Case Studies
How Merit’s Chartered Tax Advisers Help Clients Legally Reduce Tax
Most accountants file your return and send you a bill. We do something most firms can’t. Merit Accountants is led by a Chartered Tax Adviser, the UK’s highest tax qualification, with first-hand HMRC experience and partners who have built their own businesses from zero to £1m+ and raised finance for themselves and their clients. That combination sits behind every result on this page. The case studies below are anonymised examples of how we help clients reduce tax legally, defend their position with HMRC, and structure their affairs so they keep more of what they earn.
In the last two financial years alone, our team has saved clients over £9.2 million in tax, not through luck or loopholes, but through structured, year-round planning and technically robust advice. In some of the matters below the tax saved or deferred was substantial. In others, the real value was resolving an HMRC enquiry quickly and convincingly, before it escalated. This is the proactive, technically strong advisory work that compliance-only firms simply don’t offer.
- Award-Winning Chartered Tax Advisers
- Former HMRC Experience
- Business Founders, £0 to £1m+
- Proactive, Year-Round Tax Planning
CASE STUDIES
Corporate and Owner Managed Business Tax
The issue: A group with both profit-making and loss-making companies had a previous accountant who surrendered losses with no real planning, simply wiping out profits wherever they appeared. The result was inefficient: some companies still paid corporation tax at the higher rates and were pushed into the quarterly instalment payments regime, while losses were over-used elsewhere, wasting the benefit of the lower-profit thresholds that could have been preserved.
What we did: We stepped back and looked at the group as a whole, then reworked the use of group relief tactically rather than mechanically. We advised on how losses should be allocated across the group to improve the overall result, keeping profit-making companies out of the higher corporation tax bands where possible, helping prevent companies from crossing into the threshold for quarterly instalment payments, and making sure losses weren’t used in a way that wasted valuable lower-rate profit capacity.
The outcome: By using group relief carefully and strategically, the group achieved a far better overall corporation tax position. The planning reduced the risk of paying higher rates unnecessarily, helped keep companies outside the quarterly payment regime, and preserved lower-rate profit capacity across the group. It’s a clear example of how proper corporation tax planning across a group structure beats simply offsetting losses without seeing the wider picture.
The issue: A trading company realised a gain of £1.6 million on the disposal of a business property, with a commercial intention to reinvest in another qualifying business asset within the wider group. Without careful structuring, the gain could have triggered an immediate corporation tax cost at exactly the point the cash was needed for reinvestment.
What we did: We reviewed the factual and legislative position, confirmed that the replacement-asset strategy could be aligned with group rollover relief, and helped structure the reinvestment so the gain could be deferred into the cost of the replacement asset within the group.
The outcome: Instead of an immediate tax hit, the client deferred the charge and preserved cash for commercial reinvestment. It’s a strong example of tax planning supporting business growth rather than getting in the way of it, the kind of advice that comes naturally to a team that has run and grown businesses of its own.
The issue: An owner-managed company was extracting profit in a way that left unnecessary tax leakage. The directors defaulted to the familiar salary-and-dividend route, even though employer pension funding would have been more efficient for part of the extraction.
What we did: We reviewed the company’s profit position, the directors’ personal circumstances and the commercial affordability of contributions, then recommended using employer pension contributions as part of the extraction strategy rather than taking all surplus profit personally.
The outcome: A more tax-efficient structure all round: the company secured corporation tax relief on the contribution, employer’s NIC was avoided on the amount redirected to pension, and the need for additional dividend extraction was reduced. This kind of joined-up thinking across company and personal tax routinely produces a better combined outcome for owner-managed businesses.
The issue: A single-director company assumed it could not claim the Employment Allowance because the director was the only person on the payroll. As a result, it was missing a valuable employer NIC saving.
What we did: We reviewed the payroll position and explained that the company could qualify for Employment Allowance if a second employee was added to the payroll and the eligibility conditions were met. We recommended employing one additional person, for example the director’s spouse or adult child, for a short period at an appropriate level of pay, so the company became entitled to claim.
The outcome: This straightforward piece of planning gave the company entitlement to the full annual Employment Allowance of £10,500 for the year, a significant employer NIC saving from a very small payroll adjustment. It’s a good example of how attention to detail unlocks savings that many business owners would otherwise miss entirely.
The issue: A director-shareholder was drawing income in a way that was easy administratively but not especially tax-efficient once corporation tax, dividend tax, personal allowances, NIC and wider extraction planning were considered together.
What we did: We modelled the combined tax impact of salary, dividends and pension contributions, then recommended a more balanced remuneration strategy, designed not just to minimise tax in one place, but to optimise the overall result across both company and personal taxes.
The outcome: The revised mix reduced unnecessary tax leakage while still meeting the client’s cash-flow needs and protecting the right long-term position for allowances and benefits. This is a common area where proactive advice makes a measurable difference year after year.
Read the expanded owner managed business tax case studies for the full technical detail behind each result.
Construction Industry Scheme
The issue: A £12m turnover groundworks contractor was told by HMRC that one of its labour suppliers had been part of a fraudulent chain. Under rules that took effect on 6 April 2026, HMRC can cancel gross payment status immediately where a business knew or should have known it was involved, charge the lost tax even though the invoices were paid in full, and impose a penalty of up to 30% on the business, all or part of which it can then transfer personally to the directors. Reapplication is now barred for five years rather than one.
What we did: Losing gross payment status would have meant a 20% CIS deduction on every payment received, across every contract, for a business with thin working capital and framework agreements that require it. HMRC’s letter arrived within weeks of the new rules taking effect and we were instructed the same month. Because a cancellation decision carries a right to a statutory review with its own short timetable, the priority was evidence rather than argument. We built the due diligence file: verification records, supplier onboarding checks, insurance and accreditation evidence, site records showing the labour was genuinely supplied, and the bank trail. We then presented it to HMRC as a defence to the “should have known” test and dealt directly with the officer.
The outcome: Gross payment status was retained through the review process, no personal penalties have been raised against the directors, and the client now runs a documented supplier due diligence process on every new engagement.
Note: The wider position on the tax said to have been lost in the chain remains open at the time of writing, which is normal at this stage of an enquiry of this kind.
The issue: A Tameside civil engineering contractor was deducting CIS at 20% on the gross value of its subcontractor invoices. Its subcontractors were unhappy, one had walked off site over cash flow, and the contractor’s own accountant had told it that deducting on the gross figure was the safe option. Over a year the over deduction ran to around £31,000 of working capital taken out of the supply chain unnecessarily.
What we did: CIS is deducted from the payment less the direct cost of materials borne by that subcontractor, so getting it wrong in either direction is a problem. Deduct too little and the contractor is liable. Deduct too much and you starve your own supply chain. We rebuilt the process. Since 6 April 2021 only materials whose direct cost the subcontractor itself has borne reduce the payment, so materials bought further up or further down the chain, or supplied free by the contractor, do not count. Beyond that, materials, consumable stores, fuel other than fuel for travelling, plant hired in from a third party and the cost of prefabrication all reduce the payment subject to deduction. Plant the subcontractor owns does not attract a notional hire charge, although the fuel and consumables still count. Plant hired with an operator is itself a construction operation. Materials the subcontractor was reimbursed for are not deductible at all. We then set a simple evidence standard, copy supplier invoices rather than a percentage estimate, and briefed the subcontractors on it.
The outcome: Deductions fell to the correct figure, the supply chain kept £31,000 a year of cash it should always have had, and the contractor holds a file that stands up if HMRC reviews it.
The issue: A limited company subcontractor had suffered £84,000 of CIS deductions over two years and had never recovered a penny of it. Nobody had submitted an employer payment summary claiming the deductions, several contractors had never issued payment and deduction statements, and HMRC had already refused one request for duplicates.
What we did: A limited company subcontractor recovers CIS through the payroll, not the tax return. The deductions suffered go on a monthly employer payment summary, HMRC offsets them against PAYE and National Insurance, and any excess is carried forward within the tax year and repaid after the year end. Two things make this go wrong. HMRC has been able to amend or remove a set off claim since April 2021 where the evidence does not support it, and it can then bar the company from making any further claim for the rest of that tax year. Separately, since December 2022 HMRC deals with only one request per customer for copy statements, which this client had already used. We went back to each contractor directly for statements, reconciled every deduction to the bank, filed the corrected returns and submitted the repayment claim with the full evidence pack.
The outcome: £84,000 recovered, the PAYE account brought into order, and a monthly process put in place so the deductions are now claimed as they arise rather than years later.
The issue: A care home operator ran a £4.2m refurbishment and extension programme across its sites. It is not a construction business and had never registered for CIS. It paid its trades gross. HMRC opened a review and proposed assessments of £310,000 for deductions that should have been made, plus penalties.
What we did: Any business, in any sector, becomes a deemed contractor once construction spend passes £3m in a rolling twelve month period. It is a continuous test, not a year end one. There is a separate exemption from operating deductions on property used for the purposes of your own business, but that spend still counts towards the £3m threshold, and that is the part almost everyone has backwards. The exemption also fails for property held for sale, held to let, or held as an investment. Once we had established the group was a deemed contractor we applied for directions on the basis that the subcontractors had accounted for the tax on the payments they received, brought the registration up to date, and showed that most of the spend was on property in the group’s own occupation and so carried no deduction obligation going forward.
The outcome: The proposed assessments were reduced to £18,000, the penalties were cancelled, and the group now monitors its rolling construction spend monthly.
The issue: A landlord agreed to contribute £450,000 towards an incoming tenant’s fit-out. Its advisers treated the payment as being within CIS and were preparing to apply deductions of up to £90,000, holding back cash from a tenant that needed it to start work. The deal was at risk.
What we did: Since 6 April 2024 there has been a specific exclusion for landlord contributions to tenant works, but it only holds if all five conditions are met, and the works have to be intended primarily for the benefit and use of the tenant. Part of this contribution covered replacement windows and a fire safety installation, which are core building works the landlord benefits from. The exclusion is tested against the payment, and where a single payment covers works that are not primarily for the tenant’s benefit there is no published basis for apportioning it, so the safe assumption was that the whole £450,000 was at risk. We had the contribution restructured into two separately documented payments, one for the tenant specific fit-out inside the demise and one for the landlord’s own works, contracted directly by the landlord. We also put the evidence requirements in place, including copy invoices and warranties from the tenant’s contractor.
The outcome: The fit-out contribution of £372,000 fell outside CIS and was paid in full. Only the landlord’s own works stayed within the scheme. The tenant received up to £74,400 more cash on day one and the lease completed on time.
Read the expanded CIS case studies for the full technical detail behind each result.
Construction and Property VAT
The issue: A developer demolished a commercial building and rebuilt it as nine flats, retaining the front elevation because the planning officer had asked for it. HMRC opened a check and argued the works were an alteration to an existing building rather than construction of a new one. That would have moved the whole contract from zero rated to 20%, a cost of £280,000 that nobody had priced.
What we did: Zero rating survives where no more than a single facade is retained (or a double facade on a corner site) and the retention is a condition or requirement of the planning consent. The consent here said nothing explicit. We obtained the planning file, the approved drawings showing the elevation to be kept, and written confirmation from the local planning authority that retention had been required as part of the consent, cross referenced to those drawings. We also dealt with HMRC’s fallback point, that the retained wall was not a facade at all. Applying the approach the tribunal took in Smithers in 2020, a facade means the principal front of a building facing a street or open space, and here it plainly was.
The outcome: HMRC accepted zero rating and closed the check with no assessment. The developer kept the £280,000, and we put a pre-start evidence checklist in place for its next three sites.
The issue: A client was building an annexe alongside the main house for an elderly parent. The planning consent carried the usual condition that the annexe was not to be occupied as a separate dwelling. The builder had quoted the works as zero rated on the basis that this was new residential construction, and the client was expecting a refund under the DIY housebuilder scheme on top.
What we did: Three things have to hold before an annexe is treated as a dwelling for VAT. It has to be self contained, with no direct internal access to the main house. It has to be a genuine additional dwelling rather than an enlargement of the existing one. And separate use and separate disposal must both be unrestricted, which is where an occupancy condition of this kind bites. The Upper Tribunal decisions in Burton and Shields make that last point very hard to argue around. Getting the condition lifted later is not a reliable fix either, because the restriction is tested at the time of each supply, so anything invoiced while it is still in force is exposed. We stopped the build before the first invoice, applied to vary the condition, and reworked the layout so the annexe had its own access, services and postal address with no internal door to the house.
The outcome: The varied consent was granted, construction restarted, and the works were correctly zero rated. VAT avoided on the build was £38,000, plus a DIY claim of £6,500 that would otherwise have been refused.
The issue: A housebuilder’s main contractor was standard rating the entire kitchen and bathroom fit-out package on a 22 unit scheme, on the basis that white goods and carpets are blocked. That left the client carrying £64,000 of VAT. Part of it was blocked outright by the builder’s block, and part was never properly chargeable in the first place, so none of it was recoverable.
What we did: The block applies to specific goods. It does not apply to the whole package and it does not apply to the labour. We went through the specification line by line. Fitted kitchen units and worktops stay within the relief, and so does matching utility room furniture even though that room did not adjoin the kitchen. So do the boiler, radiators, underfloor heating, the extractor hood as a ventilation appliance, the burglar alarm and the fire alarm. Engineered wood and ceramic tiles are fine, because they are not carpeting material. Only the ovens, hobs, fridges, dishwashers, washing machines, carpets and fitted bedroom furniture were genuinely blocked. We then had the contractor reissue invoices apportioning the package properly, with the installation labour following the zero rate.
The outcome: Irrecoverable VAT fell from £64,000 to £11,200, a saving of £52,800 on one scheme. The invoicing template is now used across the client’s sites.
The issue: A property investor engaged a main contractor directly on a £2.1m commercial refurbishment. The contractor charged VAT of £420,000 in the normal way and the client recovered it. HMRC opened a compliance check, decided the domestic reverse charge should have applied, and denied the input tax in full.
What we did: The reverse charge applies to standard and reduced rated construction services reportable under CIS, where both parties are VAT registered and the customer is registered under CIS, unless the customer is an end user or an intermediary supplier. This client was already registered under CIS as a deemed contractor, because its construction spend across the portfolio ran well above £3m in a rolling twelve months, so the reverse charge was in point. End user status, though, is not automatic. It has to be notified to the supplier in writing by the customer, and this client had never been told to do it. Because HMRC was right on the law, we did not fight the assessment. We worked back through the chain and obtained credit notes and corrected invoices from the contractor while it was still trading, then made an unprompted disclosure covering the earlier periods.
The outcome: The £420,000 was recovered through the corrected invoices, the penalty position came out at nil, and the client now issues a standing end user notification at the point of appointing any contractor.
The issue: A contractor was asked to renovate a house that had stood empty for years. The client insisted the 5% reduced rate applied. The contractor’s own accountant told him to charge 20% because he could not prove it. On a £310,000 contract that was a £46,500 argument with his customer and a live risk of losing the job.
What we did: The reduced rate applies where the property has not been lived in during the two years immediately before the work starts. The risk sits with the supplier, not the customer, so the evidence has to exist before the first invoice goes out. We assembled a pack: council tax records showing the empty property exemption history, a letter from the local authority’s empty homes officer, electoral roll searches and utility consumption records. We also checked how long the property had been empty, because at ten years or more the owner may be able to zero rate a first grant of a major interest after the works, which changes the economics of the whole project.
The outcome: The work was correctly invoiced at 5%, saving the customer £46,500, and the contractor holds a defensible file if HMRC ever asks. He has since won further work on the strength of being able to price at 5% with confidence.
The issue: A client agreed to buy an opted commercial site with residential planning permission for £4.75m. The seller intended to charge VAT of £950,000. The buyer’s solicitor assumed a VAT1614D certificate would switch it off. It would not have done, and SDLT would then have been charged on the VAT inclusive price.
What we did: Two things had gone wrong. The certificate route applies to buildings being converted into dwellings, not to bare land, and the automatic disapplication for residential property applies to a building designed or adapted for use as a dwelling, so it does not reach bare land sold to a housebuilding company. Separately, and more expensively, any certificate has to be given before the price is legally fixed, which can be as early as signing heads of agreement. We restructured the transaction so the seller commenced construction and the transfer completed once a building was clearly under construction above foundation level, bringing the sale within the zero rate for a first grant of a major interest. We also checked the SDLT consequence, because part built dwellings are residential property, and confirmed the purchase still fell to non residential rates under the six or more dwellings rule.
The outcome: VAT of £950,000 came out of the transaction. That removed the SDLT charged on it, an absolute saving of £47,500, and removed the cost of funding the VAT until it was recovered, worth a further £28,000 on the facility the client was using.
Note: At the time of writing this area is under review. HMRC and HM Treasury opened a joint consultation on 23 June 2026, VAT treatment of land for social housing, proposing a new zero rate that would replace the golden brick requirement on land sold to registered providers. It closes on 18 August 2026. Nothing had been legislated as at 1 August 2026, and the position described here is the law as it stands.
Read the expanded construction and property VAT case studies for the full technical detail behind each result.
Property Tax, ATED and Capital Gains
The issue: A developer held completed but unsold houses, a show home and a site with an existing house awaiting demolition, all inside a limited company and all worth more than £500,000 each. It had never filed an Annual Tax on Enveloped Dwellings return, because property developer relief reduced the charge to nil and nobody thought a nil charge needed a return. HMRC assessed penalties across three years totalling £4,800, with no tax at stake at all.
What we did: Relief from ATED has to be claimed on a relief declaration return, filed in advance by 30 April each year. One return covers any number of properties in the same relief category, which makes it cheap to do and easy to forget. Because there is never any money to pay, the deadline generates no cash flow prompt and drops off the compliance calendar entirely. We filed the outstanding returns, appealed the penalties on the basis of reasonable excuse and, in the alternative, asked HMRC to exercise its discretion given the nil liability and the client’s otherwise clean record. We then set up a standing April reminder linked to the company’s stock listing.
The outcome: Penalties of £4,800 cancelled and the filing position brought up to date. We also flagged that the next valuation date is 1 April 2027, which will push several properties into higher bands from 2028/29.
The issue: A client bought a run down house for £850,000, paid SDLT at residential rates including the 5% additional dwellings surcharge, and was then approached by a reclaim firm offering to recover £43,000 on the basis that the property was uninhabitable and should have been taxed at non residential rates. The fee was contingent, so it looked like a free bet.
What we did: It is not a free bet, because the client signs the amended return and carries the risk. The Court of Appeal decision in Mudan, handed down on 27 June 2025, settled that disrepair capable of being cured does not stop a property being suitable for use as a dwelling. Rewiring, replumbing, a new kitchen, damp and no heating are not enough. The narrow line illustrated by the First-tier Tribunal in Bewley survives only where the property is fundamentally unsuitable, for example asbestos that cannot be safely remediated or a real risk of structural collapse. We read the surveyor’s report, found nothing beyond curable disrepair, and advised against the claim.
The outcome: No claim was made. Had it gone in, we would expect HMRC to have recovered the £43,000, with interest and a penalty, and the reclaim firm would have been long gone.
The issue: A client sold a property and HMRC opened a Capital Gains Tax enquiry based on an assumed gain, with a potential CGT exposure of almost £140,000. HMRC were also proceeding on the basis that a 60-day UK property return should have been filed.
What we did: We reviewed the full ownership and occupation history in detail. While the client had not occupied the property for the entire ownership period, part of the period qualified for Private Residence Relief, and the periods of non-occupation were covered by the deemed occupation rules. We sent HMRC a concise, technically precise response explaining that full main residence relief applied, and that, as no CGT was due, no 60-day reporting obligation arose either.
The outcome: HMRC closed the enquiry without requesting any further evidence. The client avoided a substantial CGT charge and unnecessary reporting, and saw first-hand how strong technical analysis, presented clearly, carries real weight with HMRC. This is exactly where our inside knowledge of how HMRC builds and tests a case makes the difference.
Read the expanded property tax, ATED and capital gains case studies for the full technical detail behind each result.
Corporation Tax Reliefs and Capital Allowances
The issue: A developer bought a former industrial site at full market value and spent £280,000 dealing with Japanese knotweed and asbestos in a redundant building. Its accountant treated all of it as site costs and moved on.
What we did: Land Remediation Relief gives an extra 50% deduction on qualifying remediation spend, on top of the 100% the business gets anyway, and a payable credit at 16% where the company is loss making. It is available to developers holding land as trading stock as well as to investors, which is unusual among property reliefs. Two conditions decided this case. The company had to have acquired the land in its contaminated state and must not have caused or knowingly permitted the contamination, which was satisfied. We also checked the sale contract and the valuation for any express reduction in the price to cover remediation, because HMRC can argue the expenditure is subsidised where the vendor has effectively met the cost. There was none. We then made the claim within the amendment window for the accounting period concerned.
The outcome: An additional deduction of £140,000 on top of the £280,000 already allowable, worth £35,000 in corporation tax at 25%.
Note: At the time of writing Land Remediation Relief is being consulted on for a second time. A first consultation ran in 2025, a summary of responses was published on 23 June 2026 concluding that there is a case for reform, and a further consultation opened on 13 July 2026 and closes on 21 September 2026, covering the timing of relief and the definition of long term derelict land. The rates described here are unchanged for now.
The issue: A client bought a £3.2m warehouse and assumed it would pick up Structures and Buildings Allowance on the purchase price. It would not have. The buyer of a second hand building inherits the original qualifying construction cost and whatever is left of the 33 and a third year period, not the price it paid. Without a copy of the original allowance statement, no claim can be made at all.
What we did: The seller had never been asked for the statement and did not know what it was. We identified the issue during the acquisition rather than after it, made production of the statement a condition of completion, and traced it back through the previous owner to the original developer. We then set the claim up at 3% of the original qualifying construction expenditure of £1.85m. Separately we reviewed the fixtures position, because the two reliefs are often confused and only one of them depends on what the buyer paid.
The outcome: Annual allowances of £55,500 for the remaining 26 years, worth around £360,000 of corporation tax relief across that period. If the chain had gone cold and the statement could not have been produced, the relief would have been effectively lost for this owner and every owner after it.
The issue: A trading company bought its own premises for £2.4m. The solicitors dealt with the conveyancing, the enquiries were answered, and nobody made a fixtures election. Nearly two years later the client asked us to look at its capital allowances.
What we did: On a second hand property purchase the buyer only gets allowances on fixtures if the seller allocated the expenditure to a pool in a period beginning on or before the transfer, and the parties either sign a joint section 198 election or apply to the tribunal, within two years of the transfer. Miss either and the buyer’s qualifying expenditure is nil, permanently, and so is every future owner’s. We confirmed the seller had pooled, valued the fixtures and integral features, negotiated the election figure with the seller’s advisers, and had it signed and reflected in both parties’ returns before the deadline.
The outcome: Qualifying expenditure of £640,000 on fixtures and integral features preserved, worth up to £160,000 of corporation tax relief over the life of the assets. Had the deadline passed, none of it would have been available to the client or to anyone who bought the building afterwards.
The issue: A Manchester software consultancy was being taxed as though it had one associated company, because the director’s wife ran an unrelated beauty business through her own limited company. The consultancy’s profits sat at £130,000. Halving the marginal relief limits took it above the upper limit altogether, so instead of marginal relief bringing the blended rate down to 23.6%, it paid the full 25%. It had been filed that way for three years.
What we did: The associated company rules do not simply count up every company a family owns. A spouse’s or other relative’s company is only brought in where there is substantial commercial interdependence between the two, and that means a financial, economic or organisational link. Only one of the three is needed, but at least one has to exist. Here there were no loans between the companies, no shared premises, no shared staff, no common customers and no invoicing either way. The two businesses genuinely had nothing to do with each other. We amended the returns on that basis and set out the analysis for HMRC in advance rather than waiting to be asked.
The outcome: A corporation tax refund of £5,400 across three years, and the current year filed correctly. We also warned the client that a single director’s loan between the two companies, or moving both to the same office, would create the interdependence and bring them back into association.
Read the expanded corporation tax relief and capital allowances case studies for the full technical detail behind each result.
VAT Registration, Schemes and Thresholds
The issue: A family ran a pub in Ashton-under-Lyne through one company and the food operation through a second. HMRC opened a review, decided the separation was artificial and proposed to treat the two as a single taxable person. It also indicated it would look to recover VAT for the previous four years, around £190,000.
What we did: Two separate arguments were being run together, and separating them was the whole engagement. HMRC can direct that two persons be treated as one taxable person where activities have been artificially separated, looking at financial, economic and organisational links. But a direction takes effect from the date it is issued or later. It is prospective only. HMRC cannot use it to assess four years of historic VAT. To get the past it has to prove there was only ever one business as a matter of fact, which is a different and much harder case. We made that distinction to the officer, evidenced the genuine separation, separate bank accounts, separate staff contracts, separate suppliers and separate management, and pointed to the arrangements HMRC’s own manuals accept are not artificial separation.
The outcome: No retrospective assessment was raised. The £190,000 fell away. The client took a commercial decision on how to structure the business going forward, with the VAT consequences understood in advance rather than discovered afterwards.
The issue: An online retailer had been showing postage on every invoice as “postage at cost, no VAT” for four years. Its bookkeeper had reasoned that Royal Mail does not charge VAT, so the retailer should not either. HMRC assessed £78,000 plus interest.
What we did: A retailer who buys postage and recharges it is making its own supply of delivery, not passing on an exempt one, as the House of Lords held in Plantiflor. Separately, only Royal Mail’s regulated universal service products are exempt at all, and that exemption belongs to Royal Mail. Where the contract requires the seller to deliver, delivery is part of a single supply of delivered goods and takes the same VAT rate as the goods themselves, itemised or not. So the answer was not the one the bookkeeper assumed, but it was not all bad news either. A large part of this client’s range was zero rated, which meant the delivery charge on those orders was zero rated too, not standard rated. We reworked the assessment on that basis. We also found the mirror error: the client had never recovered input VAT on its Parcelforce and account based services, which are outside the regulated exemption and standard rated.
The outcome: The assessment was reduced from £78,000 to £29,000, and £16,000 of previously unclaimed input VAT was recovered, bringing the net cost to £13,000.
The issue: A Manchester digital agency turning over £74,000 was told by its accountant that it did not need to register for VAT, because it was below the £90,000 threshold. It spent £26,000 a year with Meta and Google, both of which invoice from Ireland. We picked the issue up on taking over the file and found the agency should have registered eighteen months earlier.
What we did: Services bought from overseas suppliers are reverse charged, and the value of those reverse charge services counts towards the buyer’s own VAT registration threshold. It is in HMRC’s own manual with a worked example, and it catches a very large number of small agencies, consultancies and online businesses buying advertising, software and overseas freelance time. We registered the client from the correct date and made an unprompted disclosure before HMRC had raised anything, which matters because the penalty range for a failure to notify is materially lower when the disclosure is unprompted. We then did the part that mattered commercially: worked out whether being registered was actually bad for this business. Most of its clients were VAT registered and could recover, so the real cost was limited to a handful of small customers. We also recovered pre registration input VAT on services supplied in the previous six months, and on goods bought in the previous four years that were still on hand at registration.
The outcome: The penalty was reduced to the minimum of the unprompted range, £9,400 of pre registration input VAT was recovered, and the agency now prices with VAT built in rather than discovering it later.
The issue: An online reseller bought stock from house clearances, auctions and private sellers, and accounted for VAT under the second hand margin scheme. HMRC reviewed the records, found no stock book, no purchase documents for a large proportion of the stock and sales invoices that did not carry the required wording. It proposed to assess VAT on the full selling price rather than the margin, a difference of £118,000.
What we did: The margin scheme is not a concession you qualify for once. It depends on keeping a prescribed set of records, item by item, and where they are not kept the right to use the scheme is forfeited for those transactions and VAT falls due on the whole selling price. There is no substantial compliance defence. What there is, in HMRC’s own guidance, is an expectation that officers give a warning and a reasonable period, not longer than three months, to reconstruct the records. We asked for that period, rebuilt the stock book from bank records, marketplace data and supplier correspondence, and put a compliant purchase document process in place. We also moved the low value stock onto global accounting, where the margin is calculated across the period and a negative margin carries forward.
The outcome: The assessment was reduced to £11,000 on the transactions that genuinely could not be reconstructed. The scheme was retained going forward.
The issue: A UK registered company selling on Amazon was told by the marketplace that it had been reclassified as a non UK established seller. Amazon began accounting for the VAT on its sales and deducting it from remittances. The client’s cash flow fell off a cliff and it had already filed returns declaring output tax on the same sales.
What we did: Where goods are already in the UK at the point of sale and the seller is not established here, the marketplace becomes the supplier and accounts for the VAT, whatever the value of the consignment. The seller is treated as making a zero rated supply to the marketplace. Establishment is about where the human and technical resources actually are, not where the company is incorporated, which is why a UK limited company run entirely from overseas can be a non established taxable person. The consequences are counter intuitive. The seller is still making taxable supplies and so is still liable to register, with no threshold, but it may be able to apply for exemption from registration. Getting that wrong in either direction is expensive, because a seller who is not the owner or importer of record cannot recover the import VAT. We reviewed where the business was genuinely run from, corrected the returns for the periods in which Amazon had already accounted for the VAT, and reclaimed the double counted output tax.
The outcome: £64,000 of double counted VAT recovered, the registration position corrected, and the import VAT recovery route documented so it is not lost again.
Note: At the time of writing HMRC is consulting on extending marketplace VAT liability to UK established sellers as well as overseas ones. The consultation opened on 23 June 2026 and closes on 18 August 2026.
Read the expanded VAT registration and schemes case studies for the full technical detail behind each result.
Hospitality and Leisure
The issue: A restaurant group sold £420,000 of gift cards a year and accounted for VAT on every one at the point of sale. Around 8% were never redeemed. On those cards the group was paying VAT on income for which it never supplied anything, roughly £5,600 a year, and it was paying VAT on all of it months before the meal was ever served.
What we did: The VAT treatment of a voucher turns on its terms, and the terms had never been looked at. A card that can only be used against standard rated food and drink at UK sites is a single purpose voucher, because both the place of supply and the rate are known when it is issued. VAT is due on issue, and if the card is never redeemed there is no refund of that VAT. Change the terms so the card can also be used against the group’s zero rated retail lines and its cookery school, and it becomes a multi purpose voucher. Issue and transfer are then disregarded entirely, VAT arises only on redemption, and there is no VAT at all on the value that is never redeemed. We redrafted the terms and conditions, checked the change against the group’s distributor contracts so that the redemption value could be evidenced, and briefed the EPOS provider.
The outcome: VAT of £5,600 a year on unredeemed cards removed permanently, and the VAT on the remainder deferred from sale to redemption, worth £14,000 a year in working capital.
The issue: A hotel and events venue treated cancellation fees, retained deposits and no show charges as compensation outside the scope of VAT. Over four years that came to £310,000 of income with no output tax. HMRC opened a check.
What we did: HMRC’s revised policy treats these payments as consideration for the right to benefit from the contract, not compensation, and VAT is due on them. Calling a charge compensation in the terms and conditions does not change the analysis. But the revised policy on early termination and cancellation fees only requires businesses to have adopted the new treatment from 1 April 2022, and in practice HMRC does not pursue earlier periods where the previously published guidance had been followed. That took a full year of a four year assessment off the table before we argued anything else. Retained deposits and no show charges are on a different footing, because they were brought into charge from 1 March 2019, so only the cancellation fee element benefited from the later date. After that we concentrated on the two places where money could still be saved. First, we separated out the genuine damages payments, where the venue had suffered an actual loss on a breach and was not supplying anything in return, which stand outside the scope on a proper analysis. Second, we disclosed the issue before the officer reached it, which secured the maximum reduction available on the quality of the disclosure. We then reworked the booking terms so the treatment is clear on the face of the contract and the EPOS coding matches it.
The outcome: The assessment came down from £52,000 to £33,000 of VAT, the penalty was reduced to the minimum for a careless inaccuracy, and the venue’s booking terms and accounting treatment now line up.
The issue: A pub group spent £1.4m refurbishing three sites. Its previous accountant capitalised the lot as leasehold improvements and claimed nothing beyond a small figure for loose furniture.
What we did: A building is not plant, but a long list of things inside it can be. We went through the specification against the statutory list and the case law. The decorative scheme, murals, prints and light fittings qualified, following the House of Lords in Scottish and Newcastle Breweries, because creating atmosphere is a function of a hospitality trade. So did the cold rooms, the trade drainage, the fire alarm and sprinkler system, the sound insulation and the moveable partitions. Fixed wall panelling did not, because the Upper Tribunal in JD Wetherspoon held that panelling of that kind had become part of the premises. Nor did the blockwork toilet cubicles or the general wall tiling in the toilet areas, although the demountable partitions and the splashbacks around the basins did qualify. The electrical and lighting systems, the powered ventilation and air cooling, the cold water and the heating all went into the special rate pool as integral features. We apportioned the preliminaries on a pro rata basis, which is the approach the Upper Tribunal endorsed in Wetherspoon. We were also careful with the pre construction professional fees, because the Supreme Court held in Ørsted West of Duddon Sands, the Gunfleet Sands case, in April 2026 that surveys and studies of that kind are not expenditure on the provision of plant.
The outcome: £310,000 of plant and integral features identified from a £1.4m spend, worth £77,500 in corporation tax at 25%. Most of it was covered by the annual investment allowance in the year of spend.
The issue: A contract caterer delivered cooked meals to care homes and workplace canteens in heated trolleys. It had treated the supplies as zero rated food. HMRC assessed £165,000 on the basis that it was supplying catering.
What we did: Food is hot food, and therefore standard rated, if it is above the ambient air temperature when it is provided and any one of five conditions is met. Those conditions include heating it so it can be eaten hot, keeping it hot, supplying it in packaging that retains heat, and marketing it in a way that indicates it is supplied hot. On these facts every limb was satisfied, and the First-tier Tribunal decision in Slice of Pie in January 2026 shows how readily they are met. What made it worse was the client’s own website, which promised meals delivered hot and ready to serve. Its own marketing copy was the evidence against it. We could not win the past, so we advised the client accordingly and made a disclosure. Going forward we mapped which parts of the range could genuinely be supplied cold or ambient and repriced them, and rewrote the marketing so it no longer created a liability that the product did not have to carry.
The outcome: The historic position was settled at £165,000, with the penalty charged at the minimum for a careless inaccuracy after full disclosure and cooperation, and around 40% of the range was moved to a genuinely zero rated cold delivery model, saving £46,000 a year going forward.
The issue: A client owned three holiday cottages that had qualified as furnished holiday lettings for years. The regime was abolished from April 2025 and the client assumed all the tax advantages had gone with it, including any prospect of Business Asset Disposal Relief on a sale. He was preparing to sell at a 24% capital gains tax rate on a gain of around £620,000.
What we did: The regime has gone, but the transitional rules have not. Where the furnished holiday letting business actually ceased before 6 April 2025, Business Asset Disposal Relief remains available on a disposal within three years of cessation, so the last date is early April 2028. The point HMRC has been explicit about, and that most commentary misses, is that the repeal itself is not a cessation. This only helps clients whose business genuinely stopped. We checked the conditions had been met in the final qualifying year, established and evidenced the cessation date, checked the anti-forestalling rule for contracts entered into on or after 6 March 2024, and modelled the disposal against the lifetime limit. Separately we dealt with three things the client had not been told: the existing capital allowances pool continues to be written down even though new expenditure now falls under the ordinary property rules, the accumulated losses are not lost and can be set against any UK property business profits, and the VAT position has not changed at all, because holiday accommodation was always standard rated and still is.
The outcome: Relief claimed at 18% rather than 24% on the £620,000 gain, a saving of £37,200, plus £38,000 of brought forward losses preserved against the remaining portfolio.
The issue: This restaurant chain collected tips and a discretionary service charge from customers and distributed them to staff through its main payroll. Because the payments ran through the normal payroll, they were being treated as ordinary earnings and subjected to National Insurance, an avoidable cost for both the business and its people. Separately, the previous accountant had treated the discretionary service charge as VATable income, charging VAT on amounts that should never have been within the scope of VAT at all.
What we did: We tackled both problems. First, we advised the client to set up a separate tronc PAYE scheme, run independently by a troncmaster rather than by the employer. When tips and discretionary service charges are allocated through a properly constituted tronc, with the troncmaster, not the company, deciding how they are shared, the payments fall outside the National Insurance net. Second, we corrected the VAT position: a discretionary service charge, provided certain conditions are met, is not consideration for a supply and is therefore outside the scope of VAT. We reviewed the arrangements, established that the charge had been genuinely discretionary, and submitted a claim to recover the overpaid VAT, going back the full four years permitted.
The outcome: The new tronc arrangement removed the National Insurance charge on tips and service charges, generating an overall saving in the region of £42,000 to £45,000 a year, a recurring benefit for as long as the scheme is in place. The VAT correction recovered approximately £260,000 of overpaid VAT across the four years under review. It’s a clear example of why hospitality businesses need advisers who understand the sector’s specific tax rules, and how the right technical knowledge, properly applied, can turn two inherited mistakes into substantial, lasting savings.
Read the expanded hospitality and leisure case studies for the full technical detail behind each result.
Creative Industries and Agencies
The issue: A consultant working through his own limited company was told by his end client that the off-payroll rules no longer applied, because the client had become small under the new company size thresholds that took effect in April 2025. On that basis the client stopped issuing status determinations and started paying the company gross. HMRC opened an employer compliance review.
What we did: The thresholds did increase, to £15m turnover and £7.5m balance sheet total with the employee test unchanged at 50. But the off-payroll size test looks at the last financial year for which the accounts filing period ended before the start of the tax year. The first financial years under the new thresholds begin on or after 6 April 2025, so they do not feed through until 2027/28. A company also has to meet the criteria for two consecutive financial years before its size status changes, which pushes the earliest possible date back further still. The engager had applied them nearly two years early. That mattered enormously, because it decided who carried the liability. With the rules still applying, responsibility sat with the engager, not with our client’s company. We set that out, and separately dealt with the status position on its merits using the actual working practices rather than the contract alone. We also made sure the set off rules introduced in April 2024 were applied, so that the tax and National Insurance the company and the director had already paid were credited against any PAYE liability rather than the same income being taxed twice.
The outcome: The liability stayed with the engager, our client’s company was not assessed, and the engagement continued on a properly documented basis.
The issue: A non resident performer was booked for a UK tour. The promoter was obliged to withhold tax at the basic rate of 20% from every payment, calculated on gross fees. On a tour grossing £680,000 against thin margins, that meant £136,000 withheld against a real UK liability of a fraction of that, recoverable only through a return filed the following year.
What we did: There is a formal route to reduce the withholding before it happens, but it has to be used in advance. We prepared an application to HMRC’s Foreign Entertainers Unit with the contracts, the tour budget and a supported schedule of the costs actually incurred in earning the UK income, and filed it more than 30 days before the first payment was due. We also dealt with the part most people miss, which is that the withholding reaches endorsement, sponsorship and merchandising income connected with UK appearances, not just the appearance fee, and it applies even where the payment is made to an offshore company by a payer with no UK presence. We apportioned the worldwide endorsement income on a day count basis and kept the diary evidence to support it.
The outcome: The withholding was reduced to £31,000, releasing £105,000 of cash into the tour at the time it was needed rather than fourteen months later. The promoter’s quarterly returns were filed on time and no interest arose.
The issue: A media group acquired a back catalogue of master recordings and, separately, a library of films. Its accountant amortised both in the accounts and claimed corporation tax relief on both. The corporation tax return had been filed on that basis for two years.
What we did: The corporate intangibles regime broadly gives relief following the accounts, but it carves out master versions of sound recordings altogether, except as regards royalties. So the music masters sat outside the regime and no amortisation relief was available, which meant the returns were wrong and had to be corrected. Films are the opposite way round. The exclusion for films has been limited to production expenditure since 2007, so a purchased film library generally does fall within the regime and does attract relief, which the client had not appreciated was on a different footing. We also separated the publishing and copyright interests from the masters, because they are different assets and can fall the other way, and we checked the acquisition dates against the July 2020 commencement change and the restricted asset rules for related party acquisitions.
The outcome: The music position was corrected voluntarily before HMRC found it, which kept penalties at nil. The film library relief was confirmed, and further relief was found on the music publishing and copyright interests once they were separated from the excluded masters, worth £96,000 in corporation tax.
The issue: A concert promoter had treated ticket income as exempt under the cultural exemption for years. It then began paying one of its trustees for services. HMRC reviewed the position and assessed £240,000 of VAT on a full season of ticket sales.
What we did: The exemption for admission to cultural performances is only available to an eligible body, and one of the conditions is that the body is managed and administered on an essentially voluntary basis by people with no financial interest in its activities. It is a condition about governance, not about culture. The Court of Appeal in Bournemouth Symphony Orchestra held that paying someone a proper rate does not by itself give them a financial interest, but that a paid individual taking part in top level decision making stops the management being essentially voluntary. So the risk here was not the payment as such. It was that a paid person sat on the board and took part in running the organisation, and that alone can remove the exemption for an entire season. We reviewed the payments, the governance documents and the actual decision making, restructured the arrangement so that the individual concerned stepped back from the board before being engaged, and negotiated the assessment down to the periods where the condition genuinely was not met. We also flagged a second exposure the client did not know about, which is that live streamed and encore cinema screenings are treated by HMRC as outside the exemption, a view the First-tier Tribunal supported in Derby Quad in 2023.
The outcome: The assessment was reduced to £78,000, the exemption was secured going forward, and the streaming income was correctly treated as standard rated from the point we identified it rather than four years later.
The issue: A digital agency billed £3.4m a year, of which £2.6m was media spend passed through to publishers. It had always treated the gross figure as its own turnover. That took it well past the cash accounting limits it would otherwise have qualified for, distorted every turnover based measure its bank and its insurers used, and made the reported margin look a fraction of what it actually was.
What we did: Whether an agency is principal or agent on media spend is a question of fact, tested against a set of indicators: who has title, who knows the value, whether the agent’s fee is separately identified, and whether the agent can alter the nature or value of the underlying supply. It is not decided by what the contract calls the parties. We reviewed the client contracts and the publisher terms, restructured the ones that could genuinely be run on a disclosed agency basis so that the client contracted with the media owner and the agency charged commission, and left the rest as principal where the commercial reality required it. We also dealt with the volume rebates the agency received from media owners, which had been netted off quietly and needed to be brought into account properly.
The outcome: Turnover as reported fell from £3.4m to £1.1m, bringing the company back inside the cash accounting limits and giving accounts that finally showed a margin reflecting how the business actually works. The VAT position was corrected without an assessment.
The issue: A creative studio itemised third party costs on its invoices as disbursements and did not charge VAT on them: stock photography, print, freelance production and research reports. Several of its clients were charities and partly exempt businesses that could not recover VAT, so the treatment mattered to them commercially. HMRC assessed £67,000.
What we did: A disbursement has to meet eight conditions, and the one that fails almost every time is that the client, not the agency, must have used the goods or services. Where the studio buys a stock image and puts it into the artwork it is delivering, it has used that image itself. The eight conditions are set out in HMRC’s own guidance, and the First-tier Tribunal decision in Brabners illustrates the point neatly: recharging at cost and itemising it separately does not make something a disbursement. So the assessment was right in principle. We limited it where genuine disbursements existed, made an unprompted disclosure, and then did the work that mattered for the client relationships: repricing the charity accounts so the VAT was built into the fee rather than appearing as a surprise, and checking which of the studio’s digital advertising work for charities could be zero rated in its own right.
The outcome: The assessment was reduced to £41,000 and penalties were nil. The charity work was restructured so that the zero rated advertising elements were separately identified, saving those clients £12,000 a year.
Read the expanded creative industries and agencies case studies for the full technical detail behind each result.
Technology, Startups and Professional Services
The issue: A software startup raised a friends and family round and a small angel round together. Its solicitor issued the SEIS shares and the EIS shares under a single board minute on the same day. Four investors had already claimed SEIS relief on £180,000. HMRC refused the compliance statement.
What we did: SEIS is only available where no EIS or venture capital trust investment has been made in the company on or before the day the SEIS shares are issued. The test is the day, not the moment, so a single board minute covering both destroys it. There is no reasonable excuse route and no remedial provision. We could not save the relief, and said so immediately rather than running an argument that was going to fail. What we could do was deal with the consequences properly: we worked with the company on the investor communications, confirmed that EIS relief on the later shares was unaffected, and established that the four investors could still claim EIS on their subscriptions, which recovered 30% relief instead of 50% rather than nothing at all.
The outcome: £54,000 of relief preserved out of the £90,000 originally expected, and the company now issues SEIS shares on a separate day, with a separate board resolution, and files the SEIS compliance statement before the EIS one.
The issue: An investor put £200,000 into a company under EIS. He had taken 2,000 ordinary shares three years earlier in return for some early non-executive advice. HMRC refused relief on the entire £200,000.
What we did: EIS imposes an existing shareholdings requirement. At the time the new shares are issued the investor must hold no other shares in the company except shares on which risk finance relief was given, subscriber shares held continuously since issue, or shares acquired before the company issued anything other than subscriber shares and before it began trading or preparing to trade. A small holding picked up for services three years earlier is none of those, and the consequence is that relief is denied on the whole of the new investment rather than a proportion of it. HMRC was right. We could not fix it for that investor, but we could stop it happening again. We reviewed the company’s full share register against the independence test before the next round, identified two more prospective investors who would have failed for the same reason, and restructured their participation so that the new money went in on a basis that qualified.
The outcome: The £200,000 claim was lost. The following round of £1.1m was structured so that every investor qualified, preserving around £330,000 of relief that would otherwise have been at risk.
The issue: A management team took growth shares in a private company. Nobody made a section 431 election. Four years later the company sold and the shares realised £2.4m between them. Because the shares carried leaver provisions and transfer restrictions, they were restricted securities, and the restriction discount of 20% at acquisition had stayed in the system.
What we did: By the time we were instructed the election could not be made. It has to be signed by both employee and employer within 14 days of acquisition, it is irrevocable and there is no late election and no reasonable excuse. On a sale, a proportion of the proceeds corresponding to the original discount is employment income rather than a capital gain, and because the shares were readily convertible assets on a trade sale the company had to operate PAYE and employer’s National Insurance at 15% on it. We quantified the exposure precisely, negotiated the tax indemnity and the retention with the buyer on an informed basis rather than a worst case one, made sure the employees made good the PAYE within 90 days of the end of the tax year in which the notional payment arose, so that no further charge on the unpaid PAYE arose, and used a section 430 election to stop any further charges arising on the remaining holdings.
The outcome: The exposure was quantified at £298,000, made up of income tax, employee National Insurance and employer’s National Insurance on the restricted element, rather than the £420,000 the buyer’s advisers had initially reserved for, and the deal completed on time.
The issue: A founder held 8% of a company through a class of B ordinary shares. On a sale of the business he expected Business Asset Disposal Relief on a gain of £900,000. He would not have got it. The articles gave the B shares votes and a nominal capital stake but no entitlement to a share of profits available for distribution, and they were silent on proceeds. On top of that, a large participating preference tranche issued to an investor counted as ordinary share capital and diluted him below 5%.
What we did: The relief requires 5% of ordinary share capital and 5% of votes, plus either 5% of profits available for distribution and assets on a winding up, or 5% of the proceeds on a sale of the whole ordinary share capital. Alphabet shares routinely fail the profits limb, because dividends are declared class by class at the directors’ discretion and the test looks at rights rather than history. The proceeds test usually rescues the position, but only if the articles actually confer proceeds rights, and here they did not. We modelled both tests against the cap table and the expected waterfall, then amended the articles to confer the necessary rights and dealt with the preference share classification. Because the tests have to be met throughout the two years ending on disposal, we did this two years ahead of the planned exit, not two months.
The outcome: Relief secured on the £900,000 gain at 18% rather than 24%, a saving of £54,000, on a position that would otherwise have failed on a technicality in the articles.
The issue: A professional services LLP treated its junior partners as self-employed on the basis that they sat on practice group committees and therefore had significant influence over the affairs of the firm. Once the Court of Appeal had decided BlueCrest against the taxpayer on that point in January 2025, we told the firm the argument was no longer safe and that it should not wait for the Supreme Court. The exposure across eleven members, in PAYE and employer’s National Insurance at 15%, was around £410,000 a year.
What we did: The point at issue was Condition B, the significant influence test. Significant influence has to come from legally enforceable rights arising out of the mutual rights and duties of the members, and it has to be influence over the affairs of the LLP as a whole rather than operational control of a business unit. Soft or de facto influence, however commercially real, does not count. That leaves two workable routes. The first is genuine profit dependent remuneration with real downside, so that less than 80% of the member’s pay is disguised salary. The second is a capital contribution of at least 25% of the member’s disguised salary. We modelled both, took the capital route for eight members and restructured the remuneration of the other three, and made sure the contributions were genuine, enduring and carried real risk, which is what HMRC’s updated guidance requires if the anti-avoidance rule is not to bite.
The outcome: All eleven members remained self-employed on a defensible basis, avoiding around £410,000 a year. The Supreme Court handed down its judgment on 1 July 2026 and confirmed the narrow reading of Condition B, which meant the firm had already been on the right footing for a full tax year rather than scrambling to react. We also built in a review triggered by every promotion round, because a mid year pay rise triggers a fresh test at the date of the change, and if the capital contribution then falls below 25% the member fails that test from the date of the change. A top up is possible, but it is scaled back for the part of the tax year already gone, so it will rarely cure the position in full.
Read the expanded technology, startups and professional services case studies for the full technical detail behind each result.
Frequently Asked Questions
Apply to HMRC online or by post, using the form for your business type. You must pass three tests: the business does construction work in the UK, it runs through a bank account, and your tax filings and payments are up to date. Turnover excluding VAT and materials must be at least £30,000 per director or partner, or £100,000 in total.
If you trade through a limited company, you offset CIS deductions against your monthly PAYE liability using an Employer Payment Summary, then reclaim any excess after the tax year ends. Sole traders and partnerships claim through Self Assessment instead. Most delays happen because the figures do not match HMRC’s own records.
A company is associated with another if one controls the other, or both are under the control of the same person or persons. It matters because the £50,000 and £250,000 corporation tax profit limits are divided by the number of associated companies, so one extra company pushes the rest into a higher effective rate. Where the link runs through a spouse or other relative rather than direct control, the companies count only if there is also substantial commercial interdependence between them. Dormant companies are ignored.
You must register for VAT once taxable turnover in any rolling twelve months passes £90,000, so track it month by month rather than by accounting year. Genuine options include timing work differently or changing what you supply. Splitting one business artificially into two does not work, and HMRC can issue a disaggregation direction treating them as one.
It is the return a company files to claim relief from the Annual Tax on Enveloped Dwellings, and it is due by 30 April each year for property held on 1 April. Any company holding UK residential property worth more than £500,000 has to file, even where the relief reduces the charge to nil.
Four years as standard, six years where the error was careless, and twenty years where it was deliberate. Offshore matters carry a twelve year limit. It is the behaviour behind the error that decides which applies, which is why the way an enquiry is answered at the outset matters more than most people expect.
How We Deliver Results Like These
Tax planning isn’t just about knowing the rules, it’s about spotting opportunities early, understanding the wider commercial context, and giving advice that is technically sound and practical. Sometimes that means securing a relief before a deadline closes. Sometimes it means defending your position with HMRC clearly, concisely and credibly. Because our firm benefits from partners who are Chartered Tax Advisers, who have also built businesses, raised finance and worked alongside HMRC, the advice you receive is grounded in real commercial experience, not just textbook theory.
At Merit Accountants, we work with business owners, property clients, company directors and individuals who want more than routine compliance. They want tax advice that helps them keep more of what they earn, avoid unnecessary risk, and make better decisions with confidence.
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