February 2026 | DSK Partners LLP

What is a UK property business

Posted on February 5, 2026 by

The income generated from land or property in the UK is treated as arising from a UK property business. The underlying legislation defines this broadly to include all activities that produce rental income or similar receipts from UK land, whether the taxpayer is subject to Income Tax or Corporation Tax.

Although property income is treated as coming from a business, landlords are not generally regarded as trading unless they meet the normal trading tests. As a result, most trading-related tax reliefs, such as certain Capital Gains Tax reliefs, do not usually apply. Property business profits are instead calculated using principles similar to those for trading profits.

Since the 2017–18 tax year, the cash basis is the default method for calculating profits and losses for most individual landlords. However, companies and some other landlords must still use Generally Accepted Accounting Practice (GAAP).

A wide range of persons can carry on a UK property business, including individuals, partnerships, trustees, companies and non-residents with UK property income. Using an agent does not change who is treated as carrying on the business.

In most cases, all UK property income is treated as part of one single property business, allowing income and expenses across different properties to be combined. UK and overseas property, however, are treated as separate businesses. Activities carried out in different legal capacities, such as personally, as a partner or as a trustee, are also treated as separate property businesses for tax purposes.

Source: HM Revenue & Customs Tue, 03 Feb 2026 00:00:00 +0100

What is a salaried member of an LLP

Posted on February 5, 2026 by

The salaried member legislation applies to certain members of a Limited Liability Partnership (LLP) whose terms of membership are more like an employee than a partner. To be a salaried member, the individual must perform services for the LLP in their capacity as a member.

The legislation uses a three-part test. If all three conditions apply, the member is classified as a salaried member for tax purposes:

Condition A – Disguised salary: At least 80% of the member’s pay is fixed, or any variable amounts do not vary in line with the LLP’s overall profits or losses.
Condition B – Lack of influence: The member has no significant influence over the LLP’s affairs.
Condition C – Insufficient capital stake: The member’s capital contribution is less than 25% of their expected reward package.

If a member can show that at least one condition does not apply, they continue to be treated as a partner.

The rules do not apply to:

Companies
Individuals who do no more than invest money
Individuals who no longer provide services for the LLP but continue to receive a profit share

HMRC examples illustrate that remuneration linked to overall firm profits, rather than individual performance, does not create a salaried member situation. Professional qualifications or experience are also irrelevant, what counts is the member’s role and risk exposure in the LLP.

Source: HM Revenue & Customs Tue, 03 Feb 2026 00:00:00 +0100

Car and travel costs if self employed

Posted on February 5, 2026 by

If you are self-employed, it is important to understand which car and travel costs can be claimed.

You can claim allowable business expenses for car, van, or travel costs, which reduce your taxable profit. Typical allowable costs include:

Vehicle insurance
Repairs and servicing
Fuel
Parking
Hire charges
Vehicle tax and licence fees
Breakdown cover
Train, bus, tram, air, and taxi fares
Hotel rooms
Meals on overnight business trips

You cannot claim for:

Non-business driving or travel costs
Fines or penalty charges
Personal travel, including commuting between home and a regular workplace, is generally not allowable.

For vehicle costs, you may choose between claiming actual costs or using HMRC’s simplified expenses which is a flat-rate allowance for mileage.

If you buy a vehicle for your business, how you claim the cost depends on your accounting method. Under traditional accounting, you can claim capital allowances on the purchase cost. If you use cash basis accounting, you can also claim capital allowances as long as you are not using simplified expenses. For all other types of vehicles or associated costs, you can claim them as allowable business expenses.

Source: HM Revenue & Customs Tue, 03 Feb 2026 00:00:00 +0100

Eligibility for Business Asset Disposal Relief

Posted on February 5, 2026 by

Business Asset Disposal Relief (BADR) can significantly reduce the Capital Gains Tax due when selling a business or shares, but with higher rates coming from April 2026, timing and eligibility matter more than ever.

BADR applies to the sale of a business, shares in a trading company, or an individual’s interest in a trading partnership. When this relief is available, a reduced Capital Gains Tax (CGT) rate, currently 14%, is applied instead of the standard rate. These rates will increase in the new tax year starting on 6 April 2026 to 18%. As a result, disposals made after April 2026 will face a higher CGT rate.

To qualify for BADR, certain conditions must be met:

Sale of a Business or Business Closure:

You must be a sole trader or business partner; and
You must have owned the business for at least 2 years leading up to the sale or closure.
You must dispose of your business assets within 3 years to qualify.

Sale of Shares or Securities:

Both of the following must apply for at least 2 years up to the date you sell your shares:

You must be an employee or office holder of the company (or a company within the same group).
The company’s main activities must involve trading, not non-trading activities like investment, or it must be the holding company of a trading group.

Additional rules can apply if the shares are from an Enterprise Management Incentive (EMI).

Currently, you can claim a total of £1 million in BADR over your lifetime, allowing you to qualify for the relief multiple times. The lifetime limit may be higher if you sold assets before 11 March 2020.

Source: HM Revenue & Customs Tue, 03 Feb 2026 00:00:00 +0100

New employee starter checklist

Posted on February 5, 2026 by

Setting up the correct tax code when a new employee starts is essential, as even small payroll errors can lead to unnecessary tax overpayments and avoidable complications later on.

When hiring a new employee, employers need to ensure the correct tax code and starter declaration are set up in their payroll system. Using the wrong tax code can cause the employee to overpay taxes, so accurate information is essential. Much of this information is provided on the employee’s P45, so it is important to remind new employees to bring it on their first day.

If the employee does not have a P45, they can complete HMRC’s online PAYE starter checklist. A paper version is also available if they cannot access the online tool. Employers must retain this information in their payroll records for the current tax year and the following three years. Once completed, HMRC’s online tools can be used to determine the correct tax code.

The starter checklist should be used in cases where the employee:

Has a student or postgraduate loan
Has personal details that differ from their P45
Does not have a P45
Is temporarily working in the UK for an overseas employer

Once completed, the checklist can be submitted to the employer by email, post, or in person. There is no need to send it to HMRC.

Source: HM Revenue & Customs Tue, 03 Feb 2026 00:00:00 +0100

Do you charge VAT when you sell a company car?

Posted on February 5, 2026 by

The question of whether or not you are required to charge VAT when selling a company car depends on how the vehicle was bought and whether VAT was recovered at the time. Understanding these distinctions can help ensure the correct VAT treatment and avoids costly errors.

If your business sells a car on which VAT was recovered, such as a pool car or driving school vehicle, you must charge VAT on the full selling price and issue a VAT invoice if requested. These sales are not VAT-exempt and cannot use the second-hand margin scheme.
If VAT was charged but blocked when the car was bought, you do not charge VAT on the sale. The sale is VAT-exempt, and no VAT invoice can be issued. Any VAT directly linked to the sale, such as auction fees, is also exempt input tax.
Where VAT was not charged on purchase, for example if the car was bought from a private individual or under the margin scheme, you may sell it using the VAT margin scheme, accounting for VAT on the profit margin.
For commercial vehicles, VAT is charged on the full sale price if any VAT was charged when the vehicle was purchased. If no VAT was charged (for example, on a van bought from a private individual), the margin scheme can be used.
Special rules apply for vehicles bought from an insurance company or finance house, second-hand vehicles moved from Great Britain to Northern Ireland and exported vehicles, which are usually zero-rated if conditions are met.

Source: HM Revenue & Customs Tue, 03 Feb 2026 00:00:00 +0100

Payments made into employee benefit trusts constitute taxable income

Posted on February 4, 2026 by

A Tribunal recently ruled that payments made for work into a third-party trust constitute immediate employment earnings. This decision effectively precludes employers from using loan-based structures to obfuscate remuneration.

Mr. Jack was employed by an offshore company based in the Isle of Man while living and working in the UK. Under this arrangement, the fees paid for Mr. Jack’s services were split into a modest basic salary and an employee benefit trust (EBT), which would then advance these funds to Mr. Jack in the form of interest-free loans. Because these payments were categorised as loans rather than salary, they were not initially reported as taxable employment income.

Following an enquiry into Mr. Jack’s self-assessment return, HMRC issued a closure notice concluding that the £48,034 transferred to the EBT actually constituted “redirected earnings” and was, therefore, taxable as employment income under Section 62 of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003. Mr. Jack appealed, arguing that a significant portion of the funds should be exempt from tax since he had repaid approximately £23,479 of those loans in April 2011.

The Tribunal upheld HMRC’s closure notice and applied the Supreme Court’s decision in RFC 2012 plc. The Judge held that, when money was paid into the EBT for work done by Mr. Jack, it effectively became taxable employment income at that exact juncture as “redirected” earnings. Mr. Jack’s argument that he had “fixed” the tax issue by repaying the loans was also rejected, as the tax charge arose on the transfer to the EBT, and anything that happened to the money afterwards did not affect the tax already owed for the 2010/11 tax year.

This ruling confirms that the legal characterisation of a relationship or a payment in a contract is secondary to the reality of the work performed. Care must be taken when creating structures to minimise tax burden and maximise profits, as the full amount transferred to a trust could be seen as ‘earnings’. Based on the Rangers case, if money is paid in return for services, it constitutes remuneration. On the other side of the coin, if a court views a loan as salary, it may also come to view the recipient as a worker who is entitled to full statutory rights.

Source: Tribunal Wed, 04 Feb 2026 00:00:00 +0100

Turning waste disposal into an income stream

Posted on February 2, 2026 by

For many businesses, waste disposal is seen purely as a cost, an unavoidable expense required to stay compliant and keep operations running smoothly. However, there is growing interest in the idea that waste, when managed differently, can become a modest but meaningful source of income rather than a drain on resources.

The starting point is recognising that much commercial waste still has value. Materials such as metals, cardboard, plastics, glass, and certain by-products can often be separated and sold for recycling. While individual returns may appear small, the cumulative effect over a year can offset disposal costs and, in some cases, generate a surplus. This is particularly relevant for manufacturing, construction, hospitality, and retail businesses where waste volumes are high.

Technology and data are also playing a role. Improved tracking of waste streams allows businesses to understand what they are throwing away, how often, and at what cost. With this information, processes can be redesigned to reduce waste at source or to segregate materials more effectively. Cleaner, well-sorted waste commands higher prices and attracts a wider range of recycling partners.

Energy recovery offers another potential income stream. Organic waste can be converted into biogas through anaerobic digestion, while some non-recyclable materials can be used in waste-to-energy facilities. Although these solutions often require collaboration with specialist providers, they can reduce landfill charges and create long-term savings or revenue-sharing opportunities.

There is also a reputational benefit. Customers, investors, and supply chain partners are increasingly focused on sustainability. Businesses that can demonstrate circular practices may find it easier to win contracts, attract investment, or justify premium pricing.

Turning waste into income is unlikely to replace core trading profits. However, with careful planning and realistic expectations, it can reduce costs, support environmental goals, and create incremental value. In a tighter economic climate, even small efficiency gains can make a noticeable difference to overall business performance.

Source: Other Mon, 02 Feb 2026 00:00:00 +0100

The rise of the silver economy

Posted on February 2, 2026 by

The term “silver economy” is used to describe the growing economic activity linked to an ageing population. In the UK and across much of the developed world, people are living longer, healthier lives. This demographic shift is reshaping consumer demand, labour markets, and public policy, and it is creating both challenges and opportunities for businesses.

By 2040, nearly one in four people in the UK is expected to be aged 65 or over. Unlike previous generations, many older adults have higher levels of wealth, remain active for longer, and expect products and services that support independence, wellbeing, and quality of life. This has driven growth in sectors such as healthcare, home adaptations, financial planning, leisure, and technology designed for ease of use rather than novelty.

Financial services are also evolving. As people spend more years in retirement, there is greater focus on retirement planning, later-life lending, equity release, and inheritance planning. Businesses that can offer clear, trusted advice in these areas are well placed to benefit.

Importantly, the silver economy is not just about consumption. Many older individuals continue to work, volunteer, or run businesses well beyond traditional retirement age. Flexible working, part-time roles, and consultancy work allow experience and skills to remain within the economy for longer.

For policymakers and businesses alike, the key challenge is to adapt. Those who recognise the diversity, spending power, and contribution of older generations will find that the silver economy is not a burden, but a significant and growing source of economic value.

Source: Other Mon, 02 Feb 2026 00:00:00 +0100

Month: February 2026

What is a UK property business

What is a salaried member of an LLP

Car and travel costs if self employed

Eligibility for Business Asset Disposal Relief

New employee starter checklist

Do you charge VAT when you sell a company car?

Payments made into employee benefit trusts constitute taxable income

Turning waste disposal into an income stream

The rise of the silver economy

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