Latest news with #CapitalGainsTax
Daily Mirror
3 days ago
- Business
- Daily Mirror
HMRC issues new £1,000 tax warning to millions of Brits
You would be expected to pay tax if you're selling items with the intention of making profit on them - this means you're classed as trading HMRC has issued an urgent warning for anyone urging more than £1,000 in extra income. You can earn up to £1,000 through a side hustle every tax year, without having to pay tax. This is called your trading allowance. If you make above this amount, you may need to declare this to HMRC through self-assessment. You would be expected to pay tax if you're selling items with the intention of making profit on them - this means you're classed as trading - and you make more than £1,000 in one tax year. But you wouldn't be expected to pay tax if you're just selling unwanted items from your home. Online platforms such as eBay and Vinted must now share their sales data with HMRC for tax purposes if they sell at least 30 items or earn €2,000 (roughly £1,700). Previously, HMRC had to request this information. But again, this does not definitely mean you owe tax - you'd only have to pay tax if you're considered to be trading. Under current rules, you need to fill a self-assessment tax form when you earn over £1,000 in extra income per tax year - but this is being raised to £3,000. If you make under £3,000, there will be a new and simple online form that you'll need to fill in to declare your earnings instead. This will come into force by 2029. The amount of tax you need to pay won't change - only the way you report your earnings to HMRC. Myrtle Lloyd, HMRC's Director General for Customer Services, said: "Whether you are selling handmade crafts online, creating digital content, or renting out property, understanding your tax obligations is essential. "If you earn more than £1,000 from these activities, you may need to complete a Self Assessment tax return. Filing early puts you in control – you will know exactly what you owe, can plan your payments, and avoid the stress of the January rush. You don't need to pay immediately when you file – you have until 31 January to settle your tax bill." There are many other reasons why you may need to fill out a self-assessment form, which include: Your income from renting out property was more than £2,500 You earned more than £2,500 in untaxed income, for example from tips or commission Your income from savings or investments was £10,000 or more before tax You need to pay Capital Gains Tax on profits from selling things like shares or a second home You're a director of a company (unless it was a non-profit organisation) Your income, or that of your partner, was over £60,000 and you're claiming Child Benefit You have income from abroad you need to pay tax on Your taxable income was over £100,000 You're a trustee of a trust or registered pension scheme Your state pension was more than your personal allowance, and your only source of income
Time Business News
4 days ago
- Business
- Time Business News
What Is Members' Voluntary Liquidation and How Does It Benefit Company Directors?
For directors of solvent companies, choosing how and when to close their business is an important decision — especially when looking for a tax-efficient and structured exit. Members' Voluntary Liquidation (MVL) offers a formal solution that allows directors to wind up a solvent company in a way that maximises returns and ensures legal compliance. A Members' Voluntary Liquidation is a formal process for closing a solvent limited company — meaning the company can pay all its debts in full, including any outstanding taxes and liabilities. It is governed by the Insolvency Act 1986 and must be administered by a licensed insolvency practitioner. The MVL process begins when directors make a formal declaration of solvency, confirming the company is financially stable and able to settle all debts within 12 months. Once this declaration is made, shareholders pass a resolution to wind up the company. From this point, the insolvency practitioner takes control of the company's affairs. Their role is to: Realise the company's assets Settle all outstanding liabilities (if applicable) Distribute the remaining funds to shareholders. One of the primary reasons directors choose an MVL is the potential to significantly reduce their tax liability when extracting profits from the company. Funds distributed via an MVL are generally treated as capital gains, not income. This means shareholders may benefit from Capital Gains Tax (CGT) treatment, often at a lower rate than Income Tax. Even more attractively, many directors qualify for Business Asset Disposal Relief (formerly Entrepreneurs' Relief), which reduces the CGT rate on the first £1 million of lifetime gains. For directors with large retained profits, this tax saving can be substantial compared to withdrawing funds via dividends, which could attract tax rates of up to 39.35%. An MVL is initiated by the company's directors and shareholders, which means it offers a high level of control and transparency throughout the process. This flexibility makes MVLs particularly appealing to directors who want a well-planned exit, allowing them to: Prepare for the closure in advance Choose the right time for tax planning Ensure a smooth transition, especially if retirement or business restructuring is involved. An MVL provides a definitive legal end to the company's existence, ensuring all loose ends are tied up and all creditors are paid in full. For directors, this offers peace of mind. Once the MVL is complete and the company is removed from the Companies House register, there are no lingering obligations, outstanding paperwork, or compliance issues to worry about. It also demonstrates to stakeholders that the business was closed properly and in full accordance with the law. An MVL is often a reflection of success — used when a company has achieved its goals and is no longer needed. It offers a dignified and professional way to close down. Directors can present the closure as a strategic move, whether stepping into retirement, relocating, or simply moving on to a new venture. It also ensures that any remaining profits are distributed fairly and efficiently among shareholders, preserving goodwill and supporting future opportunities. A Members' Voluntary Liquidation is only suitable if the company is solvent — that is, it can pay all of its liabilities in full, usually within 12 months of liquidation starting. If your company has unmanageable debts, owes money to HMRC, or cannot meet its obligations, an alternative procedure such as a Creditors' Voluntary Liquidation (CVL) may be more appropriate. At Clarke Bell, we offer a free consultation to assess your company's position and determine whether an MVL is the right route. We work closely with directors and accountants to provide clear, tailored advice. A Members' Voluntary Liquidation is an excellent option for directors looking to close a solvent company efficiently, reduce tax liabilities, and make a clean break. Whether you're planning for retirement, restructuring your business affairs, or winding down a dormant company, an MVL offers control, tax benefits, and legal certainty. TIME BUSINESS NEWS
Spectator
4 days ago
- Business
- Spectator
Without non-doms, who will pay for Labour's bloated state?
We are not the fastest growing economy in the G7, even though the Labour party promised that we would be. We are not topping any tables for inward investment, and we have fallen to the bottom of the league for new companies listed on the stock market. Still, it is good to know that there is still one measure where the UK economy comfortably beats the rest of the world. We are now losing more millionaires than any rival nation. The exodus of wealth out of the UK, it appears, is accelerating – and very soon this is going to turn into a big problem for the Chancellor Rachel Reeves. The UK was already one of the countries that the wealthy were fleeing. But according to a report out today by the advisers Henley & Partners, a record 16,500 millionaires will leave the UK in 2025. This is double the number fleeing China, which comes in at number two on the rankings and which is expected to lose 7,800 this year. It is the first time the UK has topped the annual table, and its lead over the rest of the world is not only huge, it is also accelerating. It is now official. The rich are getting out of Britain in increasing numbers. The ending of non-dom status has driven many of the wealthy foreigners out of the country It is not hard to understand why. The ending of non-dom status has driven many of the wealthy foreigners out of the country. The decision to impose inheritance tax at 40 per cent, one of the highest rates in the world, on their global assets was unsurprisingly a major factor in persuading them to leave. The price of remaining in the UK is now punitively high if you are not British. But it goes beyond that. The UK has developed a very unappealing tax system, with high rates of income tax, a rising rate of corporation tax, increasing rates of Capital Gains Tax, especially for entrepreneurs, along with higher dividend taxes, frozen thresholds, and very high rates of stamp duty and VAT. It is not just the non-doms heading for Dubai and elsewhere. It is the well-off British as well. Of course, the left will celebrate that, and the Starmer government certainly has no time for the millionaires expected to leave this year. But here is the catch. The UK is also uniquely dependent on a small number of well-off people to support its bloated, free-spending state. The top 1 per cent of taxpayers pay 29 per cent of all the revenue from income tax, while the top 10 per cent pay 60 per cent of the total. Other countries take more out of the economy in tax overall, but they squeeze the money out of a broader range of people. The UK relies on a handful of people – many of whom are now leaving. The risk for Reeves is that the exodus now develops a momentum of its own. If that happens, the UK's already precarious public finances will be in even worse shape than they already are – and she will have only herself to blame.
Spectator
5 days ago
- Business
- Spectator
Reform can go further in its plan to woo back non-doms
We will hear plenty of familiar criticisms of the plan unveiled by Reform yesterday to bring non-doms, as wealthy foreigners who enjoy a special tax regime in the UK are known, back. It will make Britain a magnate for tax dodgers and money launderers. It will increase inequality. And the only jobs it creates will be as servants of the super-rich. In fact, however, the only problem with the Reform plan is that it doesn't go far enough. The party should be a lot more ambitious as it prepares for a potential government. It will certainly be a major change. After a decade over which all the political debate has been about how to impose higher taxes on the rich, Nigel Farage, the leader of Reform, will this week set out plans to bring them back. A new 'Britannia Card' will allow both foreigners and returning expats to pay a flat fee of £250,000, in return for which their worldwide income would be exempt from most UK taxes for 10 years. The money raised would then be distributed in the form of a 'Britannia worker's dividend' to low-paid employees, with a bonus worth an estimated £600 to £1,000 a year. Reform's plan has the potential to change the economic argument There are legitimate criticisms of the Reform plan. It may be complex to implement, and earmarking the income generated for a 'dividend', while politically clever, may prove too fiddly. The tax system needs simplification, not yet more complex allowances. And yet, it has the potential to change the economic argument. It is already clear that the Labour-Tory consensus on driving out the non-doms has been a disaster for the British economy, while the Starmer government's determination to put up taxes on the rich has led to an exodus of wealth and talent. Reform has recognised how damaging that has become, worked out that the UK needs to attract wealth, and recognised that the entrepreneurs and business owners who have left the UK need to be bought back. Indeed, extending the tax break to returning British nationals may well prove the most significant part of the package. But Reform could afford to go even further with their plan. The £250,000 flat fee may well need to come down if the UK is to compete with similar deals available in Italy and Greece or the zero taxes levied in Dubai and the Caribbean. A much lower annual threshold may well generate more revenue overall. And it should extend the offer to foreign entrepreneurs, with a far lower rate of Capital Gains Tax to start-ups who want to move from their high-tax bases in Paris, Stockholm or Madrid to a far more lightly taxed London, Cambridge or Bristol. The important point, however, is this. As the non-doms and the wealthy flee the Chancellor's Rachel Reeves's increasingly punitive tax regime, she will now have to defend her decisions against a very clear alternative. As the disaster of taxing success becomes clear, that will become harder and harder – and Reform's alternative will look a lot more attractive.
The National
5 days ago
- Business
- The National
Free it from England's yoke and Scotland is laden with opportunity
Time and again, he, like many others in the SNP leadership, fails to provide an argument for why Scotland should be independent. In addition, and vitally, he fails to provide an explanation of the benefits of Scotland being independent. I am not going to pretend that control of Scotland's economy is the biggest reason for Scotland being independent. I genuinely do not think it is. However, to pretend that economics is not a matter of significance in this debate would be entirely incorrect. Having an independent Scotland with an economic policy designed to achieve the best outcomes for the people of Scotland is fundamental to the delivery of the best benefits for the people of the country and John Swinney didn't even scratch the surface of this issue. Let me touch on three reasons why Scotland does need control of its economy and can only get this by being independent. I will also mention a necessary condition for success. READ MORE: John Swinney calls for 'diplomatic solution' after US bombs Iran Firstly, Scotland does need to decide for itself what its economic priorities are. They are not the same as those of the rest of the UK. Scotland will not, for example, ever want to promote financial services in the way that the Westminster Parliament does, given that the latter lives in fear of the City of London. Scotland can see through all the problems that has created. In addition, Scotland not only believes in renewable energy, it also has the power to deliver it. In addition, it has ample water, and England does not. What is more, Scotland has great universities. With its own economic policy, aligned to these strengths, and to the social priorities of its people Scotland could be managed to deliver economic outcomes that could certainly be as good as, if not better than, those that are achieved now. They could also be much better than those England might achieve in the future, oppressed as it is by the dominance of the culture of the City. The burdens of wealth and inequality that it creates prevent any chance of real economic development in England and always will now. Secondly, to achieve this, Scotland does need control of its own tax policies. Scotland has always believed in progressive taxation in pursuit of greater equality. While it is integrated into the tax system of the UK, which is designed to promote inequality, achieving that goal is not possible. As my work has shown, this might not require a wealth tax in Scotland. Radical transformation of existing taxes –such as Capital Gains Tax, National Insurance, Inheritance Tax, the higher rates of Income Tax, Corporation Tax and VAT –could deliver substantial increases in tax revenue in Scotland without requiring the vast majority of the Scottish population to pay more. Additional burdens would fall on the wealthiest, large companies and tax cheats, and I assure you that there are still far too many of them. And Scotland need not be worried that the wealthy will leave if it does these things. If progressive taxation is linked to investment in the economy and the people of the country, then the evidence from Scandinavia and elsewhere is that wealth wants to come into a country, not leave it, because they want a part of the success. Thirdly, Scotland needs more control over its public services. Westminster-focused political parties appear, without exception, to now hate both government and government services, even though they claim to be desperate to control them, whilst wanting to destroy both. Scotland is fortunate in having some politicians who actually believe that the job of a Scottish government is to partner with the people of the country to provide the essential safety net required to help all those who need it, while supporting those suffering temporary misfortune, and providing opportunity for those who wish to learn, innovate and develop Scotland as a whole. A Scottish government that genuinely adds value to the country, which that of the UK does not, could be created and deliver something that has not been seen in the UK since 1979. The transformational possibilities are staggering, and yet John Swinney never made any reference to this. Finally, and I cannot avoid the issue, none of this would be possible if Scotland had a currency tied to the English pound and the fortunes of the City of London. It is that City which has dragged down the UK, imposing what is best described as a finance curse on everyone in the rest of the economy as they are forced to work to meet the rapacious demands of bankers and the finance industry. Leaving the City in charge of Scottish money and interest rates would, as a consequence, be ruinous for the newly independent Scotland's fortunes. As a result, a commitment to a Scottish currency from day one of independence will be essential. But if that were done and the above-noted policies were put in place, I suspect the currency in question would, within a short period of time, be worth more than the English pound. Scotland is a country laden with opportunity if only it could be rid of the yoke that England imposes upon it but SNP politicians appear to lack the courage to say so. I have no idea why, because the opportunity is glaringly apparent to me. But if they will not, it is time for others to lead the call for independence, because that is what Scotland requires if it is to ever realise its potential.
