Hi Reader

It's finally spring and I am already loving the (intermittent) milder weather and the lighter days. Apart from the clocks changing, do you know what also happens in early Spring?

The start of the new tax year!

April 5th is the last day of the current tax year (2022/23) and from April 6th self-assessments can start being filed for the 2022/23 tax year. Will you be one of the early birds planning to get it in as soon as possible or will you be waiting until later in the year?

There are a few changes with the change of the tax year, including new corporation tax rates, the abolishment of the pensions lifetime allowance charge and a drop in the dividend allowance. You can find out more info on these changes in the key dates section at the end of this newsletter, but what else has been going on this month?

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What business expenses can I claim?

In the blog post this month I was talking about how an exotic dancer won a case against HMRC for the lingerie they danced in and why this ended up being allowed, vs a barrister who was not allowed to claim suits for attending court.

The reason these sorts of cases happen is that a lot of the HMRC guidance around tax is exactly that, guidance. This means it is down to the individual to interpret that guidance and while sometimes this is obvious, other times it is less so. The result of this is when people claim items on their tax return, HMRC can argue that it is not what the guidance meant, which then normally results in tribunals and court hearings.

When something like this happens it is called "case law" and this impacts all future interpretations of the HMRC guidance and creates the benchmark for all future claims in this area. If you are interested, you can read more about the actual case details mentioned above here.​

The main point of the blog post this month though was to run through some of the items that are always allowable expenses for tax purposes and also what is NEVER allowed. It also has a phrase you can use to apply to your own purchases so you can be sure you are claiming the correct items...

"When looking at if something can be classed as a business expense, there is a key HMRC phrase that helps assess the expense. Is the expense "Wholly and exclusively" for undertaking the business activities?

Let's break down what this means. Wholly. Is the whole amount of the expense (in currency, not quantity) for the business? Exclusively. Is the purpose of the expense, only for undertaking business?

Both of these criteria need to be met to classify something as a business expense..."

Read the full blog post here

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In non-accountancy news

There were no motorbike adventures this month, mostly due to the snow and plenty of rain! Lighter and brighter days are ahead with Spring arriving, so I will make up for it soon.

I did still have an adventure (via car) back home to Cornwall for a brief visit, which was good for my soul and included a delicious cruffin while sitting in the dunes. There is something about the sea air that you just can't beat, but the wind was something else (you may have seen my wild hair on my Insta stories).

Bonus points if you can tell where I am! (The lighthouse may be the giveaway if you know the area)

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I've also reignited my passion for bread baking recently, which means the house has been overrun with bread (which isn't really a bad thing is it!). As a result of the re-found bread obsession, I've also been watching a lot of Bake with Jack on YouTube, who helped me figure out where I was going wrong with my very rusty kneading technique.

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What's coming up

With the run-up towards the new tax year, I am excited to see who is going to be my first filed self-assessment for 2022/23! Will it be you? Keep an eye on my Instagram page to see how many people get there first and to find out what information you need to get ready if you want to be one of the first too.

I will also be talking more in April about the difference between cash basis and traditional accounting. This is something HMRC asks self-employed people on their tax return, and it normally gets met with confusion on what HMRC are asking. That is why I will be breaking this down into what exactly cash/traditional is and a simple explanation between the two.

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Key dates for April

This is a longer list than normal due to some of the tax changes that will come in during April.

• 1st - Corporation Tax payment for 30 June 2022 year ends
• 1st - Corporation Tax rates are now 19% on profits of £50,000 or less. Marginal rate on profits between £50,000 and £250,000 and 25% on taxable profits over £250,000.
• 1st - Capital Allowances: New 100% 'full expensing' First Year Allowance (FYA) for companies introduced.
• 5th - Tax year: 2022-23 tax year ends
• 6th - Tax year: 2023-24 tax year begins
• 6th - Income Tax additional rate (45%) threshold decreases to £125,140.
• 6th - Dividend allowance decreases to £1,000.
• 6th - Pensions lifetime allowance charge is abolished.
• 6th - Pensions Annual Allowance (AA) increases to £60,000.
• 6th - Optimum directors salary either £9100 or £12570 per year depending on your circumstances. Speak to me for more information.
• 7th - VAT return submission and payment (online): month-end or quarter 28 February 2023
• 30th - Corporation Tax returns for 30 April 2022 year ends
• 30th - Non-resident landlord scheme payment of tax for the quarter ended 31 March 2023

Finally, please note that the office will be closed for the Easter bank holiday weekend (and will probably consume WAY too much chocolate!).

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