Author Archive: Muhammad Zia

Key takeaways from the Spring Tax Update

In the Spring Tax Update on 28 April, the Government announced a package of measures aimed to simplify the tax and customs system.

Aiming to modernise and improve the experience of HM Revenue & Customs (HMRC) processes for individuals and traders, the policy paper contains a total of 39 measures for simplifying and reforming the tax and customs system.

These include changes for immediate effect as well as long-term reforms and consultation launches.

Here are the key takeaways from the Spring Tax Update.

Reducing burdens on businesses

Perhaps disappointment over the lack of fresh support for businesses in the Spring Statement has led to the announcement of new measures to reduce burdens on businesses, for the purpose of supporting economic growth.

The new measures include:

  • Capital Goods Scheme simplification: This measure removes computers from the assets covered by the scheme and increases the capital expenditure value of land, buildings and civil engineering work from £250,000 to £600,000 (exclusive of VAT). This aims to reduce the number of capital assets that would fall within the Capital Goods Scheme, therefore reducing the administrative burden on small businesses.
  • Reform of UK law in relation to transfer pricing, permanent establishment and Diverted Profits Tax: The Government has published a consultation on draft legislation for the reform of the UK’s international tax rules. The consultation includes proposed change to UK tax legislation in transfer pricing, permanent establishment, and Diverted Profits Tax.

Payrolling benefits in kind

Mandatory reporting and paying of Income Tax and Class 1A National Insurance contributions on benefits in kind via payroll software has been delayed a year.

While HMRC initially announced that payrolling of benefits would become mandatory from 6 April 2026, the Spring Update reveals that it will now be introduced on 6 April 2027.

Income Tax Self-Assessment criteria review

The Income Tax Self-Assessment reporting thresholds for trading, property and “other taxable” income will be aligned and changed to £3,000 (gross) each.

This removes the requirement for an estimated 300,000 taxpayers to submit a Self-Assessment return.

Employment related securities

Business owners can now transfer their employer’s National Insurance contributions liability to an employee who acquires employment-related securities such as shares from the employer, in certain circumstances. This measure will simplify the process to make a joint election to transfer the liability, by removing the requirement on the employer to submit the election form to HMRC for pre-approval.

The Spring Tax Update also confirmed that the Government will not be taking forward the draft Income Tax (Pay As You Earn) (Amendment) Regulations 2025.

This means that employers will not have to provide more detailed employee hours data to HMRC from 6 April 2026.

Other key updates

Other key highlights from the Spring Tax Update include:

  • Cultural Gift Scheme: The Government will reform the Cultural Gift Scheme by removing the restriction on jointly owned objects and allowing tax credits to be used more flexibly. This will simplify the scheme by making it more accessible and improve take up.
  • State pension forecast service: The check your state pension forecast service will be enhanced further for those making voluntary payments to fill gaps in their National Insurance record.
  • Ceasing Corporation Tax letters: While there will be no change to the overall Corporation Tax process, HMRC will stop issuing six types of non-essential Corporation Tax letters from June 2025. The measure is designed to reduce the costs of paper communication.

At Rotherham Taylor, we’re proud to be your forward-thinking advisers – ensuring you stay ahead of the game with proactive tax advice.

We keep up to date with legislative requirements to help you optimise your tax position and relieve you of the burden of compliance.

Contact our tax team today for guidance on what the Spring Tax Update means for you.

How to maximise tax relief on losses to offset higher employment costs

The recent rise in employers’ National Insurance Contributions (NICs) to 15 per cent will lead to a 60 per cent increase in NIC costs for a business employing minimum wage staff, according to the Centre for Policy Studies. 

With no new business reliefs announced in the Spring Statement and prices continuing to rise, many businesses could face growing losses. 

In a period of economic uncertainty, it is essential to make the most of the tax reliefs available on your losses. 

Trading loss 

If your business makes a loss from trading, the disposal of a capital asset, or on property income, then you may be able to claim relief from Corporation Tax by offsetting your loss against income from the same tax year. 

You can also offset losses against capital gains you have made in the same tax year.  

This may only be done after you have offset losses against your income first. 

If you make a trading loss and it cannot be used in the same year, you may be able to carry it back to earlier accounting periods. 

Losses on qualifying shareholdings 

If you have shares in an eligible business that has failed, you may be able to offset losses against your income. 

This means you could receive tax relief of up to 45 per cent on your loss. 

However, you need to make sure that your loss meets the strict conditions required by HM Revenue & Customs (HMRC), as not all losses are eligible for tax relief. 

Business closure 

No one wants to be forced to close their business. 

Unfortunately, higher employment costs may mean that some businesses are simply unable to continue. 

If you make a loss in your final 12 months of trading, you can also offset this against your profits from the previous three tax years to reduce your liabilities.   

Mitigate your losses with our tax team. 

Business owners need to make the most of the tax reliefs available to them, including those related to losses. 

Our tax advisors can help you claim tax relief on losses and recover much-needed funds. 

Need help claiming tax relief on losses? Contact our tax specialists today. 

How HMRC treats cryptoassets disposed of by businesses

Cryptoassets make up a growing portion of the market, and businesses are increasingly looking to take advantage of these digital currencies. 

If your business carries out activities involving the exchange of cryptoassets, then you are liable to pay tax on them.  

However, understanding how HM Revenue & Customs (HMRC) treats cryptoassets for tax purposes can be tricky. 

Here is what you need to know about how HMRC taxes cryptoassets for corporates. 

Disposal of cryptoassets 

Disposal of cryptoassets includes selling tokens for money and exchanging tokens for a different type of token. 

Using cryptoassets to pay for goods or services, or giving away cryptoassets to another person, also counts as a disposal. 

Disposal of cryptoassets is usually treated by HMRC as capital disposal gains or losses rather than profits or losses.  

This means that, if you hold exchange tokens as an investment in your business, you are liable to pay Corporation Tax (CT) on any gains resulting from disposal. 

However, in exceptional circumstances where your business regularly buys or disposes of cryptoassets, HMRC may classify your profits as subject to Income Tax and National Insurance (NI), rather than CGT. 

Even if the profit or gain is within your tax-free allowance, you must still report it to HMRC. 

Under HMRC rules, transactions concerning currency used as legal tender are exempt from Value Added Tax (VAT). 

However, HMRC does not consider cryptoassets to be money or currency.  

This means that cryptoassets are liable for VAT. 

HMRC also does not consider the trading of cryptoassets as gambling.  

Airdrops and mining 

If your business receives an allocation of cryptoassets as part of an airdrop (for example, a marketing campaign), any future disposal will be subject to CGT. 

In all cases, income from mining cryptoassets is subject to Income Tax. 

Where mining activity is deemed to be a trading activity by HMRC, then any income will be regarded as trading income. Otherwise, it will be treated as miscellaneous income. 

The latter will not be liable for Class 4 NI contributions and will be classed as unearned income for student loan repayments. 

It is important to note that costs for mining activities do not count toward allowable costs in respect of tokens. 

Taxes on cryptoassets – do not get caught out 

Taxing cryptoassets is a complex process, but while it may be tempting to bury your head in the sand, you mustn’t ignore the issue. 

Failure to declare gains or income from cryptoassets could get you in trouble with HMRC, while misunderstanding which kind of tax you are liable for could lead to costly errors. 

If your business is involved in cryptoassets, you must seek expert tax advice from a specialist. 

Unsure about the taxation of cryptoassets used by your business? Contact our tax team today for tailored advice and guidance.