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https://www.accountinginc.co.uk/

Accounting Inc., Hoults Yard, Walker Road, Newcastle upon Tyne (2026)

06/10/2026

💡 TAX TIP OF THE WEEK 💡

👨‍👩‍👧‍👦 Family Investment Companies: Passing Wealth Without Giving Up Control

Family Investment Companies are becoming increasingly popular as a way of holding and passing family wealth to the next generation.

The attraction is flexibility.

🏢 Parents can establish and control the company as directors while different share classes allow future growth in value to accrue to children or other family members.

📈 This can be particularly useful where parents want to retain control over investment decisions but begin moving future wealth outside their estates.

💷 Gifts of shares can potentially be Potentially Exempt Transfers for Inheritance Tax, meaning the value may fall outside the donor’s estate if they survive seven years.

⚠️ But the planning needs to be genuine. If shares are gifted while the donor effectively continues to enjoy the economic benefit attached to them, the gifts with reservation rules need to be considered.

📊 There is also no general Business Relief shortcut. A Family Investment Company whose activities are mainly investment-based would not normally qualify for Inheritance Tax Business Relief simply because the investments are held through a company.

📜 Share rights also matter. Voting rights, dividend entitlements and rights to capital all need to reflect the intended commercial and succession arrangements.

✅ A Family Investment Company can therefore be a useful long-term wealth and succession planning vehicle, but it works best when established early and structured around the family’s objectives rather than simply as an attempt to reduce Inheritance Tax.

At Accounting Inc., we help families assess company structures for property, investment and longer-term succession planning.

01/10/2026

❓ FAQ OF THE WEEK ❓

Can I put this expense through the business?

It is one of the most common questions we get from business owners.

The starting point is the “wholly and exclusively” rule.

For an expense to be deductible for tax purposes, it generally needs to be incurred wholly and exclusively for the purposes of the business.

Some costs are straightforward:

💻 Software and subscriptions
📱 Business phone costs
🧾 Professional fees
🚗 Qualifying business travel
🏢 Office and premises costs
📚 Relevant training and professional development

Others are less clear-cut.

If an expense has both a business and personal element, it may be possible to claim the identifiable business proportion where that part of the cost is incurred wholly and exclusively for the business.

However, if there is an inseparable personal or non-business purpose, the expense may fail the test altogether.

And for limited companies, simply paying something from the company bank account does not automatically make it an allowable business expense. It may instead need to be treated through the director’s loan account, payroll or another appropriate route.

The important question is not:

“Did the business pay for it?”

It is:

“Was the expense incurred wholly and exclusively for the purposes of the business?”

Getting this right matters because incorrect expense claims can affect Corporation Tax, VAT and potentially the director’s personal tax position.

At Accounting Inc., we help business owners understand what they can legitimately claim and make sure expenses are treated correctly in their accounts and tax returns.

Not sure whether something can go through the business? Get in touch before you claim it.

29/09/2026

💡 TAX TIP OF THE WEEK 💡

👩‍❤️‍👨 Dividends to Your Spouse: Not as Simple as It Looks

Using share ownership between spouses can be an effective way to share company income, particularly where one spouse pays tax at a lower rate.

But simply diverting dividends to a spouse does not automatically make the income theirs for tax purposes.

⚠️ The settlements legislation can apply where arrangements are used to shift income from one person to another to reduce the overall tax bill. HMRC specifically looks at situations involving family members, restricted shares and dividends paid disproportionately to lower-taxed shareholders.

📜 A genuine outright gift of ordinary shares between spouses is usually on much stronger ground, particularly where the shares carry meaningful rights to capital as well as income. HMRC confirms that an outright gift which is not wholly or substantially a right to income can fall outside the settlements rules.

🚩 Problems are more likely where:

💷 one spouse receives dividends without genuinely owning the underlying shares;

📊 shares carry little or no value beyond the right to receive dividends;

🔄 dividend waivers or different share classes are used purely to redirect income; or

🤝 the arrangement would make little commercial sense between unrelated parties.

✅ The key is that the shareholding must be genuine, properly documented and carry real economic rights. The tax treatment then follows the ownership, rather than an informal agreement about who receives the money.

At Accounting Inc., we help family companies structure share ownership and dividends properly, so tax planning is effective without creating unnecessary HMRC risk.

24/09/2026

❓ FAQ OF THE WEEK ❓

📈 Do I need to put employees back into the workplace pension if they previously opted out?

Yes, potentially.

Under the workplace pension automatic re-enrolment rules, employers must reassess certain employees roughly every three years and put eligible staff back into a qualifying pension scheme.

This can include employees who previously:

✅ opted out of the pension scheme
✅ stopped making contributions
✅ reduced their contributions below the required level

At the re-enrolment date, employees will generally need to be put back into the scheme if they are:

👤 aged 22 up to State Pension age, and
💷 earning more than £10,000 a year, currently equivalent to £833 per month or £192 per week.

Employees can choose to opt out again after they have been re-enrolled.

Importantly, employers must also complete a re-declaration of compliance with The Pensions Regulator, even if there are no employees who actually need to be re-enrolled. The re-declaration is generally due within five months of the relevant three-year anniversary.

And one common trap: postponement cannot be used at re-enrolment.

Automatic enrolment isn't a one-off payroll exercise. Employers have ongoing duties to monitor staff, maintain contributions and deal with re-enrolment every three years.

At Accounting Inc., we help employers manage payroll and workplace pension obligations so the correct assessments, contributions and filings are dealt with at the right time.

Get in touch if you need help with payroll, pensions or your upcoming re-enrolment duties.

23/09/2026

📊 Has your business outgrown your accountant?

It happens more often than you might think.

A business starts small, and the accounting requirements are fairly straightforward. Annual accounts, corporation tax, payroll and perhaps a bit of bookkeeping.

Then the business grows.

Turnover increases. You register for VAT. You employ people. Cash flow becomes more important. You start considering investments, property, new companies or taking more money from the business.

But the relationship with the accountant stays exactly the same.

You send everything over once a year, the accounts are prepared months later, and most of the conversation is about what has already happened.

That is usually the point where a business needs more than compliance.

We work with owner-managed businesses throughout the year, helping clients understand their numbers, plan for tax, structure things properly and make better-informed business decisions.

Sometimes that means management accounts or cash-flow forecasting. Sometimes it is tax planning, remuneration, VAT, company structure, or simply having someone available to discuss a decision before it is made.

Your accountant shouldn't just record your business's history.

They should help you understand what comes next.

If your business has grown but your accounting support hasn’t, speak to Accounting Inc. and see whether we could help.

22/09/2026

💡 TAX TIP OF THE WEEK 💡

🏢 Buying Investment Property in Your Trading Company? Think Twice

Using surplus company cash to buy an investment property can seem straightforward, but holding property inside the trading company can create problems later.

⚠️ Asset protection is one concern. If the property sits in the trading company, it is exposed to the same commercial risks as the trade.

📊 Tax reliefs can also be affected. Significant investment activity can put the company's trading status at risk for reliefs such as Business Asset Disposal Relief.

🏠 There may also be implications for Inheritance Tax Business Relief. A business consisting wholly or mainly of making or holding investments will generally not qualify.

🏗️ A separate property company or holding company structure can help ring-fence valuable assets and provide greater flexibility, but the wider group structure still needs to be considered carefully.

✅ The key is to look at the structure before the property is purchased. Moving property later can trigger tax and transaction costs.

📌 Don't buy an investment property through the trading company simply because that's where the cash happens to be. Consider asset protection, future sale plans, succession and tax reliefs first.

At Accounting Inc., we help business owners structure trading and property interests with the longer-term tax position in mind.

17/09/2026

❓ FAQ OF THE WEEK ❓

🏠 Can a property business protect my properties from Inheritance Tax?

Not by itself.

A common misconception is that putting investment properties into a limited company takes them outside your estate for Inheritance Tax purposes.

It doesn’t.

If you own the company, the value of your shares is still part of your estate. And because most property letting companies are considered investment businesses, they usually don't qualify for Business Relief from IHT.

💡 So why can a company still be useful for estate planning?

Because shares can provide considerably more flexibility than owning properties personally.

For example, you may be able to gradually transfer shares to children or other family members, introduce different share classes, retain voting control while transferring economic value, or structure future growth so it accrues to the next generation.

A genuine lifetime gift can potentially fall outside the donor’s estate once the relevant seven-year period has passed.

That does not make the transfer tax-free. Consider capital gains tax and other tax consequences before moving or gifting shares, particularly where the company holds investment property.

The key point is simple: a property company is not an IHT exemption, but it can provide a useful structure for longer-term estate planning.

At Accounting Inc., we help property owners look at the wider tax picture and structure their property businesses with both today’s tax position and future succession in mind.

Get in touch if you would like to discuss your property company or longer-term estate planning.

15/09/2026

💡 TAX TIP OF THE WEEK 💡

💷 Overdrawn Director’s Loan Accounts: Watch the Section 455 Charge

Taking money from your company through a director’s loan account is common, but leaving the balance outstanding can create a significant tax charge.

⚠️ If a loan to a shareholder remains outstanding nine months and one day after the company’s year end, the company can become liable to a Section 455 tax charge.

📈 For loans made on or after 6 April 2026, the rate is 35.75% of the outstanding balance. A £20,000 loan could therefore create a £7,150 tax payment.

✅ The charge can be avoided if the loan is cleared before the corporation tax payment date. This might be through repayment, a dividend, salary or bonus, although each route has its own tax consequences.

🔄 Section 455 tax is effectively temporary. If it has already been paid and the loan is later repaid, the company can reclaim it, although repayment is normally delayed until nine months and one day after the end of the accounting period in which the loan was cleared.

🚫 Be careful with repayments made shortly before the deadline followed by fresh borrowing. Anti-avoidance rules can treat the repayment as ineffective where money is effectively being recycled.

📌 An overdrawn director’s loan account should therefore be reviewed before the year-end accounts and corporation tax become due. Clearing it is not always the cheapest option, so the wider tax cost needs to be considered first.

At Accounting Inc., we help directors review overdrawn loan accounts and decide the most tax-efficient way to deal with them before unnecessary tax charges arise.

10/09/2026

❓ FAQ of the Week: Can I reclaim VAT on costs incurred before I registered? 🧾⏪

Registering for VAT doesn't mean the money you spent getting going is lost. HMRC allows a claim on your first return, but the rules for goods and services are very different.

📦 Goods?
Four years before your registration date, provided you still hold them at that date and will use them in the business. Stock, equipment, tools, computers, vans and fixtures.

🧾 Services?
Six months only. Rent, legal and accountancy fees, software, web development and marketing. There's no discretion to go further back unless your registration date is backdated.

🚚 Do I reduce the claim for use before registration?
No. A van bought three years ago and used only for taxable sales is recoverable in full. The exception is goods previously used for exempt or non-business purposes.

🏢 Costs incurred before the company existed?
Claimable where they relate directly to the business the company goes on to carry on. The same four year and six month limits apply.

📊 On the Flat Rate Scheme?
The normal pre-registration rules still apply on your first return, so the claim isn't lost.

⚠️ Where claims go wrong
Stock already sold, services HMRC treats as fully used up before registration, anything originally bought for private use, and missing VAT invoices. The claim also belongs on the first return you're required to file, not a later one.

📝 Keep on file
A list of goods still held at your registration date with the purchase invoices behind it. Reconstructing that afterwards is where the money gets lost.

🤝 How we can help
We can review your pre-registration costs, identify what qualifies under each time limit, and make sure the claim is properly supported before your first return is filed.

08/09/2026

💡 TAX TIP OF THE WEEK 💡

🔤 Alphabet Shares: Not as Simple as A, B, C

Splitting shares into classes to pay dividends flexibly across shareholders? It's a common structure, but not a risk free one.

⚠️ HMRC can recategorise dividends as disguised salary where they're really a substitute for pay to an employee shareholder, bringing income tax and NIC into play instead.

📋 For employee shareholders specifically, HMRC can also look to the employment-related securities rules, particularly where shares carry no real rights beyond a discretionary dividend.

👨‍👩‍👧 In family companies, the settlements anti-avoidance rules are another line of attack. HMRC has successfully argued that dividends skewed toward one spouse's share class, while the other receives nothing, amount to a "bounteous" arrangement caught by these rules.

📜 There's a company law angle too. Shares only qualify as separate classes if their rights genuinely differ. Simply relabelling identical shares as A, B and C, then paying different dividend rates, doesn't create that separation.

✅ Alphabet share structures can work well, but they need proper legal and tax advice at setup, not a DIY approach.

Accounting Inc.

06/10/2026

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Tuesday	9am - 5pm
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Thursday	9am - 5pm
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