Self Employed Archives - WRLO Accountants

HMRC targets personal expenditure on self assessment

WRLO Accountants — Mon, 25 Aug 2025 15:48:42 +0000

HMRC will run a digital campaign to ensure that self assessment taxpayers do not claim tax relief for personal expenditure on 2025/26 tax returns, according to the Institute of Chartered Accountants in England and Wales (ICAEW). HMRC has told the ICAEW that the digital campaign follows a trial in 2024. This trial generated over £27 million in tax revenue and ‘highlighted reporting of disallowable private use in business expenditure’. HMRC says that it will be opening more enquiries to check that sole traders, partners and landlords only claim deductions for business-related expenses. This includes ensuring that mixed use expenses are apportioned correctly between business and personal use, which considers the circumstance of the particular tax year. The legislation states that in order for an expense to be deductible, it must be ‘incurred wholly and exclusively for the purposes of the trade’. Where an identifiable part of an expense is incurred for trade purposes, that part of the expense is an allowable deduction. It is important that the method of apportionment used is: supported by records (eg, mileage records); and applied consistently from one tax year to the next. It must also be the case that the expense is not capital […]

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HMRC sends side hustle warning

WRLO Accountants — Fri, 04 Jul 2025 17:57:12 +0000

HMRC is warning those earning extra income through a side hustle to check if they need to register for self assessment and file a tax return. Side hustles can be any additional income stream, from online selling to content creation, from dog walking to property rental. It also includes gains or income received from cryptoassets. Anyone who earns over the £1,000 threshold may need to register for self assessment and complete a tax return. There is a checker tool on GOV.UK for those who aren’t sure if they meet the criteria. If they do and are new to self assessment they will need to register to receive their Unique Taxpayer Reference. Guides for side hustlers can also be found at taxhelpforhustles.campaign.gov.uk. 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 […]

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Almost half of sole traders unprepared for MTD changes

WRLO Accountants — Sat, 24 May 2025 12:14:35 +0000

Almost half of UK sole traders feel unprepared for upcoming Making Tax Digital (MTD) for Income Tax changes, according to research conducted by IRIS Software. The new MTD rules mandate digital record-keeping and quarterly Income Tax updates starting April 2026 and non-compliance can lead to significant penalties. The study found that almost one in three sole traders have never heard of MTD, MTD for Income Tax will require self-employed individuals, landlords and small businesses earning over £50,000 to keep digital financial records and submit quarterly updates using compatible software from April 2026. The threshold drops to £30,000 in 2027 and to £20,000 in 2028. The changes could place a significant burden on business owners, who will be required to submit at least five updates to HMRC each year. Mark Chambers, Managing Director at IRIS Accountancy, said: ‘These findings highlight an important moment of opportunity for the UK’s sole traders. With MTD just around the corner, there’s a real chance for businesses to modernise their financial processes, unlock efficiencies, and gain better visibility of their income and expenses. ‘It’s encouraging to see that nearly a quarter feel ready to meet the requirements, but that leaves a significant portion not experiencing the […]

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