With rising costs, accurate expenses classification is essential to stay compliant and maximise tax efficiency. Misclassifying expenses - such as travel and subsistence - can lead to scrutiny, fines and missed opportunities.
Quite often, business owners, when building their company and even beyond, treat the company as an extension of their personal finances. However, there can be some significant tax repercussions, for both the company and the individual when they are not treated as separate entities– although not all are bad!
Inheritance tax (IHT) receipts in April 2025 were over £800 million, which is a 14% increase on the same month in 2024. The Office for Budget Responsibility forecasts that IHT receipts will continue to increase in the current 2025/26 tax year. With the IHT exemption for pensions being removed from April 2027, it seems that the trend of increased IHT receipts is set to continue.
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