Cavendish accountants

27/11/2025

Yesterday, the government presented their much anticipated and slightly hyped budget.

Thank fully, there were a few anticipated nasties that didn't materialise, but there are lots of changes which could affect you and your business in the near future. Some items were not mentioned, but have appeared in the small print.

The chances are we are all going to be impacted by this budget.

We have just distributed our Guide to all clients. If you would like a copy please get in touch

I will be happy to discuss any challenges or opportunities that you may anticipate.

25/10/2025

f you are self-employed, a sole trader, freelancer or landlord, you may have received a letter from HMRC about Making Tax Digital (MTD) for Income Tax. We have also notified clients about this.
Starting from April 2026, MTD for Income Tax is the new way many sole traders and landlords will report tax.

The first phase of MTD comes into affect from April 2026.have already entered some clients into a pilot scheme

from April 2026 for those with qualifying income over £50,000
from April 2027 for those with qualifying income over £30,000
from April 2028 for those with qualifying income over £20,000
You will not have to comply until you hit the relevant threshold - but it pays to get prepared as soon as you can.

Qualifying income is: your sales before costs or expenses are deducted for sole traders, and your rental income for landlords.

If you have qualifying income from multiple sources - for example if you are self-employed and also rent out a property you own - you have to combine all your sources of qualifying income

You must use MTD-compatible software that’s officially recognised by HMRC, (We use FreeAgent, Xero and Quickbooks) to file your quarterly updates online and to send your final declaration each year

We will be making four quarterly returns containing your self employment and property income.. HMRC will update your tax position in real time. Then we will submit a final declaration to contains income such as employment, pensions and investment income.

08/10/2025

What is principal private residence relief?
You do not pay capital gains tax when you sell (or "dispose of") your home if all of the following apply:

You have one home and you’ve lived in it as your main home for all the time you’ve owned it.
You have not let part of it out – this does not include having a lodger.
You have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use).
The grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total.
You did not buy it just to make a gain.
If all these apply, you will automatically get a tax relief called private residence relief and will have no tax to pay. If any of them apply, you may have some tax to pay.

If the property is a second home but you lived in the property and it was your main home at some point, then the period of this residence is exempt from capital gains. Normally this would be a percentage of the total ownership period.

I have found this to be the single most valuable tax relief for property owners, particularly as other reliefs like indexation, tapering, and annual allowance have been eroded or abolished.

For help with capital gains on properties, please get in touch.
Cavendish Accountants - Watford

08/10/2025

https://www.telegraph.co.uk/gift/6d45ead779519d9b

Tax Tips: our reader is worried he may be fined over an incorrect principal residence address

28/09/2025

As a company director or a person with significant control, you may have received an email from Companies House.
Identity verification is currently voluntary however, Companies House has now confirmed that this will be compulsory for existing directors and people with significant control (PSCs) from Tuesday 18 November, with a 12-month transition period.
There are two options for you.
Identity verification will become compulsory for the following:
 existing directors
 new directors
 individuals with significant control (PSC)
 individual officers of relevant legal entities with significant control
How can identities be verified?
There are two options for individuals to verify their identification with Companies House.
An individual can verify their own identification. These are the most common:
1. biometric passport from any counrty;
2. UK photo driving licence (full or provisional)
You will also need to provide your current documents to us including proof of address.
You will need to sign in or create a GOV.UK One
We are an Authorised Corporate Service Provider (ACSP)
You will need to provide us ACSP with the relevant verification documentation listed above.
Post verification
Once you are verified you will receive a Companies House personal code. From autumn 2025 you will need this code to carry out various filings at Companies House including:
1. file confirmation statements;
2. Company accounts

Please speak to us for more information

03/08/2025

We dealt with the capital gains tax on a property that had an interesting mix of inheritance and capital gains.
It is a classic case.
A property jointly owned bought back in the 1970s.
Couple subsequently separate and husband lives elsewhere in early 1980s. They don't divorce.
The wife sadly dies in 2019 and husband inherits her half. Husband also inherits his parents home.
This property was recently sold. There will be capital gains tax as this is the husband's second home. he hadn't lived in it since 1982.

My client had carried out his own calculations and arrived at capital gains tax of £111,000.

The key to this is that the base cost of the property should be 50% of the March 1982 value. This was very small, but also the probate value of the wife's share, is 50% of the total property value in 2019.

Although the seller doesn't receive principal private residence relief, the rebasing value to the probate amount is ultimately very valuable

The result is that the actual CGT is only £47k.

19/07/2025

Making Tax Digital (MTD) is meant to be the flagship for HMRC’s digital future.
was meant to be the driving force behind HMRC’s digital future tax reporting into the First unveiled in 2015, it has remained a fixture on business agendas ever since.
A string of delays – triggered by the pandemic followed by the decision to give businesses more breathing room to implement it – seems to have left the MTD roadmap fragmented and uncertain, and given some firms an excuse to delay taking action.
Some businesses are embracing it, but many others are kicking the can down the road and foot dragging
After making several public concessions on rollout dates, HMRC is unlikely to make many more.
The longer businesses delay implementation, the more costly the transition becomes
In any case, the value of digital upgrades is that they will do more than just satisfy MTD requirements – they will also help unlock wider benefits such as real-time reporting, automated bank feeds, improved forecasting and stronger financial oversight.

The value of digital does not start or stop with MTD
Most organisations already have some level of detailed digital understanding or capability, so moving from spreadsheets to cloud-based platforms, automating expense reporting and introducing quarterly tax updates as standard practice may not be such a stretch.
The firms that act now won’t just survive MTD – they will thrive and emerge stronger, smarter and better equipped for the future.Making Tax Digital (MTD)

06/07/2025

The rise in interest rates over the past couple of years means more taxpayers are suffering tax on their savings– a problem few have had to worry about for years.
Millions are now affected.

Now with interest rates on savings on the way down, learning how to protect your savings from tax has never been more important.
We explain how savings are taxed, how much you might pay and how you can avoid paying tax on your savings.
This guide will cover:
How much interest on savings is tax-free?
Your tax-free savings allowance is largely determined by your income tax bracket – the highest rate of tax you pay on your income.
For basic-rate (20pc) taxpayers (who earn between £12,571–£50,270 is £1,000, meaning you can earn up to that amount in interest without paying tax.
This reduces to £500 for those who pay higher-rate (40pc) tax (earning between £50,271–£125,140). If you’re an additional-rate (45pc) taxpayer (earning more than £125,140), then all savings interest is taxable.
To help provide some context, to make £1,000 in interest in one year, you would need to have £20,000 in a savings account with a 5pc interest rate.
How to increase your tax-free savings allowance
You could shield even more of your savings from tax if your annual income is below £17,571. That’s because those with a lower income are eligible for the “starting rate for savings”. This is up to £5,000 of tax-free savings interest.
Those who earn less than £12,570 (the personal allowance) get the full benefit, but it decreases pound for pound when you earn above and beyond the allowance.
Therefore, by the time you earn £17,570 all of the extra tax-free allowance will be used up.
The 0pc tax rate on savings interest is intended as a savings incentive for those on lower incomes, but it can benefit well-off households, too – as long as one spouse earns less than £17,570.
How does the allowance work for couples?
As the tax break is granted at an individual level, irrespective of the higher-earning spouse’s income, it means the couple can cut their prospective tax bills by transferring savings to the lower-earning spouse.
This could work for couples where, for example, one parent is working full-time while the other has a part-time job and looks after the children. Alternatively, among couples in later life, one spouse may have retired on a good occupational pension while the other spouse receives a lower one.In cases where one spouse earns, say, £12,000 and the other earns £50,000, as a couple they could potentially earn up to £7,000 in savings interest before paying tax, were they to use the full allowances available to them – as long as the lion’s share of savings were held by the spouse with a lower income.
Alternatively, you could look at options to reduce your income tax band. Ways to do this include increasing your pension contributions, giving money to charity and taking advantage of salary sacrifice schemes.
For more on tax free savings, please contact us.