Running your own business is exciting - but it also comes with responsibility. One of the biggest challenges many small business owners face is staying on top of their taxes. Over the years, we’ve helped clients untangle tax messes, and the same mistakes crop up time and again. Here are the most common tax pitfalls we see – and how you can avoid them. 1. Not Saving for Tax When you’re just starting out, it’s tempting to think of every pound earned as “yours”, but HMRC will want its share. If you don’t put money aside as you go, you could be in for a nasty surprise when your tax bill arrives. How to avoid it: Set up a separate savings account and move a percentage of every payment you receive straight into it. As a rule of thumb, 20-30% works for most small businesses, but it depends on your circumstances. 2. Taking Drawings Instead of Salary/Dividends Many limited company owners don’t realise that simply “taking money out” of the business isn’t the same as being paid properly. Taking drawings can lead to tax inefficiencies or even an overdrawn director’s loan account – with an unexpected tax charge (the dreaded S455). How to avoid it: Speak to your accountant about the most tax-efficient way to pay yourself – usually a mix of salary and dividends. That way you’ll stay compliant and avoid paying more tax than necessary. Note that if you’re self-employed then the post-tax profit is yours and can be withdrawn. 3. Mixing Business and Personal Finances Using your personal bank account for business transactions might feel convenient at the start but it quickly becomes a bookkeeping nightmare. It’s easy to lose track of income and expenses, and HMRC may question the accuracy of your records. How to avoid it: Open a separate business bank account from day one. It makes bookkeeping cleaner, tax returns easier, and gives you a clearer picture of how your business is really performing. This is even more important for a limited company, the bank account must be in the company name. 4. Registering for VAT Too Late Some business owners don’t realise they need to register for VAT once their turnover passes the threshold (currently £90,000). Missing this deadline can lead to backdated VAT bills, interest and penalties – a costly mistake. How to avoid it: Track your rolling 12-month turnover. If you’re getting close to the threshold, speak to your accountant early. Sometimes it even makes sense to register voluntarily before you’re required to. 5. Missing Out on Allowable Expenses Too many business owners pay more tax than they should because they don’t claim all the expenses they’re entitled to. From home office costs to business mileage, small savings add up. How to avoid it: Keep detailed records and receipts throughout the year. If you’re unsure what you can and can’t claim, ask your accountant – we’d rather help you claim correctly than see you overpay. Final Thoughts Tax mistakes are easy to make - especially when you’re juggling everything else that comes with running a business. But with a bit of planning, good record-keeping, and the right advice, you can avoid the most common pitfalls. At CJL Accountancy, we’ve helped countless small business owners get back on track after making these mistakes – but we’d much rather help you avoid them in the first place. 👉 If you’re worried about tax or just want peace of mind that you’re doing things the right way, get in touch today .

If you’ve recently started earning income outside of PAYE, the clock is ticking. HMRC requires you to register for Self-Assessment by 5 October 2025 if you need to file a tax return for the 2024/25 tax year. Missing this deadline could lead to penalties, interest, and unnecessary stress. At CJL Accountancy, we help individuals and business owners stay compliant and avoid last-minute panic. Here’s what you need to know. Who Needs to Register for Self-Assessment? You may need to register if you had untaxed income during the 2024/25 tax year (6 April 2024 – 5 April 2025). This can include: Self-employed businesses Partners in a business partnership Company directors who receive dividends or other untaxed income Landlords earning rental income Investors with taxable savings, dividends, or capital gains Side hustlers and content creators making money from Etsy, YouTube, TikTok, or freelancing If HMRC doesn’t already know about your new income, you must tell them by registering for Self-Assessment. Why Is the 5 October Deadline Important? This deadline isn’t when you have to file or pay your tax, that comes later. Instead, it’s about telling HMRC you need to complete a tax return. 5 October 2025 – Deadline to register if you’re new to Self-Assessment for 2024/25. 31 January 2026 – Deadline to file your online return and pay any tax due. By registering on time, you’ll avoid HMRC penalties and get your Unique Taxpayer Reference (UTR) in plenty of time, which you need to file your return. How to Register for Self-Assessment The process depends on your situation: Self-employed – Register using form CWF1. Not self-employed (e.g., landlords, investors, directors) – Register using form SA1. Partnerships – Both the partnership and individual partners must register separately. You can register online via HMRC’s website, or we can handle the process for you. What Happens If You Miss the Deadline? If you fail to register by 5 October, HMRC can issue penalties for late notification. Acting early is the easiest way to stay compliant. How CJL Accountancy Can Help At CJL Accountancy, we specialise in helping people and small businesses stay on top of their tax obligations. We can: Register you for Self-Assessment File your return accurately and on time Ensure you claim all allowable expenses Help you plan for future tax bills so there are no surprises Don’t Leave It Too Late If you started earning new income in the 2024/25 tax year, remember: the deadline to register is 5 October 2025. The sooner you act, the smoother your tax return process will be. 📩 Get in touch with CJL Accountancy today , and let us take the stress out of Self-Assessment.

Over the past few years, side hustles have become more popular than ever. Whether it’s selling art at local markets, reselling clothes on Vinted, or monetising a blog or YouTube channel, thousands of people across the UK are making extra income outside of their 9-to-5 jobs. But when does a hobby tip over into a business in the eyes of HMRC, and what does that mean for tax? Let’s break it down. The Key Test: The “Badges of Trade” HMRC doesn’t have a single rule that says: “This is a business.” Instead, they look at something called the badges of trade - a set of indicators used to decide whether you’re just enjoying a hobby, or whether you’re carrying on a trade. Some of the main badges of trade include: Profit motive – Are you trying to make money, or just covering your costs? Frequency of transactions – Are you making occasional sales, or selling regularly? Organisation – Do you advertise, have branding, or run it like a business? Modifications – Do you change or improve items before selling them (e.g. buying second-hand clothes, then reselling at a markup)? Nature of the asset – Was what you sold originally bought to keep or to sell? No single badge proves you’re in business, but taken together they paint a picture. What HMRC Looks For HMRC will look beyond the label you put on your activity. Calling it a “hobby” doesn’t mean it won’t be taxed if you’re making money in a structured way. Some common scenarios: Selling art or crafts – If you sell the occasional canvas or crochet piece for pocket money, it may be a hobby. But if you regularly list items on Etsy, take commissions, or market yourself on Instagram, HMRC is likely to see this as a business. Reselling clothes online – Clearing out your wardrobe is fine. But if you buy clothes with the intention of reselling for profit (e.g. thrifting or bulk buying trainers), that looks like trading. Monetising a blog or YouTube channel – Once you start receiving ad revenue, affiliate income, or sponsorships, HMRC will see this as taxable business income. Landlords and property income – Even if you only rent out one property, it still counts as taxable income and must be declared. The Tax Implications If your hobby crosses into business territory, you’ll need to: Register with HMRC as self-employed (even if you also have a job). Complete a Self Assessment tax return each year. Keep accurate records of income and expenses. Pay tax and National Insurance on profits above the personal allowance. The good news is that there are some reliefs: Trading allowance – The first £1,000 of trading income (gross income, not profit) is tax-free. Allowable expenses – You can deduct costs like materials, platform fees, and a proportion of home office costs. Real-World Examples Hobby: Lucy paints in her spare time and occasionally sells a painting for £50 to friends. She doesn't advertise her paintings. No tax return needed. Business: Tom resells vintage clothes on Depop every weekend, buying items to re-sell at a profit, and keeping track of his profit margins. HMRC will expect him to register as self-employed. Side Hustle Scaling Up: Sarah runs a blog. At first, it was just a creative outlet, but now she earns £200 a month from affiliate links. She needs to declare this income to HMRC. Final Thoughts If you’re earning money - even a small amount - from a hobby, it’s worth asking: Would HMRC see this as trading? Failing to declare taxable income could lead to penalties, but getting it right from the start is straightforward with the right advice. At CJL Accountancy, we help side hustlers, content creators, and small businesses understand their tax obligations, claim the right expenses, and stay compliant without stress. 📩 Need help figuring out if your hobby is a business? Get in touch with us today for friendly, expert advice.

Cryptocurrency has moved from a niche interest to a mainstream topic. Whether you’re buying Bitcoin for the first time, dabbling in Ethereum, or trading NFTs, you’ll quickly realise there’s one thing you can’t ignore: tax. In the UK, HMRC treats crypto very differently from traditional currency - and not knowing the rules can land you with unexpected tax bills (and penalties). This beginner’s guide will walk you through the basics of crypto tax in the UK, so you can stay on the right side of the law. What counts as crypto for UK tax purposes? HMRC refers to cryptocurrency as cryptoassets. This includes: Exchange tokens (e.g. Bitcoin, Ethereum, Litecoin) Utility tokens (tokens that let you access a service) Security tokens (tokens representing ownership or debt) Non-fungible tokens (NFTs) If you own or trade any of these, you may have a tax liability. Is crypto taxed in the UK? Yes - but not in the way you might think. HMRC does not treat crypto as money or currency. Instead, it’s treated more like a form of property or investment. The two main UK taxes that might apply to your crypto are: Capital Gains Tax (CGT) – When you sell, swap, spend, or gift crypto. Income Tax – When you’re paid in crypto or receive it through mining, staking, or airdrops. Capital Gains Tax on crypto If you sell or dispose of crypto, you may need to pay Capital Gains Tax. This includes: Selling crypto for GBP or another currency Swapping one crypto for another Using crypto to pay for goods or services Giving crypto away (other than to a spouse or civil partner) You only pay CGT on your profits, not the total value. There's a tax free CGT allowance (£3,000 for 2025/26) and you'll pay tax on any gains above this. You can also claim your crypto losses to be used against other capital gains. Example: You bought 1 Bitcoin for £15,000 You sold it for £25,000 Profit = £10,000 Rates: 18% for basic rate taxpayers 24% for higher and additional rate taxpayers Income Tax on crypto You may need to pay Income Tax if you receive crypto as: Salary or payment for services Mining or staking rewards Airdrops (if received in exchange for doing something, like promoting a project) In these cases, the value of the crypto at the time you receive it is added to your income and you'll pay income tax and national insurance on your profits. How HMRC knows about your crypto HMRC has agreements with major UK crypto exchanges and can request customer data. If you think they won’t find out, think again - it’s safer (and cheaper) to declare your gains correctly from the start. Record keeping for crypto tax HMRC expects detailed records for every crypto transaction, including: Date of transaction Type of asset Number of units Value in GBP at the time Transaction fees What the transaction was for (sale, swap, etc.) Using crypto tax software (like Koinly or CoinTracker) can save hours of admin. Do you have to pay tax if you haven’t cashed out? Yes - in some cases. Even if you haven’t converted crypto to GBP, swapping one coin for another or using it to make a purchase can trigger a taxable event. How to report crypto on your tax return If you have taxable crypto gains or income: Register for Self Assessment (if you’re not already registered). Complete the Capital Gains section and/or Income section of your return. Pay any tax due by the deadline (31 January following the end of the tax year). Common crypto tax mistakes to avoid Thinking “it’s not real money” so it’s not taxable Forgetting that swaps count as disposals Ignoring small gains that push you over the allowance Not keeping records from the start Missing the tax return deadline Final thoughts If you're investing in crypto then you need to understand your tax obligations as it will save you stress, fines, and unwanted surprises later on. If you’re unsure, speak to a tax professional who understands crypto. FAQs: Crypto Q: Do I pay tax when I buy crypto? A: No. Buying crypto isn’t taxable — tax applies when you dispose of it. Q: What’s the CGT allowance for 2025/26? £3,000 per person. Q: Do I pay tax on crypto losses? You can offset crypto losses against gains to reduce your tax bill - but you must report them to HMRC. Q: Can HMRC track my crypto? Yes. They can request information from UK-based exchanges and international partners.

HMRC’s Campaign: A New Enforcement Focus HMRC has recently announced a campaign aimed at Self-Assessment taxpayers (sole traders, partnerships and landlords) to discourage claims for personal expenditure disguised as business costs on tax returns for the 2024/25 tax year. This follows a trial in 2024 that generated over £27 million in additional revenue and flagged widespread issue with personal use being misclassified as business expenditure. The campaign signals HMRC’s intention to ramp up enquiries and investigations into reported personal expenditure, ensuring only wholly and exclusively business-related deductions are claimed. Why It Matters: The “Wholly and Exclusively” Principle The crux of HMRC’s stance stems from the long-established “wholly and exclusively” rule, which mandates that expenses must be incurred purely for business purposes to be deductible. Even partial personal benefit can render the claim disallowable unless a clear, separable business-only portion exists. For example, if a self-employed individual uses a vehicle partly for personal and partly for business purposes, they must adjust their taxable profit by adding back any personal-use portion. Key Risk Areas for Self-Assessment Taxpayers There are some cost categories which are more likely have a personal element: Travel and subsistence - you can only claim business related travel to a temporary workplace, your normal commute to work and lunch in the office is personal - you should keep a mileage log and other evidence of the business purpose for the costs. Home office - you would typically apportion this based on the number of rooms or floor area, and time spent working - see our separate blog on this here . Phone and internet - if this is a mobile or home phone/internet, you should split between personal and business use. Subscriptions - there might be a personal element to subscriptions and things like streaming services and gym memberships accepted by HMRC as business expenses. How CJL Accountancy Can Help 1. Accurate Expense Classification We’ll help ensure your expenses genuinely satisfy the wholly and exclusively test, including: Identifying and separating personal vs business costs (e.g. motoring, heating, phone use) Making necessary add-back adjustments to taxable profits 2. Robust Record-Keeping Maintain clear, auditable documentation for all claims Show evidence of business purpose and usage splits where applicable 3. Proactive Tax Return Review We’ll review your draft Self-Assessments ahead of submission to flag potential issues. Where mixed-use expenses exist, we'll discuss apportionment strategies with you. 4. Preparation for HMRC Enquiries If HMRC contacts you, we'll manage communications and provide guidance, and assist in voluntary disclosures if errors are discovered. Next Steps for Business Owners Audit your last Self-Assessment: Have you included any dual-use expenses? Review your records: Ensure your receipts clearly outline business-related use. Update bookkeeping systems: Track business vs personal costs separately. Speak to us: CJL Accountancy can help revise past returns before any HMRC contact. Final Thoughts HMRC’s current campaign makes it clear: personal expenditure claims are under the microscope. With the right systems, advice, and documentation, you can reduce risk and remain compliant. CJL Accountancy is here to help you navigate this evolving landscape with confidence. Contact us .

Many business owners stick with an accountant they’ve outgrown. Maybe your business has changed, your needs have evolved, or you simply want more proactive advice. But here’s the thing: switching accountants is easier than you think - and it’s not awkward at all. In this guide, I’ll bust the myths, explain how the process works, and show you how we make it simple. Myth 1: “I have to wait until my year-end to switch.” Not true. You can change accountants at any point in the year - even mid-tax return or VAT quarter. In fact, switching sooner can help fix problems and get you back on track faster. Your new accountant will pick up where the old one left off. Myth 2: “It’ll be awkward to tell my current accountant.” Think of it like switching energy suppliers - it’s a business decision. Your new accountant will usually handle the handover for you. We simply get your permission, contact your previous accountant, and request the records we need. You don’t have to get into a long conversation about why you’re leaving unless you want to. Myth 3: “It’s too much hassle.” It’s actually very straightforward: Choose your new accountant (hopefully us!) Complete quick Anti-Money Laundering (AML) checks - this is a legal requirement for all accountants Sign a Letter of Engagement Give written permission to your old accountant for them to provide information and documents to us We request your records We request authorisations from HMRC You get back to running your business What Happens When You Switch to CJL Accountancy When a client joins us, we: Contact your old accountant directly Request your accounts, tax returns, and bookkeeping records Register as your agent with HMRC so we can file on your behalf Review your current position to make sure nothing’s been missed Get you set up with clear processes, deadlines, and support We make sure there’s no gap in compliance Signs It Might Be Time to Switch You only hear from your accountant at year-end You’re not sure what you can and can’t claim as expenses You’re worried about missing deadlines or penalties You never get proactive tax-saving advice You don’t feel like a priority If any of these sound familiar, it might be time for a change. Why Switching Now Can Save You Money A more proactive accountant can: Spot tax savings you’re missing Help you pay yourself more efficiently Keep you ahead of VAT or MTD requirements Give you better tools for managing your finances ✅ Ready to Make the Move? Switching accountants is simple, stress-free, and can make a big difference to your business. If you’re ready for: Clear advice in plain English Proactive support (not just at year-end) A friendly accountant who knows your business 📩 Get in touch today: Contact Us We’ll handle the handover - so you can get back to running your business.

Just formed a UK limited company? Here's your step-by-step checklist to stay compliant, pay yourself properly, and avoid common startup mistakes.

If you're self-employed or a landlord, it’s time to start preparing for Making Tax Digital (MTD). Here’s what you need to know, and what to do now. What is Making Tax Digital? Making Tax Digital (MTD) is an HMRC initiative designed to make the UK tax system more efficient, accurate and easier for taxpayers to manage. It replaces traditional paper-based records and manual submissions with a digital-first approach. MTD affects how businesses and individuals keep their financial records and how they submit tax information to HMRC. Who Does MTD Apply To? MTD is being introduced in phases. Here’s a breakdown of who’s affected and when: ✅ Already in place: VAT-registered businesses for VAT submissions (Making Tax Digital for Business - MTDfB ) 🚨 From April 2026: Self-employed individuals and landlords with annual income over £50,000 (Making Tax Digital for Income Tax - MTD for ITSA) 🚨 From April 2027: The threshold drops to £30,000 🚨 From April 2028: The threshold drops to £20,000 There were plans to implement for corporation tax in the future too but this has been cancelled. How do you calculate your annual income? To work out whether you fall within the scope of Making Tax Digital for Income Tax (MTD for ITSA), you need to calculate your total gross turnover - not your profit. Self-employment (sole trader income before expenses) UK property income (rental income before costs) This does not include: PAYE income (employment) Pensions Dividends Interest Any other non-business income 🔍 Important: You must add together your gross self-employment income and gross property income (if you have both). If the combined total exceeds the threshold, you will fall within MTD for ITSA. What Are the Key Requirements? If you're within the scope of MTD for ITSA, you must: Keep digital records of your income and expenses Use MTD-compatible software to send tax data to HMRC File updates quarterly instead of annually Submit an end-of-period statement and final declaration annually Why You Need to Start Planning Now 🔄 Quarterly reporting is a big change Going from one annual return to five digital submissions (4 updates + 1 final declaration) is a major shift - and not something to leave until the last minute. 💻 You’ll need to use software Spreadsheets are an acceptable digital record, but you'll need compatible software for the submission to HMRC, or to use accounting software such as Xero, Quickbooks, FreeAgent, Sage etc. If you’re switching systems, you’ll need time to get comfortable with the new setup. 🧾 Better records = fewer mistakes Digital record-keeping reduces human error, which can lead to fewer HMRC penalties and more reliable cashflow management. The sooner you switch, the better for your business. 📆 Deadlines are coming fast April 2026 might seem far away, but building the right systems and habits now will save you time, stress, and money later. How CJL Accountancy Can Help At CJL Accountancy, we help businesses and landlords prepare for Making Tax Digital with: ✅ Advice on whether MTD applies to you ✅ Support choosing and setting up the right software ✅ Ongoing bookkeeping and tax compliance services ✅ Quarterly and annual reporting support under MTD rules Whether you're unsure if you're affected or already feeling overwhelmed, we’re here to help you navigate MTD with confidence. FAQs: Making Tax Digital Q: Do I need to register for MTD? A: Yes, you’ll need to register when MTD ITSA applies to your income level. Q: Can I still use spreadsheets? A: Spreadsheets can be used with bridging software. Q: What software do I need? A: You can either: Use spreadsheets + bridging software, or Switch to MTD-compatible software like Xero, QuickBooks, FreeAgent or Sage. We can help you choose the best option. Q: What if I don’t comply? A: HMRC will apply penalties for non-compliance, including missed deadlines or failure to keep proper records. Don’t Wait – Let’s Get You MTD-Ready Making Tax Digital isn’t going away – and the sooner you act, the easier the transition will be. Whether you’re a landlord or self-employed, CJL Accountancy is here to make things clear, simple, and stress-free. 📞 Get in touch today to start your digital tax journey with expert support every step of the way.

If you’re a landlord or property investor in the UK, you might be wondering: Does VAT apply to rental income? When should a landlord register for VAT? What about VAT on commercial property? VAT and property can be complex, but understanding the basics could help you make better investment decisions and avoid costly mistakes. At CJL Accountancy, we help landlords navigate VAT, tax, and property finances with confidence. Here's your essential guide to VAT for landlords. Is There VAT on Residential Rental Income? In most cases, residential rental income is exempt from VAT. This means: ✅ You do not charge VAT to your residential tenants. ❌ You also cannot reclaim VAT on expenses related to residential lettings. Common residential lettings that are VAT-exempt: Houses, flats, apartments rented to private tenants Student accommodation Housing association lets However, because the income is exempt, you can't reclaim VAT on: Repairs and maintenance Estate agent or letting agent fees Legal and professional costs Are There Exceptions for Residential Property VAT? Yes, if you let out properties as holiday accommodation, you may need to register and charge VAT. See our general VAT guide here. VAT on Commercial Property For commercial property, VAT works differently. Commercial property rental is generally exempt from VAT, but landlords can "opt to tax”, allowing them to: ✅ Charge VAT on rent (typically at 20%) ✅ Reclaim VAT on associated costs (repairs, refurbishments, professional fees) This is especially useful if: You’re leasing to VAT-registered businesses You’ve incurred VAT on refurbishment or construction You want to recover VAT on professional services Opting to Tax: Things to Consider Once elected, the option usually applies for 20 years. Opting to tax can complicate matters for tenants who are not VAT-registered. You must formally notify HMRC when opting to tax. Should a Landlord Register for VAT? You must register for VAT if your VAT-taxable turnover (from holiday lets, opted commercial property rents, or other taxable activities) exceeds £90,000 in a 12-month period. If your activities are a mix of exempt (e.g. residential rent) and taxable (e.g. holiday lets, opted commercial property) then it can be complex. Can Landlords Reclaim VAT? ✅ On residential lettings: No - unless it's a holiday let or part of a taxable business. ✅ On commercial property with an option to tax: Yes - you can reclaim VAT on related expenses. How CJL Accountancy Can Help Landlords At CJL Accountancy, we help residential and commercial landlords with VAT registration and compliance. Quick FAQs – VAT for Landlords Q: Do I need to charge VAT on residential rent? A: No, residential rent is usually VAT-exempt. Q: Do I charge VAT on commercial property rent? A: Not by default, but you can opt to tax and charge VAT to reclaim expenses. Q: What about holiday lets? A: If your holiday let income exceeds £90,000 in 12 months, you must register for VAT and charge it on bookings. Q: Can I reclaim VAT on a property refurbishment? A: Only if the property is part of a taxable supply, like an opted commercial property or a holiday let. Final Thoughts VAT for landlords can be complex, especially if you have mixed residential and commercial property. Getting the VAT treatment right can save you money - or help you avoid costly penalties. Contact CJL Accountancy today to get clear, practical advice for your property business.