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Most directors brace themselves for December expenses – but here’s the twist, HMRC can actually contribute to your Christmas… if you know the rules.

This isn’t one of those “creative accounting hacks” you see on TikTok. These allowances are built into UK tax legislation, they’re under-used, and they can genuinely take the pressure off your festive spending.

Let’s break down the four big opportunities directors regularly miss.

1. The £150 Staff Party Allowance

Every year, your company can treat its employees to up to £150 per head, completely tax-free.
That includes food, drinks, entertainment and the taxi home.

Key conditions:
• It must be an annual event (Christmas party counts).
• It must be open to all employees.
• Stay under £150 per head or the whole thing becomes taxable.

Yes, even a sole director can benefit, as long as there’s a legitimate company event. If you’re eating a festive meal alone because you only employ yourself, that’s between you and your conscience, but the allowance still stands.

2. Tax-Free Director Gifts (Trivial Benefits)

As a director, you can receive up to £300 per year in tax-free trivial benefits.
That’s up to £50 per gift, not cash, and not a reward for doing your job.

Think:
• Dinner out
• A Christmas hamper
• A candle you pretend you didn’t buy yourself
• Nice bottle of wine
• Even a little “treat yourself” luxury

If it’s genuinely a perk, not a bonus, the business can pay and you pay zero tax.

3. £50 Gifts for Your Team

Want to give your staff a little something without triggering PAYE or NI?
You can buy up to £50 per gift (again, following the trivial benefit rules) and the business gets a corporation tax deduction.

Perfect for:
• Chocolates
• Gift cards (not cash)
• Mini hampers
• Christmas drinks
• Desk treats

It’s simple, generous, and totally legitimate.

4. Charitable Donations

Festive giving counts too.

Company donations to registered charities are corporation-tax deductible, which means your business saves tax while doing something genuinely meaningful.

No wrapping paper required.

The Bottom Line

If you use these rules properly, HMRC genuinely does step in as an unexpected Secret Santa. Not because they’re generous, but because these allowances were designed to support employee wellbeing and business culture.

Most directors leave thousands of pounds of tax-efficient benefits unused each year.
That is optional. Overspending at Christmas doesn’t have to be.

If you want to know exactly what you can claim, or you want us to check you’re using these allowances correctly, get in touch. Your Christmas might cost less than you think.

Yesterday’s 2025 Autumn Budget brought plenty of speculation but relatively little genuine support for small business owners. While there have been no increases to the main rates of tax, National Insurance or VAT, the reality is that businesses are being asked to absorb rising costs for longer, with very little incentive to grow or invest.

Below is a clear summary of the key changes most likely to affect you and your business.

1. Minimum wage rises – higher payroll costs from April 2026

From 1 April 2026, the National Living Wage and National Minimum Wage will rise:

• National Living Wage (21+) increases by 4.1% to £12.71 per hour
• 18–20 year olds increase by 8.5% to £10.85 per hour
• 16–17 year olds & apprentices increase by 6.0% to £8.00 per hour
• Accommodation offset increases to £11.10 per day

What this means for you:

If you employ staff on or near minimum wage, your wage bill will rise again, along with employers’ NI and pension costs.

Action: These rates should be built into your budgets and pricing strategy now so margins are not slowly eroded.

2. Frozen income tax thresholds – the stealth tax continues

Income tax thresholds remain frozen until 2031. While tax rates have not risen, more of your income will gradually fall into higher bands as earnings rise.

What this means for you:

Directors and employees alike will experience higher effective tax rates over time, even where pay increases are modest.

3. Dividend, property and savings tax – key increases

Dividend tax

• Basic rate up 2 percentage points to 10.75%
• Higher rate up 2 percentage points to 35.75%

Property income (from April 2027)

New property-specific tax rates will apply:

• Basic rate 22%
• Higher rate 42%
• Additional rate 47%

Finance cost relief will be restricted to the 22% property basic rate.

Tax on savings interest (from April 2027)

Tax band rates on savings interest will increase by 2 percentage points. New tax rates will be 22% at the savings basic rate, 42% at the savings higher rate and 47% at the savings additional rate for 2027 to 2028.

What this means for you:

• If you pay yourself mainly via dividends, your personal tax bill will rise.
• If you own rental properties or have significant savings income alongside your business income, your overall tax burden will increase again.

Action on dividends: Ask us for a personalised calculation to see if it is still worthwhile extracting profits via dividends or whether you may now be better off taking a higher salary, reducing Corporation Tax but accepting higher personal tax.

4. Property tax – challenging environment for landlords

Combined with the new property tax rates, this is not a friendly landscape for traditional buy-to-let landlords.

You may wish to consider whether limited company ownership would improve your position; however, transferring property into a company is complex and only works where strict conditions are met. It does not suit everyone and can trigger Stamp Duty and Capital Gains Tax.

Action: Seek specialist advice before making any structural changes. We have a trusted property tax advisor who can assist where appropriate.

5. Pension salary sacrifice – NIC advantage capped

From April 2029:

Salary sacrifice pension contributions above £2,000 per year will no longer be fully exempt from National Insurance. Both employee and employer NIC will be payable on the excess.

What this means for you:

Salary sacrifice still has value, but the strongest NI benefit is capped. This needs to be factored into longer-term planning rather than assumed to remain optimal.

6. Business rates – relief and expansion no longer penalised

From 1 April 2026:

• Lower rate multipliers for many retail, hospitality and leisure premises with rateable values under £500,000
• A new higher multiplier for properties with rateable value above £500,000, particularly impacting large warehouses and distribution sites
• Transitional relief and an extended Small Business Rates Relief grace period of up to three years when taking on a second property

What this means for you:

If you occupy small high-street premises, you may benefit from lower long-term rates. If you operate from large or high-value premises, costs may rise.

Important change for expanding businesses:

Previously, opening a second premises meant losing your business rates relief and both sites becoming fully chargeable. Under the new rules, you will now keep your relief when opening another branch. Expansion is no longer financially penalised in the same way.

7. Capital allowances – timing now matters more

From 1 January 2026:

• New 40% First Year Allowance introduced
• Writing Down Allowance reduced from 18% to 14%

There is still incentive to invest, but careful planning around timing and scale of expenditure will now have greater tax impact.

8. Electric vehicles – new mileage charge

From 1 April 2028, a new mileage levy will apply:

• 3p per mile for electric vehicles
• 1.5p per mile for hybrids

This will be payable alongside road tax.

What this means for you:

EVs remain tax-efficient in some scenarios, but long-term cost calculations should now include this additional charge.

9. ISA changes – reduced cash allowance from April 2027

• Previously £20,000 could be held in a Cash ISA
• Now limited to £12,000 cash. The overall ISA limit remains at £20,000, meaning you can invest the remaining £8,000 in stocks & shares
• More generous limits continue for those aged over 65, enabling them to continue investing £20,000 into a cash ISA

This nudges savers towards higher investment exposure and may affect how you structure personal reserves.

10. Taxi Tax – VAT now applies to the full fare

Taxi and private hire operators previously paid VAT only on their commission portion. With effect from 2 January 2026, VAT at 20% will apply to the entire journey fare. The policy closes the long-contested Tour Operators Margin Scheme (TOMS) exemption. Private hire vehicle operators such as Uber and Bolt, will all be on a level playing field with respect to VAT accounting.

What this means for you:

As a taxi operator, this will increase VAT liabilities and may force price increases or reduced margins within the sector. As a taxi-user, your fares could increase by up to 20%.

Final take – is it good or bad?

Despite all the speculation, there is some marginal good news for business owners. There have been no increases to the main rates of tax, National Insurance or VAT.

However, this is not support, it is prolonged pressure.

Costs will continue to rise, particularly through minimum wage increases, while frozen tax thresholds quietly squeeze profitability. There remains no meaningful incentive to stimulate growth or encourage investment.

Cash flow management will therefore remain challenging for many businesses. Keeping up-to-date accounts, understanding your numbers and reviewing your financial position regularly remains as crucial as ever.

The businesses that adapt will be the ones that stay close to their data, challenge their assumptions and make decisions based on clarity rather than instinct.

If you’re inclined to do so, you can read the full Autumn Budget 2025  here.

If you would like to discuss how these changes specifically affect your business or your personal tax position as a director, please get in touch to arrange a complimentary 20 minute call and review. We’ll be happy to help.

For years, spreadsheets have been the go-to tool for tracking income and expenses. But under Making Tax Digital (MTD), they just won’t cut it. Here’s why.

Spreadsheets aren’t fully digital

MTD requires digital records and a direct link to HMRC. Copying and pasting figures into a form won’t be allowed – it breaks the “digital link” rule. However, you can look into ‘bridging software’ that will convert your spreadsheet to MTD compliant format.

Risk of errors

Spreadsheets are prone to mistakes. One wrong formula or accidental overwrite can cause huge problems, especially when quarterly reporting is mandatory.

No automation

Software like Xero pulls in bank transactions, invoices, and receipts automatically. Spreadsheets can’t match that — meaning more admin and higher risk of missing transactions.

Penalties for non-compliance

If HMRC finds you’re not keeping records in an approved way, you risk penalties and extra scrutiny.

The better alternative: Cloud accounting software

Xero and other MTD-compliant tools are designed to:

• Maintain digital records in line with HMRC rules
• Submit quarterly updates automatically
• Provide real-time visibility of your tax position

Summary

Spreadsheets might feel familiar, but they’ll soon be a compliance risk. By switching now, you’ll not only be MTD-ready, you’ll also benefit from smarter bookkeeping, better reporting, and less admin.

Talk to us today about moving onto Xero ahead of Making Tax Digital.

Book a call with us today and we’ll walk you through what MTD means for your situation.

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Book a call link: https://calendly.com/accountancyoffice/makingtaxdigital

You’ve got a limited company, a growing business, and a personal income or directors turnover target in mind—maybe £60k, maybe £100k, maybe more.

But here’s the truth most directors miss:

There’s a massive difference between business profit and personal income. And if you don’t know the exact turnover your company needs to hit your goal, you’re probably overpaying tax – or worse, underpaying yourself.

That’s Where the Director’s Turnover & Tax Plan Calculator Comes In

Our bespoke calculator gives you total clarity. You input your personal income goal, and it shows you:

• ✅ The turnover your business needs to generate
• ✅ The pre-tax profit required to hit your target
• ✅ A full breakdown of income tax, dividend tax, National Insurance and Corporation Tax
• ✅ Your true effective tax rate
• ✅ A visual dashboard that ties it all together

No more guesstimates. No more pulling random numbers from your bank balance. Just solid, data-driven financial insight that helps you run your company like a director, not just a doer.

Why This Tool Matters

Most business owners aim for a round figure – like “I want to take home £60k”—but don’t know what that actually means in business performance terms. 

If your business is VAT registered or has staff? That required turnover increases significantly.

VAT registered businesses collect 20% on top of their prices for HMRC – so only a portion of gross revenue is yours. If you employ staff, their wages, employer NIC (now 15%), pensions and payroll costs all reduce your profit before you even think about director pay.

Result? You need to generate a lot more in sales to safely and sustainably hit your personal income target.

Without this level of visibility, you’re likely to:

• Underpay yourself (and wonder where all the profit went)
• Overpay in tax (because you’re not extracting income smartly)
• Miss out on planning opportunities (like pension contributions or salary tweaks)

Ready to Know Exactly What Your Business Needs to Earn?

Stop guessing. Start planning like a director.

• Calculate your required turnover
• Plan your salary + dividends strategically
• Understand your total tax burden
• Save time, money—and tax

Grab the Director’s Turnover & Tax Plan Calculator now

Only £59 – used by UK company directors just like you to plan ahead for turnover and tax.

For any other Accountancy questions please visit us here or call us on 01386 366741

In our previous blog, we wrote about Dave and Vicky, a married couple running a successful limited company, despite only forming their marketing consultancy company two years ago. However, they were in a bit of a mess with their finances.

In this blog, we outline one of the ways we helped this lovely couple get back on their feet and gain control of their finances.

The Buckhams were making good money, but every month, whatever came in, went straight out. Vicky admitted to having a love of fashion and an excessive online shopping habit. Dave, a keen sports player; loved various sports including football, golf and cricket and found himself regularly spending large sums of money on new kit.

Dave and Vicky had also taken four overseas family holidays in the past 12 months alone, believing the money in the business was theirs to spend – until the tax man told the Buckhams they owed thousands. They were utilising credit cards to pay the bills. They knew they needed to gain control of their personal spending and understand their business finances properly.

The Buckhams weren’t used to owning a limited company and having received no guidance from their previous accountant, they got into a bad habit of spending money freely. Having both been employed in the past, they were used to spending whatever money was in the bank as their taxes had already been paid.

When the tax bills landed, it was always a shock. They felt like they were working hard but never getting ahead financially.

They wanted to apply for a mortgage and to improve their family lifestyle, but they needed an additional £3,000 per month (after tax) from the company to do everything they wanted, an extra £36,000 per year.

Between them, the Buckhams were taking home £70,000 already so with the extra £36,000, this was going to give them the total household income of £106,000 needed (£53,000 each).

They asked us for help with crunching the numbers and how much business income would be needed to generate the additional cash. 

Here’s what we came up with:

Dave and Vicky both receive an annual salary of £12,570. They needed dividends of at least £40,430 each, to give them a total income of £53,000 each per year. 

To allow for the dividend tax that they would need to pay personally (with some of their dividends being taxed at the higher tax rate of 33.75%), they needed to receive dividends from the company of £47,000 each. 

The personal dividend tax payable on £47,000 was £6,394 so the net cash in their pocket was only £40,606 each. A salary of £12,570 and a dividend of £40,606 gives each of them £53,176 per year (total household income of £106,352). A little over what they need but Vicky said she had her eye on a new pair of Christian Louboutins so any extra would be useful. 

Let’s see how that looks for the company….

We need to consider company corporation tax, because the company will be taxed on the profits before the £47,000 dividends can be distributed to Dave and Vicky.

Dave and Vicky’s company needs net profit of £122,078 to cover a dividend of £47,000 each AND the corporation tax payable on company profits (with a marginal corporation tax rate of 23%).

We’ll add back their salaries (2 x £12,570 = £25,140) and £5,000 of business running costs onto the net profit to give us a gross profit of £152,218.

With their consultancy work, the average client value is £14,400 each year and their business operates at a 60% gross profit margin. 

With a 60% gross profit margin, the Buckhams need to generate £253,700 of annual sales. Divided by the average client value of £14,400, this means they need 18 clients.

£253,700 of annual sales will allow Vicky and Dave to receive the personal income they need and for the business to cover the corporation tax liability. Knowing exactly how much their personal income is, has helped the Buckhams budget far more carefully. We also worked with them to ensure that the amount of sales was achievable AND how they were going to achieve it through a well-planned marketing strategy.

Their next tax bill is already planned for – no stress! Their mortgage application looks stronger and the Buckhams finally feel in control of their finances instead of constantly reacting to surprises. Vicky has also created a separate pot of money to save for her Christian Louboutins.

If you’re running a business but struggling to make your hard-earned cash actually work for you, we can help. Let’s get your finances working for your life goals – not against them.

Be more Buckham….

For advice on your Limited Company Call The Accountancy Office  on 01386 366741 or book a call for a time to discuss that is convenient for you.