Overview

You

can

make

decisions

on

someone

’s

behalf

if

they

appoint

you

using

a

lasting

power

of

attorney

LPA

You

can

contact

GOV.UK

to

request

this

guide

in

another

format

for

example

large

print

or

braille

The

person

who

appoints

you

is

called

the

donor

You

’re

their

attorney

You

do

n’t

need

any

legal

experience

to

act

as

someone

’s

attorney

The

types

of

decisions

you

make

depend

on

whether

you

’re

a

property

and

financial

affairs

attorney

health

and

welfare

attorney

This

guide

is

also

available

in

Welsh

Cymraeg

Making

decisions

Check

what

you

need

to

do

before

you

’re

allowed

to

start

making

decisions

After

you

start

you

must

follow

any

instructions

the

donor

included

in

the

LPA

consider

any

preferences

the

donor

included

in

the

LPA

help

the

donor

make

their

own

decisions

as

much

as

they

can

make

any

decisions

in

the

donor

’s

best

interests

respect

their

human

and

civil

rights

You

must

make

the

decisions

yourself

you

ca

n’t

ask

someone

to

make

them

for

you

You

can

get

help

making

difficult

decisions

Your

decisions

can

be

checked

If

you

’re

not

the

only

attorney

Check

the

LPA

It

will

tell

you

whether

you

must

make

decisions

jointly

this

means

all

the

attorneys

must

agree

jointly

and

severally

this

means

you

can

make

decisions

together

or

on

your

own

The

LPA

may

tell

you

to

make

some

decisions

jointly

and

others

jointly

and

severally

Find

out

what

to

do

if

you

make

decisions

jointly

with

someone

who

stops

acting

as

an

attorney

Property

and

financial

affairs

attorneys

As

a

property

and

financial

affairs

attorney

you

make

or

help

the

donor

make

decisions

about

things

like

money

tax

and

bills

bank

and

building

society

accounts

property

and

investments

pensions

and

benefits

You

can

use

the

donor

’s

money

to

look

after

their

home

and

buy

anything

they

need

day

to

day

for

example

food

Discuss

decisions

that

affect

the

donor

’s

living

arrangements

medical

care

or

daily

routine

with

their

health

and

welfare

attorney

if

they

have

one

Looking

after

money

and

property

You

must

keep

the

donor

’s

finances

separate

from

your

own

unless

you

’ve

already

got

something

in

both

of

your

names

like

a

joint

bank

account

or

you

own

a

home

together

Managing

bank

accounts

Before

you

can

manage

the

donor

’s

account

you

must

show

the

bank

the

original

registered

lasting

power

of

attorney

LPA

or

a

copy

of

it

signed

on

every

page

by

the

donor

a

solicitor

or

notary

You

’ll

also

need

to

give

proof

of

your

name

your

address

the

donor

’s

name

or

address

if

they

’re

not

the

same

as

on

the

bank

account

The

bank

might

ask

for

additional

types

of

proof

Spending

money

on

gifts

or

donations

Unless

the

LPA

states

otherwise

you

can

spend

money

on

gifts

to

a

donor

’s

friend

family

member

or

acquaintance

on

occasions

when

you

would

normally

give

gifts

such

as

birthdays

or

anniversaries

donations

to

a

charity

that

the

donor

would

n’t

object

to

for

example

a

charity

they

’ve

donated

to

before

You

must

apply

to

the

Court

of

Protection

for

any

other

type

of

gift

or

donation

even

if

the

donor

has

given

them

before

These

include

paying

someone

’s

school

or

university

fees

letting

someone

live

in

the

donor

’s

property

without

paying

market

rent

anything

they

pay

below

market

rent

counts

as

a

gift

interest

free

loans

You

must

check

that

the

donor

can

afford

the

gift

or

donation

even

if

they

’ve

spent

money

on

these

types

of

things

before

For

example

you

ca

n’t

donate

their

money

if

that

would

mean

they

could

n’t

afford

their

care

costs

Read

the

guidance

for

more

information

on

giving

gifts

or

donations

Buying

and

selling

property

You

’ll

need

to

get

legal

advice

if

the

sale

is

below

the

market

value

you

want

to

buy

the

property

yourself

you

’re

giving

it

to

someone

else

Making

a

will

You

can

apply

for

a

statutory

will

if

the

donor

needs

to

make

a

will

but

ca

n’t

do

it

themselves

You

ca

n’t

change

a

donor

’s

will

You

can

be

ordered

to

repay

the

donor

’s

money

if

you

misuse

it

or

make

decisions

to

benefit

yourself

Health

and

welfare

attorneys

As

a

health

and

welfare

attorney

you

make

or

help

the

donor

make

decisions

about

things

like

daily

routine

for

example

washing

dressing

and

eating

medical

care

where

the

donor

lives

You

might

need

to

spend

the

donor

’s

money

on

things

that

maintain

or

improve

their

quality

of

life

This

can

include

new

clothes

or

hairdressing

decorating

their

home

or

room

in

a

care

home

paying

for

extra

support

so

the

donor

can

go

out

more

for

example

to

visit

friends

or

relatives

or

to

go

on

holiday

You

must

ask

for

money

from

the

person

in

charge

of

the

donor

’s

funds

Refusing

or

consenting

to

treatment

Check

the

lasting

power

of

attorney

LPA

for

instructions

about

refusing

or

consenting

to

treatment

You

’ll

need

to

show

the

LPA

to

care

staff

sign

medical

consent

forms

make

decisions

in

the

donor

’s

best

interests

You

ca

n’t

always

make

decisions

about

the

donor

’s

medical

treatment

for

example

if

the

donor

’s

made

a

living

will

or

has

been

sectioned

Living

wills

advance

decisions

This

is

a

legal

statement

from

the

donor

about

which

medical

treatments

they

do

n’t

want

You

’ll

need

to

give

this

to

care

staff

along

with

the

LPA

NHS

Choices

has

information

about

advance

decisions

Apply

for

a

one

off

decision

You

may

need

to

apply

for

a

one

off

decision

from

the

Court

of

Protection

to

make

a

decision

about

a

medical

treatment

if

the

living

will

and

LPA

give

different

instructions

the

medical

staff

or

the

donor

’s

friends

and

family

disagree

about

whether

the

treatment

should

be

given

Start

acting

as

an

attorney

You

must

have

a

registered

lasting

power

of

attorney

LPA

before

you

can

start

acting

as

an

attorney

The

LPA

is

registered

when

the

Office

of

the

Public

Guardian

OPG

has

stamped

it

with

VALIDATED

OPG

You

can

prepare

before

you

start

by

talking

to

the

donor

so

you

’re

ready

to

make

decisions

in

their

best

interests

For

example

ask

about

their

plans

for

their

money

or

how

they

want

to

be

cared

for

if

they

become

seriously

ill

Starting

as

a

property

and

financial

affairs

attorney

The

LPA

may

give

you

permission

to

make

decisions

while

the

donor

still

has

the

mental

capacity

to

make

their

own

financial

decisions

If

it

does

n’t

you

can

only

start

making

decisions

when

they

do

n’t

have

mental

capacity

Starting

as

a

health

and

welfare

attorney

You

can

only

make

decisions

when

the

donor

does

n’t

have

mental

capacity

to

make

them

You

must

tell

people

involved

in

the

donor

’s

care

when

you

start

This

includes

the

donor

’s

friends

and

family

doctor

and

other

healthcare

staff

care

workers

social

worker

and

other

social

care

staff

Staff

may

want

to

see

proof

of

your

identity

and

either

the

original

LPA

or

a

certified

copy

Taking

over

as

a

replacement

attorney

Replacement

attorneys

are

listed

in

the

LPA

You

’ll

be

able

to

start

helping

a

donor

make

decisions

as

soon

as

the

attorney

you

’re

replacing

stops

acting

Check

the

LPA

to

see

if

there

are

other

attorneys

you

might

need

to

make

decisions

with

Records

and

expenses

Keep

a

record

of

important

decisions

you

make

and

when

for

example

selling

the

donor

’s

home

or

agreeing

to

medical

treatment

the

donor

’s

assets

income

and

how

you

spend

their

money

if

you

’re

their

finance

and

property

affairs

attorney

Include

details

of

who

you

asked

for

advice

and

any

disagreements

Do

n’t

include

small

everyday

decisions

Expenses

You

can

only

claim

expenses

for

things

you

must

do

to

carry

out

your

role

as

an

attorney

for

example

hiring

a

professional

to

do

things

like

fill

in

the

donor

’s

tax

return

travel

costs

stationery

postage

phone

calls

You

can

be

ordered

to

repay

the

donor

’s

money

if

you

misuse

it

or

make

decisions

to

benefit

yourself

Keep

your

receipts

and

invoice

the

donor

for

your

expenses

The

money

is

paid

by

whoever

’s

in

charge

of

the

donor

’s

funds

Checks

and

visits

The

Office

of

the

Public

Guardian

and

Court

of

Protection

can

check

your

decisions

They

may

arrange

a

visit

with

you

and

the

donor

together

or

the

donor

alone

contact

other

people

such

as

the

donor

’s

family

bank

or

care

workers

They

can

investigate

and

stop

you

acting

as

an

attorney

if

for

example

you

’ve

done

something

the

lasting

power

of

attorney

LPA

says

you

ca

n’t

you

have

n’t

done

something

the

LPA

has

instructed

you

to

do

you

have

n’t

been

acting

in

the

donor

’s

best

interests

you

misuse

the

donor

’s

money

or

make

decisions

to

benefit

yourself

you

do

something

that

goes

against

their

human

or

civil

rights

the

donor

is

n’t

being

treated

well

the

donor

made

the

LPA

under

pressure

or

they

were

tricked

into

it

Stop

acting

as

an

attorney

The

lasting

power

of

attorney

LPA

ends

when

the

donor

dies

Tell

the

Office

of

the

Public

Guardian

OPG

and

send

them

a

copy

of

the

death

certificate

the

original

LPA

all

certified

copies

of

the

LPA

Stopping

before

the

donor

dies

You

can

choose

to

stop

acting

as

an

attorney

sometimes

called

disclaiming

an

attorneyship

There

are

also

some

cases

in

which

the

law

requires

you

to

stop

acting

as

an

attorney

Any

replacement

attorneys

listed

in

the

LPA

will

take

over

if

you

stop

If

there

are

no

replacements

there

may

be

other

ways

to

help

the

donor

make

decisions

If

you

choose

to

stop

Fill

in

and

send

a

notification

form

to

the

donor

if

the

LPA

has

n’t

been

registered

the

donor

and

OPG

at

the

address

on

the

form

if

the

LPA

is

registered

any

other

attorneys

appointed

on

the

LPA

When

you

have

to

stop

You

must

stop

acting

as

an

attorney

if

the

donor

takes

you

off

their

LPA

sometimes

called

revoking

an

attorney

you

lose

mental

capacity

and

ca

n’t

make

decisions

any

more

you

’re

a

property

and

financial

affairs

attorney

and

you

become

bankrupt

or

subject

to

a

debt

relief

order

you

’re

married

to

or

in

a

civil

partnership

with

the

donor

and

you

get

a

divorce

or

an

annulment

unless

the

LPA

says

you

can

keep

acting

as

an

attorney

you

’re

a

joint

attorney

and

another

attorney

stops

acting

unless

the

LPA

says

you

can

carry

on

making

decisions


When

you

can

annul

a

marriage

Annulment

sometimes

known

as

nullity

is

a

different

way

of

ending

a

marriage

You

or

your

spouse

must

have

either

lived

in

England

or

Wales

for

at

least

a

year

had

a

permanent

home

in

England

or

Wales

for

at

least

months

Unlike

divorce

you

can

apply

for

annulment

in

the

first

year

of

your

marriage

or

any

time

after

However

if

you

apply

years

after

the

wedding

you

might

be

asked

to

explain

the

delay

You

’ll

need

to

show

that

the

marriage

was

never

legally

valid

void

was

legally

valid

but

meets

one

of

the

reasons

that

makes

it

voidable

Your

marriage

is

not

legally

valid

void

marriages

You

can

annul

a

marriage

if

it

was

not

legally

valid

in

the

first

place

for

example

you

’re

closely

related

to

the

person

you

married

one

or

both

of

you

were

under

one

of

you

was

already

married

or

in

a

civil

partnership

If

a

marriage

was

never

legally

valid

the

law

says

that

it

never

existed

However

you

may

need

legal

paperwork

a

decree

of

nullity

to

prove

this

for

example

if

you

want

to

get

married

again

Your

marriage

is

voidable

You

can

annul

a

marriage

for

a

number

of

reasons

such

as

it

was

not

consummated

you

have

not

had

sexual

intercourse

with

the

person

you

married

since

the

wedding

does

not

apply

for

same

sex

couples

you

did

not

properly

consent

to

the

marriage

for

example

you

were

forced

into

it

the

other

person

had

a

sexually

transmitted

disease

STD

when

you

got

married

your

spouse

was

pregnant

by

someone

else

when

you

got

married

one

spouse

is

in

the

process

of

transitioning

to

a

different

gender

As

with

divorce

your

marriage

legally

exists

until

you

annul

it

using

one

of

these

reasons

The

rules

on

ending

a

civil

partnership

are

slightly

different

but

the

court

forms

are

the

same

Apply

for

an

annulment

You

can

apply

to

have

your

marriage

annulled

as

soon

as

you

get

married

Unlike

divorce

you

do

not

have

to

wait

for

a

year

To

annul

a

marriage

fill

in

a

nullity

petition

Read

the

supporting

notes

before

you

start

Send

copies

of

the

form

to

your

nearest

divorce

court

and

keep

your

own

copy

Filing

a

nullity

petition

form

costs

You

may

be

able

to

get

help

with

court

fees

if

you

’re

on

benefits

or

a

low

income

Apply

for

a

decree

nisi

The

other

person

must

respond

to

your

nullity

petition

within

days

saying

whether

they

agree

the

marriage

should

be

annulled

If

they

agree

you

can

apply

for

a

decree

nisi

This

will

confirm

that

the

court

does

not

see

any

reason

why

the

marriage

can

not

be

annulled

To

get

a

decree

nisi

fill

in

the

application

for

decree

nisi

or

conditional

order

Statement

in

support

of

annulment

You

must

also

fill

in

a

statement

confirming

that

what

you

said

in

your

nullity

petition

is

true

Use

one

of

the

forms

below

depending

on

whether

your

marriage

is

void

or

voidable

statement

in

support

of

annulment

void

marriage

statement

in

support

of

annulment

voidable

marriage

See

when

you

can

annul

a

marriage

for

the

difference

between

void

and

voidable

marriages

The

marriage

will

not

be

ended

yet

you

still

need

to

apply

for

a

decree

absolute

Apply

for

a

decree

absolute

You

can

apply

for

a

decree

absolute

weeks

after

you

get

the

decree

nisi

In

these

cases

it

’s

also

called

a

decree

of

nullity

This

is

the

final

legal

document

which

says

that

the

marriage

has

been

annulled

To

apply

for

a

decree

of

nullity

fill

in

the

notice

of

application

for

decree

nisi

to

be

made

absolute

The

decree

absolute

fee

is

included

in

the

annulment

cost

When

you

return

your

forms

The

court

will

check

if

there

are

any

reasons

that

the

marriage

can

not

be

annulled

In

most

cases

you

do

not

need

to

go

to

court

for

this

If

the

court

is

happy

it

will

send

you

the

decree

of

nullity

This

will

confirm

that

you

’re

no

longer

married

If

your

marriage

was

never

legally

valid

void

the

decree

will

confirm

that

you

were

never

legally

married


Plan

for

growth

Once

your

business

is

established

and

you

’re

making

a

profit

on

the

products

and

services

you

sell

to

customers

you

may

want

to

start

thinking

about

how

to

grow

Many

businesses

think

of

growth

in

terms

of

increased

sales

but

it

’s

also

important

to

focus

on

how

to

maintain

or

improve

your

profitability

Things

you

can

do

to

help

grow

your

business

include

looking

into

ways

of

increasing

your

sales

both

to

existing

customers

and

new

customers

improving

your

products

and

services

by

researching

and

testing

changes

with

your

customers

developing

new

products

and

services

and

selling

them

to

new

or

existing

markets

taking

on

staff

or

training

your

current

staff

including

working

with

apprentices

and

mentors

looking

for

additional

sources

of

funding

such

as

bringing

in

new

investors

thinking

about

selling

your

products

or

services

online

work

with

a

business

mentor

who

can

help

you

think

about

how

to

do

all

of

these

things

As

your

business

grows

You

must

register

for

VAT

if

your

VAT

taxable

turnover

reaches

more

than

You

may

also

find

that

a

different

legal

structure

is

more

suitable

as

your

business

grows

Contact

the

business

support

helpline

in

your

area

for

help

and

advice

on

starting

or

growing

your

business

Get

extra

funding

Growing

your

business

whether

through

increased

sales

or

improved

profitability

often

means

you

need

to

invest

more

You

can

do

this

by

investing

previous

profits

back

into

your

business

taking

out

a

loan

selling

shares

to

outside

investors

looking

for

other

sources

of

finance

including

government

backed

schemes

Find

out

which

types

of

finance

might

work

for

your

business

Find

public

finance

using

the

finance

finder

tool

or

search

for

private

finance

Professional

advisers

such

as

accountants

can

help

you

to

work

out

whether

it

makes

financial

sense

to

take

on

loans

or

investment

You

should

take

legal

advice

before

taking

on

new

investment

in

your

business

Find

a

chartered

accountant

on

the

Institute

of

Chartered

Accountants

ICAEW

website

or

a

solicitor

on

the

Law

Society

website

Taking

out

a

loan

You

should

make

sure

that

your

business

will

be

able

to

pay

back

the

debt

before

you

take

out

a

loan

Repayments

are

often

made

in

instalments

over

a

number

of

years

and

you

’ll

need

to

pay

off

any

interest

on

outstanding

debts

If

you

’re

a

sole

trader

looking

for

a

loan

a

lender

might

ask

you

to

provide

a

personal

guarantee

or

promise

to

hand

over

assets

like

your

house

or

car

if

you

ca

n’t

repay

the

loan

Selling

shares

If

you

’re

thinking

of

bringing

in

new

investors

they

’ll

want

to

know

how

much

your

business

could

increase

in

value

if

they

buy

shares

To

work

this

out

they

’ll

need

to

know

how

much

their

investment

will

increase

your

sales

and

profitability

You

’ll

need

to

provide

potential

lenders

and

investors

with

a

financial

model

showing

how

your

business

will

spend

the

extra

money

to

increase

sales

and

profitability

how

initial

costs

and

increased

ongoing

costs

will

affect

your

cash

flow

Increases

in

sales

usually

only

happen

after

taking

on

additional

costs

like

employing

more

staff

moving

to

larger

premises

or

putting

in

bigger

orders

for

raw

materials

You

’ll

need

to

take

all

of

these

into

account

in

your

financial

planning

Increase

sales

to

existing

customers

How

you

go

about

increasing

sales

depends

on

your

circumstances

and

how

your

business

is

performing

You

might

choose

to

focus

on

customers

who

’ve

already

bought

from

you

or

you

could

try

to

win

new

customers

in

your

local

area

nationally

or

overseas

The

simplest

way

to

increase

your

sales

is

to

sell

more

of

the

products

or

services

you

’re

selling

at

the

moment

to

the

customers

who

are

already

buying

them

For

most

businesses

this

involves

persuading

one

off

customers

to

become

repeat

customers

finding

customers

who

’ve

stopped

buying

from

you

and

trying

to

win

them

back

selling

more

of

the

same

products

or

services

to

your

regular

customers

By

keeping

a

record

of

who

your

customers

are

and

what

you

sold

to

them

you

can

work

out

who

’s

stopped

buying

from

you

and

who

might

consider

buying

more

Targeting

these

customers

is

often

a

cheaper

and

more

effective

way

to

increase

sales

than

trying

to

find

new

ones

Review

your

prices

Regularly

reviewing

your

prices

and

checking

them

against

your

competitors

can

be

an

effective

way

of

increasing

your

sales

profits

or

both

You

should

try

to

estimate

the

likely

effect

of

different

price

changes

on

the

sales

cash

flow

and

profitability

of

your

business

before

making

any

changes

To

do

this

successfully

you

need

to

understand

the

cost

structure

of

your

business

including

regular

fixed

costs

and

variable

costs

that

change

according

to

your

business

activity

the

value

your

customers

place

on

your

products

and

services

It

’s

worth

bearing

in

mind

that

offering

a

discount

can

sometimes

reduce

your

overall

profitability

even

if

your

sales

go

up

Equally

you

might

be

able

to

make

more

profit

overall

by

increasing

prices

even

if

you

’re

selling

fewer

items

Small

changes

to

pricing

like

providing

loyalty

schemes

or

bulk

discounts

can

increase

sales

to

both

existing

and

former

customers

You

should

also

regularly

check

the

price

you

’re

selling

products

and

services

at

against

competitors

This

will

help

you

find

out

if

you

’re

losing

customers

who

get

the

same

product

or

service

elsewhere

for

less

money

sacrificing

profitability

because

customers

are

willing

to

pay

more

than

you

’re

charging

them

Find

resources

on

pricing

strategy

and

increasing

sales

on

the

Marketing

Donut

website

Attract

new

customers

One

way

of

finding

new

customers

for

your

products

and

services

is

by

increasing

awareness

in

your

local

area

You

can

do

this

by

asking

your

customers

to

recommend

you

to

their

friends

and

colleagues

advertising

in

local

media

using

other

forms

of

marketing

including

online

You

could

also

talk

to

potential

customers

who

do

n’t

use

your

business

at

the

moment

and

find

out

what

it

would

take

for

them

to

switch

from

your

competition

Expanding

outside

your

local

area

If

you

want

to

sell

your

product

or

service

through

new

sales

channels

or

markets

elsewhere

in

the

UK

there

are

different

organisations

you

’ll

need

to

work

with

including

wholesalers

retailers

including

online

retailers

distributors

You

could

try

using

direct

marketing

to

find

new

customers

Search

the

contracts

finder

for

business

opportunities

from

government

departments

and

agencies

Expanding

outside

the

UK

You

might

decide

to

find

new

customers

outside

the

UK

by

exporting

your

products

The

Department

for

International

Trade

offers

help

and

resources

on

successfully

selling

your

products

and

services

to

customers

in

other

countries

Make

sure

that

you

’re

aware

of

your

legal

responsibilities

around

the

sale

of

goods

and

services

and

data

protection

Improve

your

products

and

services

If

you

’re

looking

to

grow

your

business

by

improving

your

products

and

services

start

by

focusing

on

your

existing

customers

and

their

needs

Talk

to

them

and

find

out

their

views

on

what

they

’re

buying

from

you

and

what

they

value

most

about

it

what

you

could

do

to

make

it

more

useful

and

valuable

to

them

what

would

encourage

them

to

buy

more

Make

changes

based

on

feedback

Getting

customer

feedback

should

help

you

to

identify

ways

to

improve

what

you

’re

offering

to

your

current

customers

It

may

also

allow

you

to

increase

the

price

you

charge

to

your

existing

customers

attract

new

customers

whose

needs

you

were

n’t

meeting

before

Try

to

ensure

that

any

changes

you

make

will

increase

your

sales

and

profitability

enough

to

make

the

time

and

money

you

’ll

need

to

invest

worthwhile

If

possible

you

should

test

out

prototypes

of

improved

products

or

services

with

a

few

existing

customers

By

doing

this

you

can

get

their

feedback

and

avoid

making

unpopular

changes

that

could

harm

your

business

Doing

this

is

equally

important

for

all

businesses

whether

you

’re

starting

up

or

established

improving

an

existing

product

or

service

or

bringing

something

new

to

market

Think

about

selling

online

Selling

your

products

or

services

on

the

internet

can

help

improve

efficiency

and

productivity

reduce

costs

help

you

communicate

better

with

customers

and

suppliers

You

can

use

analytics

software

to

help

you

understand

how

customers

use

your

site

and

show

you

ways

to

improve

it

Consider

the

costs

of

going

online

You

’ll

need

to

make

sure

you

understand

all

the

costs

involved

eg

hardware

software

hosting

training

services

maintenance

and

support

upgrades

etc

You

must

also

provide

your

customers

with

certain

information

Online

security

If

you

’re

going

to

sell

online

protect

your

customers

and

business

with

measures

to

keep

systems

and

data

safe

from

theft

or

hackers

Develop

new

products

and

services

If

you

’re

planning

to

develop

new

products

and

services

you

should

test

them

with

your

customers

with

just

as

much

care

and

attention

as

a

new

business

going

to

market

for

the

first

time

By

making

sure

there

’s

real

demand

for

what

you

’re

planning

to

sell

you

can

find

out

about

any

problems

and

fix

them

before

you

’ve

wasted

too

much

time

effort

and

money

Talk

to

existing

and

potential

customers

and

find

out

about

their

needs

If

you

can

develop

a

prototype

as

quickly

and

cheaply

as

possible

Work

out

the

minimum

investment

that

lets

you

find

out

if

you

’re

meeting

a

real

need

Test

it

with

customers

and

get

feedback

Find

out

what

they

’d

be

willing

to

pay

for

it

Try

out

different

prices

with

different

customers

in

a

consistent

realistic

way

to

see

what

people

will

really

pay

Can

you

make

enough

money

for

a

return

on

the

investment

you

’d

need

to

develop

your

new

product

or

service

If

there

are

are

other

businesses

competing

for

your

market

think

about

what

will

make

you

different

Can

you

provide

something

better

than

what

’s

already

available

And

is

it

significantly

different

or

better

to

what

you

’re

already

offering

Benefits

of

development

By

developing

new

products

and

services

you

can

sell

more

to

existing

customers

making

the

most

of

existing

relationships

is

cheaper

than

finding

new

customers

spread

fixed

costs

like

premises

or

machinery

across

a

range

of

products

diversify

the

products

you

offer

so

you

’re

less

reliant

on

certain

customers

or

markets

Another

way

of

expanding

your

product

range

is

by

importing

goods

from

overseas

to

sell

in

the

UK

Make

sure

you

know

the

rules

on

things

like

tax

and

commodity

codes

if

you

’re

planning

to

import

Business

ideas

and

intellectual

property

If

you

’ve

invented

something

or

come

up

with

an

original

idea

that

you

want

to

turn

into

a

product

or

service

you

should

register

it

to

make

sure

nobody

copies

it

without

your

permission

Find

out

about

trademarks

copyright

and

intellectual

property

You

can

find

local

support

in

England

for

coming

up

with

business

ideas

and

developing

them

on

the

National

Enterprise

Network

website

Other

sources

of

advice

and

support

include

the

Design

Council

’s

business

resources

the

British

Library

business

and

intellectual

property

centre

You

may

be

able

to

benefit

from

developing

your

idea

in

partnership

with

experts

in

academic

institutions

through

Knowledge

Transfer

Partnerships

Hire

and

train

staff

As

your

business

expands

you

’ll

need

more

capacity

to

produce

or

provide

your

product

or

service

and

a

wider

range

of

skills

The

easiest

ways

of

achieving

this

are

usually

by

taking

on

new

staff

or

training

your

existing

workforce

Employing

people

By

taking

on

new

people

you

can

spread

your

workload

expand

production

and

take

advantage

of

new

and

different

skills

and

expertise

This

applies

whether

you

already

have

employees

or

you

started

your

business

on

your

own

as

a

sole

trader

and

are

thinking

about

taking

on

staff

for

the

first

time

Find

out

about

your

responsibilities

when

employing

someone

Apprenticeships

Taking

on

an

apprentice

allows

you

to

grow

your

capacity

by

investing

in

people

who

want

to

learn

Your

business

benefits

from

the

skills

they

develop

as

they

train

both

on

and

off

the

job

Find

out

about

the

practical

steps

involved

in

taking

on

an

apprentice

Training

your

staff

You

can

improve

the

range

and

level

of

skills

in

your

business

by

training

up

existing

staff

Giving

staff

training

opportunities

can

increase

their

loyalty

to

your

company

and

their

productivity

as

well

as

your

profits

Schemes

and

organisations

that

can

help

you

to

grow

your

business

through

training

include

finding

training

courses

specific

to

your

business

area

through

the

National

Careers

Service

using

a

business

improvement

framework

like

Investors

in

People

Work

with

a

mentor

Business

mentors

can

help

you

develop

your

ideas

for

growth

by

sharing

their

skills

expertise

experience

and

contacts

Find

free

and

paid

for

mentors

in

your

area

with

knowledge

and

experience

relevant

to

your

business

on

the

mentorsme

website

or

Business

mentoring

if

you

’re

in

Wales

Mentorsme

also

has

advice

on

how

to

pick

the

right

mentor

for

your

business


How

VAT

works

You

can

only

charge

VAT

if

your

business

is

registered

for

VAT

VAT

is

charged

on

things

like

business

sales

for

example

when

you

sell

goods

and

services

hiring

or

loaning

goods

to

someone

selling

business

assets

commission

items

sold

to

staff

for

example

canteen

meals

business

goods

used

for

personal

reasons

non

sales

like

bartering

part

exchange

and

gifts

These

are

known

as

taxable

supplies

There

are

different

rules

for

charities

Responsibilities

VAT

registered

businesses

must

charge

VAT

on

their

goods

or

services

may

reclaim

any

VAT

they

’ve

paid

on

business

related

goods

or

services

must

account

for

import

VAT

on

their

VAT

return

if

they

use

import

VAT

this

way

known

as

postponed

VAT

accounting

If

you

’re

a

VAT

registered

business

you

must

report

to

HM

Revenue

and

Customs

HMRC

the

amount

of

VAT

you

’ve

charged

and

the

amount

of

VAT

you

’ve

paid

This

is

done

through

your

VAT

Return

which

is

usually

due

every

months

You

may

want

to

appoint

an

agent

to

deal

with

HMRC

on

your

behalf

You

must

account

for

VAT

on

the

full

value

of

what

you

sell

even

if

you

receive

goods

or

services

instead

of

money

for

example

if

you

take

something

in

part

exchange

have

n’t

charged

any

VAT

to

the

customer

whatever

price

you

charge

is

treated

as

including

VAT

If

you

’ve

charged

more

VAT

than

you

’ve

paid

you

have

to

pay

the

difference

to

HMRC

If

you

’ve

paid

more

VAT

than

you

’ve

charged

you

can

reclaim

the

difference

from

HMRC

VAT

rates

There

are

different

rates

of

VAT

and

you

must

make

sure

you

charge

the

right

amount

Get

a

list

of

reduced

or

zero

rated

goods

and

services

Standard

rate

Most

goods

and

services

are

standard

rate

You

should

charge

this

rate

unless

the

goods

or

services

are

classed

as

reduced

or

zero

rated

This

includes

any

goods

below

the

distance

selling

threshold

you

supply

from

Northern

Ireland

to

non

VAT

registered

EU

customers

If

you

go

over

the

threshold

you

’ll

have

to

register

for

VAT

in

that

country

Reduced

rate

When

you

charge

this

rate

can

depend

on

what

the

item

is

as

well

as

the

circumstances

of

the

sale

for

example

children

’s

car

seats

and

domestic

fuel

or

power

are

always

charged

at

mobility

aids

for

older

people

are

only

charged

at

if

they

’re

for

someone

over

and

the

goods

are

installed

in

their

home

Zero

rate

Zero

rated

means

that

the

goods

are

still

VAT

taxable

but

the

rate

of

VAT

you

must

charge

your

customers

is

You

still

have

to

record

them

in

your

VAT

accounts

and

report

them

on

your

VAT

Return

Examples

include

books

and

newspapers

children

’s

clothes

and

shoes

motorcycle

helmets

most

goods

you

export

from

England

Wales

and

Scotland

Great

Britain

to

a

country

outside

the

UK

most

goods

you

export

from

Northern

Ireland

to

a

country

outside

the

EU

and

the

UK

goods

you

supply

from

Northern

Ireland

to

a

VAT

registered

EU

business

you

can

check

if

the

VAT

number

is

valid

If

you

sent

goods

to

the

EU

from

Northern

Ireland

you

’ll

need

their

VAT

number

and

paperwork

proving

that

the

goods

have

been

sent

within

certain

time

limits

usually

months

Rates

can

change

and

you

must

apply

any

changes

to

the

rates

from

the

date

they

change

What

you

must

do

when

charging

VAT

You

need

to

know

the

right

VAT

rate

so

you

can

charge

it

correctly

and

reclaim

it

on

your

purchases

If

a

transaction

is

a

standard

reduced

or

zero

rated

taxable

supply

you

must

charge

the

right

rate

of

VAT

work

out

the

VAT

if

a

single

price

is

shown

that

includes

or

excludes

VAT

show

the

VAT

information

on

your

invoice

show

the

transaction

in

your

VAT

account

a

summary

of

your

VAT

show

the

amount

on

your

VAT

Return

You

may

be

able

to

reclaim

the

VAT

on

purchases

that

relate

to

these

sales

You

can

not

claim

back

all

of

the

amount

you

’ve

paid

if

you

pay

the

wrong

amount

of

VAT

on

a

purchase

VAT

inclusive

and

exclusive

prices

You

’ll

need

to

make

a

calculation

when

charging

VAT

on

goods

or

services

or

when

working

out

the

amount

of

VAT

you

can

claim

back

on

items

which

were

sold

inclusive

of

VAT

VAT

inclusive

prices

To

work

out

a

price

including

the

standard

rate

of

VAT

multiply

the

price

excluding

VAT

by

To

work

out

a

price

including

the

reduced

rate

of

VAT

multiply

the

price

excluding

VAT

by

VAT

exclusive

prices

To

work

out

a

price

excluding

the

standard

rate

of

VAT

divide

the

price

including

VAT

by

To

work

out

a

price

excluding

the

reduced

rate

of

VAT

divide

the

price

including

VAT

by

When

not

to

charge

VAT

You

can

not

charge

VAT

on

exempt

or

out

of

scope

items

Exempt

goods

and

services

Exempt

goods

or

services

are

supplies

that

you

can

not

charge

VAT

on

If

you

buy

or

sell

an

exempt

item

you

should

still

record

the

transaction

in

your

general

business

accounts

Examples

of

exempt

items

include

insurance

postage

stamps

or

services

health

services

provided

by

doctors

Get

a

list

of

goods

and

services

that

are

VAT

exempt

VAT

registration

Businesses

that

sell

only

VAT

exempt

goods

and

services

can

not

register

for

VAT

If

you

start

selling

items

that

are

n’t

exempt

you

can

register

for

VAT

voluntarily

You

must

register

if

the

total

value

of

non

exempt

goods

and

services

goes

over

the

VAT

taxable

turnover

threshold

Out

of

scope

Some

goods

and

services

are

outside

the

VAT

tax

system

so

you

can

not

charge

or

reclaim

the

VAT

on

them

For

example

out

of

scope

items

include

goods

or

services

you

buy

and

use

outside

the

UK

statutory

fees

like

the

London

congestion

charge

goods

you

sell

as

part

of

a

hobby

like

stamps

from

a

collection

donations

to

a

charity

if

given

without

receiving

anything

in

return

Charging

VAT

to

charities

As

a

VAT

registered

business

you

can

sell

certain

goods

and

services

to

charities

at

the

zero

or

reduced

rate

of

VAT

It

’s

your

responsibility

to

check

the

charity

is

eligible

and

to

apply

the

correct

rate

Community

amateur

sports

clubs

CASCs

do

n’t

qualify

for

VAT

reliefs

for

charities

Check

the

charity

is

eligible

To

make

sure

the

charity

is

eligible

ask

them

for

evidence

that

they

’re

a

charity

a

written

declaration

or

certificate

confirming

they

meet

the

conditions

for

the

particular

VAT

relief

Evidence

of

charitable

status

The

charity

should

give

you

either

their

Charity

Commission

registration

number

a

letter

of

recognition

from

HM

Revenue

and

Customs

HMRC

if

they

’re

not

registered

with

the

Charity

Commission

for

England

and

Wales

for

example

if

they

’re

a

Scottish

or

Northern

Irish

charity

Written

declaration

Charities

are

legally

required

to

give

you

an

eligibility

certificate

when

you

supply

eligible

building

or

construction

services

to

them

at

zero

VAT

The

certificate

must

contain

specific

information

A

declaration

is

not

legally

required

for

other

items

you

sell

at

the

zero

or

reduced

rate

but

you

should

ask

for

one

to

prove

the

charity

is

eligible

for

the

relief

These

sample

declarations

contain

examples

of

the

information

a

charity

should

give

you

when

buying

medical

and

scientific

equipment

motor

vehicles

and

computer

software

charity

advertising

goods

and

services

for

disabled

people

The

written

declaration

should

be

separate

from

the

order

form

or

invoice

for

the

goods

or

services

the

charity

is

buying

You

must

keep

the

completed

declarations

for

at

least

years

Items

that

qualify

for

the

reduced

rate

You

may

be

able

to

apply

the

reduced

VAT

rate

when

you

sell

fuel

and

power

in

certain

circumstances

to

an

eligible

charity

Items

that

qualify

for

the

zero

rate

You

may

be

able

to

apply

zero

VAT

when

you

sell

the

following

to

an

eligible

charity

advertising

and

items

for

collecting

donations

aids

for

disabled

people

construction

services

drugs

and

chemicals

equipment

for

making

talking

books

and

newspapers

lifeboats

and

associated

equipment

including

fuel

medicine

or

ingredients

for

medicine

resuscitation

training

models

Equipment

for

medical

and

veterinary

use

You

may

also

be

able

to

zero

rate

some

other

medical

and

veterinary

equipment

when

you

sell

it

to

certain

health

bodies

for

example

NHS

Trusts

not

for

profit

research

institutions

charities

that

provide

institutional

care

or

medical

or

surgical

treatment

for

chronically

sick

or

disabled

people

charities

that

provide

transport

services

for

disabled

people

charities

that

provide

rescue

or

first

aid

services

to

humans

or

animals

someone

buying

it

specifically

for

donation

to

one

of

these

bodies

The

money

used

to

buy

the

equipment

must

be

from

charitable

or

donated

funds

This

should

be

stated

on

the

eligibility

declaration

The

eligible

items

include

medical

veterinary

and

scientific

equipment

ambulances

goods

for

disabled

people

motor

vehicles

for

medical

use

rescue

equipment

resuscitation

training

dummies

Returned

goods

When

you

return

goods

to

a

supplier

or

a

customer

returns

goods

to

you

the

balance

of

payment

can

be

settled

by

issuing

either

a

replacement

invoice

credit

or

debit

note

If

you

exchange

the

goods

for

goods

of

the

same

value

you

do

n’t

need

to

issue

a

new

VAT

invoice

Credit

and

debit

notes

These

must

show

the

same

information

as

the

VAT

invoice

and

why

it

was

issued

the

total

amount

credited

excluding

VAT

the

number

and

date

of

the

original

VAT

invoice

Discounts

and

free

gifts

Discounts

VAT

may

have

to

be

charged

on

discounts

and

deals

Offer

How

to

charge

VAT

Discounts

Charged

on

the

discounted

price

not

the

full

price

Gifts

Charged

on

the

gift

’s

full

value

there

are

some

exceptions

listed

below

Multi

buys

Charged

on

the

combined

price

if

all

the

items

have

the

same

VAT

rate

If

not

VAT

is

apportioned

as

mixed

rate

goods

Money

off

coupons

vouchers

etc

No

VAT

due

if

given

away

free

at

time

of

a

purchase

If

not

VAT

due

on

the

price

charged

Face

value

vouchers

that

can

be

used

for

more

than

one

type

of

good

or

service

No

VAT

due

if

sold

at

or

below

their

monetary

value

Redeemed

face

value

vouchers

Charged

on

the

full

value

of

the

transaction

Redeemed

face

value

vouchers

sold

at

a

discount

Charged

on

the

discounted

value

of

the

transaction

Link

save

offers

buy

one

get

one

free

or

discounted

VAT

is

apportioned

as

mixed

rate

goods

there

are

exceptions

Exceptions

for

gifts

and

link

save

offers

There

’s

no

VAT

due

on

gifts

given

to

the

same

person

if

their

total

value

in

a

month

period

is

less

than

VAT

is

charged

on

the

combined

value

of

link

save

items

if

the

incentive

product

has

a

resale

value

of

less

than

has

a

sale

value

of

less

than

costs

you

less

than

of

the

total

of

the

other

items

in

the

offer

is

n’t

sold

at

a

separate

price

from

the

main

product

Free

goods

and

services

You

do

n’t

have

to

pay

VAT

on

things

like

free

samples

if

they

meet

certain

conditions

Supplies

Condition

to

meet

so

no

VAT

due

Free

samples

Used

for

marketing

purposes

and

provided

in

a

quantity

that

lets

potential

customers

test

the

product

Free

loans

of

business

assets

The

cost

of

hiring

the

asset

is

included

in

something

else

you

sell

to

the

customer

Free

gifts

The

total

cost

of

all

gifts

to

the

same

person

is

less

than

in

a

month

period

Free

services

You

do

n’t

get

any

payment

or

goods

or

services

in

return


Overview

You

can

claim

capital

allowances

when

you

buy

assets

that

you

keep

to

use

in

your

business

for

example

equipment

machinery

business

vehicles

for

example

cars

vans

or

lorries

These

are

known

as

plant

and

machinery

You

can

deduct

some

or

all

of

the

value

of

the

item

from

your

profits

before

you

pay

tax

This

guide

is

also

available

in

Welsh

Cymraeg

If

you

’re

a

sole

trader

or

partner

and

have

an

income

of

or

less

a

year

you

may

be

able

to

use

a

simpler

system

called

cash

basis

instead

Work

out

the

value

of

your

item

In

most

cases

the

value

is

what

you

paid

for

the

item

Use

the

market

value

the

amount

you

’d

expect

to

sell

it

for

instead

if

you

owned

it

before

you

started

using

it

in

your

business

it

was

a

gift

Other

business

costs

You

claim

for

the

cost

of

things

that

are

not

business

assets

in

a

different

way

This

includes

your

business

’s

day

to

day

running

costs

items

that

it

’s

your

trade

to

buy

and

sell

interest

payments

or

finance

costs

for

buying

assets

Claim

these

costs

as

business

expenses

if

you

’re

a

sole

trader

or

partner

or

deduct

from

your

profits

as

a

business

cost

if

you

’re

a

limited

company

Other

capital

allowances

As

well

as

plant

and

machinery

you

can

also

claim

capital

allowances

for

renovating

business

premises

in

disadvantaged

areas

of

the

UK

extracting

minerals

research

and

development

know

how

intellectual

property

about

industrial

techniques

patents

dredging

structure

and

buildings

If

you

let

out

residential

property

You

can

only

claim

for

items

in

residential

property

if

your

business

qualifies

as

a

furnished

holiday

lettings

business

In

each

year

the

property

must

be

available

for

holiday

letting

for

days

let

for

days

or

more

What

you

can

claim

on

You

can

claim

capital

allowances

on

items

that

you

keep

to

use

in

your

business

these

are

known

as

plant

and

machinery

In

most

cases

you

can

deduct

the

full

cost

of

these

items

from

your

profits

before

tax

using

annual

investment

allowance

AIA

If

you

’re

a

sole

trader

or

partner

and

have

an

income

of

or

less

a

year

you

may

be

able

to

use

a

simpler

system

called

cash

basis

instead

What

does

not

count

as

plant

and

machinery

You

can

not

claim

capital

allowances

on

things

you

lease

you

must

own

them

buildings

including

doors

gates

shutters

mains

water

and

gas

systems

land

and

structures

for

example

bridges

roads

docks

items

used

only

for

business

entertainment

for

example

a

yacht

or

karaoke

machine

What

counts

as

plant

and

machinery

Plant

and

machinery

includes

items

that

you

keep

to

use

in

your

business

including

cars

costs

of

demolishing

plant

and

machinery

parts

of

a

building

considered

integral

known

as

integral

features

some

fixtures

for

example

fitted

kitchens

or

bathroom

suites

alterations

to

a

building

to

install

other

plant

and

machinery

this

does

not

include

repairs

Claim

repairs

as

business

expenses

if

you

’re

a

sole

trader

or

partner

deduct

from

your

profits

as

a

business

cost

if

you

’re

a

limited

company

Integral

features

Integral

features

are

lifts

escalators

and

moving

walkways

space

and

water

heating

systems

air

conditioning

and

air

cooling

systems

hot

and

cold

water

systems

but

not

toilet

and

kitchen

facilities

electrical

systems

including

lighting

systems

external

solar

shading

Fixtures

You

can

claim

for

fixtures

for

example

fitted

kitchens

bathroom

suites

fire

alarm

and

CCTV

systems

You

can

claim

if

you

rent

or

own

the

building

but

only

the

person

who

bought

the

item

can

claim

When

you

buy

a

building

from

a

previous

business

owner

you

can

only

claim

for

integral

features

and

fixtures

that

they

claimed

for

You

must

agree

the

value

of

the

fixtures

with

the

seller

If

you

do

not

you

can

not

claim

for

them

Agreeing

the

value

also

means

the

person

selling

the

assets

can

account

correctly

for

them

If

you

let

residential

property

You

can

only

claim

for

items

in

residential

property

if

either

you

run

a

furnished

holiday

lettings

business

the

item

is

in

the

common

parts

of

a

residential

building

for

example

a

table

in

the

hallway

of

a

block

of

flats

Care

workers

There

are

special

rules

if

you

run

a

care

business

Annual

investment

allowance

You

can

deduct

the

full

value

of

an

item

that

qualifies

for

annual

investment

allowance

AIA

from

your

profits

before

tax

If

you

sell

the

item

after

claiming

AIA

you

may

need

to

pay

tax

What

you

can

claim

on

You

can

claim

AIA

on

most

plant

and

machinery

up

to

the

AIA

amount

What

you

can

not

claim

on

You

can

not

claim

AIA

on

cars

items

you

owned

for

another

reason

before

you

started

using

them

in

your

business

items

given

to

you

or

your

business

Claim

writing

down

allowances

instead

The

AIA

amount

The

AIA

amount

has

temporarily

increased

to

million

between

January

and

December

Changes

to

the

AIA

The

AIA

amount

has

changed

several

times

since

April

If

the

AIA

changed

in

the

period

you

’re

claiming

for

you

need

to

adjust

the

amount

you

can

claim

AIA

Sole

traders

partners

Limited

companies

million

January

December

January

December

January

December

January

December

April

December

April

December

January

April

January

March

April

December

April

December

April

April

April

March

April

April

April

March

You

get

a

new

allowance

for

each

accounting

period

If

your

accounting

period

is

more

or

less

than

months

Adjust

your

AIA

if

your

accounting

period

is

more

or

less

than

months

The

rules

are

different

if

your

accounting

period

is

longer

than

months

or

you

have

a

gap

or

overlap

between

accounting

periods

When

you

can

claim

You

can

only

claim

AIA

in

the

period

you

bought

the

item

The

date

you

bought

it

is

when

you

signed

the

contract

if

payment

is

due

within

less

than

months

when

payment

’s

due

if

it

’s

due

more

than

months

later

If

you

buy

something

under

a

hire

purchase

contract

you

can

claim

for

the

payments

you

have

not

made

yet

when

you

start

using

the

item

You

can

not

claim

on

the

interest

payments

If

your

business

closes

you

can

not

claim

AIA

for

items

bought

in

the

final

accounting

period

If

you

do

not

want

to

claim

the

full

cost

If

you

do

not

want

to

claim

the

full

cost

for

example

you

have

low

profits

you

can

claim

writing

down

allowances

instead

part

of

the

cost

as

AIA

and

part

as

writing

down

allowances

Items

you

also

use

outside

your

business

You

can

not

claim

the

full

value

of

items

you

also

use

outside

your

business

if

you

’re

a

sole

trader

or

partner

Reduce

the

capital

allowances

you

claim

by

the

amount

you

use

the

asset

outside

your

business

If

you

spend

more

than

the

AIA

amount

Claim

writing

down

allowances

on

any

amount

above

the

AIA

If

a

single

item

takes

you

above

the

AIA

amount

you

can

split

the

value

between

the

types

of

allowance

Mixed

partnerships

AIA

is

not

available

for

partnerships

where

one

of

the

partners

is

a

company

or

another

partnership

More

than

one

business

or

trade

If

you

’re

a

sole

trader

or

a

partner

and

you

have

more

than

one

business

or

trade

each

business

usually

gets

an

AIA

You

only

get

one

AIA

if

the

businesses

are

both

controlled

by

the

same

person

in

the

same

premises

or

have

similar

activities

If

or

more

limited

companies

are

controlled

by

the

same

person

they

only

get

one

AIA

between

them

They

can

choose

how

to

share

the

AIA

How

to

claim

Claim

on

your

tax

return

First

year

allowances

If

you

buy

an

asset

that

qualifies

for

first

year

allowances

you

can

deduct

the

full

cost

from

your

profits

before

tax

You

can

claim

first

year

allowances

in

addition

to

annual

investment

allowance

they

do

not

count

towards

your

AIA

limit

What

qualifies

You

can

claim

enhanced

capital

allowances

a

type

of

first

year

allowances

for

the

following

energy

and

water

efficient

equipment

some

cars

with

low

emissions

energy

saving

equipment

that

’s

on

the

energy

technology

product

list

for

example

certain

motors

water

saving

equipment

that

’s

on

the

water

efficient

technologies

product

list

for

example

meters

efficient

toilets

and

taps

plant

and

machinery

for

gas

refuelling

stations

for

example

storage

tanks

pumps

gas

biogas

and

hydrogen

refuelling

equipment

new

zero

emission

goods

vehicles

You

can

not

normally

claim

on

items

your

business

buys

to

lease

to

other

people

or

for

use

within

a

home

you

let

out

How

to

claim

Claim

on

your

tax

return

If

you

do

not

claim

all

the

first

year

allowances

you

’re

entitled

to

you

can

claim

part

of

the

cost

in

the

next

accounting

period

using

writing

down

allowances

Business

cars

You

can

claim

capital

allowances

on

cars

you

buy

and

use

in

your

business

This

means

you

can

deduct

part

of

the

value

from

your

profits

before

you

pay

tax

Use

writing

down

allowances

to

work

out

what

you

can

claim

cars

do

not

qualify

for

annual

investment

allowance

AIA

Sole

traders

and

partners

If

you

’re

a

sole

trader

or

a

partner

you

can

claim

simplified

mileage

expenses

on

business

vehicles

instead

as

long

as

you

have

not

already

claimed

for

them

in

another

way

Employees

If

you

’re

an

employee

you

can

not

claim

capital

allowances

for

cars

motorbikes

and

bicycles

you

use

for

work

but

you

may

be

able

to

claim

for

business

mileage

and

fuel

costs

What

counts

as

a

car

For

capital

allowances

a

car

is

a

type

of

vehicle

that

is

suitable

for

private

use

this

includes

motorhomes

most

people

use

privately

was

not

built

for

transporting

goods

What

does

not

count

Because

they

do

not

count

as

cars

you

can

claim

AIA

on

motorcycles

apart

from

those

bought

before

April

lorries

vans

and

trucks

Rates

for

cars

The

rate

you

can

claim

depends

on

the

emissions

of

your

car

and

the

date

you

bought

it

The

main

and

special

rates

apply

from

April

for

limited

companies

and

April

for

sole

traders

and

partners

The

first

year

allowances

rate

applies

from

April

for

all

businesses

Cars

bought

from

April

Description

of

car

What

you

can

claim

New

and

unused

emissions

are

km

or

car

is

electric

First

year

allowances

New

and

unused

emissions

are

between

km

and

km

Main

rate

allowances

Second

hand

emissions

are

between

km

and

km

or

car

is

electric

Main

rate

allowances

New

or

second

hand

emissions

are

above

km

Special

rate

allowances

Cars

bought

between

April

and

April

Description

of

car

What

you

can

claim

New

and

unused

emissions

are

km

or

less

or

car

is

electric

First

year

allowances

New

and

unused

emissions

are

between

km

and

km

Main

rate

allowances

Second

hand

emissions

are

km

or

less

or

car

is

electric

Main

rate

allowances

New

or

second

hand

emissions

are

above

km

Special

rate

allowances

Cars

bought

between

April

and

April

Description

of

car

What

you

can

claim

New

and

unused

emissions

are

km

or

less

or

car

is

electric

First

year

allowances

New

and

unused

emissions

are

between

km

and

km

Main

rate

allowances

Second

hand

emissions

are

km

or

less

or

car

is

electric

Main

rate

allowances

New

or

second

hand

emissions

are

above

km

Special

rate

allowances

Cars

bought

between

April

and

April

Description

of

car

What

you

can

claim

New

and

unused

emissions

are

km

or

less

or

car

is

electric

First

year

allowances

New

and

unused

emissions

are

between

km

and

km

Main

rate

allowances

Second

hand

emissions

are

km

or

less

or

car

is

electric

Main

rate

allowances

New

or

second

hand

emissions

are

above

km

Special

rate

allowances

Cars

bought

between

April

and

April

Description

of

car

What

you

can

claim

New

and

unused

emissions

are

km

or

less

or

car

is

electric

First

year

allowances

New

and

unused

emissions

are

between

km

and

km

Main

rate

allowances

Second

hand

emissions

are

km

or

less

or

car

is

electric

Main

rate

allowances

New

or

second

hand

emissions

above

km

Special

rate

allowances

Move

the

balance

of

any

cars

bought

before

April

to

your

main

rate

allowances

pool

If

your

car

does

not

have

an

emissions

figure

use

the

special

rate

use

the

main

rate

if

it

was

registered

before

March

Using

cars

outside

your

business

If

you

’re

a

sole

trader

or

partner

and

you

also

use

your

car

outside

your

business

calculate

how

much

you

can

claim

based

on

the

amount

of

business

use

If

your

business

provides

a

car

for

an

employee

or

director

you

can

claim

capital

allowances

on

the

full

cost

You

may

need

to

report

it

as

a

benefit

if

they

use

it

personally

How

to

claim

When

you

’ve

worked

out

your

capital

allowances

claim

on

your

Self

Assessment

tax

return

if

you

’re

a

sole

trader

partnership

tax

return

if

you

’re

a

partner

Company

Tax

Return

if

you

’re

a

limited

company

you

must

include

a

separate

capital

allowances

calculation

Employees

must

claim

in

a

different

way

The

amount

you

can

claim

is

deducted

from

your

profits

When

you

can

claim

You

must

claim

in

the

accounting

period

you

bought

the

item

if

you

want

to

claim

the

full

value

under

annual

investment

allowance

first

year

allowances

If

you

do

not

want

to

claim

the

full

value

you

can

claim

part

of

it

using

writing

down

allowances

You

can

do

this

at

any

time

as

long

as

you

still

own

the

item

When

you

bought

it

The

date

you

bought

it

is

when

you

signed

the

contract

if

payment

is

due

within

less

than

months

when

payment

’s

due

if

it

’s

due

more

than

months

later

If

you

buy

something

under

a

hire

purchase

contract

you

can

claim

for

the

payments

you

have

not

made

yet

when

you

start

using

the

item

You

can

not

claim

on

the

interest

payments


Overview

If

you

’re

self

employed

your

business

will

have

various

running

costs

You

can

deduct

some

of

these

costs

to

work

out

your

taxable

profit

as

long

as

they

’re

allowable

expenses

Allowable

expenses

do

not

include

money

taken

from

your

business

to

pay

for

private

purchases

If

you

run

your

own

limited

company

you

need

to

follow

different

rules

You

can

deduct

any

business

costs

from

your

profits

before

tax

You

must

report

any

item

you

make

personal

use

of

as

a

company

benefit

Costs

you

can

claim

as

allowable

expenses

These

include

office

costs

for

example

stationery

or

phone

bills

travel

costs

for

example

fuel

parking

train

or

bus

fares

clothing

expenses

for

example

uniforms

staff

costs

for

example

salaries

or

subcontractor

costs

things

you

buy

to

sell

on

for

example

stock

or

raw

materials

financial

costs

for

example

insurance

or

bank

charges

costs

of

your

business

premises

for

example

heating

lighting

business

rates

advertising

or

marketing

for

example

website

costs

training

courses

related

to

your

business

for

example

refresher

courses

You

can

not

claim

expenses

if

you

use

your

tax

free

trading

allowance

Contact

the

Self

Assessment

helpline

if

you

’re

not

sure

whether

a

business

cost

is

an

allowable

expense

Costs

you

can

claim

as

capital

allowances

If

you

use

traditional

accounting

claim

capital

allowances

when

you

buy

something

you

keep

to

use

in

your

business

for

example

equipment

machinery

business

vehicles

for

example

cars

vans

lorries

You

can

not

claim

capital

allowances

if

you

use

your

tax

free

trading

allowance

If

you

use

cash

basis

If

you

use

cash

basis

accounting

and

buy

a

car

for

your

business

you

can

claim

this

as

a

capital

allowance

However

all

other

items

you

buy

and

keep

for

your

business

should

be

claimed

as

allowable

expenses

in

the

normal

way

If

you

use

something

for

both

business

and

personal

reasons

You

can

only

claim

allowable

expenses

for

the

business

costs

If

you

work

from

home

You

may

be

able

to

claim

a

proportion

of

your

costs

for

things

like

heating

electricity

Council

Tax

mortgage

interest

or

rent

internet

and

telephone

use

You

’ll

need

to

find

a

reasonable

method

of

dividing

your

costs

for

example

by

the

number

of

rooms

you

use

for

business

or

the

amount

of

time

you

spend

working

from

home

Simplified

expenses

You

can

avoid

using

complex

calculations

to

work

out

your

business

expenses

by

using

simplified

expenses

Simplified

expenses

are

flat

rates

that

can

be

used

for

vehicles

working

from

home

living

on

your

business

premises

Office

property

and

equipment

Claim

items

you

’d

normally

use

for

less

than

years

as

allowable

expenses

for

example

stationery

rent

rates

power

and

insurance

costs

For

equipment

you

keep

to

use

in

your

business

for

example

computers

or

printers

claim

allowable

expenses

if

you

use

cash

basis

accounting

capital

allowances

if

you

use

traditional

accounting

You

can

not

claim

for

any

non

business

use

of

premises

phones

or

other

office

resources

Stationery

You

can

claim

expenses

for

phone

mobile

fax

and

internet

bills

postage

stationery

printing

printer

ink

and

cartridges

computer

software

your

business

uses

for

less

than

years

computer

software

if

your

business

makes

regular

payments

to

renew

the

licence

even

if

you

use

it

for

more

than

years

Claim

other

software

for

your

business

as

capital

allowances

unless

you

use

cash

basis

Rents

rates

power

and

insurance

costs

You

can

claim

expenses

for

rent

for

business

premises

business

and

water

rates

utility

bills

property

insurance

security

using

your

home

as

an

office

only

the

part

that

’s

used

for

business

Business

premises

You

can

not

claim

expenses

or

allowances

for

buying

building

premises

Claim

expenses

for

repairs

and

maintenance

of

business

premises

and

equipment

For

alterations

to

install

or

replace

equipment

claim

allowable

expenses

if

you

use

cash

basis

accounting

capital

allowances

if

you

use

traditional

accounting

You

can

also

claim

capital

allowances

for

some

integral

parts

of

a

building

for

example

water

heating

systems

Car

van

and

travel

expenses

You

can

claim

allowable

business

expenses

for

vehicle

insurance

repairs

and

servicing

fuel

parking

hire

charges

vehicle

licence

fees

breakdown

cover

train

bus

air

and

taxi

fares

hotel

rooms

meals

on

overnight

business

trips

You

can

not

claim

for

non

business

driving

or

travel

costs

fines

travel

between

home

and

work

You

may

be

able

to

calculate

your

car

van

or

motorcycle

expenses

using

a

flat

rate

known

as

simplified

expenses

for

mileage

instead

of

the

actual

costs

of

buying

and

running

your

vehicle

Buying

vehicles

If

you

use

traditional

accounting

and

buy

a

vehicle

for

your

business

you

can

claim

this

as

a

capital

allowance

If

you

use

cash

basis

accounting

and

buy

a

car

for

your

business

claim

this

as

a

capital

allowance

as

long

as

you

’re

not

using

simplified

expenses

For

all

other

types

of

vehicle

claim

them

as

allowable

expenses

Clothing

expenses

You

can

claim

allowable

business

expenses

for

uniforms

protective

clothing

needed

for

your

work

costumes

for

actors

or

entertainers

You

can

not

claim

for

everyday

clothing

even

if

you

wear

it

for

work

Staff

expenses

You

can

claim

allowable

business

expenses

for

employee

and

staff

salaries

bonuses

pensions

benefits

agency

fees

subcontractors

employer

’s

National

Insurance

training

courses

related

to

your

business

You

can

not

claim

for

carers

or

domestic

help

for

example

nannies

Reselling

goods

You

can

claim

allowable

business

expenses

for

goods

for

resale

stock

raw

materials

direct

costs

from

producing

goods

You

can

not

claim

for

any

goods

or

materials

bought

for

private

use

depreciation

of

equipment

Legal

and

financial

costs

Accountancy

legal

and

other

professional

fees

can

count

as

allowable

business

expenses

You

can

claim

costs

for

hiring

of

accountants

solicitors

surveyors

and

architects

for

business

reasons

professional

indemnity

insurance

premiums

You

can

not

claim

for

legal

costs

of

buying

property

and

machinery

if

you

use

traditional

accounting

claim

for

these

costs

as

capital

allowances

fines

for

breaking

the

law

Bank

credit

card

and

other

financial

charges

You

can

claim

business

costs

for

bank

overdraft

and

credit

card

charges

interest

on

bank

and

business

loans

hire

purchase

interest

leasing

payments

alternative

finance

payments

for

example

Islamic

finance

If

you

’re

using

cash

basis

accounting

you

can

only

claim

up

to

in

interest

and

bank

charges

You

can

not

claim

for

repayments

of

loans

overdrafts

or

finance

arrangements

Insurance

policies

You

can

claim

for

any

insurance

policy

for

your

business

for

example

public

liability

insurance

When

your

customer

does

not

pay

you

If

you

’re

using

traditional

accounting

you

can

claim

for

amounts

of

money

you

include

in

your

turnover

but

will

not

ever

receive

bad

debts

However

you

can

only

write

off

these

debts

if

you

’re

sure

they

will

not

be

recovered

from

your

customer

in

the

future

You

can

not

claim

for

debts

not

included

in

turnover

debts

related

to

the

disposal

of

fixed

assets

for

example

land

buildings

machinery

bad

debts

that

are

not

properly

calculated

for

example

you

can

not

just

estimate

that

your

debts

are

equal

to

of

your

turnover

Bad

debts

can

not

be

claimed

if

you

use

cash

basis

accounting

because

you

’ve

not

received

the

money

from

your

debtors

With

cash

basis

you

only

record

income

on

your

return

that

you

’ve

actually

received

Marketing

entertainment

and

subscriptions

You

can

claim

allowable

business

expenses

for

advertising

in

newspapers

or

directories

bulk

mail

advertising

mailshots

free

samples

website

costs

You

can

not

claim

for

entertaining

clients

suppliers

and

customers

event

hospitality

Subscriptions

You

can

claim

for

trade

or

professional

journals

trade

body

or

professional

organisation

membership

if

related

to

your

business

You

can

not

claim

for

payments

to

political

parties

gym

membership

fees

donations

to

charity

but

you

may

be

able

to

claim

for

sponsorship

payments

Training

courses

You

can

claim

allowable

business

expenses

for

training

that

helps

you

improve

the

skills

and

knowledge

you

use

in

your

business

for

example

refresher

courses

The

training

courses

must

be

related

to

your

business

You

can

not

claim

for

training

courses

that

help

you

start

a

new

business

expand

into

new

areas

of

business

including

anything

related

to

your

current

business

How

to

claim

Keep

records

of

all

your

business

expenses

as

proof

of

your

costs

Add

up

all

your

allowable

expenses

for

the

tax

year

and

put

the

total

amount

on

your

Self

Assessment

tax

return

You

do

not

need

to

send

in

proof

of

expenses

when

you

submit

your

tax

return

But

you

should

keep

proof

and

records

so

you

can

show

them

to

HM

Revenue

and

Customs

HMRC

if

asked

You

must

make

sure

your

records

are

accurate


Overview

The

deadline

for

your

payment

will

depend

on

your

taxable

profits

Taxable

profits

of

up

to

million

You

must

pay

your

Corporation

Tax

months

and

day

after

the

end

of

your

accounting

period

Your

accounting

period

is

usually

your

financial

year

but

you

may

have

accounting

periods

in

the

year

you

set

up

your

company

Taxable

profits

of

more

than

million

You

must

pay

your

Corporation

Tax

in

instalments

Check

the

rules

and

deadlines

if

your

taxable

profits

are

between

million

and

million

if

your

taxable

profits

are

more

than

million

Ways

to

pay

Make

sure

you

pay

HM

Revenue

and

Customs

HMRC

by

the

deadline

They

may

charge

you

interest

if

you

do

not

pay

on

time

They

’ll

pay

you

interest

if

you

pay

your

tax

early

Pay

now

The

time

you

need

to

allow

depends

on

how

you

pay

You

can

no

longer

pay

at

the

Post

Office

Same

day

or

next

day

online

or

telephone

banking

Faster

Payments

CHAPS

through

your

online

bank

account

working

days

Bacs

Direct

Debit

if

you

’ve

set

one

up

before

online

by

debit

or

corporate

credit

card

at

your

bank

or

building

society

working

days

Direct

Debit

if

you

have

not

set

one

up

before

You

can

not

pay

Corporation

Tax

by

post

If

the

deadline

falls

on

a

weekend

or

bank

holiday

make

sure

your

payment

reaches

HMRC

on

the

last

working

day

before

it

unless

you

’re

paying

by

Faster

Payments

Make

an

online

or

telephone

bank

transfer

You

can

pay

HM

Revenue

and

Customs

HMRC

by

Faster

Payments

CHAPS

or

Bacs

The

back

of

your

payslip

sent

to

you

by

HMRC

tells

you

which

account

to

use

If

you

’re

not

sure

use

Cumbernauld

Sort

code

Account

number

HMRC

Cumbernauld

HMRC

Shipley

Reference

number

Use

your

character

Corporation

Tax

payslip

reference

for

the

accounting

period

you

’re

paying

You

’ll

find

the

payslip

reference

on

any

payslip

that

HMRC

sent

you

through

your

company

’s

HMRC

online

account

choose

View

account

then

Accounting

period

Your

payment

may

be

delayed

if

you

use

the

wrong

reference

number

How

long

it

takes

Payments

made

by

Faster

Payments

online

or

telephone

banking

will

usually

reach

HMRC

on

the

same

or

next

day

including

weekends

and

bank

holidays

CHAPS

payments

usually

reach

HMRC

the

same

working

day

if

you

pay

within

your

bank

’s

processing

times

Bacs

payments

usually

take

working

days

Check

your

bank

’s

transaction

limits

and

processing

times

before

making

a

payment

Overseas

accounts

Use

these

details

to

pay

from

an

overseas

account

Account

number

IBAN

Bank

identifier

code

BIC

HMRC

Cumbernauld

HMRC

Shipley

Multiple

payments

by

CHAPS

Send

an

online

CHAPS

enquiry

form

if

you

want

to

make

a

single

payment

to

cover

more

than

one

company

for

the

same

accounting

period

HMRC

’s

banking

address

is

Approve

a

payment

through

your

online

bank

account

You

can

pay

your

Corporation

Tax

bill

directly

using

your

online

or

mobile

bank

account

When

you

’re

ready

to

pay

select

start

a

payment

and

then

pay

by

bank

account

You

’ll

then

be

directed

to

sign

in

to

your

online

or

mobile

banking

account

to

approve

your

Corporation

Tax

payment

The

payment

is

usually

instant

but

sometimes

it

takes

up

to

hours

to

show

in

your

account

You

’ll

need

to

have

your

online

banking

details

ready

to

pay

this

way

By

debit

or

corporate

credit

card

online

You

can

pay

online

There

’s

a

fee

if

you

pay

by

corporate

credit

card

or

corporate

debit

card

The

fee

is

not

refundable

There

’s

no

fee

if

you

pay

by

personal

debit

card

You

can

not

pay

with

a

personal

credit

card

Use

your

character

Corporation

Tax

payslip

reference

for

the

accounting

period

you

’re

paying

You

’ll

find

the

payslip

reference

on

any

payslip

that

HM

Revenue

and

Customs

HMRC

sent

you

through

your

company

’s

HMRC

online

account

choose

View

account

then

Accounting

period

Your

payment

may

be

delayed

if

you

use

the

wrong

reference

number

If

you

’re

unable

to

pay

your

Corporation

Tax

bill

in

full

by

card

you

should

use

another

payment

method

like

a

bank

transfer

How

long

it

takes

Allow

working

days

for

your

payment

to

reach

HMRC

’s

bank

account

At

your

bank

or

building

society

You

can

pay

at

a

branch

by

cash

or

cheque

You

’ll

need

to

use

the

payslip

that

HM

Revenue

and

Customs

HMRC

sends

you

Make

your

cheque

payable

to

HM

Revenue

and

Customs

only

Write

your

character

Corporation

Tax

payslip

reference

number

on

the

back

of

your

cheque

for

the

accounting

period

you

’re

paying

You

can

find

the

reference

number

on

the

payslip

sent

to

you

by

HMRC

Allow

working

days

for

your

payment

to

reach

HMRC

’s

bank

account

If

you

do

not

have

a

payslip

You

’ll

need

to

pay

by

another

method

instead

for

example

debit

or

credit

card

online

online

or

telephone

banking

Direct

Debit

Direct

Debit

Set

up

and

make

changes

to

a

Direct

Debit

through

your

company

’s

HM

Revenue

and

Customs

HMRC

online

account

Use

your

character

Corporation

Tax

payslip

reference

for

the

accounting

period

you

’re

paying

You

can

find

the

payslip

reference

on

the

payslip

that

HMRC

sent

you

through

your

company

’s

HMRC

online

account

choose

View

account

then

Accounting

period

Your

payment

may

be

delayed

if

you

use

the

wrong

reference

number

How

long

it

takes

Allow

working

days

to

process

a

Direct

Debit

the

first

time

you

set

one

up

It

should

take

working

days

each

time

you

pay

once

you

’ve

already

authorised

a

Direct

Debit

from

HMRC

Payments

will

appear

on

your

bank

statements

as

HMRC

NDDS

Payments

for

a

group

of

companies

If

your

company

is

in

a

group

you

can

pay

Corporation

Tax

under

a

Group

Payment

Arrangement

HM

Revenue

and

Customs

HMRC

will

write

to

tell

you

the

correct

payslip

reference

Tell

HMRC

no

payment

is

due

Tell

HM

Revenue

and

Customs

HMRC

if

you

have

nothing

to

pay

HMRC

will

send

you

payment

reminders

if

you

do

not

You

can

tell

HMRC

by

either

filling

in

the

to

pay

form

sending

back

the

payslip

on

the

reminder

HMRC

sends

you

marked

due

You

must

still

file

your

company

tax

return

Check

your

payment

has

been

received

Check

your

HM

Revenue

and

Customs

HMRC

online

account

to

see

if

your

payment

has

been

received

It

should

be

updated

within

a

few

days

of

HMRC

receiving

the

payment


Overview

When

you

buy

shares

you

usually

pay

a

tax

or

duty

of

on

the

transaction

If

you

buy

shares

electronically

you

’ll

pay

Stamp

Duty

Reserve

Tax

SDRT

shares

using

a

stock

transfer

form

you

’ll

pay

Stamp

Duty

if

the

transaction

is

over

You

’ll

have

to

pay

tax

at

if

you

transfer

shares

into

some

depositary

receipt

schemes

or

clearance

services

You

pay

tax

on

the

price

you

pay

for

the

shares

even

if

their

actual

market

value

is

much

higher

Transactions

you

pay

tax

on

You

pay

tax

when

you

buy

existing

shares

in

a

company

incorporated

in

the

UK

an

option

to

buy

shares

an

interest

in

shares

for

example

an

interest

in

the

money

from

selling

them

shares

in

a

foreign

company

that

has

a

share

register

in

the

UK

rights

arising

from

shares

for

example

rights

you

have

when

new

shares

are

issued

When

you

do

not

pay

tax

You

do

not

have

to

pay

tax

if

you

are

given

shares

for

nothing

subscribe

to

a

new

issue

of

shares

in

a

company

buy

shares

in

an

open

ended

investment

company

OEIC

from

the

fund

manager

buy

units

in

a

unit

trust

from

the

fund

manager

You

do

not

normally

have

to

pay

Stamp

Duty

or

SDRT

if

you

buy

foreign

shares

outside

the

UK

But

you

may

have

to

pay

other

taxes

When

you

sell

the

shares

You

may

need

to

pay

Capital

Gains

Tax

when

you

sell

your

shares

Help

and

advice

Contact

Stamp

Duty

share

enquiries

for

general

information

about

Stamp

Duty

on

shares

Contact

Stamp

Duty

Reserve

Tax

enquiries

if

you

have

questions

about

Stamp

Duty

on

electronic

paperless

share

transactions

You

can

also

get

professional

help

for

example

from

a

tax

adviser

with

your

tax

Buying

shares

electronically

You

’ll

pay

Stamp

Duty

Reserve

Tax

SDRT

if

you

buy

shares

electronically

through

the

CREST

system

a

computerised

register

of

shares

and

shareowners

The

tax

is

taken

automatically

when

you

buy

the

shares

so

you

do

not

need

to

do

anything

else

about

your

tax

SDRT

is

charged

at

when

you

buy

shares

electronically

If

you

do

not

pay

cash

for

your

shares

but

give

something

else

of

value

to

buy

them

you

pay

SDRT

based

on

the

value

of

what

you

gave

If

you

’re

given

shares

for

nothing

you

do

not

have

to

pay

any

tax

Buying

shares

off

market

You

must

also

pay

SDRT

on

off

market

transactions

This

is

when

shares

are

transferred

outside

CREST

How

to

pay

Tax

is

not

deducted

automatically

when

you

buy

shares

off

market

You

’ll

need

to

send

HM

Revenue

and

Customs

HMRC

a

written

notice

with

details

of

the

transaction

If

you

do

not

pay

on

time

you

’ll

be

charged

interest

from

the

due

date

until

the

date

you

pay

You

may

also

get

a

penalty

Buying

shares

using

a

stock

transfer

form

You

must

pay

Stamp

Duty

on

your

shares

if

you

buy

shares

through

a

stock

transfer

form

the

transaction

is

over

You

pay

duty

which

will

be

rounded

up

to

the

nearest

For

shares

under

you

will

not

need

to

pay

anything

Get

a

stock

transfer

form

You

can

get

a

stock

transfer

form

from

a

broker

a

lawyer

or

an

accountant

who

deals

in

shares

You

can

also

download

a

stock

transfer

form

from

the

internet

Find

out

what

you

need

to

include

in

a

stock

transfer

form

Send

the

transfer

form

to

HMRC

and

pay

Stamp

Duty

You

must

send

a

copy

of

your

stock

transfer

form

to

the

Stamp

Office

within

days

of

it

being

signed

and

dated

Email

an

electronic

version

or

a

scan

of

your

paper

form

to

stampdutymailbox@hmrc.gov.uk

If

you

can

not

email

your

stock

transfer

form

send

a

photocopy

by

post

You

must

keep

the

original

signed

document

for

your

records

There

is

a

different

address

to

send

a

stock

transfer

form

by

courier

You

must

also

pay

the

Stamp

Duty

within

days

of

the

stock

transfer

form

being

signed

and

dated

You

may

get

a

penalty

if

you

do

not

pay

on

time

Special

share

arrangements

You

pay

Stamp

Duty

Reserve

Tax

SDRT

or

Stamp

Duty

at

if

you

transfer

shares

into

some

depositary

receipt

schemes

or

clearance

services

This

is

when

the

shares

are

transferred

to

a

service

operated

by

a

third

party

for

example

a

bank

The

shares

can

then

be

traded

free

of

Stamp

Duty

or

SDRT

Not

all

of

these

schemes

work

like

this

Sometimes

the

higher

rate

is

not

charged

and

you

pay

Stamp

Duty

or

SDRT

in

the

normal

way

Check

the

details

of

your

scheme

with

your

stockbroker


Overview

You

must

register

as

a

contractor

with

the

Construction

Industry

Scheme

CIS

if

you

pay

subcontractors

to

do

construction

work

your

business

does

not

do

construction

work

but

you

have

spent

more

than

million

on

construction

in

the

months

since

you

made

your

first

payment

You

may

be

a

sole

trader

in

a

partnership

or

own

a

limited

company

If

you

’re

not

sure

if

you

need

to

register

check

who

is

covered

by

CIS

Rules

you

must

follow

You

must

register

for

CIS

before

you

take

on

your

first

subcontractor

You

must

check

if

you

should

employ

the

person

instead

of

subcontracting

the

work

You

may

get

a

penalty

if

they

should

be

an

employee

instead

Check

with

HM

Revenue

and

Customs

HMRC

that

your

subcontractors

are

registered

with

CIS

When

you

pay

subcontractors

you

’ll

usually

need

to

make

deductions

from

their

payments

and

pay

the

money

to

HMRC

Deductions

count

as

advance

payments

towards

the

subcontractor

’s

tax

and

National

Insurance

bill

You

’ll

need

to

file

monthly

returns

and

keep

full

CIS

records

you

may

get

a

penalty

if

you

do

not

You

must

let

HMRC

know

about

any

changes

to

your

business

Who

is

covered

by

CIS

The

Construction

Industry

Scheme

CIS

covers

most

construction

work

to

buildings

including

site

preparation

decorating

and

refurbishment

Mainstream

contractors

If

your

business

is

construction

and

you

pay

subcontractors

for

construction

work

you

’re

a

mainstream

contractor

This

applies

if

you

’re

a

builder

labour

agency

gangmaster

or

gang

leader

property

developer

Deemed

contractors

You

count

as

a

deemed

contractor

if

your

business

does

not

do

construction

work

but

you

have

spent

more

than

million

on

construction

in

the

months

since

you

made

your

first

payment

This

could

apply

to

housing

association

or

arm

’s

length

management

organisations

ALMOs

local

authorities

government

departments

You

must

monitor

your

construction

spend

if

you

are

likely

to

become

a

deemed

contractor

Exceptions

for

contractors

CIS

does

not

apply

if

your

work

is

paid

for

by

a

charity

or

trust

paid

for

by

a

governing

body

or

head

teacher

of

a

maintained

school

on

behalf

of

the

local

education

authority

on

the

subcontractor

’s

own

property

and

worth

less

than

excluding

materials

you

must

call

the

CIS

helpline

to

get

an

exemption

CIS

also

does

not

apply

if

you

’re

a

deemed

contractor

paying

for

work

on

property

that

is

not

for

sale

or

rent

for

your

own

business

use

a

construction

contract

worth

less

than

excluding

materials

you

must

call

the

CIS

helpline

to

get

an

exemption

Construction

work

not

covered

by

CIS

There

are

also

certain

jobs

that

are

exempt

from

the

scheme

including

architecture

and

surveying

scaffolding

hire

with

no

labour

carpet

fitting

delivering

materials

work

on

construction

sites

that

is

clearly

not

construction

for

example

running

a

canteen

or

site

facilities

The

CIS

guide

for

contractors

and

subcontractors

explains

in

full

what

type

of

work

is

covered

by

CIS

How

to

register

To

register

as

a

contractor

you

need

to

follow

the

process

for

setting

up

as

a

new

employer

When

done

you

’ll

get

a

letter

from

HM

Revenue

and

Customs

HMRC

with

the

information

you

need

to

start

working

as

a

Construction

Industry

Scheme

CIS

contractor

If

your

business

is

based

outside

the

UK

but

you

do

construction

work

here

you

follow

a

different

registration

process

Help

with

registering

If

you

need

help

call

the

new

employer

helpline

or

the

CIS

helpline

You

can

also

sign

up

for

webinars

and

emails

or

watch

videos

from

HMRC

about

CIS

Verify

subcontractors

Before

you

can

pay

a

new

subcontractor

you

’ll

need

to

verify

them

with

HM

Revenue

and

Customs

HMRC

HMRC

will

tell

you

whether

they

’re

registered

for

the

Construction

Industry

Scheme

CIS

what

rate

of

deduction

to

use

or

if

you

can

pay

them

without

making

deductions

You

must

also

verify

subcontractors

you

’ve

used

before

if

you

have

not

included

them

on

a

CIS

return

in

the

current

or

last

tax

years

How

to

verify

You

can

verify

subcontractors

using

the

free

HMRC

CIS

online

service

commercial

CIS

software

If

you

need

to

verify

more

than

subcontractors

you

’ll

need

to

use

commercial

CIS

software

What

you

’ll

need

Make

sure

you

have

your

Unique

Taxpayer

Reference

UTR

the

reference

number

for

your

HMRC

accounts

office

your

HMRC

employer

reference

You

’ll

also

need

your

subcontractor

’s

UTR

National

Insurance

number

if

they

’re

a

sole

trader

you

can

not

verify

temporary

numbers

which

start

with

TN

or

digits

company

name

company

UTR

and

registration

number

if

they

’re

a

limited

company

nominated

partner

details

trading

name

and

partnership

UTR

if

they

’re

a

partnership

The

details

you

provide

to

verify

the

subcontractor

must

exactly

match

the

details

the

subcontractor

used

to

register

with

HMRC

Make

deductions

and

pay

subcontractors

When

you

pay

a

subcontractor

you

usually

make

some

deductions

from

their

payments

HM

Revenue

and

Customs

HMRC

will

tell

you

how

much

to

deduct

from

a

subcontractor

’s

payments

when

you

verify

them

The

Construction

Industry

Scheme

CIS

deduction

rates

are

for

registered

subcontractors

for

unregistered

subcontractors

if

the

subcontractor

has

gross

payment

status

for

example

they

do

not

have

deductions

made

You

must

pay

these

deductions

to

HMRC

they

count

as

advance

payments

towards

the

subcontractor

’s

tax

and

National

Insurance

bill

How

to

make

a

CIS

deduction

To

make

a

deduction

from

a

subcontractor

’s

payment

start

with

the

total

gross

amount

of

the

subcontractor

’s

invoice

Take

away

the

amount

the

subcontractor

has

paid

for

VAT

materials

equipment

which

is

now

unusable

consumable

stores

fuel

used

except

for

travelling

equipment

hired

for

this

job

plant

hire

manufacturing

or

prefabricating

materials

Only

deduct

materials

the

subcontractor

has

paid

for

directly

Ask

the

subcontractor

for

evidence

that

they

paid

for

the

materials

if

you

’re

unsure

Finally

deduct

the

CIS

percentage

rate

as

given

to

you

by

HMRC

from

the

amount

left

You

’ll

be

left

with

the

net

amount

you

need

to

pay

the

subcontractor

Paying

subcontractors

You

usually

pay

your

subcontractors

directly

But

you

can

pay

them

through

a

third

party

such

as

a

relative

or

debt

company

if

they

ask

you

to

If

you

make

deductions

you

must

give

the

subcontractor

a

payment

and

deduction

statement

within

days

of

the

end

of

each

tax

month

If

you

’re

not

making

payments

If

you

know

you

’re

not

going

to

make

any

payments

to

subcontractors

for

up

to

months

you

can

ask

for

your

scheme

to

be

made

inactive

HMRC

will

not

send

you

any

returns

for

that

period

You

must

file

a

return

when

you

start

paying

subcontractors

again

Pay

deductions

to

HMRC

You

must

pay

HM

Revenue

and

Customs

HMRC

any

deductions

you

’ve

made

HMRC

will

set

up

a

Construction

Industry

Scheme

CIS

payment

scheme

for

you

when

you

register

as

a

contractor

If

you

already

have

employees

HMRC

will

change

your

existing

PAYE

Scheme

to

a

PAYE

CIS

scheme

You

should

make

one

payment

each

month

or

quarter

to

cover

your

PAYE

tax

National

Insurance

and

CIS

deductions

When

and

how

to

pay

Pay

HMRC

every

month

by

the

or

the

if

you

’re

paying

by

post

You

may

be

charged

interest

and

penalties

if

you

pay

late

Pay

CIS

deductions

to

HMRC

in

the

same

way

as

PAYE

and

National

Insurance

payments

File

your

monthly

returns

You

must

tell

HM

Revenue

and

Customs

HMRC

each

month

about

payments

you

’ve

made

to

subcontractors

through

your

monthly

return

You

can

file

returns

by

using

the

HMRC

CIS

online

service

some

commercial

CIS

software

On

your

return

you

must

declare

that

the

subcontractors

listed

are

not

employees

You

could

get

a

penalty

of

up

to

if

you

give

the

wrong

employment

status

for

a

subcontractor

on

your

monthly

return

If

you

made

no

payments

You

do

not

have

to

file

a

return

for

the

months

when

you

made

no

payments

to

subcontractors

but

you

must

tell

HMRC

that

no

return

is

due

You

can

contact

HMRC

to

make

an

inactivity

request

if

you

’ve

temporarily

stopped

using

subcontractors

This

lasts

for

months

You

must

tell

HMRC

if

you

start

using

subcontractors

again

Phone

lines

are

currently

busier

than

usual

because

of

coronavirus

You

can

use

your

online

account

to

tell

HMRC

Using

commercial

CIS

software

Your

return

must

not

include

any

negative

values

if

you

’re

using

commercial

CIS

software

If

any

entries

come

to

less

than

you

should

put

instead

HMRC

might

ask

you

later

to

give

details

of

any

entries

you

’ve

replaced

Deadlines

Send

your

monthly

returns

to

HMRC

by

the

of

every

month

following

the

last

tax

month

Penalties

for

late

returns

You

’ll

get

a

penalty

if

you

miss

the

deadline

for

filing

returns

The

penalty

will

be

cancelled

if

you

let

HMRC

know

that

you

did

not

pay

any

subcontractors

that

month

How

late

the

return

is

Penalty

day

late

months

late

months

late

or

of

the

CIS

deductions

on

the

return

whichever

is

higher

months

late

or

of

the

CIS

deductions

on

the

return

whichever

is

higher

For

returns

later

than

this

you

may

be

given

an

additional

penalty

of

up

to

or

of

the

CIS

deductions

on

the

return

whichever

is

higher

Pay

your

late

filing

penalty

If

you

disagree

with

a

penalty

You

can

appeal

within

days

of

the

date

on

the

penalty

notice

through

HMRC

’s

online

service

by

writing

to

HMRC

quote

your

Unique

Taxpayer

Reference

UTR

and

the

payment

reference

shown

on

the

notice

Correcting

or

changing

returns

Use

the

HMRC

CIS

online

service

to

change

or

correct

something

on

your

return

Call

the

CIS

helpline

if

you

need

any

help

with

this

Record

keeping

Under

the

Construction

Industry

Scheme

CIS

you

must

keep

records

of

the

gross

amount

of

each

payment

invoiced

by

subcontractors

excluding

VAT

any

deductions

you

’ve

made

from

subcontractor

payments

If

you

made

deductions

you

must

also

keep

records

of

the

costs

of

materials

the

subcontractor

invoiced

you

for

excluding

VAT

Keep

these

details

for

at

least

years

after

the

end

of

the

tax

year

they

relate

to

HM

Revenue

and

Customs

HMRC

could

ask

to

see

your

CIS

records

at

any

time

You

could

be

fined

up

to

if

you

can

not

show

your

CIS

records

when

asked

by

HMRC

Tell

HMRC

about

changes

You

must

tell

HM

Revenue

and

Customs

HMRC

if

you

change

address

as

an

individual

or

business

you

change

your

business

structure

for

example

from

sole

trader

to

limited

company

or

vice

versa

a

contractor

dies

you

’re

a

multiple

contractor

and

you

take

on

another

contractor

’s

business

you

must

tell

HMRC

within

days

If

you

stop

trading

or

using

subcontractors

You

must

tell

HMRC

stop

filing

monthly

CIS

reports

Do

this

even

if

you

’ve

stopped

using

subcontractors

temporarily

for

example

because

you

’re

using

your

own

employees

to

carry

out

work

If

you

’ve

temporarily

stopped

using

subcontractors

You

can

contact

HMRC

to

make

an

inactivity

request

if

you

’ve

temporarily

stopped

using

subcontractors

This

lasts

for

months

You

must

tell

HMRC

if

you

start

using

subcontractors

again

Phone

lines

are

currently

busier

than

usual

because

of

coronavirus

You

can

use

your

online

account

to

tell

HMRC