• Will your annual net rental income be more than £1,000? You may need to Register for self-assessment
• Property income and associated expenses must be recorded separately for each property. Consider using software to record this information, or a spreadsheet (if simple).
• Are you renting out more than one property, or is there a significant number of transactions? Consider setting up a business bank account.
• Do you have a mortgage on the property? You may be able to claim interest on the loan against the income. Ensure you have informed your mortgage provider you are renting the property out.
• Do you need to register for VAT? You will if your annual rental income (before expenses are deducted) is more than £90,000.
• Consider paying voluntary national insurance contributions.
• Making Tax Digital will be commencing in April 2026 for landlords with income of £50,000 or more. Quarterly reports will need to be submitted to HMRC via approved software.
• Are you a non-UK resident renting a UK property? You will be required to pay 20% tax on each amount of rental income received. If you have no other UK income you may wish to consider applying to have the rent paid gross.
• Ensure you are familiar with your legal responsibilities as a landlord, including meeting safety standards.
• Some expenses will be of a capital nature, and some will be revenue. Only revenue expenses can be offset against rental income.
• If you are renting a residential property that is held in a company, partnership or trust, you will need to consider whether the Annual Tax on Enveloped Dwellings (ATED) is payable.
• Find out who is responsible for paying the Council Tax.

The post How do I set up as a landlord? first appeared on Competex.

The post How do I set up as a landlord? appeared first on Competex.

• Register as a sole trader with HMRC as soon as possible. The deadline for doing this is 5 October following the end of the tax-year in which you started trading; however we would recommend this should be one of the first things you do before or when you start trading. If you need help, Competex can carry out this registration for you.
• Do you want to choose a business name? If you want a business name you must still display your own name on all business invoices, quotations and stationery, as well as on things like your website. For example, you should state ‘John Smith trading as JS Designers’. Choosing a business name does not protect the name or stop anyone else using it – consider registering it as a trademark if the name is of particular importance to you.
• What level of turnover do you anticipate in a year? If it exceeds the VAT threshold, you will be required to register for VAT. Competex can advise and, if necessary, do this for you.
• Will you be employing others to help you run your business? If so you will need contracts of employment for them and will need to operate payroll services, including filing returns with HMRC. Competex can provide full payroll services for any employees you have.
• Check with your local authority whether you need to pay business rates, or if you need a special licence to carry on your business.
• Consider what insurances you might need, such as public liability or professional indemnity.
• There is no legal requirement to set up a separate business bank account, but unless your business is very small, with nominal transactions, it is usually a good idea to do so. This means that personal transactions do not get mixed up with business ones and it is clearer to see what money the business has available and how it is doing.
• How will you manage the book-keeping? Recording all your transactions using a simple accounting package is the easiest way forward and saves a lot of time and effort compared to keeping manual records. Competex can provide you with such a package.

The post How do I set up as self-employed? first appeared on Competex.

The post How do I set up as self-employed? appeared first on Competex.

Income tax and National Insurance on earnings as an employee are collected through a PAYE scheme. Employers must deduct tax and national insurance contributions from earnings based on tax rates & tax codes supplied by HMRC. The Employer is also required to pay National Insurance.  The total amount deducted, together with the Employers National Insurance contribution, must be paid to HMRC on a monthly or quarterly basis. Employers must keep certain records and must make a Real Time Information (RTI) submission each time an employee is paid. They must also send HMRC a final declaration with the final payment for the tax year.

We act as your company’s agent in all dealings with HMRC relating to PAYE. Once your company is in a position to start paying a salary, we arrange with HMRC to set up a new payroll scheme in the name of your company, and thereafter we liaise with them on all payroll matters. We set up records for each new employee, and process salaries on a monthly or annual basis. Once the payment has been made payslips and summary sheets can be viewed on the online portal.

Forms P60 (Certificate of pay, income tax and national insurance contributions) will be made available by 31 May following the end of the tax year. P60’s can be viewed, downloaded & printed via the online portal and will be produced for any employee who has been paid during the tax year and is still employed by the company on 5 April. We will also prepare forms P11D (Return of expenses payments and benefits) if applicable, but please note that P11D information is extracted from your quarterly accounts returns and we therefore need to have received confirmation that all of your transactions have been entered in Competex FreeAgent.

Please note that since we act as your agent, HMRC should communicate with us on all matters relating to the operation of your payroll. If you receive any correspondence from HMRC that is not of a personal nature and which you think should have been addressed to us, please contact us immediately so that we can correct the situation.

Real Time Information (RTI)

Since 6 April 2013, HMRC has been operating Real Time Information (RTI). RTI doesn’t change the way PAYE is calculated, it just means we need to make more regular submissions to HMRC and they must be on or before the net pay reaches the personal bank account. Previously this information was provided just once a year at Payroll Year End.

Each time a salary is processed a Full Payment Submission (FPS) is sent to HMRC advising them of the calculations, the date paid, the period the payment covered, and any recent starters or leavers. Should there be no payments in a pay period (one month), we notify HMRC by sending an Employer Payment Summary (EPS) by the 19th of the following tax month. This will ensure HMRC don’t wrongly send you a penalty because they were expecting an FPS from you.

The post What is PAYE and how does it work? first appeared on Competex.

The post What is PAYE and how does it work? appeared first on Competex.

You decide each month how much you wish to pay, or how much you are obliged to pay under IR35.

You advise us of your salary instructions by emailing a payroll template to payroll@competex.co.uk. We will process your payroll within 3 working days of receiving your instruction. Your payslips, reports and details of amounts owed to HMRC will be available on your own password-protected portal.  An email will be sent to you after we have processed your payroll for the first time inviting you to access the portal.

Payroll Template

The payroll template should be completed each time a salary is required, and this acts as your instruction to us, dictating who should be paid and how your salary funds should be split or calculated.  The payroll template should then be emailed to payroll@competex.co.uk.  If you wish us to pay a regular salary to any person on your company payroll, then you can send one initial instruction with full details. This instruction will then stay in place until further notice from you.

Additional employees

Our fees include payroll for yourself & one employee.  We will make an additional charge if you wish further employees to be included on your payroll.

There is also an additional charge if there is more than one fee-earning director or employee.

Any change to the payroll must be notified to Competex as soon as possible.

The post How are salary payments processed? first appeared on Competex.

The post How are salary payments processed? appeared first on Competex.

Form P45 shows your date of leaving, your tax code, the gross remuneration and tax paid to you in the tax year to date.

The P45 details are submitted electronically by your old employer to HMRC to notify them that you have left that employer, and a hardcopy P45 with parts 1A, 2 and 3 are passed to you. You should keep Part 1A for your own records and pass parts 2 & 3 to your new employer at the time you start to receive a salary (in this case pass to Competex, acting as your company’s agent). We use the information to set up a PAYE record for you and to continue taxing you on the same basis as your previous employer, if this is appropriate. We inform HMRC electronically so that they can update your records held with them. HMRC should then review your records and make any necessary adjustments to your tax code.

Form P45 & benefits in kind

It may be that when you leave your old employment, your tax code includes deductions that are no longer relevant to your new employment. For instance, it may include a reduction because you had a company car, and/or your previous employer paid for your medical insurance. In these circumstances, you will need to contact the HMRC Employee Helpline and bring them up to date; otherwise you will be paying more tax than you should be.

Form P45 & permanent employment

If, after working through your personal service company for some time, you decide to take up permanent employment again, please let us know and we can advise you. It is a requirement of Companies House that you remain as an employee of your company, but of course this can be a secondary employment. Upon leaving its employ and starting with a new firm, we have been advised by HMRC not to issue a P45. After commencing a new employment, complete the new starter forms, indicating that you have another employment. After submission to HMRC, please telephone HMRC Employee Helpline and request that your new employment becomes your primary one. HMRC will then switch the tax code, taking into account the previous pay and tax to date figures, to your new employment. Even though you have resumed permanent employment, you will continue as a director of your company until it is dissolved, and HMRC will therefore issue a second tax code that gives no tax allowances (normally a D0 code), to be used in the event of any further salary being paid through your company.

The post What is form P45? first appeared on Competex.

The post What is form P45? appeared first on Competex.

You will need to have set up your company bank account by this stage, so that your company can receive payment for your products or services, and so that you can refund your expenses and pay yourself a salary.

Competex can run your company payroll for you, and we appreciate that you may wish to pay yourself or other employees different amounts each month.

When you are ready to pay yourself, we will set-up your PAYE scheme and operate this on your behalf. Further employees can be added to the payroll at any time.

Your payroll will be processed on a monthly or annual basis, with computations based on the total funds (including Employer’s National Insurance) that you wish to devote to salaries in that particular month/year unless you advise us differently.

For company directors, National Insurance is charged on an annual basis, which means that no Employer’s or Employee’s National Insurance is payable until your salary meets the annual threshold (pro-rated in the first year from the date of incorporation). When working on assignment for the first time you may also have the benefit of unused tax allowances, and as a result your first net salary payment will probably include less tax and National Insurance than you would normally expect to pay in later months.

The post How does my company payroll work? first appeared on Competex.

The post How does my company payroll work? appeared first on Competex.

The rules for the Employment Allowance (EA) changed from the 2020/21 tax year.

You now need to make extra checks to find out if you are eligible to claim EA. This includes checking de minimis state aid.

A new claim needs to be submitted each tax year through your Employer Payment Summary (EPS) as claims will not automatically renew each year.

To be eligible you must fulfil all the below criteria:

• Either work in the private sector or perform less than 50% of your work in or for the public sector, in terms of time or turnover. This restriction does not apply to those supplying IT services for a government department or local council.
• Pay more than one employee.

If only directors are paid they must both have a gross salary above the annual secondary threshold.  If a directorship began after the start of the tax year this is pro-rated.

If a director and an employee, (who is not a director), are being paid, the non director needs to be paid above the secondary threshold, irrespective of the amount the director is paid.  The employee does not have to be paid above the secondary threshold for the entire year to qualify. If your company has employees paid above the secondary threshold, but circumstances change during the tax year and the director becomes the only employee paid above the secondary threshold, you can still claim the Employment Allowance for the tax year, but you will not be able to continue the claim into the next tax year.

• Your total qualifying employers (secondary) Class 1 NICs liability in the previous tax year must be less than £100,000.
• You must not exceed the de minimis state aid threshold. This means it will contribute to the total aid you are allowed to receive under the relevant de minimis state aid cap in the relevant 3 year period.

If you are unsure, at this stage, whether you will meet the eligibility requirements, you can always claim later, either when you are assured of your eligibility, or at the end of the tax year.

Should you have any doubt at all regarding your eligibility, we would advise that you speak to HMRC directly on 0300 200 3200.

The post Am I entitled to claim Employment Allowance? first appeared on Competex.

The post Am I entitled to claim Employment Allowance? appeared first on Competex.

In order for your accountant to prepare your accounts, they will require the following information:

The post What information is needed to prepare annual accounts? first appeared on Competex.

The post What information is needed to prepare annual accounts? appeared first on Competex.

Once your company has been incorporated, you need to complete statutory accounts each year, and these annual statutory accounts must be filed both with HMRC and at Companies House, until the company has ceased trading, has been dissolved and the name removed from the register at Companies House.

We will prepare your annual statutory accounts in the required format, together with the accountant’s report, and will file these electronically both with HMRC (together with the Corporation Tax return) and at Companies House. No audit is required for companies of this size.

If your company is dormant (i.e. there are no transactions in the course of a year), accounts can be filed in a prescribed format suitable for a dormant company.

If, after a while, you see no prospect of needing your company again, it can be dissolved and the name removed from the register at Companies House. All accounts must be filed up to date and clearance obtained from HMRC. However, do not start this process until all fees have been collected, all debts paid and all remaining funds have been withdrawn from the company bank account. If you fail to withdraw the remaining funds from the bank, they will be taken by the Treasury Solicitor as “bona vacantia”.

The post What is the correct procedure for filing annual accounts? first appeared on Competex.

The post What is the correct procedure for filing annual accounts? appeared first on Competex.

Registration to MTD for Income Tax, for those with relevant income over the threshold, will commence early in 2026, after submission of your 2024/25 tax return. Further details will follow nearer the time.

The post How do I register for Making Tax Digital (MTD)? first appeared on Competex.

The post How do I register for Making Tax Digital (MTD)? appeared first on Competex.