Make decisions on behalf of someone

When you can make decisions for someone

Someone can choose you to make and carry out certain decisions on their (someone) behalf.

They (someone) can ask you to do this:

now - for example, while they (someone)’re on holiday

in the future - for example, if they (someone) lose the mental capacity to make their (someone) own decisions

You can also apply to a court to help someone make decisions if they do not have mental capacity now.

This guide is also available in Welsh (Cymraeg).

When someone can choose you

A person (someone) must have mental capacity when they (someone) choose you for short-term or long-term help with decisions.

Short-term help

You can be appointed to make decisions about someone’s (someone) money or property for a limited time - for example, while they (someone)’re on holiday.

They (someone) can appoint you with either:

a lasting power of attorney for ‘property and financial affairs’ - they (someone)’ll say when it starts and ends

an ‘ordinary power of attorney’ - you can only use this while they (someone) have mental capacity

To make an ordinary power of attorney, the person who appoints you (someone) needs to buy a document from a newsagent or use a solicitor.

Long-term help

You can be appointed with a lasting power of attorney to help someone make ongoing decisions about either or both:

money and property - starting at any time, or when they (someone) do not have mental capacity

health and welfare - starting when they (someone) do not have mental capacity

You can also help someone with ongoing decisions using an enduring power of attorney made before 1 October 2007.

When you apply to a court

Apply to a court to help someone without mental capacity with one-off or long-term decisions.

Check if someone already has an attorney or deputy to help them with decisions before you apply.  If they do have an attorney or deputy, ask them for help instead.

One-off decisions

Ask the Court of Protection to make:

a one-off decision about an issue that’s not urgent

an urgent or emergency decision about something that puts them at risk

If the decision is about medical treatment, you must consider any living will (advance decision) that the person has made.

Long-term help

Apply to the Court of Protection to help someone long-term with decisions about either or both:

money and property - as a ‘property and financial affairs deputy’

health and welfare - as a ‘personal welfare deputy’

How to make decisions

As someone’s attorney or deputy you must:

give them (someone’s) all the help they (someone’s) need to make each decision before deciding they (someone’s) do not have mental capacity to make that decision themselves (someone’s)

make any decisions in their (someone’s) best interests

make decisions that restrict their (someone’s) human and civil rights as little as you can

Helping someone make decisions

Give the person all the information they (someone) need to make a decision.

Make it easy for them (the person) to understand and weigh up the information, for example by:

allowing plenty of time

choosing a time that suits them (the person) best

talking in familiar surroundings - for example, their (the person) home

removing distractions such as background noise

explaining things a different way - in pictures or sign language, for example

Suggest different ways for them (the person) to tell you their (the person) decision if they (the person) cannot tell you in words - for example, by pointing, squeezing your hand, blinking or nodding.

Making decisions in someone’s best interests

Any decisions you make for someone must be right for them (‘in their best interests’). Take into account:

what they (the person) would have decided if they (the person) could

their (the person) past and present values and wishes, including moral, political and religious views

Do not make assumptions based on their (the person) age, gender, ethnic background, sexuality, behaviour or health.

It can help to:

write down what the person has told you is important to them

look at other things they (the person) wrote down or recorded (such as household budgets or home videos)

speak to friends, family or colleagues who know them (someone) well

consult anyone involved in their (someone) care, for example personal carers or care home staff

notice their (someone) behaviour and reactions - this can tell you about wishes and feelings that a person cannot express in words

Human and civil rights

Your decisions must restrict the person’s human and civil rights as little as possible. Citizens Advice has information about human and civil rights.

You can never make decisions on someone’s behalf about certain things, such as:

voting

relationships - for example consenting to sex, getting married or getting divorced

Follow the Mental Capacity Act code of practice when you make decisions.

Difficult decisions and disagreements

Consult the person as well as their family, friends and carers. Including everyone in a ‘best interests’ meeting can help you reach agreement.

If you cannot agree you can:

get advice about how to reach agreement from the Office of the Public Guardian

get help from an advocate who can represent the person’s best interests

find a mediation service

get help from the social services team at your local council if it’s a disagreement about the person’s care

ask the Court of Protection to decide if it’s a major disagreement about a serious issue

Checking mental capacity

A person may not have mental capacity because of a problem with the way their brain functions, for example:

a serious brain injury

an illness, such as dementia

severe learning disabilities

Mental capacity can come and go (for example, with dementia and some mental illnesses). A person can also recover mental capacity (for example, following a severe stroke).

What you must check

You must check that a person has mental capacity to make a decision at the time it needs to be made.

They (a person) can make the decision (a decision) if they (a person) can:

understand the information they (a person) need - for example, what the consequences will be

remember the information for long enough to make the decision (a decision)

weigh up the options and make a choice

communicate their (a person) decision (a decision) in any way - for example, by blinking or squeezing a hand

You cannot decide a person lacks mental capacity because you think they’ve made a bad or strange decision.

If the person cannot make a decision at a certain time, they may still be able to:

make it (a decision) at another time

make decisions about other things

Do not make a decision for them (the person) if it can wait until they (the person) can do it (a decision) themselves (the person).

Get help checking mental capacity

You can ask the person’s doctor or another medical professional to assess their mental capacity.

Follow the Mental Capacity Act code of practice when you check mental capacity.


Money and property when you divorce or separate

Getting a financial agreement

When you divorce or end a civil partnership you and your ex-partner need to agree how to separate your finances.

This (agree) includes deciding how you’re going to divide:

pensions

property

savings

investments

You might get things like:

a share of your your partner’s pension - including State Pension or private pension plans

regular maintenance payments to help with children or living expenses

You can usually avoid going to court hearings if you agree how to split your money and property.

The rules are different if you were not married or in a civil partnership. You’ll still have to agree on child maintenance payments for any children.

What you can do is different in Scotland and Northern Ireland.

Making an agreement legally binding

If you and your ex-partner agree on how to divide money and property,  you need to apply for a consent order to make it (an agreement) legally binding.

Get help agreeing

You can use a mediator or get other help to resolve issues out of court.

Get the court to decide

If you cannot agree on everything, you can ask a court to make a financial order.

If you agree

It’s usually more straightforward and less expensive if you agree how to divide your money and property. Get help agreeing.

Making your agreement legally binding

To make your agreement legally binding you need to draft a consent order and ask a court to approve it.

If your agreement is not legally binding, a court cannot enforce it (an agreement) if there are any issues later.

A consent order is a legal document that confirms your agreement. It explains how you’re going to divide up assets like:

pensions

property

savings

investments

It (A consent order) can also include arrangements for maintenance payments, including child maintenance.

You can get legal advice or ask a solicitor to draft a consent order for you.

When to apply for a consent order

You can ask the court to approve your consent order if you’ve started the paperwork to divorce or end your civil partnership.

It is usually more straightforward to divide money and property before you apply for the final legal document to end the relationship.

The final legal document (the final legal document to end the relationship) is the:

decree absolute if you’re divorcing

final order if you’re ending a civil partnership

You can divide money and property after your divorce is finalised or civil partnership has ended. This may change what you’re entitled to get and you may have to pay tax on it.

How to ask the court for approval

You and your ex-partner have to:

draft a consent order

sign the draft consent order (a consent order) - you also need 2 photocopies of the signed original

fill in a statement of information form

One of you also needs to fill in a notice of an application for a financial order.

If you’re ending a civil partnership or legally separating, send the signed forms and copies with the £50 fee to the court dealing with your paperwork. Keep your own copies.

If you’re divorcing, send the signed forms and copies with the £50 fee to:

You may be able to get help with court fees if you’re on benefits or a low income.

There’s usually no court hearing. A judge will approve your consent order to make it legally binding if they think it’s fair.

If they (A judge) do not think it (your consent order)’s fair, they (A judge) can ask you to change it (your consent order).

How much it costs

The court fee is £50.

Solicitor fees vary depending on their experience and location. They usually charge per hour.

Get help agreeing

A mediator can help you and your ex-partner agree on how to split money and property, without taking sides.

Mediation is not relationship counselling. It can help you agree on how you’ll divide your assets, including:

pensions

property

savings

investments

Mediation can be quicker and cheaper than asking a court to decide for you.

You need to attend a mediation information assessment meeting (MIAM) before you start mediation.

Find a local mediator.

The mediator (a local mediator) can decide mediation is not right for you (for example, if there’s been domestic abuse and you need to go to court instead).

How much it costs

A MIAM is usually about £30. If you need more mediation sessions they cost more and fees vary depending on where you live.

Check if you can get legal aid for mediation.

Making your agreement legally binding

At the end of mediation you’ll get a document showing what you agreed. This agreement (your agreement) is not legally binding.

If you want a legally binding agreement you need to draft a consent order and get a court to approve it. The consent order can be based on what you agreed in mediation.

If you need more help agreeing

You can:

ask a legal adviser about other ways to resolve issues out of court (such as family arbitration or collaborative law)

get information and advice from Citizens Advice

read guidance to help you sort out finances when you get divorced

work out your finances with a divorce and separation calculator

If you do not agree on everything

You can ask a court to decide on anything you have not agreed on.

Get the court (a court) to decide

If you and your ex-partner cannot agree how to divide your finances you can ask a court to make a financial order (also known as the ‘contested’ route or an ‘ancillary relief order’).

This (ask) means the court (a court) will decide how assets will be split. Getting the court (a court) to decide usually takes longer and is more expensive than if you and your ex-partner agree.

You must attend a meeting about mediation before you can apply to the court to decide - except in certain cases (if there’s been domestic abuse, for example).

A financial order will describe how you’re going to divide up assets like:

pensions

property

savings

investments

It (A financial order) can also include arrangements for maintenance payments, including child maintenance.

When to apply for a financial order

You can ask a court to make a financial order if you’ve started the paperwork to divorce or end your civil partnership.

The final legal document is the:

decree absolute if you’re divorcing

final order if you’re ending a civil partnership

You can divide money and property after your divorce is finalised or civil partnership has ended but it may change what you’re entitled to get and you may have to pay tax on it.

How to apply

You need to apply for a financial order.

Send 2 copies of the form to the court dealing with paperwork in your area to divorce or end your civil partnership. Keep a copy for yourself.

You can hire a solicitor to help you apply for a financial order from the court.

After you apply

There are three stages:

the first appointment - a short hearing with the judge to discuss your application

financial dispute resolution (FDR) appointment -  to help you agree without needing a final hearing (you might need more than one appointment)

final hearing -  if you’re not able to agree, this is when a judge will decide how you must separate your finances

The court will send you and your ex-partner details when the first appointment will be. This is usually 12 to 14 weeks after you apply.

Before the first appointment

You and your ex-partner need to fill in a financial statement for a financial order (Form E) to show a breakdown of your property and debts. This includes giving an estimate of your future living costs.

You’ll also need to collect documents about your finances, for example:

rental or mortgage agreements

pension documents

loan agreements

proof of your salary income, for example P60 or recent pay slips

details of personal belongings worth more than £500, for example a car or house contents

How long it takes

It depends on:

how many financial dispute resolution appointments you need

if you need a final hearing

There can be several months between the appointments.

How the court decides

If you cannot agree, a judge will decide how assets will be split. They’ll base their decision on how long you’ve been married or in a civil partnership, as well as your:

age

ability to earn

property and money

living expenses

standard of living

financial needs and responsibilities

role in looking after the family, for example if you were the main earner or caring for the family or home

disability or health condition, if you have any

The judge (a judge) will decide on the fairest way to divide the assets if there’s enough to meet everyone’s needs. They (a judge) will make arrangements for any children first - especially their housing arrangements and child maintenance. The reason for the divorce or dissolution is not taken into account.

The judge (a judge) will usually try to arrange a ‘clean break’, so everything is shared out, and you no longer have any financial ties to one another.

How much it costs

The court fee is £255.

Solicitor fees vary depending on their experience and where you live. They usually charge by the hour. How much you pay in total depends on how many financial dispute resolution appointments you need and if there will be a final hearing.

You can get legal aid to help with court costs in certain situations, for example if you’re separating from an abusive partner.

Further help and advice

You can:

get information and advice from Citizens Advice

read guidance to help you sort out finances when you get divorced

find out more about how to apply for a financial order

Maintenance payments

The court sometimes tells the person with the higher income to make regular maintenance payments to help with the other person’s living costs.

This (tells) is called a ‘maintenance order’.

A maintenance payment can be set for:

a limited period of time

until one of you dies, marries or enters into a new civil partnership

The payment (A maintenance payment) can also be changed if one of you loses your job or gets much better paid work.

Child maintenance

The court can also decide on child maintenance, but this is often arranged by the Child Maintenance Service.

Read more about making arrangements to look after children when you divorce or separate.

Tax when transferring assets

You do not usually have to pay Capital Gains Tax if you give, or otherwise ‘dispose of’, assets to your husband, wife or civil partner before you finalise the divorce or civil partnership.

Assets include shares, certain personal possessions and property. You usually do not have to pay tax if you transfer or sell your main home.

If you transfer an asset when you’re separated

If you lived together at any point in the tax year that you transferred the asset (an asset), the normal rules for spouses and civil partners apply.

Otherwise you may have to pay Capital Gains Tax. You’ll need to get a valuation of the asset (an asset) on the date of transfer, and use it to work out the gain or loss.

The tax year (the tax year that you transferred the asset (an asset)) is from 6 April to 5 April the following year.

If you transfer an asset after you’ve divorced or dissolved your civil partnership

You may have to pay Capital Gains Tax on assets you transfer after your relationship has legally ended.

The rules for working out your gain or loss are complex. Contact HM Revenue and Customs (HMRC) or get professional tax help, such as an accountant or tax adviser. You’ll need to tell them the date of:

the decree absolute or dissolution

any court order, if assets were transferred this way

any other contract showing the transfer of assets


Set up a business partnership

Setting up

In a partnership, you and your partner (or partners) personally share responsibility for your business. This includes:

any losses your business makes

bills for things you buy for your business, like stock or equipment

Partners share the business’s (your business) profits, and each partner pays tax on their share.

A partner does not have to be an actual person. For example, a limited company counts as a ‘legal person’ and can also be a partner.

What you need to do

When you set up a business partnership you need to:

choose a name

choose a ‘nominated partner’

register with HM Revenue and Customs (HMRC)

The ‘nominated partner’ (a ‘nominated partner’) is responsible for managing the partnership’s (a business partnership) tax returns and keeping business records.

There are different rules for limited partnerships and limited liability partnerships (LLPs).

Naming your partnership

You can trade under your own names, or you can choose another name for your business. You do not need to register your name.

You must include all the partners’ names and the business name (if you have one) on official paperwork, for example invoices and letters.

Business names

Business partnership names must not:

include ‘limited’, ‘Ltd’, ‘limited liability partnership, ‘LLP’, ‘public limited company’ or ‘plc’

be offensive

be the same as an existing trade mark

Your name also cannot contain a ‘sensitive’ word or expression, or suggest a connection with government or local authorities, unless you get permission.

Check which words you need permission to use, and who from.

You’ll need to register your name as a trade mark if you want to stop people from trading under your business name (Your name).

Register the partnership (your partnership)

You must register your partnership for Self Assessment with HM Revenue and Customs (HMRC) (HM Revenue and Customs (HMRC) if you’re the ‘nominated partner’. This means you’re responsible for sending the partnership tax return.

The other partners need to register separately.

Register a partner or partnership

All partners also need to send their own tax returns as individuals.

You must register by 5 October in your business’s second tax year, or you could be charged a penalty.

Other ways to register

You can also register the partnership (your partnership) using form SA400 if you cannot register online. You can register as a partner using form SA401.

Registering for VAT

You must also register for VAT if your VAT taxable turnover is more than £85,000. You can choose to register if it’s below this, for example to reclaim VAT on business supplies.

You can appoint an agent to deal with HMRC (HM Revenue and Customs (HMRC) on your behalf.


Capital Gains Tax for business

What you pay it on

You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) all or part of a business asset.

Business assets you may need to pay tax on (a business asset) include:

land and buildings

fixtures and fittings

plant and machinery, for example a digger

shares

registered trademarks

your business’s reputation

You’ll need to work out your gain to find out whether you need to pay tax.

You pay Capital Gains Tax if you’re a self-employed sole trader or in a business partnership. Other organisations like limited companies pay Corporation Tax on profits from selling their assets.

When you do not pay it (Corporation Tax)

You do not usually need to pay tax on gifts to your husband, wife, civil partner or a charity.

Work out your gain

Your gain is usually the difference between what you paid for your business asset and what you sold it for.

Use the market value instead if:

you gave it (your business asset) away (there are different rules if it (your business asset) was to your spouse, civil partner or a charity)

you sold it (your business asset) for less than it (your business asset) was worth to help the buyer

you inherited the asset (your business asset) (and do not know the Inheritance Tax value)

you owned it (your business asset) before April 1982

If the asset (your business asset) was given to you and you claimed Gift Hold-Over Relief, use the amount it (your business asset) was originally bought for to work out your gain. If you paid less than it (your business asset) was worth, use the amount you paid for it (your business asset).

Deduct costs

You can deduct certain costs of buying, selling or improving your asset from your gain.

Costs you can deduct include:

fees, for example for valuing or advertising assets

costs to improve assets (but not normal repairs)

Stamp Duty Land Tax and VAT (unless you can reclaim the VAT)

You cannot deduct certain costs. These include:

interest on a loan to buy your asset

costs you can claim as business expenses

Contact HM Revenue and Customs (HMRC) if you’re not sure whether you can deduct a certain cost.

Apply reliefs

You may be able to reduce or delay paying tax on your gains if you’re eligible for tax relief.

Work out if you need to pay

When you know your gain you need to work out if you need to report and pay Capital Gains Tax.

If you’re in a business partnership:

work out your share of each gain or loss

the nominated partner must fill in form SA803

You can get help with working out your tax, for example from an accountant.

Reporting a loss

The rules are different if you need to report a loss.

Tax relief

You may be able to reduce or delay the amount of Capital Gains Tax you have to pay if you’re eligible for tax relief.

Relief | Description | Eligibility

Entrepreneurs’ Relief | Pay 10% Capital Gains Tax on qualifying profits if you sell all or part of your business (instead of the normal rates) | For sole traders, business partners or those with shares in a ‘personal company’

Business Asset Rollover Relief | Delay paying Capital Gains Tax when you sell or dispose of some types of asset if you replace them | Buy the new asset within 3 years of disposing of the old one. Use the old and new assets in your business

Incorporation Relief | Delay paying Capital Gains Tax when you transfer your business to a company | Transfer all your business and its assets (except cash) in return for shares in the company

Gift Hold-Over Relief | Pay no Capital Gains Tax if you give away a business asset - the person you gave it to pays tax when they sell it | You used the business asset for trading as a sole trader or partner

Tax relief when you sell your home

You normally get Private Residence Relief when you sell or dispose of your main home, meaning you do not pay any Capital Gains Tax.

If you’ve used any part of your home just for business, you have to pay Capital Gains Tax on that part when you sell your home.

Disincorporation relief

You may be able to claim Disincorporation Relief if you become a partnership or sole trader having been a limited company.

If you acquire the company’s assets when it changes its business structure, you may have to pay Capital Gains Tax if you sell or dispose of them later - you’ll use their value, including any Disincorporation Relief, when you acquired them.

You can get help from an accountant or tax adviser.


Company Tax Returns

Overview

Your company or association must file a Company Tax Return if you get a ‘notice to deliver a Company Tax Return’ from HM Revenue and Customs (HMRC).

You must still send a return if you make a loss or have no Corporation Tax to pay.

You do not send a Company Tax Return if you’re self-employed as a sole trader or in a partnership - but you must send a Self Assessment return.

What it involves

When you file your tax return, you work out your:

profit or loss for Corporation Tax (this is different from the profit or loss shown in your annual accounts)

Corporation Tax bill

You can either get an accountant to prepare and file your tax return or do it (file) yourself.

If you have a limited company, you may be able to file your accounts with Companies House at the same time as your tax return.

Deadlines

The deadline for your tax return is 12 months after the end of the accounting period it covers. You’ll have to pay a penalty if you miss the deadline.

There’s a separate deadline to pay your Corporation Tax bill. It’s usually 9 months and one day after the end of the accounting period.

Penalties for late filing

You’ll have to pay penalties if you do not file your Company Tax Return by the deadline (The deadline for your tax return).

Time after your deadline (The deadline for your tax return) | Penalty

1 day | £100

3 months | Another £100

6 months | HM Revenue and Customs (HMRC) will estimate your Corporation Tax bill and add a penalty of 10% the unpaid tax

12 months | Another 10% of any unpaid tax

If your tax return is late 3 times in a row, the £100 penalties are increased to £500 each.

If your tax return is more than 6 months late

If your tax return is 6 months late, HMRC (HM Revenue and Customs (HMRC)) will write telling you how much Corporation Tax they (HM Revenue and Customs (HMRC)) think you must pay. This is called a ‘tax determination’. You cannot appeal against it.

You must pay the Corporation Tax due and file your tax return. HMRC (HM Revenue and Customs (HMRC)) will recalculate the interest and penalties you need to pay.

Appeals

If you have a reasonable excuse, you can appeal against a late filing penalty by writing to your company’s Corporation Tax office.

Check recent tax forms or letters from HMRC (HM Revenue and Customs (HMRC)) for your Corporation Tax office address or call the Corporation Tax helpline.

Making changes

You must usually make any changes (‘amendments’) within 12 months of the filing deadline.

You can:

log in to HM Revenue and Customs (HMRC) online services to amend your Company Tax Return

use commercial software

send a paper return or write to your company’s Corporation Tax office

Check recent tax forms or letters from HMRC (HM Revenue and Customs (HMRC)) for the Corporation Tax office address or call the helpline.

HMRC (HM Revenue and Customs (HMRC)) may charge you a penalty for errors.

HMRC (HM Revenue and Customs (HMRC)) can make a compliance check to check for errors in your Company Tax Return.


Machine Games Duty

What you pay it on

You may have to pay Machine Games Duty (MGD) if there are machines that give cash prizes on your premises. You pay duty on:

slot and fruit machines, and other gaming machines

quiz machines and other ‘skill with prize’ machines

This guide is also available in Welsh (Cymraeg).

You do not pay it (Machine Games Duty (MGD)) on machines where the prize is less than the cost to play, or on takings from charity events, tournaments, lottery machines or if the machine is for domestic use.

Your takings from machine games will be exempt from VAT if you pay MGD (Machine Games Duty (MGD)).

If you’re responsible for MGD (Machine Games Duty (MGD)) you’ll need to register, send regular returns, pay duty (Machine Games Duty (MGD)) and keep records.

Who’s responsible for registering and paying

It’s your responsibility if you hold any of the following licences:

premises licence, for example for gambling or alcohol

family entertainment centre gaming machine permit

club premises certificate, a club gaming permit or club machine permit

prize gaming permit or amusement permit

registration certificate including a club registration certificate

bookmaking office licence or bingo club licence

licence to sell alcohol in Northern Ireland

There are different rules if you’re the tenant of a pub. You’re responsible for MGD (Machine Games Duty (MGD)), not the premises licence owner (usually the pub’s owner). When you stop being the tenant, you need to cancel your registration.

You are not responsible for MGD (Machine Games Duty (MGD)) if you supply the machines, unless you also hold the licence or permit for the premises.

If your premises (the premises) does not have a licence, HM Revenue and Customs (HMRC) will ask someone else, usually the manager or owner, to register and pay the duty (Machine Games Duty (MGD)).

You may have to pay a penalty if you do not register when you should.

Register

Register for Machine Games Duty (MGD) at least 14 days before you make your machines available to play.

You register by adding MGD (Machine Games Duty (MGD)) to your HM Revenue and Customs (HMRC) account. If you do not have one (or only have an account for personal tax), create an account as an organisation.

To register for MGD (Machine Games Duty (MGD)), you’ll need:

any licence or permit numbers for your premises

your Unique Taxpayer Reference (UTR), if you’re registered for Self Assessment or Corporation Tax

your VAT number, if you’re registered for VAT

your National Insurance number

to know how many machines you have

your accountant’s MGD (Machine Games Duty (MGD)) agent reference number and postcode, if you want them to file returns on your behalf

Register now

After you’ve registered

You’ll need to keep accurate records to show:

how you worked out the figures for your return

that the amount you’ve paid is correct

Keep your records for 4 years as HMRC (HM Revenue and Customs (HMRC)) might ask to see them.

If you want to file paper returns

Fill in and send the registration form if you want to file paper returns.

How much you pay

You pay Machine Games Duty (MGD) on the total net takings from your machine games.

This (Machine Games Duty (MGD)) is what you charge to play the games (your machine games) minus the amount you pay as winnings, including non-cash prizes.

You do not pay it (Machine Games Duty (MGD)) on takings from charity events, tournaments, lottery machines or if the machine is for domestic use.

MGD (Machine Games Duty (MGD)) rates

| Cost to play | Prize | Rate you pay

Machine type 1 - lower rate | 20 pence or less | £10 or less | 5%

Machine type 2 - standard rate | 21 pence to £5 | £11 or more | 20%

All other machine types - higher rate | More than £5 | Any | 25%

If your machine has more than one type of game, you pay the rate for the highest rated game on all takings from the machine.

File your return

You must file a Machine Games Duty (MGD) return every 3 months.

Your return (a Machine Games Duty (MGD) return) is due within 30 days of the end of the accounting period. You’ll get a reminder if you included your email address when you registered online.

You’ll need:

records of your total net takings from machine games (your machine games)

details of how you worked out the figures

You still fill in a return even if you do not owe anything, or your business has not traded during this accounting period (the accounting period). This can be for any reason, including if you’ve closed because of coronavirus (COVID-19). Enter ‘0’ in all boxes.

File your return

If you chose to file using paper forms

HM Revenue and Customs (HMRC) will send you paper forms when your return (a Machine Games Duty (MGD) return) is due. If you do not receive them, contact the helpline.

After you’ve filed your return (a Machine Games Duty (MGD) return)

Pay your Machine Games Duty bill within 30 days of the end of your accounting period (the accounting period).

You may have to pay a penalty if your return or payment is late. HMRC (HM Revenue and Customs (HMRC)) can also charge you an estimate of what you owe.

Change your details

Sign in to the Machine Games Duty (MGD) service to:

change your contact address or other details

cancel your registration if you’ve stopped trading, no longer have machine games or want to be registered as part of a group of companies

add, change or remove an authorised agent to file returns for you

You can also contact HM Revenue and Customs (HMRC) by phone or post. You’ll need to tell them (HM Revenue and Customs (HMRC)) your registration number.

Switch to file online instead of sending paper returns

If you already have an HMRC (HM Revenue and Customs (HMRC)) online account, sign in to add the MGD service (the Machine Games Duty (MGD) service).

Otherwise, register for an HMRC (HM Revenue and Customs (HMRC)) account and sign up for MGD (the Machine Games Duty (MGD) service).


Pay your VAT bill

Overview

Before you pay your VAT bill, make sure your deadline has not passed. Your deadline will be shown on your VAT return.

There are different deadlines if you use:

the Annual Accounting Scheme

payments on account

Pay now

There’s a different way to pay a VAT Mini One Stop Shop (VAT MOSS) bill.

Ways to pay

Make sure your payment will reach HM Revenue and Customs’ (HMRC) bank account by the deadline. You may have to pay a surcharge if you do not pay on time.

You can use the VAT payment deadline calculator to work out how much time to allow.

Same or next day

online or telephone banking (Faster Payments)

CHAPS

3 working days

Direct Debit

Bacs

standing order (only for businesses using the Annual Accounting Scheme or Payments on Account)

online by debit or corporate credit card

at your bank or building society

If the deadline falls on a weekend or bank holiday, your payment must arrive in HMRC’s (HM Revenue and Customs’ (HMRC)) bank account (HM Revenue and Customs’ (HMRC) bank account) on the last working day before it (the deadline) (unless you pay by Faster Payments).

Direct Debit

Use your VAT online account to set up a Direct Debit.

Set up the Direct Debit (a Direct Debit) at least 3 working days before you submit your online VAT return, otherwise the payment will not be taken from your bank account in time.

Once you’ve set up the Direct Debit (a Direct Debit), payments will be collected automatically from your bank account 3 working days after the payment deadline on your VAT return.

If you file your VAT return late, your payment will be taken 3 days after you file the return (your VAT return).

You cannot pay by Direct Debit if you have a ‘payments on account’ arrangement.

If you’ve signed up to Making Tax Digital

Businesses that have signed up for Making Tax Digital and usually pay VAT by Direct Debit do not need to set up a new one.

HMRC (HM Revenue and Customs’ (HMRC)) will transfer your Direct Debit to the new system.

If you use the Annual Accounting Scheme

Businesses that use the Annual Accounting Scheme can only set up an automatic Direct Debit online for balancing payments.

You can set up a Direct Debit for regular payments using form VAT 623.

Getting VAT repayments

The bank account details you use to set up your Direct Debit will not be used for VAT repayments.

To get VAT repayments paid into your bank account, update the registration details in your VAT online account. Otherwise HMRC (HM Revenue and Customs’ (HMRC)) will send you a cheque.

Make an online or telephone bank transfer

You can pay HM Revenue and Customs (HMRC) (HM Revenue and Customs’ (HMRC)) by Faster Payments, CHAPS or Bacs.

Sort code | Account number | Account name

08 32 00 | 11963155 | HMRC (HM Revenue and Customs’ (HMRC)) VAT

Reference number

You’ll need your 9-digit VAT registration number to make a payment.

Find your registration number:

in your VAT online account

on your VAT registration certificate

Do not put any spaces between the digits when paying your VAT bill.

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 (HM Revenue and Customs’ (HMRC)) on the same or next day, including weekends and bank holidays.

CHAPS payments usually reach HMRC (HM Revenue and Customs’ (HMRC)) the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Check your bank’s transaction limits and processing times before making a payment.

Overseas payments

Account number (IBAN) | Bank identifier code (BIC) | Account name

GB36BARC20051773152391 | BARCGB22 | HMRC (HM Revenue and Customs’ (HMRC)) VAT

HMRC’s banking address is:

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 cannot pay by personal credit card.

Find your registration number:

in your VAT online account

on your VAT registration certificate

Allow 3 working days for your payment to reach HM Revenue and Customs’ (HM Revenue and Customs’ (HMRC)) bank account.

If you’re unable to pay your VAT bill in full by card, you should use another payment method like a bank transfer.

At your bank or building society

You’ll need to order paying-in slips online or by phone from HM Revenue and Customs (HMRC) (HM Revenue and Customs’ (HMRC)) before you can pay this way. It can take up to 6 weeks for them to arrive.

Use the paying-in slips (paying-in slips) to pay at your own bank or building society by cash or cheque. Make your cheque payable to ‘HM Revenue and Customs only’.

Write your 9-digit VAT registration number on the back of your cheque. You will find your registration number:

in your VAT online account

on your VAT registration certificate

Standing order

Businesses using the Annual Accounting Scheme or making payments on account can pay a VAT bill by standing order. Standing orders take 3 working days to reach HM Revenue and Customs’ (HMRC) bank account.

Annual Accounting Scheme

Ask to pay by standing order on your application form for the Annual Accounting Scheme.

After you’ve received a letter from HMRC (HM Revenue and Customs’ (HMRC)) accepting your application, set up a standing order using either:

form VAT 622

online or telephone banking

Payments on account

Set up a standing order using either:

form VAT 622

online or telephone banking

Check your payment has been received

View your VAT online account to see if your payment has been received - it should update within 48 hours.

Pay your UK VAT MOSS bill

The UK VAT Mini One Stop Shop (VAT MOSS) scheme closes on 10 January 2021.

You must send your final UK VAT MOSS return and payment by 20 January 2021. You will not be able to submit a return after 31 January 2021.

If you sell digital services to customers in the EU you must either register for VAT MOSS (UK VAT MOSS) in an EU country, or pay VAT in each country you supply to. Find out about registering for VAT in EU countries.

Ways to pay

Businesses that are VAT registered in the UK can pay by Faster Payments, CHAPS or Bacs to the Union VAT MOSS account. Businesses outside the EU should use the Non-Union VAT MOSS account.

Use the payment reference HMRC (HM Revenue and Customs’ (HMRC)) sent you when you submitted your VAT MOSS Return. You can also find it by logging in to your online account and checking the confirmation message.

Union VAT MOSS account details

08 32 00 | 12001047 | HMRC VAT ON E

You cannot combine your VAT MOSS (UK VAT MOSS) payment with your normal UK VAT Return payment, because it goes to a different bank account.

How long it takes

Payments made by Faster Payments (online or telephone banking) will usually reach HMRC (HM Revenue and Customs’ (HMRC)) on the same or next day.

Non-Union VAT MOSS account details

Use the Non-Union VAT MOSS bank details if your business is based outside the EU.

GB34BARC20051710753491 | BARCGB22 | HMRC VAT ON E (HM Revenue and Customs’ (HMRC))

To avoid underpaying HMRC (HM Revenue and Customs’ (HMRC)) because of bank charges, ask your bank to use the code ‘OUR’ in the ‘Detail of charge’ field when they process your payment.

HMRC’s (HM Revenue and Customs’ (HMRC)) banking address for Non-Union VAT MOSS payments is:


Tax when your limited company gives to charity

Overview

Your limited company pays less Corporation Tax when it gives the following to charity:

money

equipment or trading stock (items it (Your limited company) makes or sells)

land, property or shares in another company (shares in your own company don’t qualify)

employees (on secondment)

sponsorship payments

You can claim tax relief by deducting the value of your donations from your total business profits before you pay tax.

There are different rules for sole traders and partnerships.

Donating money

Your limited company can pay less Corporation Tax when it (Your limited company) gives money to a charity or community amateur sports club (CASC).

Deduct the value of the donations (the value of your donations) (money) from your total business profits before you pay tax.

Payments that don’t qualify

You can’t deduct payments that:

are loans that will be repaid by the charity

are made on the condition that the charity will buy property from your company (Your limited company) or anyone connected with it (Your limited company)

are a distribution of company profits (eg dividends)

If you’re given something in return

Any benefits you’re given in return for your donation (eg tickets to an event) must be below a certain value.

Donation amount | Maximum value of benefit

Up to £100 | 25% of the donation

£101 - £1,000 | £25

£1,001 and over | 5% of the donation (up to a maximum of £2,500)

This applies to benefits given to any person or company connected with your company (Your limited company), including close relatives.

If you get a benefit that’s related to the company (Your limited company) your donation qualifies as a sponsorship payment.

Equipment and trading stock

Your limited company pays less Corporation Tax if it gives equipment or items it makes or sells (‘trading stock’) to a charity or community amateur sports club (CASC).

Giving equipment

You can claim full capital allowances on the cost of equipment.

To qualify, the equipment must have been used by your company (Your limited company). This includes things like:

office furniture

computers and printers

vans and cars

tools and machinery

Giving trading stock

If your company donates its trading stock to a charity or CASC, you don’t have to include anything in your sales income for the value of the gift. This means you get tax relief on the cost of the stock you’ve given away.

VAT

If your company is VAT-registered, you’ll need to account for VAT on the items you give away.

However, you can apply zero VAT to the items (the items you give away) - even if you normally charge the standard or reduced rate - if your company makes the donation specifically so that the charity can:

sell the items

hire out the items

export the items

This means you can reclaim the VAT on the cost of the trading stock you donate.

If you can’t zero rate the items (the items you give away), use the VAT rate you normally apply to them (the items you give away).

Land, property and shares

Your limited company could pay less Corporation Tax if it gives or sells any of the following to charity:

land or property

shares in another company

You can’t claim for gifts or sales of shares in your own company.

Contact your chosen charity first to make sure it can accept your gift.

What you get

If you give these to charity (including selling them for less than they’re worth):

you won’t have to pay tax on capital gains

you can deduct the value of the gift (its ‘market value’) from your business profits before you pay tax

If you donate or sell to a community amateur sports club (CASC), you don’t pay tax on capital gains but you can’t deduct the value of the gift from your business profits.

Work out the market value (the value of the gift)

You’ll need to know how much the gift would sell for in an open market (its (the gift) ‘market value’) to calculate your tax relief. You can get professional help with this.

What you need to do

You must keep documents relating to the donation to show that you’ve made the gift or sale and that the charity (your chosen charity) has accepted it. You must keep these records for at least 6 years.

Land or property

You must get a letter or certificate from the charity (your chosen charity) which contains:

a description of the land or property (the donation)

the date of the gift or sale (the donation) (the ‘disposal date’)

a statement confirming that it (your chosen charity) now owns the land or property

Shares

You must fill in a stock transfer form to take the shares out of your company’s name and put them into the charity’s (your chosen charity) name.

Selling land, property or shares on behalf of a charity

When you offer a gift of land, property or shares, the charity (a charity) may ask you to sell the gift on its (a charity) behalf.

You can do this (sell) and still claim tax relief for the donation (a gift of land, property or shares), but you must keep records of the gift (a gift of land, property or shares) and the charity’s (a charity) request (ask). Without them, you might have to pay Corporation Tax.

Seconding employees

You can deduct any costs as normal business expenses if:

your company temporarily transfers an employee to work for a charity (known as a ‘secondment’)

an employee volunteers for a charity in work time

Your company must continue to pay the employee (an employee) and run Pay As You Earn (PAYE) on their (an employee) salary. You can set the costs (including wages and business expenses) against your taxable profits as if they (an employee) were still working for you.

You can’t claim the costs of employees on secondment or volunteering at a community amateur sports club (CASC).

Sponsoring a charity

Charity sponsorship payments are different from donations because your company (your company’s) gets something related to the business in return.

You can deduct sponsorship payments from your business profits before you pay tax by treating them as business expenses.

What qualifies

Payments qualify as business expenses if the charity:

publicly supports your products or services

allows you to use their (the charity) logo in your own printed material

allows you to sell your goods or services at their (the charity) event or premises

links from their (the charity) website to yours

If you’re unsure whether a charity payment qualifies as a sponsorship payment or a donation, contact the charities helpline.

How to claim

There are different ways to claim tax relief depending on the type of donation you make.

Deduct from your profits

Claim relief in the Company Tax Return that covers  the accounting period during which you made the donation or sale if you have:

donated money

given or sold land, property or shares

Enter the total value of your donations in the ‘Qualifying donations’ box of the ‘Deductions and Reliefs’ section of your tax return.

There are special rules for working out the value of your donation if you give or sell land, property or shares to a charity.

Deduct as business expenses

Deduct costs as normal business expenses in your company’s annual accounts if you have:

seconded employees

sponsored a charity

Claim capital allowances

Claim capital allowances on the cost of equipment you donate in your company’s annual accounts.

If you donate more than your profit

The most you can deduct is the amount that reduces your company’s profits to zero.

If you donate more than your total profits you can’t:

declare trading losses on your tax return

carry over any remaining amount to your next tax return


What you must do as a Construction Industry Scheme (CIS) subcontractor

Overview

You should register for the Construction Industry Scheme (CIS) if you work for a contractor and you’re one of the following:

self-employed

the owner of a limited company

a partner in a partnership or trust

Under CIS (the Construction Industry Scheme (CIS)), a contractor must deduct 20% from your payments and pass it to HM Revenue and Customs (HMRC).

These deductions (deduct) count as advance payments towards your tax and National Insurance bill.

If you do not register for the scheme (the Construction Industry Scheme (CIS)), contractors must deduct 30% from your payments instead.

If you do not want deductions made

If you do not want deductions to be made in advance by contractors, you can apply for ‘gross payment status’. You can do this when you register for CIS (the Construction Industry Scheme (CIS)).

You do not need to register for CIS (the Construction Industry Scheme (CIS)) if you’re an employee. Check your employment status if you’re not sure.

How to register

To register for the Construction Industry Scheme (CIS) you’ll need:

your legal business name - you can also give a trading name if it’s different to your business name

your National Insurance Number

the unique taxpayer reference number (UTR) for your business

your VAT registration number (if you’re VAT registered)

If you’re a subcontractor and a contractor (you pay subcontractors to do construction work), you’ll need to register for CIS (the Construction Industry Scheme (CIS)) as both.

Register as a sole trader

If you’re a sole trader and you already have a UTR, you can register for CIS (the Construction Industry Scheme (CIS)) online. You’ll need the Government Gateway user ID and password you used when you registered for Self Assessment (or another government service).

You can apply for gross payment status (‘gross payment status’) at the same time.

If you do not have a UTR, register as a new business for Self Assessment (Self Assessment (or another government service) and choose ‘working as a subcontractor’ when prompted. You’ll be registered for Self Assessment (Self Assessment (or another government service) and CIS (the Construction Industry Scheme (CIS)) at the same time.

You can also call the CIS (the Construction Industry Scheme (CIS)) helpline to register.

Register as another type of business

Fill in the online form for limited companies or the online form for partnerships.

HMRC will register the partnership separately to your sole trader registration. They will need the partnership UTR and trading name.

You are based abroad

You should still register for CIS (the Construction Industry Scheme (CIS)) if you are a subcontractor based abroad but do construction work in the UK.

Help and support

Call the CIS helpline for help with registering.

You can also sign up for webinars and emails or watch videos from HMRC about CIS (the Construction Industry Scheme (CIS)).

Get paid

To be paid correctly by a contractor, make sure you give them the exact same legal business name or trading name you gave when you registered for the Construction Industry Scheme (CIS). You should also give them your Unique Taxpayer Reference (UTR) so they can verify you.

If you do not, this could affect how much you get paid.

Deduction rates

When a contractor pays you under CIS (the Construction Industry Scheme (CIS)), they’ll normally make deductions at the standard rate of 20%.

Contractors will make deductions at a higher rate of 30% if:

you are not registered for CIS (the Construction Industry Scheme (CIS))

they (Contractors) cannot verify you

you give the wrong name for your business

Your contractor should give you monthly statements of payments and deductions. Use them to calculate whether you still owe tax and National Insurance to HM Revenue and Customs (HMRC) (HMRC) or are due a refund.

Gross payment status

You can apply for gross payment status when you register for CIS (the Construction Industry Scheme (CIS)). This means the contractor will not make deductions from your payments and you’ll pay all your tax and National Insurance at the end of the tax year.

What does not count as your pay

Contractors will not make a deduction from amounts you charge on your invoice for:

VAT

materials that you have paid for directly

equipment which is now unusable (‘consumable stores’)

plant hired for the job

manufacturing or prefabricating materials

Pay tax and claim back deductions

When you’re registered with the Construction Industry Scheme (CIS), you’re still responsible for paying the correct tax and National Insurance for your business, even if deductions have been made by contractors throughout the year.

Contractors will give you a monthly statement of what they’ve paid you and deductions they’ve made to help with your accounting.

Sole traders and partners

At the end of the tax year, send in your Self Assessment tax return as usual. You should record:

the full amounts on your invoices as income

any deductions contractors have made in the ‘CIS (the Construction Industry Scheme (CIS)) deductions’ field

HM Revenue and Customs (HMRC) (HMRC) will work out your tax and National Insurance bill and take off any deductions made by contractors.

If you still owe tax after this, you’ll need to pay it by 31 January following the end of the tax year.

If you’re due a tax refund, HMRC will pay the money back.

Limited companies

If you have gross payment status, declare all your income in your Corporation Tax return as usual.

If you pay CIS deductions, you must claim these back through your company’s monthly payroll scheme. Do not try to claim back through your Corporation Tax return - you may get a penalty if you do.

Send your monthly Full Payment Submission (FPS) as usual to HMRC.

Also send an Employer Payment Summary (EPS). Enter the total CIS deductions for the year to date.

HMRC will take your CIS deductions off what you owe in PAYE tax and National Insurance. Pay the balance by the usual date.

If your company’s PAYE bill for the period is reduced to zero and you still have some CIS deductions you have not been able to claim back, carry these (CIS deductions) forward to the next month or quarter (in the same tax year (the tax year)). Tell HMRC in the EPS (an Employer Payment Summary (EPS)) that you have nothing to pay.

If HMRC thinks your claim is wrong

HMRC may ask you to provide evidence for your CIS deductions (the total CIS deductions for the year to date) or to change your claim.

If you do not do this by the deadline they (HMRC) give you, you will not be able to make any more claims in that tax year (the year to date).

You can appeal HMRC’s (HMRC) decision. They (HMRC)’ll tell you how to do this.

Keep records

Your company (your company’s) must keep a record of amounts claimed back against your monthly or quarterly PAYE bill.

You can use form CIS132 to do this (Keep) or keep your own records.

If you paid too much in CIS deductions

HMRC will pay back any deductions your company (your company’s) has not been able to claim back from its (your company’s) PAYE bill during the tax year (the year to date).

If your company goes into administration

If your company goes into administration or liquidation, the person managing it (your company) should write to HMRC to ask for CIS deductions to be repaid straight away.

If you do not have all your CIS statements

If you have not received all the CIS statements you need (all your CIS statements) from your contractor, you can ask them (HMRC) to send you replacement copies.

If the contractor you’re working for (your contractor) stops trading and you have not been able to get all your CIS statements you should write to HMRC.

Include the following information:

your name, address and Unique Taxpayer Reference (UTR)

the name and address of the contractor (your contractor)

the contractor’s (your contractor) tax reference - if you know it

the dates of the payments or the tax months when the contractor (your contractor) paid you

the reason why you do not have the statements or duplicates

How to get gross payment status

You can apply for gross payment status when you register for CIS.

This means contractors will pay you in full, without deductions. You’ll pay all your tax and National Insurance at the end of the tax year (the year to date).

If you’re already registered for CIS, you can apply for gross payment status by calling the CIS helpline or applying online.

Apply for gross payment status online

Sign in to Government Gateway - you’ll need the Government Gateway user ID and password you used when you registered for CIS. If you do not have a user ID, you can create one when you register for CIS.

From ‘Your tax account’, go to ‘Other services’.

Choose ‘Construction Industry Scheme – Subcontractors’.

To qualify

You must show HM Revenue and Customs (HMRC) (HMRC) that your business passes some tests. You’ll need to show that:

you’ve paid your tax and National Insurance on time in the past

your business does construction work (or provides labour for it) in the UK

your business is run through a bank account

HMRC will look at your turnover for the last 12 months. Ignoring VAT and the cost of materials, your turnover must be at least:

£30,000 if you’re a sole trader

£30,000 for each partner in a partnership, or at least £100,000 for the whole partnership

£30,000 for each director of a company, or at least £100,000 for the whole company

If your company’s controlled by 5 people or fewer, you must have an annual turnover of £30,000 for each of them.

You could be fined if you provide false information or help someone else to make a false application.

Paying tax when you have gross payment status

You must declare your payments as income at the end of the tax year (the year to date) in:

your Self Assessment tax return if you’re a sole trader or partner

your Corporation Tax return if you own a limited company

Annual review

If you have gross payment status, HM Revenue and Customs (HMRC) (HMRC) will review your business every year, to decide if you can keep your status (gross payment status).

You must be on time with your tax returns and payments to keep your gross payment status (gross payment status).

If you run a limited company, HMRC will review the company itself, rather than individual directors or shareholders.

You do not meet all the conditions

You could fail the review and HMRC will remove your gross payment status. You’ll be allowed a small amount of late payments or returns.

Contact HMRC if you have problems paying your tax on time. If HMRC give you more time to pay, this will not affect your gross payment status.

You fail your review (the review)

You’ll get a letter explaining you’re about to fail the review, along with the reasons why.

If you disagree, you can write back with your reasons.

If HMRC accept your explanation, they (HMRC) will not remove your gross payment status.

If you do not reply to the letter or HMRC does not accept your explanation, they (HMRC)’ll write to explain:

what conditions you have not met

that they (HMRC)’re withdrawing your gross payment status (gross payment status) in 90 days

If you think HMRC have made the wrong decision, you have 30 days from the date of this letter (the letter) to appeal.

Reapplying for gross payment status

If HMRC cancel your gross payment status (gross payment status), you need to wait a year from the date of the cancellation before you can reapply.

Changes you need to report

Report changes by calling the Construction Industry Scheme (CIS) helpline.

Tell them (the Construction Industry Scheme (CIS) helpline) if you:

change from a sole trader to a partnership

leave a partnership or company to become a sole trader

create a company or change your business to a company

You’ll usually need to register again for CIS - as you cannot transfer the registration from your old business structure.

If you have gross payment status, you’ll need to apply again.

You must also tell HM Revenue and Customs (HMRC) (HMRC) if you:

change your trading name

change your business, private or registered office address

stop trading

add new shareholders - HMRC may withdraw your gross payment status if you do not tell them (HMRC) within 30 days

Stop trading

If your business goes into administration it can keep receiving payments for work it’s done under CIS. It should be paid in the same way that it was paid normally - either gross or under deduction.


Avoid and report anti-competitive activity

Overview

All businesses, whatever their size, must understand how they’re affected by competition law.

You must follow the rules on all types of anti-competitive activity including:

price fixing, bid rigging and other ways of agreeing not to compete (sometimes called ‘cartels’)

abuse of a dominant market position

You should manage the risk of breaking the law, for example by having clear policies, guidelines and training for your staff.

You can report anti-competitive activity if you think another business is breaking the law, or if you might have been involved yourself.

If you’re involved in anti-competitive activity

Your business can be fined up to 10% of its worldwide turnover and sued for damages.

You can be fined or sent to prison for up to 5 years if you’re found guilty of being involved in cartel activity.

Company directors can be disqualified from being a director for up to 15 years.

Get legal advice or contact the Competition Pro Bono Scheme if you think something your business is doing might break the law.

Types of anti-competitive activity

You must avoid all types of anti-competitive activity in your business including:

agreeing not to compete with another business

abusing a dominant position

You can report anti-competitive activity if you see it.

Agreeing not to compete with another business (‘cartels’)

If 2 or more businesses agree not to compete with each other in certain ways, it’s called a ‘cartel’.

The rules on cartels apply to businesses of any size.

Rules about cartels cover:

price fixing

bid rigging

sharing markets or customers

sharing commercially sensitive information

An agreement does not have to be in writing for it to be illegal. You can break the law if you have an informal conversation (or ‘gentleman’s agreement’) with another business, even if the agreement is not carried out.

You can work with other businesses without breaking competition law. Get legal advice or contact the Competition Pro Bono Scheme if you need to, and make sure you manage any risks.

Price fixing

You must not discuss the prices you’re going to charge your customers with your competitors.

You’ll be breaking the law if you agree with another business:

to charge the same prices to your customers

to offer discounts or increase your prices at the same time

to charge the same fees to intermediaries, for example retailers selling your products

Bid rigging

You cannot discuss bids for a contract tender with your competitors. Bid rigging includes:

agreeing with your competitors how much you’ll bid for a contract or share information about your bid

taking turns to win contracts

asking other businesses to bid when they do not want the contract (contracts) (called ‘cover bids’)

paying other businesses not to bid or when you win a tender

agreeing with other businesses not to bid or to withdrawing your bid

Market sharing

You cannot agree with other businesses to share markets or customers. You’ll be breaking competition law (the law) if you agree with another business:

not to approach each other’s customers

not to compete with them (each other’s) for customers, for example in specific locations

Sharing information

You cannot share information with other businesses that might reduce competition between you, for example information about:

prices

production

your suppliers, customers or contractors

the markets you sell or plan to sell to

This includes sharing information through a third party, for example a trade association.

Abusing a dominant position

Your business might have a ‘dominant position’ in the market if:

it (Your business) has more than a 40% market share

it (Your business)’s not affected by normal competitive restraints

You might be abusing your dominant position if you’re unfair to your customers or other businesses, for example you:

treat customers differently, for example by offering different prices or terms to similar customers

make customers buy products they do not want, for example forcing them to take warranties for electrical products

charge low prices that do not cover your costs so you drive out competitors

If you think you have a dominant market position, get legal advice or contact the Competition Pro Bono Scheme to find out what you can and cannot do.

Other anti-competitive activities

You must avoid other activities that break competition law, eg:

buying or selling jointly with your competitors

agreeing with your competitors to reduce production of something to raise its market value

restricting how much other businesses can sell your product for

agreeing with your competitors not to sell to certain customers or deal with certain suppliers

having long-term exclusive contracts with any customers or suppliers

Manage risk

The people who run your business are responsible for ensuring it does not break competition law. You should:

work out where your business is at risk and how serious any risks are

set up policies, guidelines and training for your staff if you need to

Your business can still be given a penalty and sued for damages even if your senior managers did not know about the illegal activity.

Work out if your business is at risk

You’re more likely to be at risk if:

you or your employees have contact with your competitors, for example at conferences or trade association meetings

your employees regularly move to or from jobs with your competitors

you have partnerships with your competitors, for example joint buying or selling

you have any long-term exclusive contracts with any customers or suppliers

your business has a dominant position in any market where you do business

Set up policies, guidelines and training

You should ask a senior member of staff, for example a director, to make sure your employees know how to avoid and report anti-competitive behaviour.

There’s further guidance from the Competition and Markets Authority (CMA) on reducing the risk of your business breaking the law.

Report anti-competitive activity

The way you report anti-competitive activity depends on the type of activity.

Report a cartel

A cartel is where two or more businesses agree not to compete with each other, for example by sharing a market or fixing prices.

Contact the Competition and Markets Authority (CMA) cartels hotline if you:

know about a cartel

have been involved in one

You may:

get a financial reward for information that leads to an investigation

be treated with leniency if you report a cartel you’ve been involved with

Report other anti-competitive activity

Tell the CMA if you have concerns about anti-competitive activity. Email general.enquiries@cma.gov.uk with the following information:

your contact details

the business you have concerns about and a description of the issue along with any supporting evidence

the market area according to the UK Standard Classification Index

details of any other organisations you have contacted

If you want help with a consumer problem, contact Citizens Advice (or the Financial Conduct Authority for consumer credit-related issues).

Report your concerns to an industry regulator

You can also report concerns about anti-competitive activity in certain sectors to a regulator. These are:

Civil Aviation Authority for airports and air traffic services

Financial Conduct Authority for financial services in the UK

Monitor for health services in England

Ofcom for television, radio, telephone, postal and internet services

Ofgem for gas and electricity in England, Wales and Scotland

Ofwat for water and sewage services in England and Wales

Office of Road and Rail for railways in England, Wales and Scotland

Payment Systems Regulator for payment systems in the UK

Utility Regulator for gas, electricity, water and sewerage in Northern Ireland


Running a limited company

Directors' responsibilities

As a director of a limited company, you must:

follow the company’s (a limited company) rules, shown in its (a limited company) articles of association

keep company records and report changes

file your accounts and your Company Tax Return

tell other shareholders if you might personally benefit from a transaction the company (a limited company) makes

pay Corporation Tax

You can hire other people to manage some of these things day-to-day (for example, an accountant) but you’re still legally responsible for your company’s (a limited company) records, accounts and performance.

You may be fined, prosecuted or disqualified if you do not meet your responsibilities as a director.

Contact your professional adviser or trade association to find out more.

Taking money out of a limited company

How you take money out of the company (a limited company) depends on what it (a limited company)’s for and how much you take out.

Salary, expenses and benefits

If you want the company (a limited company) to pay you or anyone else a salary, expenses or benefits, you must register the company (a limited company) as an employer.

The company (a limited company) must take Income Tax and National Insurance contributions from your salary payments and pay these to HM Revenue and Customs (HMRC), along with employers’ National Insurance contributions.

If you or one of your employees make personal use of something that belongs to the business, you must report it as a benefit and pay any tax due.

Dividends

A dividend is a payment a company can make to shareholders if it has made a profit.

You cannot count dividends as business costs when you work out your Corporation Tax.

Your company must not pay out more in dividends than its available profits from current and previous financial years.

You must usually pay dividends to all shareholders.

To pay a dividend, you must:

hold a directors’ meeting to ‘declare’ the dividend (a dividend)

keep minutes of the meeting (a directors’ meeting), even if you’re the only director

Dividend paperwork

For each dividend payment the company (a company) makes, you must write up a dividend voucher showing the:

date

company name

names of the shareholders being paid a dividend

amount of the dividend

You must give a copy of the voucher to recipients of the dividend and keep a copy for your company’s (a company) records.

Tax on dividends

Your company (a company) does not need to pay tax on dividend payments. But shareholders may have to pay Income Tax if they’re over £2,000.

Directors’ loans

If you take more money out of a company than you’ve put in - and it’s not salary or dividend  - it’s called a ‘directors’ loan’.

If your company makes directors’ loans, you must keep records of them. There are also some detailed tax rules about how directors’ loans are handled.

Company changes you must report

You must report certain changes to Companies House.

Changing your company’s registered office address

You must tell Companies House if you want to change your company’s registered office address. If the change is approved, they (Companies House) will tell HM Revenue and Customs (HMRC).

Your company’s new registered office address (your company’s registered office address) must be in the same part of the UK that the company (a company) was registered (incorporated).

For example, if your company was registered in England and Wales, the new registered office address (your company’s registered office address) must be in England or Wales.

Your address (your company’s registered office address) will not officially change until Companies House has registered it (your company’s registered office address).

Other changes you must report

You must tell HMRC (HM Revenue and Customs (HMRC)) if:

your business’ contact details change - for example, your name, gender, business name or your personal or trading address

you appoint an accountant or tax adviser

You must tell Companies House within 14 days if you make changes to:

the address where you keep your records, and which records you keep there

directors or their personal details, like their address

‘people with significant control’ (PSC), or their (directors) personal details like a new address

company secretaries (appointing a new one or ending an existing one’s appointment)

You must tell Companies House within a month if you issue more shares in your company.

How to report changes to Companies House

You can:

use the Companies House online service

fill in and send paper forms

Changes that shareholders must approve

You may need to get shareholders to vote on the decision if you want to:

change the company name

remove a director

change the company’s articles of association

This is called ‘passing a resolution’. Most resolutions will need a majority to agree (called an ‘ordinary resolution’). Some might require a 75% majority (called a ‘special resolution’).

Companies House has more details about the types of changes and resolutions you must report to them (Companies House).

Your new company name will not take effect until it’s registered by Companies House - they (Companies House)’ll tell you when this happens.

Shareholder voting

When you’re working out whether you have a majority, count the number of shares that give the owner the right to vote, rather than the number of shareholders.

You do not necessarily need to have a meeting of shareholders to pass a resolution. If the right amount of shareholders have told you they agree, you can confirm the resolution in writing. But you must write to all shareholders letting them know about the decision.

Company and accounting records

You must keep:

records about the company itself (the company’s)

financial and accounting records

You can hire a professional (for example, an accountant) to help with your tax.

HM Revenue and Customs (HMRC) may check your records to make sure you’re paying the right amount of tax.

Records about the company (the company’s)

You must keep details of:

directors, shareholders and company secretaries

the results of any shareholder votes and resolutions

promises for the company (the company’s) to repay loans at a specific date in the future (‘debentures’) and who they must be paid back to

promises the company (the company’s) makes for payments if something goes wrong and it’s the company’s fault (‘indemnities’)

transactions when someone buys shares in the company

loans or mortgages secured against the company’s assets

You must tell Companies House if you keep the records somewhere other than the company’s registered office address.

Register of ‘people with significant control’

You must also keep a register of ‘people with significant control’ (PSC). Your PSC register (Register of ‘people with significant control’) must include details of anyone who:

has more than 25% shares or voting rights in your company

can appoint or remove a majority of directors

can influence or control your company or trust

You still need to keep a record if there are no people with significant control.

Read more guidance on keeping a PSC register if your company’s ownership and control is not simple.

Accounting records

You must keep accounting records that include:

all money received and spent by the company (the company’s), including grants and payments from coronavirus support schemes

details of assets owned by the company

debts the company (the company’s) owes or is owed

stock the company (the company’s) owns at the end of the financial year

the stocktakings you used to work out the stock figure

all goods bought and sold

who you bought and sold them to and from (unless you run a retail business)

You must also keep any other financial records, information and calculations you need to prepare and file your annual accounts and Company Tax Return. This includes records of:

all money spent by the company (the company’s), for example receipts, petty cash books, orders and delivery notes

all money received by the company (the company’s), for example invoices, contracts, sales books and till rolls

any other relevant documents, for example bank statements and correspondence

You can be fined £3,000 by HMRC or disqualified as a company director if you do not keep accounting records.

How long to keep records

You must keep records for 6 years from the end of the last company financial year they relate to, or longer if:

they (records) show a transaction that covers more than one of the company’s accounting periods

the company (the company’s) has bought something that it (the company’s) expects to last more than 6 years, like equipment or machinery

you sent your Company Tax Return late

HMRC has started a compliance check into your Company Tax Return

If your records are lost, stolen or destroyed

If you cannot replace your records after they were lost, stolen or destroyed you must:

do your best to recreate them (your records)

tell your Corporation Tax office straight away

include this information in your Company Tax Return

Confirmation statement (annual return)

You need to check that the information Companies House has about your company is correct every year. This is called a confirmation statement (previously an annual return).

Check your company’s details

You need to check the following:

the details of your registered office, directors, secretary and the address where you keep your records

your statement of capital and shareholder information if your company (your company’s) has shares

your SIC code (the number that identifies what your company (your company’s) does)

your register of ‘people with significant control’ (PSC)

Check the Companies House register.

Send your confirmation statement

Send your confirmation statement online or by post. It costs £13 to file your confirmation statement online, and £40 by post.

If you need to report changes

You can report changes to your statement of capital, shareholder information and SIC codes at the same time.

You cannot use the confirmation statement to report changes to:

your company’s officers

the registered office address

the address where you keep your records

people with significant control

You must file those changes separately with Companies House.

When it’s due

Your confirmation statement is due usually a year after either:

the date your company (your company’s) incorporated

the date you filed your last annual return or confirmation statement

You can file your confirmation statement up to 14 days after the due date.

Sign up to get an email reminder when your confirmation statement is due.

You can be fined up to £5,000 and your company may be struck off if you do not send your confirmation statement.

Signs, stationery and promotional material

Signs

You must display a sign showing your company name at your registered company address and wherever your business operates. If you’re running your business from home, you do not need to display a sign there.

The sign must be easy to read and to see at any time, not just when you’re open.

Stationery and promotional material

You must include your company’s name on all company documents, publicity and letters.

On business letters, order forms and websites, you must show:

the company’s (your company’s) registered number

its (your company’s) registered office address

where the company (your company’s) is registered (England and Wales, Scotland or Northern Ireland)

the fact that it (your company’s)’s a limited company (usually by spelling out the company’s (your company’s) full name including ‘Limited’ or ‘Ltd’)

If you want to include directors’ names, you must list all of them.

If you want to show your company’s share capital (how much the shares were worth when you issued them), you must say how much is ‘paid up’ (owned by shareholders).

There are different rules for what you need to include on invoices.


Expenses and benefits: loans provided to employees

Overview

As an employer providing loans to your employees or their relatives, you have certain National Insurance and reporting obligations.

What’s included

There are different rules for:

providing ‘beneficial loans’, which are interest-free, or at a rate below HMRC’s official interest rate

providing loans you write off

charging a director’s personal bills to their loan account within the company

Beneficial loans

The rules cover beneficial loans advanced, arranged, facilitated, guaranteed or taken over from someone else by:

you (the employer)

a company or partnership you control

a company or partnership that controls your business

a person with a material interest in your business

See the technical guidance for what to do in more complicated situations, eg if you use third-party arrangements to make a loan to your employee.

What's exempt

You might not have to report anything to HMRC (HMRC’s) or pay tax and National Insurance on some types of beneficial loans.

This includes loans you provide:

in the normal course of a domestic or family relationship as an individual (not as a company you control, even if you are the sole owner and employee)

with a combined outstanding value to an employee of less than £10,000 throughout the whole tax year (£5,000 for 2013 to 2014)

to an employee for a fixed and invariable period, and at a fixed and invariable rate that was equal to or higher than HMRC’s official interest rate when the loan was taken out

under identical terms and conditions to the general public as well (this mostly applies to commercial lenders)

that are ‘qualifying loans’, meaning all of the interest qualifies for tax relief - see the technical guidance for an explanation of this complex area

using a director’s loan account as long as it’s not overdrawn at any time during the tax year

Salary sacrifice arrangements

You do have to report loans to your employees or their relatives if they’re made as part of a salary sacrifice arrangement.

What to report and pay

If the loans you provide aren’t exempt, you have to report the costs to HMRC (HMRC’s), and deduct or pay National Insurance on them.

Beneficial loans

If you or your business provides a beneficial loan, as defined in the overview, you’ll need to:

report it (a beneficial loan, as defined in the overview) on form P11D

pay Class 1A National Insurance on the value of the benefit

Loans you write off

You always have to report and pay on loans to employees that you write off, whether or not they are classed as beneficial loans.

You must:

report it on form P11D

deduct and pay Class 1 National Insurance (but not PAYE tax) on the value of the benefit

Work out the value

You can work out the value of loans using HMRC’s PAYE Online or commercial payroll software.

You can also work out the value manually on P11D working sheet 4.

Salary sacrifice arrangements

If the cost of the loan is less than the amount of salary given up, report the salary amount instead.

These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.

Technical guidance

The following guides contain more detailed information:

beneficial loans: contents page

Class 1 National Insurance: loans written off

loans released or written off

making a loan: loan made by third party

contrasting treatment where some or part of the interest would qualify for relief

director’s loan accounts: overview

director’s loan accounts: whether withdrawals are loans or earnings

beneficial loan arrangements (chapter 17 of ‘Expenses and benefits: a tax guide’)


Late commercial payments: charging interest and debt recovery

When a payment becomes late

You can claim interest and debt recovery costs if another business is late paying for goods or a service.

If you agree a payment date, it must usually be within 30 days for public authorities or 60 days for business transactions.

You can agree a longer period than 60 days for business transactions - but it must be fair to both businesses.

If you do not agree a payment date, the law says the payment is late 30 days after either:

the customer gets the invoice

you deliver the goods (goods) or provide the service (if this is later)

Interest on late commercial payments

The interest you can charge if another business is late paying for goods or a service is ‘statutory interest’ - this is 8% plus the Bank of England base rate for business to business transactions. You cannot claim statutory interest if there’s a different rate of interest in a contract.

You cannot use a lower interest rate if you have a contract with public authorities.

Check the current Bank of England base rate and previous rates.

Send a new invoice if you decide to add interest to the money you’re owed.

Claim debt recovery costs on late payments

You can also charge a business a fixed sum for the cost of recovering a late commercial payment on top of claiming interest from it.

The amount you’re allowed to charge (a fixed sum) depends on the amount of debt. You can only charge the business (a business) once for each payment.

Amount of debt | What you can charge

Up to £999.99 | £40

£1,000 to £9,999.99 | £70

£10,000 or more | £100

These amounts are set by late payment legislation.

If you’re a supplier, you can also claim for reasonable costs each time you try to recover the debt.

Read more on recovering debt.


Wind up a company that owes you money

Overview

You can apply to the court to close or ‘wind up’ a company if it cannot pay its debts. This is also known as compulsory liquidation.

To wind up a company you must:

be owed £750 or more

be able to prove that the company (a company) cannot pay you

You need to fill in forms and send them to the right court to apply to wind up a company.

Your application to the court is known as a ‘winding-up petition’. If you’re successful:

the company assets are sold

any legal disputes are settled

the company collects money it’s owed

funds are paid to you and any other creditors

You might not get all or any of the money you’re owed.

There are also other ways to recover money that you’re owed. You can get a debt specialist (like a solicitor) to help you recover debt.

Fees

The fees (Fees) are:

£280 - court fees

£1,600 - petition deposit (to manage the ‘winding-up’)

You might be able to get the fees (Fees) back if the company (a company) can afford to repay them (Fees).

Scottish companies

There are different rules on winding up a company in Scotland.

Apply

You must send the right form to the court before they (the court) can deal with your petition. You might want to get legal help to make sure you submit your petition correctly.

Forms

Fill in form Comp 1 and make 3 copies.

You’ll need to:

make sure the company’s (a company) details are correct

state if any European Community regulations apply (this applies if the company (a company) is registered in or does business in England and Wales)

ask the court to restore the company (a company) (if it (a company)’s been dissolved) before winding up the company (a company)

You need to provide evidence the company (a company) owes you money, for example:

a statutory demand - include the amount and date the demand was served

a court judgment - include the amount awarded (and your costs and interest), the date of the judgment, the court name and case number

You’ll also need to fill in form Comp 2 confirming the details of your petition.

Where to send the petition (your petition)

Where you send the petition (your petition) depends on how much ‘paid-up share capital’ the company has - you can find this on the Companies House register.

Paid-up share capital is £120,000 or more

Submit the petition (your petition) online. It (your petition)’ll go to the High Court.

You pay the court fees online, but not the petition deposit. You’ll get an email after you apply, telling you how to pay the deposit.

Paid-up share capital is under £120,000

You’ll need to find the court nearest to the company’s registered office - the court must deal with bankruptcy.

Submit the petition (your petition) online if it (the court)’s one of these courts:

Admiralty and Commercial Court

Chancery Division

Companies Court

High Court (including Bankruptcy Court)

London Mercantile Court

Rolls Building

If it (the court) was another court you’ll need to submit the petition (your petition) by post. You can pay the fees (the court fees) by cash, postal order or a building society, bank or solicitor’s cheque made payable to ‘HM Courts and Tribunals Service’.

After you apply

You’ll get a copy of your petition from the court after you pay the petition deposit. You must:

deliver (‘serve’) it (your petition) to a company director or employee

provide a certificate of service to the court confirming that the petition (your petition) has been served on the company (the company’s)

You can get a ‘process server’ to help you - your solicitor can arrange this.

You can serve the petition (your petition) by attaching it (your petition) to the company’s front door or leaving it (your petition) at the office (the company’s registered office) if you cannot serve it (your petition) in person.

The day after you serve the petition (your petition), send a copy to the relevant liquidator, administrative receiver, administrator or supervisor if the company (the company’s) is involved in:

voluntary liquidation

administrative receivership

an administration order

a voluntary arrangement

The court hearing

If the court accepts your petition, they (the court)’ll arrange a date for a hearing.

Announce the hearing (a hearing)

When you’re given a date for the hearing (a hearing), you must formally announce when and where it (a hearing) will take place.

At least 7 working days before the hearing (a hearing), place an advert in The Gazette to say the petition (your petition) has been served.

Send a copy of the advert (an advert) and form Comp 3 to the court at least 5 working days before the hearing (a hearing).

Give a list of everyone who will be attending to the court by 4:30pm on the day before the hearing (a hearing).

The advert (an advert) must state:

that you’ve presented a petition to wind up the company (your petition) (the company’s)

your name and address

your solicitor’s name and address (if you have one)

the date you presented the petition (your petition)

the court where the hearing (a hearing) will take place (the court)

that anyone wanting to come to the hearing (a hearing) must give notice

After the hearing (a hearing)

If the petition (your petition) is successful, the court will issue a winding-up order.

The court will put an official receiver in charge of the liquidation. They’ll start the process of turning the company’s assets into money that can be used to pay the company’s debts.

Other creditors can register to claim the money they’re owed.


Energy Performance Certificates for your business premises

Overview

An Energy Performance Certificate (EPC) rates how energy efficient your building is using grades from A to G (with ‘A’ the most efficient grade).

When you need an EPC

You must have an EPC if:

you rent out or sell the premises

a building under construction is finished

there are changes to the number of parts used for separate occupation and these changes involve providing or extending fixed heating, air conditioning or mechanical ventilation systems

You can be fined between £500 and £5,000 based on the rateable value of the building (a building under construction) if you don’t make an EPC available to any prospective buyer or tenant.

When you must display one

You must display an EPC by fixing it to your commercial building if all these apply:

the total useful floor area is over 500 square metres

the building (your commercial building) is frequently visited by the public

an EPC has already been produced for the building’s (your commercial building) sale, rental or construction

How much it costs

The cost of an EPC will depend on the building being assessed. All EPCs are valid for 10 years.

How to get a certificate

You can only get an Energy Performance Certificate (EPC) from a commercial energy assessor.

The type of assessor you’ll need will depend on the complexity and features of the building. If you need advice on choosing one, speak to a commercial (non-domestic) energy assessor or contact the approved accreditation scheme they belong to.

Exemptions

You don’t need an Energy Performance Certificate (EPC) if you can demonstrate that the building is any of these:

listed or officially protected and the minimum energy performance requirements would unacceptably alter it (the building)

a temporary building only going to be used for 2 years or less

used as a place of worship or for other religious activities

an industrial site, workshop or non-residential agricultural building that doesn’t use much energy

a detached building with a total floor space under 50 square metres

due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents

Vacant buildings and demolition

A building is also exempt if all of the following are true:

it (A building)’s due to be sold or rented out with vacant possession

it (A building)’s suitable for demolition and the site could be redeveloped

the buyer or tenant has applied for planning permission to demolish it (A building)

Appeal a penalty charge

You can ask for a review if you get a penalty charge notice. The notice will tell you how to do this. If the review fails you’ll get a letter confirming your penalty.

You can then appeal to the county court (or sheriff court in Scotland) but you must do this within 28 days of receiving your confirmed penalty.