allowable once you were trading.
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Which allowances let an agency owner take money tax-free?
Four allowances worth knowing, with the 2026/27 figures: the trading allowance, the personal allowance, the capital gains annual exempt amount and the ISA limit. Using them properly before the tax year ends is the whole trick.
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Is gold taxable in the UK? Capital Gains Tax on gold
Sovereigns and Britannias are exempt from CGT because they are UK currency. Gold bars, ETFs, foreign coins and gold held in a company can be taxed at up to 24%.
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Earning over £60,000 and claiming Child Benefit? What HMRC takes back
The High Income Child Benefit Charge is based on the highest earner in the household, not the household total. That is why one parent on £80,000 can lose all of it while a couple on £59,000 each keeps the lot.
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Does HMRC really look at your social media before opening an enquiry?
HMRC compares what you report with other information available about you. If the lifestyle on your feed does not match the income on your return, that mismatch can be the thing that gets noticed.
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How can you give your agency staff a gift without creating a tax bill?
The trivial benefits rules let you give an employee a gift worth up to £50 tax free while the agency still claims the cost. Directors get their own annual cap, and one common mistake breaks the whole thing.
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Can you put an overseas business trip through your agency?
Flights, hotels and food on a genuine business trip can be allowable. Add enough personal time to the itinerary and HMRC can challenge the individual costs, or the whole trip.
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Does HMRC pay people for reporting serious tax evasion?
HMRC's Strengthened Reward Scheme can pay a share of the tax recovered in serious cases. It is aimed at very large evasion and avoidance, not at everyday business tax, and it says something useful about where HMRC is putting its effort.
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Lost the receipt: does HMRC still let you claim the expense?
HMRC can reject an expense you can't prove. A bank statement and a note may do for small costs from known suppliers. Bigger or unusual costs need the receipt.
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What happens if HMRC finds a personal cost in your agency's expenses?
Trying to claim personal costs as business expenses is exactly how you open yourself up to an HMRC investigation. Here is what actually happens when HMRC disallows one, and why the cost is rarely limited to the expense itself.
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Can your agency put branded hoodies and staff uniform through the books?
Plain clothes you could wear anywhere are disallowed, however smart they make you look on stage. Clothing carrying a permanent company logo is a different argument, and kitting out staff has its own exemption.
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Want to reward a key employee without a 40% tax hit? Consider EMI options
A £40k bonus can lose a big share to income tax and National Insurance before it reaches your best employee. EMI share options can turn the same reward into a capital gain instead.
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Why is your agency not growing? Look at what you spend on tools
Tool spend creeps up one subscription at a time and nobody owns the total. An expense being deductible is not the same as it being worth paying, and the arithmetic on that is less forgiving than most founders assume.
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Is that £5k course a business expense or a personal one?
Training that sharpens skills you already use in the agency is normally deductible. Training that buys you a new career is capital, and HMRC has case law to back that up.
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How do you sell your agency without getting destroyed by tax?
Two structures come up again and again before a sale: selling through a holding company, or selling while non-UK resident. Each solves a different problem, and one of them has a five year trap in it.
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Netflix, Audible, YouTube Premium: which subscriptions can your agency claim?
Two agencies can pay for the same subscription and only one of them gets the deduction. The deciding factor is whether there is any private benefit attached, because a part claim is usually not on offer.
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What do you actually give away when you pay someone in shares?
Paying a consultant in equity protects cash flow and quietly costs you control. Drop below 75% and there are decisions you can no longer make on your own.
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What salary do you need to buy a £300k house?
Around £60,000 of household income, on a worked example with a 10% deposit: £30,000 saved and a £270,000 mortgage. First-time buyers pay no stamp duty here.
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What your agency can actually claim as an expense: a 2026 checklist
Most agencies under-claim, not over-claim. As work has gone remote and software-heavy, the list of legitimate business expenses has quietly grown.
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How much should an agency founder actually pay themselves?
Most founders treat their pay as a personal withdrawal rather than a business decision. Here is a cleaner way to think about salary, dividends, and what to leave in.
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Plan your tax around the exit, not just the year-end
If the plan is to sell in five to ten years, the decisions you make now shape both your tax bill and your valuation. Year-end tidy-ups miss most of that.
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Does your company pay corporation tax on dividends it receives?
Dividends received by a UK company, from the UK or overseas, are usually exempt from corporation tax. Receive £50,000 and the company can usually keep £50,000, with a few exceptions worth knowing.
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You moved abroad. Do you still owe UK tax?
Booking a one-way flight does not end your tax relationship with the UK. Where you pay is decided by residence rules, not your postcode.
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VAT for agencies: where the money quietly leaks
VAT rarely gets founders excited, but the wrong scheme or a missed recharge quietly costs agencies real money every quarter.
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Why clean books quietly raise your agency's valuation
Buyers pay more for businesses they can understand. The work that makes your numbers legible is the same work that makes them defensible.
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