AP Accounting Solutions Limited, Aleksandra David MSc Accountancy Finances

16/03/2025

**The New EV Car Benefit-in-Kind for Directors in the UK: What You Need to Know**

As the UK continues its transition to a greener economy, the government has introduced new incentives to encourage the adoption of electric vehicles (EVs). One of the key benefits for company directors and business owners is the **low Benefit-in-Kind (BiK) tax rate** for EVs. At AP Accounting Solutions, we want to ensure you understand how this incentive works and how you can take advantage of it.

# # # **What is Benefit-in-Kind (BiK)?**

Benefit-in-Kind (BiK) is a tax levied on employees and directors who receive perks from their company that aren’t included in their salary. One of the most common BiK perks is a company car.

# # # **What’s Changing for EVs?**

For the 2024/25 tax year, the BiK rate for fully electric vehicles remains at **2%**, making them significantly more tax-efficient than petrol or diesel company cars, which can attract BiK rates of up to **37%**.

The government has also outlined gradual increases in BiK rates for EVs:

- **2% until April 2025**
- **3% in 2025/26**
- **4% in 2026/27**
- **5% in 2027/28**

Even with these small increases, EVs remain a highly attractive option for company car schemes compared to traditional vehicles.

# # # **What Does This Mean for Directors?**

If you’re a company director, switching to an electric vehicle through your business can offer **significant tax savings**, including:
✅ **Lower BiK tax bills** – Pay much less tax compared to petrol/diesel alternatives.
✅ **Corporation tax savings** – Your company can claim **100% first-year capital allowances** on the purchase of an EV.
✅ **Lower running costs** – EVs generally have lower fuel and maintenance costs.
✅ **National Insurance savings** – As the BiK value is lower, your company pays less employer National Insurance contributions.

# # # **How to Maximise the Benefit**

To make the most of this tax-efficient scheme:
🔹 Consider leasing an EV through your company instead of purchasing it personally.
🔹 Explore salary sacrifice schemes for employees to further benefit from tax savings.
🔹 Ensure charging costs are structured properly to maximise allowable business expenses.

# # # **Final Thoughts**

With the government committed to phasing out petrol and diesel cars, now is the perfect time for company directors to take advantage of the low BiK rates on EVs. Not only can you reduce your tax burden, but you’ll also contribute to a more sustainable future.

At **AP Accounting Solutions**, we specialise in helping business owners and directors navigate tax-efficient strategies. Get in touch with us today to discuss how an EV can benefit your company financially!

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16/03/2025

Kolejny Rok Podatkowy Dobiega Końca – Czy Jesteś Przygotowany?

Kolejny rok podatkowy dobiega końca, co oznacza, że zarówno firmy, jak i osoby prywatne powinny ocenić swoją sytuację finansową i upewnić się, że są gotowe na nadchodzące zmiany. Terminy podatkowe, raportowanie finansowe i wymogi zgodności mogą być przytłaczające, ale dzięki odpowiedniemu doradztwu można je przejść bez stresu.

Najważniejsze Aspekty Przed Końcem Roku Podatkowego

1. Przegląd Finansów

Teraz jest idealny moment, aby przeanalizować swoje przychody, wydatki i ogólną kondycję finansową. Upewnij się, że Twoje księgi są aktualne i dokładne – drobne korekty mogą pomóc zoptymalizować Twoje zobowiązania podatkowe.

2. Maksymalne Wykorzystanie Ulg i Odliczeń Podatkowych

Sprawdź, czy korzystasz ze wszystkich dostępnych ulg podatkowych, takich jak ulgi na inwestycje kapitałowe, składki emerytalne oraz inne odliczenia, które mogą obniżyć Twój podatek do zapłaty.

3. Terminowe Składanie Deklaracji

Opóźnienie w złożeniu deklaracji podatkowej może skutkować karami i odsetkami. Niezależnie od tego, czy składasz deklarację w ramach samooceny, czy rozliczasz podatek dochodowy od osób prawnych, ważne jest, aby dotrzymać terminów.

4. Planowanie na Przyszły Rok

Koniec roku podatkowego to także doskonała okazja, aby zaplanować przyszłość. Warto rozważyć inwestycje podatkowo korzystne, strategię rozwoju biznesu oraz sposoby na lepsze zarządzanie przepływem gotówki.

Potrzebujesz Profesjonalnej Pomocy Podatkowej?

Podatki mogą być skomplikowane, ale nie musisz radzić sobie z nimi sam. AP Accounting Solutions oferuje najlepsze na rynku doradztwo podatkowe dostosowane do Twoich indywidualnych i biznesowych potrzeb.

Jeśli potrzebujesz wsparcia w zakresie planowania podatkowego, zgodności z przepisami lub innych kwestii finansowych, skontaktuj się z AP Accounting Solutions już dziś. Razem zadbamy o to, abyś wszedł w nowy rok podatkowy z pewnością i spokojem.

Skontaktuj się z nami już teraz i przejdź przez sezon podatkowy bez stresu!

16/03/2025

Another Tax Year Ending – Are You Prepared?

As another tax year draws to a close, businesses and individuals alike must take stock of their financial situation and ensure they are fully prepared for the transition into the new tax year. Tax deadlines, financial reporting, and compliance requirements can be overwhelming, but with the right guidance, you can navigate them with confidence.

Key Considerations Before the Tax Year Ends

1. Review Your Financials

Now is the time to assess your income, expenses, and overall financial health. Make sure your accounts are up to date and accurate, as last-minute adjustments could help optimize your tax position.

2. Maximize Tax Allowances and Reliefs

Ensure you are taking full advantage of all available tax reliefs, such as capital allowances, pension contributions, and other deductions that can reduce your taxable income.

3. File on Time to Avoid Penalties

Missing tax deadlines can result in fines and interest charges. Whether you're submitting a self-assessment tax return or corporation tax filings, timely submissions are crucial.

4. Plan for the Year Ahead

The end of the tax year is also the perfect time to strategize for the next. Consider tax-efficient investments, business growth plans, and ways to improve cash flow management.

Need Expert Tax Advice?

Navigating the complexities of tax regulations can be challenging, but you don’t have to do it alone. At AP Accounting Solutions, we provide industry-leading tax advice tailored to your personal and business needs.

If you require assistance with tax planning, compliance, or any other financial matters, contact AP Accounting Solutions today for the best-in-market advice. Let’s ensure you step into the new tax year with confidence and financial security.

Get in touch with us now to make tax season stress-free!

07/11/2024

2024 Autumn Budget – Private Individuals
1 November, 2024

Inheritance Tax

Nil-Rate Bands

The Chancellor has frozen the Inheritance Tax (IHT) Nil Rate Band threshold of £325,000 for a further two years from the initial date of 2028 to 2030. Thus, the first £325,000 of any estate, and £500,00 of an estate consisting of a residential home being inherited by a direct descendant will continue to be tax-free. The rest of an estate will continue to be taxed at 40%.

Residence-based System

Currently IHT is only applicable to worldwide estates when the deceased was domiciled in the UK or deemed domiciled by being resident in the UK for a minimum of 15 years out of the previous 20.

This has been amended to a residence test so that individuals who have been UK resident for 10 of the preceding 20 tax years will become subject to IHT on their worldwide assets. Consequently, even the estates of those who have become non-UK resident could remain subject to the IHT for 10 years after moving out of the UK.

Business Property Relief and Agricultural Relief

Business Property Relief allows eligible businesses to pass on assets tax-free, and Agricultural Relief allows farmers to pass on agricultural assets tax-free.

Both reliefs will be reformed from April 2026. The first £1 million of combined business and agricultural assets will be tax-free on inheritance. However, for combined business and agricultural assets of over £1 million, IHT will apply on 50% of the asset value, which will result in an effective rate of 20%.

AIM-listed shares will not be included in this £1 million limit. Where AIM shares have previously qualified for BPR, because they are trading companies rather than investment companies, they will now receive only 50% IHT relief, and subject to an effective rate of 20%.

Purchasing farms as a means of sheltering assets from IHT liability has become increasingly popular. This APR reform is likely to deter high net worth individuals from doing so. The Chancellor stated that the £1 million relief would assist in protecting small farms. However, currently £1million would roughly equate to 50 acres of land, so it is to be expected that practically all farms, even the small ones, will be subject to IHT on their owner’s death so presenting a substantial threat to the rural community.

Business and agricultural assets have not always enjoyed full exemption from IHT. When they were chargeable in previous years, there was an interest-free instalment facility. Should this be re-introduced, this would relieve pressure on IHT payments.

Pensions

The Chancellor has confirmed that inherited pensions will form part of an estate for inheritance tax purposes, but not until April 2027. Until now they have not formed part of an estate and generally have not been subject to tax because the undrawn funds are held in a discretionary trust over which the pension holder has no absolute authority.

As a result high net worth individuals have utilised pensions as a tool for inheritance tax planning, often by maximising their contributions simply by living off assets they hold absolutely and which are therefore chargeable.

This amendment will affect people of more modest means and will also cause a large rise in the number of estates subject to IHT from 2027. A difficulty with pensions is that an individual is unable to pass them on during their lifetime, unlike with other assets.

The delay in implementation is likely largely due to the difficulties in reconciling the charge, with the technicalities of ownership through discretionary trusts and the inheritance tax charge. In addition, the delay in implementation gives pension scheme administrators time to prepare for these changes which place responsibility on them for payment of the tax.

It was thought that the facility to draw down up to 25% of a pension pot without any tax liability might be affected by the Budget but this seems to survive, at least for the time being.

Capital Gains Tax

Increased CGT Rates

The government has increased the Capital Gains Tax (CGT) rates. The lower rate of CGT, broadly paid by basic rate income tax payers has been raised from 10% to 18%, while the higher rate has moved from 20% to 24%. This change applies to disposals made after 30 October 2024, only the second time the rate of CGT has been increased in the middle of a tax year (the other being George Osborne, the then Chancellor, in 2010).

The rate of CGT applying to additional residences was already at these levels, so there is no longer a premium rate for this asset class.

Stamp Duty Land Tax

Stamp Duty Land Tax (SDLT) was another focal point of the Autumn Budget, with new measures designed to support first-time buyers and those purchasing primary residences, while ensuring that additional homebuyers and property investors contribute more.

Higher Rates for Additional Dwellings

From 31 October 2024, the surcharge on SDLT for second homes and additional properties will rise from 3% to 5%. This policy is aimed at providing a competitive edge to those purchasing primary residences, including first-time buyers, by reducing the competition from landlords, property investors, and second-home buyers.

The government projects that the increase in the Higher Rates for Additional Dwellings will contribute to an additional 130,000 transactions over the next five years by buyers acquiring their primary homes. The surcharge is applicable even if a buyer’s existing residential property is situated outside the UK. In addition, buyers who are non-UK resident incur a further 2% SDLT penalty is applied, bringing the top SDLT rate as high as 19%.

This series provides a summary and commentary on the 2024 Autumn Budget. For detailed advice and assistance navigating the impacts of the new budget please contact Aleksandra David at AP Accounting Solutions Limited.

31/10/2024

UK eVisa Implementation And Application: 10 Most Discussed Questions Answered
22 October, 2024

As it is already widely known and spoken about, the UK’s immigration system is going digital by 2025.

This essentially means that the government is replacing physical immigration documents with a digital proof of immigration status called an eVisa. The initiative will increase the security and efficiency of the immigration system and enable eVisa holders to prove their rights instantly, accurately and securely.

Below, we answer ten most frequently asked and talked-about questions on the eVisa rollout process.

What is an eVisa?
An eVisa is an online record of your immigration status and the conditions of your permission to enter or stay in the UK. You will need to create a UKVI account to be able to access your eVisa and prove your status to others, such as an employer or landlord.

Updating your physical document to an eVisa does not affect your immigration status or the conditions of your permission to enter or stay in the UK.

Who needs to take some action?
Anyone who currently uses a physical document to evidence their immigration status will need to take action to convert their permission to an eVisa.

If you have a Biometric Residence Permit (BRP) that expires on 31 December 2024, you can now create a UKVI account and access your eVisa. You should do this before the expiry date of your BRP.
If you have a Biometric Residence Card (BRC) and you have been granted status under the EU Settlement Scheme, then you already have an eVisa and you do not need to take any action to obtain one.
If you have a Biometric Residence Card (BRC) and you have not been granted status under the EU Settlement Scheme, obtained another form of immigration leave, or become a British citizen, then your BRC is no longer valid, even if it appears to still be in date. To continue living in the UK you should get an immigration status as soon as possible.
If you have indefinite leave to enter or indefinite leave to remain (also known as settlement or settled status) and you currently prove your rights through a different type of physical document, such as a wet-ink stamp in your passport or a vignette sticker, then you should make a “no time limit (NTL) application to replace your document with a BRP. Once you have a BRP, you will be able to create a UKVI account to access your eVisa. Bear in mind though that after 31 October 2024 the Home Office will no longer issue plastic cards and it will no longer be possible to replace them. For details on this, please have a read of our previous article available here: https://www.cartercamerons.com/brp-cards-to-be-phased-out-after-31-october-2024-key-information-on-the-evisa-transition-2/.
For those who already have and use a UKVI account, no further action is required.

British passport holders and Irish citizens also do not need to do anything.

How will a visa holder be able to use UKVI account?
Once you have created your UKVI account, you will be able to view the details of your eVisa online, for example the type of permission you hold, when your permission expires and your conditions of stay in the UK.

You can update your personal information in your UKVI account, such as your contact details. Your eVisa will be linked to your passport in your UKVI account.

How will an eVisa holder be able to prove status to others?
You can share your immigration status information with third parties, such as employers or landlords, by generating a “share code” in the Home Office view and prove service. This will give the third party time-limited access to your immigration status information. You can get a new “share code” whenever you need one and you do not have to remember a single unique code to be able to prove your status.

How can eVisas impact overseas travel?
If you wish to travel overseas from 1 January 2025, you must obtain an eVisa as soon as possible. With an eVisa, overseas travel will be much easier.

UK Border Force and international air, sea and rail carriers will be able to automatically access your immigration information that is held on your UKVI account, to verify your permission.

You should make sure your personal information and your passport details in your UKVI account are up to date well in advance before you travel. You may be delayed or denied boarding by carriers if your information is not correct or not complete. You will still need to carry your current passport with you.

Will eVisa be updated automatically if the holder’s immigration status changes?
Yes, when visa holders use the Home Office view and prove service, they should be able to see their current status. If your status is showing incorrectly and it is not automatically updated with the correct information, we recommend contacting the UKVI contact centre to resolve the issue.

What will happen with new applications between now and 31 December 2024?
If you need to make a new application for permission to stay in the UK, you should follow the usual application process.

We would like to remind that after 31 October 2024 the Home Office will no longer issue plastic cards and it will no longer be possible to replace them, so that applications decided after this date will only lead to getting an eVisa for successful applicants.

How will children be affected by the move to eVisas?
Children will require their own UKVI account, and families cannot set up one account for the whole family. Where a child under the age of 18 is unable to create and manage their own account, a parent, guardian or responsible adult should do this for them.

To create a UKVI account for a child, the parent, guardian or responsible adult will need the child’s identity document and date of birth. The adult can use their own contact details, such as their phone number and email address.

When the child is able to manage their UKVI account themselves, or where they reach 18 years of age, the child’s account can be transferred to them.

Should a visa holder keep hold of physical documents?
Yes, we recommend keeping hold of your physical immigration document even after it expires, as it may help with future applications to stay in the UK. You may also want it for your personal records.

How will employers and landlords be able to check rights to work and rent for eVisa holders?
Employees and property tenants who have been issued with a digital immigration status (eVisa) can evidence their rights to work and rent using the Home Office view and prove online service. Employers and landlords will need to ask eVisa holders to present them with a respective share code (which eVisa holders would get either for right to work or right to rent purposes), which can then be used to check the individual’s right to work and rent using the Home Office designated system.

For further advice and assistance with the above-outlined eVisa questions, or any other immigration matters, please contact our team. We are here to help. Aleksandra David 07853222375.

27/04/2024