For UK small business owners and self-employed individuals, mastering HMRC allowable expenses is a powerful way to reduce your tax bill UK. These tax-deductible expenses UK are costs incurred wholly and exclusively for your business, deductible from your taxable income to lower your tax liability. Whether you’re a freelancer, retailer, or consultant, understanding business expenses claim UK can unlock significant savings, allowing you to reinvest in your business or personal goals. Post-pandemic, allowable expenses working from home UK have become increasingly relevant, offering substantial deductions for remote workers.

These self-employed expenses guide UK 2025 provides a comprehensive roadmap to what expenses can I claim UK, covering allowable business expenses sole trader UK and allowable expenses limited company UK. We’ll explore key expense categories, clarify misconceptions, highlight differences between sole traders and limited companies, and emphasize record-keeping to ensure compliance with UK business expense rules. By the end, you’ll be equipped to maximize tax deductions for small business UK and avoid common pitfalls. Let’s get started!

1. Office Costs: Powering Your Business Hub

Office-related expenses are a cornerstone of HMRC allowable expenses, whether you operate from a rented office or your home. These include rent, utilities (electricity, heating, water), stationery (pens, paper, printer ink), phone bills, and internet costs. For those claiming allowable expenses working from home UK, HMRC allows deductions based on the proportion of your home used for business. For instance, if one room in a five-room house serves as your office, you can claim 20% of eligible household costs, such as mortgage interest, council tax, or utilities.

Alternatively, HMRC’s simplified expenses scheme offers a flat rate for home office costs, ranging from £10 to £26 per month in 2025, depending on hours worked from home. This is ideal when comparing simplified expenses vs actual costs UK, as it reduces paperwork. Communication costs (business phone lines, internet) are fully deductible if used exclusively for business, but mixed-use items require apportionment based on business use.

Key Tip: Maintain a dedicated business phone line to simplify claims and align with HMRC guidance on business expenses working from home. Regularly review your home office usage to ensure accurate calculations.

2. Travel Costs: Claiming Your Business Journeys

Travel expenses are a significant category for business expenses claim UK, encompassing mileage, public transport fares, and subsistence (meals and accommodation during business trips). For allowable business expenses sole trader UK, HMRC’s mileage allowance is straightforward: in 2025, you can claim 45p per mile for the first 10,000 miles and 25p per mile thereafter for cars. Alternatively, you can claim actual vehicle costs (fuel, insurance, repairs) proportional to business use, which suits cash basis vs traditional accounting expenses UK preferences but requires detailed records.

Public transport costs, such as train or bus fares, are deductible if the journey is wholly for business purposes. Subsistence covers reasonable expenses for meals and accommodation during business travel, but extravagant costs, like dining at a high-end restaurant, may be disallowed. A common question is, “Is coffee with a client an allowable expense UK?” If it’s a reasonable cost tied to a business meeting, it may qualify under subsistence, per HMRC guidance on business expenses travel. Overnight stays allow a £5 per night incidental expense claim in the UK.

Key Rule: Travel to a fixed workplace (e.g., your office) is considered commuting and isn’t deductible.

3. Staff and Subcontractor Costs: Investing in Your Team

Employing staff or hiring subcontractors generates tax deductible expenses UK, including salaries, bonuses, pension contributions, and National Insurance contributions. Payments to subcontractors, such as a freelance web developer, are deductible if their work directly supports your business. Trivial benefits for employees UK, like a £50 gift card, are allowable if they’re non-cash, not performance-related, and meet HMRC criteria.

Training costs to enhance employee skills are deductible, and sole traders can claim training to maintain existing skills relevant to their trade. Limited companies enjoy broader flexibility for training claims under allowable expenses limited company UK. However, sole traders cannot deduct their own salary, as their profits are their income, unlike limited company directors, who can deduct reasonable director salaries.

Key Tip: Retain detailed payroll records and subcontractor invoices to substantiate claims, aligning with HMRC guidance on business expenses staff costs. This is crucial during audits.

4. Marketing, Legal, and Financial Costs: Growing and Protecting Your Business

Marketing expenses are vital for growth and fully deductible under maximizing tax deductions for small business UK. These include website development, online advertising (e.g., Google Ads), social media campaigns, and promotional materials like business cards or flyers. Sponsorships or trade show booths also qualify if they promote your business.

Legal and financial costs, such as accountancy fees, legal advice for business matters (e.g., contract drafting), and professional subscriptions (e.g., to a trade body), are allowable. Insurance premiums, like public liability or professional indemnity, also qualify. Sole traders can deduct training courses to maintain skills, but courses for entirely new skills may not qualify. Claiming expenses before company formation UK is possible if costs are wholly for the business and incurred within seven years before trading begins.

Key Rule: Personal expenses, such as gym memberships or personal legal fees, are not deductible, per UK business expense rules.

5. Capital Allowances: Deducting Big-Ticket Purchases

For significant purchases like equipment, vehicles, or machinery, capital allowances allow you to deduct costs from taxable profits, a key component of allowable expenses limited company UK and sole traders. The Annual Investment Allowance (AIA) offers 100% deduction on qualifying expenditure up to £1 million in 2025, covering items like computers, tools, or delivery vans. If your expenditure exceeds the AIA limit, you can claim writing-down allowances at a slower rate.

Qualifying assets must be used primarily for business, and you’ll need to track their business-use percentage. For example, a van used 80% for business allows you to claim 80% of its cost under capital allowances. The impact of budget changes on allowable expenses UK in 2025 may adjust AIA limits or rates, so monitor HMRC updates.

Key Tip: Consult an accountant to determine which assets qualify and optimize your capital allowance claims.

6. Record-Keeping: The Backbone of Compliance

Accurate record-keeping is non-negotiable for business expenses claim UK. HMRC requires you to retain receipts, invoices, bank statements, and other documentation for at least six years to substantiate your claims. This is critical for both allowable business expenses sole trader UK and allowable expenses limited company UK, as HMRC may audit your records to verify expenses were wholly and exclusively for business.

Digital tools like QuickBooks, Xero, or FreeAgent can streamline record-keeping by categorizing expenses, tracking receipts, and generating reports for tax returns. Cloud-based solutions ensure your records are backed up and accessible, reducing the risk of lost receipts. For mixed-use expenses (e.g., a phone used for personal and business calls), maintain logs to demonstrate business-use percentages.

Key Tip: Regularly photograph or scan receipts and store them digitally to avoid fading or loss. Use accounting software to align with HMRC guidance on business expenses record-keeping.

7. Sole Traders vs. Limited Companies: Understanding the Differences

While HMRC allowable expenses apply to both sole traders and limited companies, there are key differences in how they’re claimed and processed. For allowable business expenses sole trader UK, expenses are reported on your Self-Assessment tax return, directly reducing your taxable profits. Sole traders cannot deduct their own salary, as their income is the business’s profit, and training deductions are limited to maintaining existing skills.

For allowable expenses limited company UK, expenses are deducted from your corporation tax liability. Directors can claim salaries as a business expense, provided they’re reasonable, and limited companies have broader flexibility for training and entertainment expenses (e.g., staff parties within limits). However, HMRC scrutinizes director-related expenses to ensure they’re wholly for business, especially for mixed-use costs.

Record-keeping requirements are stricter for limited companies, as they must file annual accounts and a Company Tax Return. Sole traders using cash basis vs traditional accounting expenses UK may opt for simpler cash-basis accounting, while limited companies typically use traditional accrual accounting.

Key Tip: Consult an accountant to navigate the nuances of your business structure and maximize deductions.

Expenses You CANNOT Claim: Avoiding Costly Mistakes

Not all costs qualify as HMRC allowable expenses. Everyday clothing, even if worn for work (e.g., a suit), isn’t deductible unless it’s a branded uniform or protective gear. Non-business entertainment, such as taking clients to a concert, is non-deductible, though business-related meals may qualify under subsistence rules. Fines (e.g., parking tickets) and personal expenses (e.g., groceries) are also excluded.

For allowable expenses working from home UK, personal costs like Netflix subscriptions or non-business utilities are non-deductible. Mixed-use expenses require clear apportionment between personal and business use to avoid HMRC penalties. Missteps here can lead to disallowed claims or fines, so clarity is essential.

Conclusion: Maximize Your Savings with Expert Support

Mastering what expenses can I claim UK is a powerful strategy to reduce your tax bill UK. From office costs and travel to staff, marketing, capital allowances, and robust record-keeping, tax deductible expenses UK offer significant savings for sole traders and limited companies. Understanding the nuances of allowable business expenses sole trader UK versus allowable expenses limited company UK, combined with adherence to UK business expense rules, ensures you claim every penny you’re entitled to.

Struggling with HMRC allowable expenses? Let Alchemy Financial Solutions Bookkeeping help you get organized. Our expert team specializes in expense tracking, tax preparation, and maximizing tax deductions for small business UK. Contact us today to ensure you’re not overpaying on taxes and to focus on growing your business.

CTA: Ready to unlock your savings in 2025? Book a free consultation with Alchemy Financial Solutions Bookkeeping at www.alchemyfs.co.uk or call +44 2039069060. Download our free Self-Employed Expenses Guide UK 2025 to start optimizing your claims today!

The post Unlock Savings: The Ultimate Guide to HMRC Allowable Expenses for UK Small Businesses & Self-Employed appeared first on Alchemy Financial Solutions.

The advisory fuel rates for journeys undertaken on or after 1 March 2018 are:

HMRC guidance states that the rates only apply when you either:

• reimburse employees for business travel in their company cars or
• require employees to repay the cost of fuel used for private travel.

You must not use these rates in any other circumstances.

If you would like to discuss your car policy, please contact us.

Internet link: GOV.UK AFR

The post Advisory fuel rates for company cars appeared first on Alchemy Financial Solutions.

The IR35 rules in broad terms mean that those working via a personal service company have to consider whether, if the services were provided by the individual contractor directly to the client, there would be a contract of employment.

The tribunal looked at lots of factors pertinent to Ms Ackroyd’s engagement and considered it significant that the BBC could control what work she did. She was engaged for seven years on effectively a full time basis.

Subject to any appeal and determination of final figures, the tax and NIC that Ms Ackroyd will be liable for amounts to around £420,000 before offset of corporation tax.

The IR35 rules were amended for Public Bodies (including the BBC) from April 2017 and the government has announced that it may make changes to the rules for the private sector as well in the future.

Internet link: ICAEW News

The post Tribunal rules BBC journalist is caught by ‘IR35’ legislation appeared first on Alchemy Financial Solutions.

The post Reuters Business News appeared first on Alchemy Financial Solutions.

The post BBC News – UK appeared first on Alchemy Financial Solutions.

The post Stock Market Update appeared first on Alchemy Financial Solutions.

Historically, the main annual Budget has generally taken place in the Spring, followed by an Autumn Statement later in the year.

However, under the new regime the annual Budget now takes place in the Autumn and is followed by a Spring Statement.

The first Spring Statement will be delivered on 13 March 2018.

The post The new Spring Statement appeared first on Alchemy Financial Solutions.

In July 2017, the government announced significant changes to the timetable and scope of HMRC’s digital tax programme for businesses. VAT will be the first tax where taxpayers will keep digital records and report digitally to HMRC. The new rules will apply from April 2019 to all VAT registered businesses with turnover above the VAT threshold.

As with electronic VAT filing at present, there will be some exemptions from Making Tax Digital for VAT. However, the exemption categories are tightly-drawn and unlikely to be applicable to the generality of VAT registered businesses.

Comment

Keeping digital records will not mean businesses are mandated to use digital invoices and receipts but the actual recording of supplies made and received must be digital. It is likely that third party commercial software will be required. Software will not be available from HMRC. The use of spreadsheets will be allowed, but they will have to be combined with add-on software to meet HMRC’s requirements.

In the long run, HMRC are still looking to a scenario where income tax updates are made quarterly and digitally, and this is really what the VAT provisions anticipate.

Corporation tax rates

Corporation tax rates have already been enacted for periods up to 31 March 2021.

The main rate of corporation tax is currently 19%. The rate for future years is:

• 19% for the Financial Years beginning on 1 April 2018 and 1 April 2019
• 17% for the Financial Year beginning on 1 April 2020.

Class 2 National Insurance contributions (NICs)

The 2016 Budget announced that Class 2 NICs will be abolished from April 2018. The legislation to effect this measure was intended to be introduced this year. In November 2017 the government decided to implement a one year delay so that Class 2 NICs will be abolished from April 2019.

Comment

The government is still committed to abolishing Class 2 NICs. The deferral allows time to engage with interested parties with concerns relating to the impact of the abolition of Class 2 NICs on self-employed individuals with low profits.

Class 4 NICs

The Chancellor announced in the 2017 Budget proposals to increase the main rate of Class 4 NICs from April 2018 but was forced to make a subsequent announcement that the increase would not take place and there will be no increases to NICs rates in this Parliament.

Partnership taxation

Legislation will be introduced with the aim to provide additional clarity over aspects of the taxation of partnerships:

• where a beneficiary of a bare trust is entitled absolutely to any income of that bare trust consisting of profits of a firm but is not themselves a partner in the firm, then they are subject to the same rules for calculating profits etc and reporting as actual partners
• how the current rules and reporting requirements operate in particular circumstances where a partnership has partners that are themselves partnerships.

The proposed legislation also:

• provides a relaxation in the information to be shown on the partnership return for investment partnerships that report under the Common Reporting Standard or Foreign Account Tax Compliance Act and who have non-UK resident partners who are not chargeable to tax in the UK
• makes it clear that the allocation of partnership profits shown on the partnership return is the allocation that applies for tax purposes for the partners
• provides a new structured mechanism for the resolution of disputes between partners over the allocation of taxable partnership profits and losses shown on the partnership return.

Mileage rates

The government will legislate to give unincorporated property businesses the option to use a fixed rate deduction for every mile travelled by car, motorcycle or goods vehicle for business journeys. This will be as an alternative to claims for capital allowances and deductions for actual expenses incurred, such as fuel. The changes will have effect from 6 April 2017.

Profit fragmentation

The government will consult on the best way to prevent UK traders or professionals from avoiding UK tax by arranging for UK trading income to be transferred to unrelated entities. This will include arrangements where profits accumulate offshore and are not returned to the UK.

Royalties Withholding Tax

A consultation is to be published on the design of rules expanding the circumstances in which a royalty payment to persons not resident in the UK has a liability to income tax. The changes will have effect from April 2019.

Disincorporation Relief

A disincorporation relief was introduced in April 2013 for five years. Broadly, the relief is aimed at certain small companies where the shareholders want to transfer the business into sole tradership or a partnership business. The relief removes the tax charge arising on the disposal of the company’s assets of land and goodwill if qualifying conditions are met. The government has decided not to extend this relief beyond the current 31 March 2018 expiry date.

Improving Research and Development (R&D)

A number of measures have been announced to support business investment in R&D including:

• an increase in the rate of the R&D expenditure credit which applies to the large company scheme from 11% to 12% where expenditure is incurred on or after 1 January 2018
• a pilot for a new Advanced Clearance service for R&D expenditure credit claims to provide a pre-filing agreement for three years
• a campaign to increase awareness of eligibility for R&D tax credits among SMEs
• working with businesses that develop and use key emerging technologies to ensure that there are no barriers to them claiming R&D tax credits.

Intangible Fixed Asset regime

The government will consult in 2018 on the tax treatment of intellectual property also known as the Intangible Fixed Asset regime. This will consider whether there is an economic case for targeted changes to this regime so that it better supports UK companies investing in intellectual property.

Non-UK resident companies

The government is to legislate so that non-UK resident companies with UK property income and/or chargeable gains relating to UK residential property will be charged to corporation tax rather than income tax or capital gains tax respectively as at present. The government plans to publish draft legislation for consultation in summer 2018. The change is set to have effect from 6 April 2020.

Extension of First Year Allowances (FYA)

A 100% FYA is currently available for businesses purchasing zero-emission goods vehicles or gas refuelling equipment. Both schemes were due to end on 31 March 2018 but have been extended for a further three years.

Extension of First Year Tax Credits (FYTC)

FYA enables profit-making businesses to deduct the full cost of investments in energy and water technology from their taxable profits. Loss-making businesses do not make profits, so they do not benefit from FYAs. However, when the loss-making business is a company it can claim FYTC when they invest in products that feature on the energy and water technology lists. A FYTC claim allows the company to surrender a loss in exchange for a cash credit and is currently set at 19% but the facility was due to end on 31 March 2018.

The credit system is to be extended for five years but the percentage rate of the claim is to reduce to two-thirds of the corporation tax rate.  The changes to FYTC will have effect from 1 April 2018.

Capital gains indexation allowance

This measure changes the calculation of indexation allowance by companies so that for disposals of assets on or after 1 January 2018, indexation allowance will be calculated using the Retail Price Index factor for December 2017 irrespective of the date of disposal of the asset.

Off-payroll working extension to the private sector

The government will consult in 2018 on how to tackle non-compliance with the intermediaries legislation (commonly known as IR35) in the private sector. The legislation aims to ensure that individuals who effectively work as employees are taxed as employees even if they choose to structure their work through a company. A possible next step would be to extend the recent public sector reforms to the private sector.

The post Business Tax appeared first on Alchemy Financial Solutions.

The post Seed Enterprise Investment Scheme appeared first on Alchemy Financial Solutions.

Comment

A reminder that not everyone has the benefit of the full personal allowance. There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000, which is £1 for every £2 of income above £100,000. So for 2017/18 there is no personal allowance where adjusted net income exceeds £123,000. For 2018/19 there will be no personal allowance available where adjusted net income exceeds £123,700.

Tax bands and rates

The basic rate of tax is currently 20%. The band of income taxable at this rate is £33,500 so that the threshold at which the 40% band applies is £45,000 for those who are entitled to the full personal allowance.

In 2017/18 the band of income taxable at the basic rate for income (other than savings and dividend income) is different for taxpayers who are resident in Scotland to taxpayers resident elsewhere in the UK. The Scottish Government set the band of income taxable at the basic rate at £31,500 so that the threshold at which the 40% band applies is £43,000.

The additional rate of tax of 45% is payable on taxable income above £150,000 (other than dividend income) for all UK residents.

Tax bands and rates 2018/19

The government has announced that for 2018/19 the basic rate band will be increased to £34,500 so that the threshold at which the 40% band applies is £46,350 for those who are entitled to the full personal allowance.

The additional rate of tax of 45% remains payable on taxable income above £150,000.

The Scottish Government will announce the Scottish income tax rates and bands for 2018/19 in the Draft Budget on 14 December.

Tax bands and rates – dividends

Dividends received by an individual are subject to special tax rates. Currently the first £5,000 of dividends are charged to tax at 0% (the Dividend Allowance). Dividends received above the allowance are taxed at the following rates:

• 7.5% for basic rate taxpayers
• 32.5% for higher rate taxpayers
• 38.1% for additional rate taxpayers.

Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the £5,000 allowance.

To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed.

Reduction in the Dividend Allowance

The Chancellor has confirmed the Dividend Allowance will be reduced from £5,000 to £2,000 from 6 April 2018.

Comment

The government expect that even with the reduction in the Dividend Allowance to £2,000, 80% of ‘general investors’ will pay no tax on their dividend income. However, the reduction in the allowance will affect family company shareholders who take dividends in excess of the £2,000 limit. The cost of the restriction in the allowance for basic rate taxpayers will be £225 increasing to £975 for higher rate taxpayers and £1,143 for additional rate taxpayers.

Tax on savings income

Savings income is income such as bank and building society interest.

The Savings Allowance was first introduced for the 2016/17 tax year and applies to savings income. The available allowance in a tax year depends on the individual’s marginal rate of income tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000. For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers.

Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income less allocated allowances and reliefs) exceeds £5,000.

The Marriage Allowance

The Marriage Allowance allows certain couples, where neither pay tax at more than the basic rate, to transfer 10% of their unused personal allowance to their spouse or civil partner, reducing their tax bill by up to £230 a year in 2017/18. The government will legislate to allow Marriage Allowance claims on behalf of deceased spouses and civil partners, and for the claim to be backdated for up to four years where the entitlement conditions are met.

This measure will come into force on 29 November 2017.

Individual Savings Accounts (ISAs)

The overall ISA savings limit for 2017/18 and 2018/19 is £20,000.

Help to Buy ISAs

Help to Buy ISAs are a type of cash ISA and potentially provide a bonus to savers if the funds are used to help to buy a first home.

Lifetime ISA

The Lifetime ISA has been available from April 2017 for adults under the age of 40. Individuals are able to contribute up to £4,000 per year, between ages 18 and 50, and receive a 25% bonus from the government. Funds, including the government bonus, can be used to buy a first home at any time from 12 months after opening the account, and can be withdrawn from age 60 completely tax free.

Comment

The overall ISA limit was significantly increased from £15,240 to £20,000 for 2017/18. The increase in the investment limit was partly due to the introduction of the Lifetime ISA. There are therefore four types of ISAs for many adults from April 2017 – cash ISAs, stocks and shares ISAs, Innovative Finance ISAs (allowing investment into peer to peer loans and crowdfunding debentures) and the Lifetime ISA. Money can be placed into one of each kind of ISA each tax year.

As stated above, Help to Buy ISAs are a type of cash ISA and therefore care is needed not to breach the ‘one of each kind of ISA each tax year rule’.

Help to Save accounts

In 2016 the government announced the introduction of a new type of savings account aimed at low income working households. Individuals in low income working households will be able to save up to £50 a month into a Help to Save account and receive a 50% government bonus after two years. Overall the account can be used to save up to £2,400 and can benefit from government bonuses worth up to £1,200. Account holders can then choose to continue saving under the scheme for a further two years. The scheme will be open to all adults in receipt of Universal Credit with minimum weekly household earnings equivalent to 16 hours at the National Living Wage or those in receipt of Working Tax Credits.

Accounts will be available no later than April 2018.

Universal Credit

Universal Credit is a state benefit designed to support those on low income or out of work. It is intended to replace some benefits such as housing benefit, tax credits and income support. It is being introduced in selected areas. The intention is that the rollout will be completed by September 2018.

An individual’s entitlement to the benefit is made up of a number of elements to reflect their personal circumstances. Claimants’ entitlement to Universal Credit is withdrawn at a rate of 63 pence for every extra £1 earned (the ‘taper rate’) where claimants earn above the work allowances.

Following concerns about the roll out of Universal Credit, the Chancellor announced that households in need who qualify for Universal Credit will be able to access a month’s worth of support within five days, via an interest-free advance, from January 2018. This advance can be repaid over 12 months.

Claimants will also be eligible for Universal Credit from the day they apply, rather than after seven days. Housing Benefit will continue to be paid for two weeks after a Universal Credit claim.

Increased limits for knowledge-intensive companies

The government will legislate to encourage more investment in knowledge-intensive companies under the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs). The government will:

• double the limit on the amount an individual may invest under the EIS in a tax year to £2 million from the current limit of £1 million, provided any amount over £1 million is invested in one or more knowledge-intensive companies
• raise the annual investment limit for knowledge-intensive companies receiving investments under the EIS and from VCTs to £10 million from the current limit of £5 million. The lifetime limit will remain the same at £20 million, and
• allow knowledge-intensive companies to use the date when their annual turnover first exceeds £200,000 in determining the start of the initial investing period under the permitted maximum age rules, instead of the date of the first commercial sale.

The changes will have effect from 6 April 2018. This measure is subject to normal state aid rules.

Venture Capital

The government will introduce measures to ensure venture capital schemes (the EIS, Seed Enterprise Investment Scheme and VCTs) are targeted at growth investments. The government has announced that relief under the schemes will be focussed on companies where there is a real risk to the capital being invested, and will exclude companies and arrangements intended to provide ‘capital preservation’.

Detailed guidance will be issued shortly after the publication of the Finance Bill.

VCTs

The government will legislate to limit the application of an anti-abuse rule relating to mergers of VCTs. The rule restricts relief for investors who sell shares in a VCT and subscribe for new shares in another VCT within a six month period, where those VCTs merge. This rule will no longer apply if those VCTs merge more than two years after the subscription, or do so only for commercial reasons.

The change will have effect for VCT subscriptions made on or after 6 April 2014.

The government will also legislate to move VCTs towards higher risk investments by:

• removing certain ‘grandfathering’ provisions that enable VCTs to invest in companies under rules in place at the time funds were raised, with effect on and after 6 April 2018
• requiring 30% of funds raised in an accounting period to be invested in qualifying holdings within 12 months after the end of the accounting period, with effect on and after 6 April 2018
• increasing the proportion of VCT funds that must be held in qualifying holdings to 80%, with effect for accounting periods beginning on and after 6 April 2019
• increasing the time to reinvest the proceeds on disposal of qualifying holdings from six months to 12 months for disposals on or after 6 April 2019, and
• introducing a new anti-abuse rule to prevent loans being used to preserve and return equity capital to investors, with effect on and after Royal Assent.

This measure is subject to normal state aid rules.

Rent a room relief

The government will publish a call for evidence on 1 December 2017 to build the evidence base around the usage of rent a room relief and to help establish whether it is consistent with the original policy rationale to support longer-term lettings.

Simplification of Gift Aid donor benefit rules

The government will introduce legislation to simplify the donor benefit rules that apply to charities that claim Gift Aid. Currently there are a mix of monetary and percentage thresholds that charities have to consider when determining the value of benefit they can give to their donors in return for a donation on which Gift Aid can be claimed. These will be replaced by two percentage thresholds:

• the benefit threshold for the first £100 of the donation will remain at 25% of the amount of the donation, and
• for larger donations, charities will be able to offer an additional benefit to donors up to 5% of the amount of the donation that exceeds £100.

The total value of the benefit that a donor will be able to receive remains at £2,500.

The government have confirmed that four extra statutory concessions that currently operate in relation to the donor benefit rules will also be brought into law. The changes will have effect on and after 6 April 2019.

The post The personal allowance appeared first on Alchemy Financial Solutions.