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TP Business Consultants LLP

Your Local Accounting Partner. We Make Your Tax Return & Company Accounts Simple! Competitive Fees.

*Fixed fees always agreed in advance
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04/03/2026

There still seems to be a great deal of confusion about VAT in the construction industry.

I often have to send invoices back to subcontractors for amendment because the wrong VAT code has been applied. Usually causing a VAT headache for them in the process.

So here it is in the simplest terms I can muster.

If you are a subcontractor who is not VAT registered, you can crack on and ignore this post. It doesn’t apply to you.

If you are a VAT registered subbie working for another contractor, here’s what you need to do:

First, ask the contractor if they are VAT registered.

If they aren’t, invoice them in the normal way, charging the applicable VAT rate (0%, 5% or 20%) on your invoice.

If the contractor is VAT registered, then the following applies:

Check with the contractor whether the project you’re working on is zero-rated, reduced rate, or standard rate for VAT.

For zero-rated projects, invoice in the normal way.

For reduced rate (5%) and standard rate (20%) projects, do not add VAT to your invoice. Instead, show the VAT as DRC 5% or DRC 20% and add a line stating: 'Domestic Reverse Charge Applies.'

Using accounting software such as Xero (there are many others) will help ensure your invoices are correct, look professional, and that your VAT returns are reported to HMRC properly.

Additional points to note:

If the job falls under DRC, it applies to the whole supply, including materials you are supplying as part of the job. You do not charge normal VAT on the materials. The reverse charge applies to both labour and materials together.

Do not confuse DRC VAT and CIS Tax. They are completely separate schemes.

Getting VAT wrong in construction is expensive and time consuming to fix. If you’re serious about running your subcontracting business properly, make sure your invoicing process is set up correctly from the start.

02/03/2026

Inheritance Tax (IHT) Planning, know your allowances.

IHT isn’t a “wealthy people problem.”

It’s a planning problem.

Here’s what too many families miss:

1️⃣ £3,000 Annual Exemption

You can gift £3,000 each tax year IHT-free.
Unused? Carry forward one year.

That’s £6,000 out of your estate with minimal effort.

Yet estates still pay 40% on money that could have been given away tax-free.

2️⃣ £250 Small Gifts

Gift £250 to as many people as you like each year.
It doesn’t affect your £3,000 allowance.

Small gifts. Big long-term impact.

3️⃣ Wedding Allowances

You can gift:

• £5,000 to a child
• £2,500 to a grandchild
• £1,000 to anyone else

Combine with your annual exemption.

A grandparent could pass on £5,500 to a grandchild tax-free.

4️⃣ Gifts From Surplus Income

Often overlooked.
No monetary cap.

✔️ From income
✔️ Regular
✔️ Doesn’t reduce your lifestyle
✔️ Properly documented

Immediately outside your estate if done correctly.

5️⃣ The 7-Year Rule

Larger gifts = Potentially Exempt Transfers.

Survive 7 years? No IHT.

Earlier death? Tax tapers from 40% down to 8%.
7+ years = 0%.

Biggest mistake?

Poor records.

If executors can’t evidence gifts, exemptions can fail.

IHT planning isn’t usually complex.

It’s delayed decisions that cost families.

Build wealth.
But plan how it passes on.

Are you doing both?

26/02/2026

Tax on Overdrawn Director's Loan Accounts (ODLA) – What's changing?
From April 2026, the tax rules on overdrawn director's loan accounts are changing, with the section 455 tax charge increasing to 35.75% for loans made on or after 6 April 2026 for close companies. This is a two-percentage-point increase from the current rate of 33.75%, which applies to loans taken out on or after 6 April 2022 (loans predating this are charged at 32.5%).

Overdrawn director's loan accounts can present considerable complexity in the event of insolvency, with tax implications representing just one of several complicating factors. Given the upcoming changes, now is an opportune time to seek professional advice on overdrawn directors’ loan accounts in the context of insolvency.

13/12/2025

Everyone wants 0% tax.
Until they discover the invoice behind the dream.

Some weeks ago I spoke with a founder who moved to Dubai,
set up a company,

and expected life to get easier.

A few months later, reality hit:

• Incorporation fees were higher than planned
• Banking wasn’t plug-and-play
• Moving funds required extra compliance
• And exiting was far harder than entering
• Cost of living increased more than tax savings

This is the part nobody says out loud:
➡️ Zero tax ≠ zero cost
➡️ Zero tax ≠ zero friction
➡️ Zero tax ≠ zero risk

Monaco, Dubai, Singapore, Bahamas...
they’re not 'free'.
They’re premium systems that trade tax for
higher cost, lifestyle overhead, and regulatory complexity.

Meanwhile, countries like Portugal, Thailand, Malaysia, Cyprus…
may offer balanced systems when aligned with the right structure.

Sometimes, paying a little tax
buys you more flexibility + stability + long-term upside
than chasing 0% ever will.

The real goal isn’t tax escape
It’s tax alignment.

03/12/2025

S455 CTA – HMRC Tightens the Rules (Important for Accountants & Directors)
HMRC has quietly made an important change to how Section 455 on director loans works — and they’ve now started emailing accountants to check past returns.
🔹 Before April 2025:
When filing a CT600A, we could reduce or remove the S455 charge by entering an anticipated repayment — even if that repayment hadn’t happened yet, as long as it was expected within nine months of year-end.
🔹 From April 2025:
HMRC’s system no longer allows future repayment dates to be entered.
If the repayment hasn’t actually been made at the time of filing, you can’t claim relief.
🔹 Why this matters:
Some companies may have underpaid S455 tax where:
relief was claimed based on an expected repayment,
the repayment wasn’t made (or wasn’t made as expected), and
the CT600 wasn’t amended.
HMRC is now emailing firms to confirm whether those repayments actually occurred.
For directors:
If your accountant asks for loan account details or repayment evidence, this is simply to ensure your company remains compliant under the corrected system.

28/11/2025

Yesterday, the Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, made her Autumn Budget 2025 speech.

Here are some of the information on the key measures announced that may have an impact on your business, as well as information to help answer potential queries from your employees.

Changes to property income
From 6‌‌‌ April‌‌‌ 2027, the government will create separate tax rates for property income.

The income tax rates for property income will be 22% for basic rate, 42% for higher rate and 47% for additional rate.

The government will engage with the devolved governments of Scotland and Wales to provide them with the ability to set property income rates in line with their current income tax powers in their fiscal frameworks.
Changes to savings income
From 6‌‌‌‌‌‌ ‌‌April‌‌‌‌‌‌ ‌‌2027, the savings basic rate will increase to 22%.

Savings on the higher rate will increase to 42% and the savings additional rate will increase to 47%.
Changes to dividends rates
From 6‌‌‌ April‌‌‌ 2026, the rates for individuals will increase by 2% to 10.75% for the dividend ordinary rate and 35.75% for the dividend higher rate.

The additional rate will remain unchanged at 39.35%.

The way customers report and pay tax on dividends, rental income and savings interest will remain the same, it is only the rate of tax charged that will change. Customers therefore don’t need to take any action or call HMRC.
Salary sacrifice reform for pension contributions (GOV.UK explainer)
From April‌‌‌ 2029, the amount of salary that an employee can sacrifice in return for pension contributions before attracting a National Insurance contributions (NICs) charge will be capped at £2,000 a year.

Employees can still make pension contributions above this cap using salary sacrifice but any contributions above £2,000 will be subject to employer and employee NICs, bringing them in line with all other forms of employee workplace pension contribution. Most employees making typical pension contributions and their employers will be unaffected.

Contributions through salary sacrifice, like all pension contributions, will still be exempt from Income Tax (subject to the usual limits). Employees who choose to sacrifice salary to receive Tax Free Childcare or Child Benefit can keep doing so.
Voluntary National Insurance contributions (NICs) abroad (GOV.UK explainer)
From April‌‌‌ 2026 for tax years 2026 to 2027 onwards, the option to pay voluntary Class 2 NICs for periods abroad will be removed and new Class 3 NICs applications for periods abroad will require 10 years continuous UK residency or National Insurance contributions.

These changes do not affect the ability of anyone to purchase voluntary National Insurance contributions (VNICs) for tax years prior to 2026 to 2027 and a wider review of VNICs policy is planned to ensure the system is fair and fit for purpose.

Capital Gains Tax Employee Ownership Trusts
The government will reduce the Capital Gains Tax relief available on qualifying disposals to Employee Ownership Trusts from 100% of the gain to 50%. This will take effect from 26‌‌‌ November 2025.

HMRC is also implementing technical and structural fixes to close loopholes and improve the data that HMRC holds to tackle non-compliance by the wealthy.

From 6‌‌‌ April 2026 individuals, partnerships or trustees will need to make a claim for incorporation relief for Capital Gains Tax in their Self Assessment return.

Extend employer National Insurance contributions veteran’s relief
In April 2021, a National Insurance contributions (NICs) relief for employers that hire former members of the UK regular armed forces was introduced. The veteran’s relief was due to end on 5‌‌‌ April‌‌‌ 2026 but will now be extended for a final two years, until the 2027 to 2028 tax year.

18/11/2025

💡 UK Landlords: Don’t Let Hidden Rental Income Cost You

HMRC’s Let Property Campaign gives landlords a chance to disclose undeclared rental income - with reduced penalties and interest.

If you’ve earned rent from a property in the UK (or abroad) and haven’t reported it correctly, acting before HMRC contacts you can save thousands and protect your record.

✅ Lower penalties when you disclose first
✅ Flexible repayment options
✅ Peace of mind knowing your taxes are up to date

📞 Next Step: Review your rental accounts now and make a disclosure before HMRC does. Call us on 07402 261588.

#

17/11/2025

Annual Tax on Enveloped Dwellings (ATED)

"My company has loads of cash - should I buy a house to live in via my company?"

The answer to this is no - it's a terrible idea. Here's why:

1. One of the most valuable reliefs available to homeowners is Private Residence Relief, which exempts any gain on a sale*. Houses owned by companies don't qualify.
2. Companies automatically pay a 5% Stamp Duty Land Tax surcharge when purchasing residential property. On a £500k property, that's a difference in a £15k liability and a £40k liability.
3. A company may have to pay the Annual Tax on Enveloped Dwellings (ATED). That's £4,450 every year for a property worth £500k.
4. If the occupier doesn't pay market rate rent to the company, they'll have a taxable benefit for the equivalent amount each year. So a £20k rent would give a higher-rate taxpayer an £8k personal liability each year**.

A better idea might be to borrow the cash from the company and use that to buy the house personally, but that also comes with tax consequences.

06/11/2025

🚨 Heads up for company directors – new HMRC reporting rules on the way
From the 2025–26 tax year (returns filed after 6 April 2026) directors of most small and family-run companies will need to give HMRC more detail on their self assessment returns.

New reporting rules.

If you’re a director of a UK close company – broadly a company controlled by five or fewer people – you’ll need to report:

• 🏢 Company name and registered number
• 💷 Total dividends received from that company (shown separately from other UK dividends)
• 📊 Highest percentage shareholding you held at any point in the year
There’s also a new requirement to show 📅 start and end dates if a business starts or ceases during the tax year.

⚠️ Penalty alert: HMRC has introduced a new £60 penalty for each piece of missing or incorrect information. These disclosures don’t change your tax bill, but you can still be fined if they’re incomplete.

✅ Tip: Start keeping clear records of dividends and shareholdings now so you’re not scrambling when 2025–26 returns are due.

04/11/2025

"If I'm living in Dubai but earning money in the UK, do I still have to pay UK tax?"

The answer isn't as simple as yes or no - there are specific rules you need to follow.

Here's how it works:

As a UK national, it's our "birthright" to pay UK tax unless we can prove we're no longer a resident.

The way we prove non-residency is mainly through days spent in the UK per tax year.

The Third Automatic Overseas Working Test Most people will meet what's called the third automatic test for non-residency:

→ 90 days or less in the UK per tax year
→ Of those 90 days, you can't work more than 31 days in UK
→ No more than 31 day consecutive overseas working break.

If you tick all these boxes and you're actually living in Dubai, you won't pay UK tax on your income.

The key point:

→ You must be genuinely living in Dubai and not just using it as a paper exercise.

It sounds straightforward, but it only gets complicated when you want to spend more than 90 days in the UK or leave part way through a tax year. That's when we have to look at "ties" to the UK, which makes the whole process much more complex.

The 90-day rule is your clearest path to non-residency.

Address

81 Stockport Road Denton
Manchester
M346DD

Opening Hours

Monday	9am - 5pm
Tuesday	9am - 5pm
Wednesday	9am - 5pm
Thursday	9am - 5pm
Friday	9am - 5pm
Saturday	11am - 3pm

Telephone

+447402261588

Website

https://www.tpconsultantsllp.co.uk/

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