Category: Taxes

Coventry Transport Company Tax Defaulter Fined For Owing £26,000 In Tax: What It Means For UK Hauliers

Posted on by Sidra

A Coventry‑based transport company tax defaulter has appeared on HMRC’s current list of deliberate tax defaulters for failing to pay more than £26,000 in tax. Elvis Transports UK Limited, previously registered at 292 Grangemouth Road, was listed in HMRC’s March 2026 update covering deliberate defaults. The agency found that the company deliberately defaulted on tax from 1 November 2023 to 30 November 2023 and 1 January 2024 to 31 March 2024, owing £26,217 in unpaid tax; HMRC imposed a penalty of £17,434.30. This penalty equates to roughly two‑thirds of the tax owed, signalling that HMRC viewed the default as deliberate and used a high penalty within its permitted ranges.

Why HMRC Names Transport Company Tax Defaulters And How Penalties Are Calculated

HMRC’s power to publish details of deliberate tax defaulters stems from section 94 of the Finance Act 2009. The department publishes a list when it has investigated and charged a person or business with one or more penalties for deliberate defaults where the total tax involved exceeds £25,000. The intention is deterrence: by naming non‑compliant taxpayers, HMRC aims to create a level playing field and encourage voluntary compliance. The information is only published once penalties are final (after any appeals) and is removed after 12 months.

Penalties for deliberate inaccuracies, such as HMRC penalty for transport companies, vary. HMRC’s compliance handbook states that for an unprompted disclosure of a deliberate inaccuracy, the maximum penalty is 70 per cent of the tax underpaid and the minimum is 20 per cent. 

For prompted disclosures (where HMRC has already begun an enquiry), penalties range between 35 per cent and 70 per cent. In Elvis Transports UK Limited’s case, the penalty equates to about 66.5 per cent of the unpaid tax – near the upper end of the scale – suggesting that the company did not volunteer the error and that there may have been limited cooperation.

Impact On The Transport Sector And Wider Business Community

The March 2026 list includes several logistics businesses, highlighting HMRC’s focus on deliberate tax default in UK transport. Alongside Elvis Transports, other West Midlands haulage firms such as Valeriutrans Ltd and Iordan Transport Limited were named in local news reports for unpaid taxes exceeding £25,000. 

The road haulage industry operates on tight margins and is heavily exposed to fuel costs, subcontractor arrangements and cross‑border VAT rules. That pressure may tempt some operators to delay tax payments or under‑declare takings. 

However, the financial and reputational risks of non‑compliance, including an HMRC penalty for transport companies, are far greater. Being named on HMRC’s defaulters list signals deliberate wrongdoing, can undermine trust with customers and suppliers, and may impede access to finance or public contracts.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Record‑keeping and Registration Obligations

Many tax defaults stem from poor record keeping or failure to register for taxes on time. Limited companies must maintain separate business bank accounts and keep both company records and detailed accounting records. Accounting records must include all money received and spent, assets owned, debts owed and details of stock and goods bought and sold. Failure to keep adequate records can result in fines of up to £3,000 or even disqualification as a director. Businesses must retain these records for at least six years.

For VAT‑registered businesses, HMRC’s record‑keeping notice stresses that business records must generally be retained for six years and that VAT invoices are critical evidence for recovering input tax. 

With Making Tax Digital now mandatory for most VAT‑registered businesses, records must be kept digitally in functional compatible software. Transport companies that regularly import or export goods should pay particular attention to these requirements. The VAT registration threshold currently stands at £90,000 in taxable turnover, while deregistration can be optional if turnover falls below £88,000. Operators approaching these thresholds must monitor turnover and register promptly to avoid penalties for failing to register.

Lessons For Hauliers: Compliance, Disclosure and Cooperation

The Elvis Transports case underscores several points that all businesses – not just those in transport – should heed:

  • Understand whether a default is deliberate. HMRC defines a deliberate default as a deliberate inaccuracy in a return, a failure to comply with an obligation or a VAT or excise wrongdoing. Accidental errors attract lower penalties; knowingly under‑declaring or failing to register triggers higher sanctions and possible publication.
  • Maintain accurate records and segregate finances. Keep business and personal finances separate and maintain complete accounting and VAT records as set out above. Digital record‑keeping software, integrated with cloud invoicing and banking, helps ensure compliance.
  • Monitor turnover and register for VAT promptly. If turnover exceeds £90,000 in any rolling 12‑month period, register for VAT. Delay can lead to penalties and interest, while unregistered businesses cannot reclaim input tax.
  • File returns and pay tax on time. Late returns or payments increase the risk of HMRC inquiries and create cash‑flow problems. The consequences are more serious when errors are considered deliberate.
  • Cooperate with HMRC. Unprompted disclosures and full cooperation can significantly reduce penalties. HMRC can reduce penalties to as low as 20 per cent of the tax underpaid where businesses make an unprompted disclosure.

Commentary: What Lies Behind HMRC’s Approach

HMRC’s deliberate defaulters programme balances deterrence with fairness. Publishing names is not automatic; the law requires that the tax at stake exceeds £25,000 and that HMRC has charged penalties after investigation. 

Businesses that fully disclose errors can avoid publication. The focus on a Coventry transport company indicates that HMRC is looking beyond high‑profile tax avoidance schemes and tackling compliance in everyday sectors. Rising fuel prices, cost‑of‑living pressures and the administrative burden of Brexit‑related customs rules may have strained cash‑flow for hauliers. 

Nevertheless, HMRC expects businesses to prioritise tax obligations, and the penalty calculation reflects the seriousness with which deliberate defaults are viewed. The penalty imposed on Elvis Transports is close to the 70 per cent maximum for prompted disclosures, suggesting limited cooperation.

Businesses should also note that a deliberate tax default in UK transport may lead to the defaulters list being removed after 12 months, impacting reputation. Quick resolution and improved compliance can therefore help rehabilitate a company’s reputation. In contrast, ignoring correspondence, failing to appeal promptly or continuing non‑compliance could lead to further penalties, director disqualification or even criminal proceedings.

How Apex Accountants & Tax Advisors Can Help

Navigating UK tax law is challenging, especially for transport businesses juggling multiple taxes and tight margins. Apex Accountants & Tax Advisors offers tailored support:

  • VAT and duty compliance: we help assess whether you need to register for VAT, ensure returns are filed on time and advise on border‑related rules that affect hauliers.
  • Digital record‑keeping and Making Tax Digital: our accountants can set up compatible software and train your team to keep digital records, issue VAT invoices and store records for six years.
  • Corporate tax planning: we advise on separating personal and business finances, maintaining statutory records and preparing accurate Corporation Tax returns.
  • HMRC investigations: if HMRC raises a compliance check, we provide representation, guide you through disclosure and appeal procedures and work to minimise penalties.

In an environment of heightened enforcement, professional advice is invaluable. For a confidential discussion, contact Apex Accountants today to ensure your business stays on the right side of the law.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Frequently Asked Questions

What did the Coventry transport company do wrong? 

HMRC’s March 2026 defaulters list shows that Elvis Transports UK Limited deliberately defaulted on tax between November 2023 and March 2024, owing £26,217 in tax and receiving a £17,434 penalty.

When does HMRC publish names of tax defaulters? 

HMRC may publish a taxpayer’s details when it has charged penalties for deliberate defaults involving more than £25,000 in tax. Publication happens only after the penalty becomes final and the name remains public for up to 12 months.

What is the current VAT registration threshold? 

Businesses must register for VAT when taxable turnover exceeds £90,000 in a 12‑month period; deregistration is optional when turnover falls below £88,000.

How long must I keep business records? 

Limited companies must keep accounting records for six years. VAT records must also be kept for at least six years.

How are penalties for deliberate errors determined?

 For unprompted disclosures of deliberate inaccuracies, penalties range from 20 per cent to 70 per cent of the tax owed. Prompted disclosures carry a minimum of 35 per cent and maximum of 70 per cent. Full cooperation can reduce penalties; failure to cooperate may result in penalties near the maximum.

What should I do if I cannot pay my tax bill? 

Do not ignore the problem. Contact HMRC as soon as possible to arrange a payment plan and seek professional advice. Unpaid tax and poor disclosure can lead to higher penalties and publication on the deliberate defaulters list.

Could Returning to the UK Trigger a Returning Expatriates UK Tax Bill? What You Need to Know

Posted on by Sidra

Returning from the Middle East during wartime is an emotional decision, but for many British expatriates, it also brings a potential returning expatriates UK tax bill.The UK tax system doesn’t simply ‘start fresh’ the day you land at Heathrow; under HM Revenue & Customs’ statutory rules the moment you cease to be a non‑resident, your worldwide income and gains may fall into the UK tax net. Understanding the statutory residence test (SRT), the temporary non‑residence rules and recent changes to the non‑dom regime can make the difference between an orderly transition and an unexpected six‑figure tax bill.

How the Statutory Residence Test for Returning Expatriates Captures Tax Residency

The SRT determines whether you are a UK tax resident in any tax year. It begins with simple day-count rules. Spending 183 days or more in the UK during a tax year automatically makes you a UK resident. Conversely, if you were a UK resident in at least one of the three preceding tax years and spend fewer than 16 days in the UK, you are automatically a non‑resident; that threshold rises to 46 days if you were not a resident in the prior three years. A third automatic overseas test allows non‑residence if you work full‑time abroad, spend fewer than 91 days in the UK, and do not exceed 30 UK workdays.

For those who do not meet an automatic test, HMRC applies the ‘sufficient ties’ test, a crucial aspect of the tax residency rules for returning expatriates. The more connections (family, accommodation, work, and 90-day ties) you have to the UK, the fewer days you can spend here before becoming a resident. 

Individuals who were UK residents in one or more of the preceding three years can become residents with as few as 16 days in the UK if they have four UK ties, 46 days with three ties or 91 days with two ties, illustrating how strict the tax residency rules for returning expatriates can be. Those with no recent UK residence need more days to trigger residency, but the principle is the same: the greater your social and economic ties, the sooner HMRC will treat you as back in the UK tax net.

Exceptional circumstances offer only limited respite. HMRC allows up to 60 days of UK presence to be disregarded where events beyond your control keep you here, but the bar is high. The internal manual explains that the concession usually applies only when the Foreign Office advises against all travel to your host country, such as during civil unrest or natural disasters. Even then, the maximum 60 days is a limit; any additional days count towards residence. HMRC emphasises that exceptional circumstances generally do not apply merely because a crisis prompted you to return to the UK.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

The Five‑Year Trap: Temporary Non‑Residence Rules

Simply being a non-resident doesn’t automatically exempt you from UK tax on gains. Under the temporary non-residence rules UK, gains and income can still be taxed when you return within five years. HMRC’s temporary non‑residence rules catch individuals who were UK residents in four out of the seven tax years before departure and return within five years. In that case, capital gains and some distributions realized during the period of non‑residence are treated as arising in the tax year of return. 

The 2025 version of the HMRC helpsheet notes that a gain made while abroad can be taxed when UK residence is resumed. Crucially, the five‑year clock counts full tax years; someone who left in April 2021 and returns before April 2026 will fall within the rules even if they lived abroad for almost five calendar years.

The implications for Gulf‑based executives are stark. Many earn tax‑free salaries and realize gains on shares or businesses while abroad. If they return within five tax years, those historic gains can be taxed at UK rates of up to 20 percent for capital gains and 39.35 percent for dividends. The rules also apply to certain income, such as close company distributions and some partnership profits. Assets acquired during the overseas period are normally exempt, but exceptions apply where relief was rolled over from a UK asset.

A New Non‑Dom Regime: Who Qualifies?

HM Treasury announced in 2024 that the long‑standing domicile‑based tax regime would end from 6 April 2025. Domicile will no longer determine access to the remittance basis; instead the government is introducing a residence‑based foreign income and gains (FIG) regime. 

The policy paper states that the new rules will provide 100 per cent relief on foreign income and gains for newcomers during their first four tax years of UK residence, provided they have not been UK tax resident in any of the ten preceding years. 

Protection for income and gains in trusts will end for non‑doms who do not qualify. This relief is aimed at attracting internationally mobile talent, not at returning expatriates; most Gulf returnees will have been UK tax resident within the last decade and therefore will not qualify. In addition, any foreign income or gains that arose before 6 April 2025 under the old remittance basis will still be taxed when remitted to the UK.

Practical Considerations and Risks for a Returning Expatriates UK Tax Bill

  • Day Counts and Tax Residency:
    • Vigilance over day counts is crucial. An unplanned overnight stay or UK business trip could result in triggering tax residency.
    • 183 days automatically makes you a tax resident in the UK, but fewer days can still suffice, particularly if family or accommodation ties are considered.
    • Meticulous record-keeping of your arrivals and departures is essential to avoid being caught out.
    • If travel to the Gulf is unsafe, consider spending time in a third country to manage your days of residency.
  • Split-Year Treatment:
    • For permanent returns, explore whether split-year treatment can reduce UK tax exposure.
    • HMRC’s Statutory Residence Test (SRT) allows a tax year to be split into UK and overseas parts.
    • Only income arising in the UK part of the year will be taxed.
  • Temporary Non-Residence Rules:
    • If you’ve sold a business or other assets while abroad, ensure you review whether the temporary non-residence rules apply.
    • Gains on assets acquired after leaving the UK are generally excluded from UK tax.
    • However, exceptions apply to assets linked to earlier UK holdings.
    • To avoid unexpected tax liabilities, consider timing disposals to ensure the five-year period elapses before your return, as required under the temporary non-residence rules UK, or arrange to defer your return until after the tax year ends.
  • National Insurance Contributions (NICs):
    • When returning to work in the UK, your National Insurance contributions will likely resume.
    • You must notify HMRC and file a Self Assessment tax return by 5 October following the tax year if you have untaxed income to report.
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

How Apex Accountants & Tax Advisors Can Help

Apex Accountants & Tax Advisors has extensive experience supporting globally mobile clients. We help expatriates calculate their UK day counts, interpret the SRT and assess whether exceptional circumstances can be claimed. Our advisers can model the impact of temporary non‑residence rules on historic gains, evaluate eligibility for the new FIG regime and structure asset disposals to mitigate UK tax. If you are considering returning from the Middle East, we can assist with split‑year claims, Self Assessment registration and National Insurance planning, and liaise with HMRC on your behalf. 

Contact us for a confidential consultation before you book your flight home; proactive planning is essential when days in the UK are limited.

FAQs

1. How many days can I spend in the UK without becoming tax resident? 

If you spend 183 days or more in the UK in a tax year, you are automatically a resident. However, you may become a resident with far fewer days once your UK ties are taken into account.

2. Do exceptional circumstances excuse additional UK days?

HMRC may disregard up to 60 days if you are forced to stay in the UK due to events beyond your control, but only where the Foreign Office advises against all travel to your country.

3. What is the temporary non‑residence rule? 

It applies if you were UK resident for at least four of the seven tax years before departure and you return within five tax years. Gains and certain income arising during that overseas period are taxed in the year of return.

4. Can I avoid tax on assets sold while abroad?

Gains on assets acquired after you left the UK are usually excluded, but gains on assets owned before departure or linked through rollover relief can be charged under the temporary non‑residence rules.

5. Who qualifies for the new foreign income and gains (FIG) regime? 

From 6 April 2025 new arrivals can claim 100 per cent relief on foreign income and gains for four years if they have not been UK tax resident in the previous ten years. Returning expats who were recently UK resident are unlikely to qualify.

6. Do I need to register for Self Assessment when I return?

You must tell HMRC by 5 October following the tax year if you have foreign income or gains to report. Employees without other untaxed income may not need to register.

April 2026 Car Tax Changes: What UK Drivers Need to Know About UK Vehicle Excise Duty

Posted on by Farazia Gillani

From 1 April 2026, many motorists will pay more UK vehicle excise duty (VED). The increase is inflation-linked and applies across several parts of the system, not only the “headline” band for the highest CO₂ cars.

For most people, the change is modest. For buyers of brand-new, high-emission cars, the first-year bill can be eye-watering. And for electric vehicle owners, there is still tax to pay, even if the first-year rate stays low.

Also Read: Van Tax Changes and How they Affect Employer Vehicle Costs

Car Tax Changes on 1 April 2026

AreaWhat changes from 1 April 2026Why it matters
Standard rate (most cars registered after April 2017, years 2+)£195 → £200Small rise for many drivers
Top first-year CO₂ band (new cars over 255 g/km)£5,490 → £5,690Up to £200 extra in year one for top emitters
Expensive Car Supplement (ECS) amount£440 per year (years 2–6)Extra cost on top of standard rate for expensive cars
ECS threshold for zero-emission cars£40,000 → £50,000 (rule takes effect 1 April 2026)Helps many EVs avoid the ECS if priced between £40k–£50k

How VED Works 

For cars first registered on or after 1 April 2017, VED is usually split into two parts:

  1. First-year rate (based on CO₂ emissions)
  2. Standard rate (a flat annual rate from year two onwards)

On top of that, some cars pay the Expensive Car Supplement for five years (years 2–6).

For cars registered between 1 March 2001 and 31 March 2017, VED follows a different CO₂ band table and does not work the same way as the post-2017 system.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

The Big Headline: Higher First-Year Bills For High-Emission New Cars

If you are buying a new petrol or diesel car with very high CO₂ emissions, the first-year “showroom tax” can be the biggest cost shock.

For cars emitting over 255 g/km, the first-year rate rises to £5,690 from 1 April 2026. That is £200 more than the 2025–26 level.

This matters most if you are:

  • Buying a high-performance model
  • Buying a heavy SUV or large engine vehicle with high CO₂
  • Registering a brand-new vehicle close to the April changeover date

Read: VAT on Car Hire in the UK – What Businesses Need to Know

What About UK Vehicle Excise Duty on Electric Vehicles In 2026?

Electric cars are no longer fully exempt from VED. Under the rules that came in from 1 April 2025, new zero-emission cars pay a £10 first-year rate, and then pay the standard rate afterwards.

From 1 April 2026, that standard rate becomes £200 (up from £195).

There is also a helpful change for many EV buyers: the government is increasing the Expensive Car Supplement threshold for zero-emission cars to £50,000, effective 1 April 2026, for eligible vehicles registered from 1 April 2025 onwards.

Practical takeaway: an EV priced at £45,000 may avoid the ECS once the new threshold applies, while a petrol or diesel car still faces the £40,000 threshold.

VED For Older Cars (Registered 2001 To 2017): Rates Rise Too

If your car was registered between 1 March 2001 and 31 March 2017, your annual VED is still based on CO₂ bands.

Here are the top-end bands for 2026–27:

Band (2001–2017 system)CO₂ emissionsStandard rate from 1 April 2026
L226–255 g/km£760
MOver 255 g/km£790

Planning Tips For Households And Businesses

Small increases add up, especially for fleets. A few sensible checks can protect cash flow.

  • If you are ordering a new car, confirm the official CO₂ figure and expected first-year VED before you sign.
  • If you run a fleet, build the new rates into your 2026–27 budgets and forecasts.
  • If you are considering an EV, check the list price carefully and whether the £50,000 ECS threshold will apply to your licence date.
  • Keep records tidy. For business vehicles, VED is typically treated as a running cost in the accounts, so clean bookkeeping helps your year-end work and reporting.

How We Can Help You Plan For Upcoming Car Tax Changes in UK

At Apex Accountants, we help drivers and businesses understand how motoring costs affect tax, budgeting, and cash flow.

Our support can include:

  • Fleet cost forecasting and budgeting reviews
  • Bookkeeping clean-up for vehicle and mileage records
  • Company structure and cost planning for vehicle-heavy businesses
  • Management reporting so you can track motoring costs month by month
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Conclusion

The April 2026 updates to UK vehicle excise duty are not a single “one-off” change. They raise the standard annual rate, increase first-year charges for the highest CO₂ cars, and adjust how the expensive car rules apply to many EVs.

If you want help modelling the cost impact for your household or fleet, contact Apex Accountants for a practical review and clear next steps.

FAQs About UK Road Tax

1. Is car tax rising for electric vehicles? 

Yes. Since April 2025 EVs lost their tax exemption. A new EV now pays £10 in its first year and then £200 per year. However, EV buyers get a higher luxury threshold: if the car’s list price is under £50,000, the extra £425 tax doesn’t apply.

2. How does the luxury tax change? 

The Expensive Car Supplement (also called luxury car tax) stays at £425 per year, but now only applies above £40k list price for petrol/diesel cars, and above £50k for EVs. This means many £40–£50k EVs bought since April 2025 are now exempt from the extra fee.

3. What about car tax on diesel cars? 

Most diesel models follow the same bands as petrol. However, non-RDE2 compliant diesels still pay one band higher (up to £5,490 in 2025). The 2026 update likely maintains that rule.

4. What about car tax on Older cars (pre-2001)? 

These are taxed by engine size. The 2026 rates (via RPI) are modest: e.g. £220 for 12 months on a small petrol car. For cars from 2001–2017, old CO₂ bands now have even the cleanest cars at £20 (no free road tax any more).

5. How to pay UK road tax & check? 

You can pay or renew online via GOV.UK. Input your reg to see the exact VED due. If unsure, consult a tax professional for advice on company cars or vehicle financing, as these changes can affect tax planning.

6. Why are some people saying “£200 extra”?

That refers to the jump in the top first-year band for new cars over 255 g/km, which rises by £200 (to £5,690).

Rockstar’s “Grand Theft Tax” Row, Explained: What UK Video Games Tax Relief Really Does

Posted on by Farazia Gillani

Rockstar Games’ UK tax position is back in the headlines. A recent report, picked up by The Scotsman and widely repeated across the games press, says Rockstar’s UK studio claimed more than £70 million through the UK’s Video Games Tax Relief (VGTR) in the 2024–25 financial year. The same coverage points to reported UK profits of over £87 million and dividends of around £85 million, which is why the story has sparked a fresh debate about whether the relief still hits its original target. A Labour MP has also criticised the scale of relief being claimed, using the phrase “Grand Theft Tax”, while worker representatives and unions have argued that public support should come with stronger expectations around fairness and workplace rights. Rockstar, for its part, says it has invested heavily in the UK and created a large number of creative-sector jobs.

At Apex Accountants, we see two separate issues getting mixed together:

  • How VGTR (and its replacement, VGEC) works in law
  • Whether the policy outcomes still match what taxpayers expect

This article explains both, so studio owners, finance teams and founders can make informed decisions.

What is VGTR and why does it exist?

VGTR was introduced in 2014 to support the development of video games with cultural value and to encourage production in the UK and Europe. An HMRC-commissioned evaluation describes VGTR as one of the UK’s creative industry tax reliefs, designed to incentivise culturally British or European games and strengthen the sector.

In practice, VGTR reduces corporation tax for qualifying games projects or produces a payable credit for loss-making companies. It has been especially important for smaller studios that need cashflow support while they build and ship a game.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

The key eligibility points (VGTR)

To claim VGTR, HMRC guidance says the game must:

  • Be certified as British by the BFI cultural test
  • Be intended for supply to the public
  • Have started production on or before a stated deadline in the guidance
  • Exclude certain categories, such as gambling and advertising products

The “British values” phrase that appears in some commentary is often a shorthand for the BFI cultural test and certification process, which is the formal route in the law and HMRC guidance.

The policy row: why Rockstar’s claim is controversial

The argument is not that claiming VGTR is illegal. It is about whether it is desirable for a very large studio, owned by a global group, to claim a large share of relief in the same years it reports strong profits and pays substantial dividends.

Several points are driving the debate:

  • Concentration risk: A significant portion of VGTR has been claimed by Rockstar across multiple years, raising questions about the policy balance between inward investment and support for smaller studios.
  • Worker allegations: A UK MP has raised concerns in Parliament after being contacted by constituents who believed they were dismissed for organising at work and said the claims should be scrutinised given the scale of relief.
  • Fairness optics: When headlines highlight large relief claims alongside profits and dividends, the public often reads the relief as “avoiding tax”, even though the mechanism is a relief built into the tax system.

Rockstar’s tax case response has been to emphasise local investment and job creation, stating that it has created substantial UK employment and helped build skills and innovation in the creative sector.

The practical reality: VGTR is changing, and studios must plan for 2026 and beyond

If you develop games in the UK, the bigger operational story is not Rockstar. It is the transition from VGTR to the Video Games Expenditure Credit (VGEC).

VGEC: the new regime replacing VGTR

HMRC guidance confirms:

  • VGEC can be claimed on qualifying expenditure incurred from 1 January 2024
  • The credit is calculated at a headline rate of 34% of qualifying expenditure (subject to the scheme’s rules)
  • Qualifying expenditure is based on UK core costs and is capped through the scheme’s formula

The BFI also explains that expenditure credits are available from 1 January 2024, with new productions moving to the expenditure credits from 1 April 2025, and a full move by 1 April 2027.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

VGTR vs VGEC: what changes in real life

Here are the differences that matter for finance teams.

VGTR (older relief)

  • Relief is linked to the qualifying trade computation and can reduce tax or create a payable credit.
  • It relies on the BFI cultural test and qualifying expenditure rules.
  • It applies to games that meet the scheme conditions and timeline restrictions.

VGEC (new credit)

  • It is a taxable expenditure credit calculated on qualifying spend.
  • HMRC sets a 34% headline rate, but you still need to model the net impact after corporation tax and your company’s position.
  • UK spending rules are central, so your outsourcing and subcontracting profile matters.

This is why two studios can have the same budget and receive very different outcomes.

The compliance risks studios need to manage

Whether you are a five-person indie team or a multi-site studio, most VGTR and VGEC problems come from avoidable process gaps.

Watch out for:

  • Incorrect “core costs” classification (mixing production costs with non-qualifying spend)
  • Weak evidence files for cultural test scoring, interim certification and final certification
  • Project boundary issues if several products or expansions are treated inconsistently
  • Late planning around the transition dates, which can affect relief choice and cashflow
  • Overlaps with R&D claims that are not properly mapped, documented and reconciled

HMRC expects clear, supportable numbers, with a proper trail from bookkeeping to claim schedules.

What grand theft tax means for the UK games sector

The headline row will continue. But for most UK studios, the key takeaway is simpler:

  • The UK still backs game development through tax policy.
  • The mechanism is shifting to VGEC.
  • Better record keeping and earlier modelling will decide who benefits most.

Public pressure may also increase scrutiny, even for fully compliant claims. So your documentation and governance matter more than ever.

How We Can Help You

If you are a UK game developer, publisher or creative studio group, Apex Accountants can support you with:

  • VGTR and VGEC eligibility reviews and project structuring
  • BFI cultural test support and evidence packs
  • Claim preparation and submission support with clear audit trails
  • R&D tax credit reviews where relevant to your development activity
  • Management accounts and forecasting for project cashflow control
  • Bookkeeping and cloud accounting setups built around clean cost coding
  • Payroll and contractor payments support aligned to project reporting
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Conclusion

Rockstar’s tax case has reignited a public argument about the purpose of creative tax support and who should benefit most from it. The political optics are real, and so are the concerns about policy concentration and fairness.

For studios, though, the action point is not the headlines. It is your own compliance and planning.

VGTR and VGEC can be valuable. But the rules are detailed, and the transition timeline is active. HMRC and the BFI guidance is clear on certification, qualifying spend and the move to expenditure credits.

If you want to claim with confidence, start with clean project cost tracking, early modelling and a strong evidence file. That is how you protect cashflow, reduce risk and keep your claim defensible if questions arise.

If you would like support with Video Games Tax Relief or the new expenditure credit, you can contact Apex Accountants today. Our team can review your eligibility, prepare your claim, and guide you through HMRC requirements. Visit our website or get in touch to discuss your project.

FAQs: Video Games Tax Relief and VGEC in the UK

1. How does VGTR work in the UK?

Video Games Tax Relief (VGTR) allows eligible companies to reduce Corporation Tax or receive a payable credit. Relief is based on qualifying core costs, such as designing and testing. Claims can cover up to 80% of costs, with an effective benefit around 20%.

2. Who qualifies for video games tax relief?

A company can qualify if it develops a game intended for public release, passes the BFI cultural test, and is subject to UK Corporation Tax. The company must be responsible for design, production, and testing and cannot claim for advertising or gambling products.

3. What is the BFI cultural test, and how do you pass it?

The BFI cultural test assesses whether a game is “British”. It is points-based, requiring at least 16 out of 31 points across areas such as cultural content, contribution, location, and personnel. Certification is mandatory for both VGTR and VGEC claims.

4. VGTR vs VGEC: which is better?

VGTR offers a deduction or payable credit on profits or losses, while VGEC provides a taxable credit at a headline rate of 34% of qualifying UK expenditure. The better option depends on project timing, cost structure, and whether production began before April 2025.

5. Is VGTR ending, and when?

Yes, VGTR is being phased out. New productions starting after 1 April 2025 must use the Video Games Expenditure Credit. Existing projects can continue claiming VGTR until 31 March 2027, after which all claims will move fully to the new system.

6. Can overseas-owned studios claim UK relief?

Yes, overseas-owned studios can claim UK relief if they operate a UK company subject to Corporation Tax. The company must meet eligibility rules, including passing the cultural test and carrying out qualifying development activity within the UK.

Non-UK Directors Tax: What UK Companies Need To Know

Posted on by Waheed Ahmed

Appointing a director who lives overseas can be a smart move. You gain experience, contacts, and strategic oversight. However, non-UK directors’ tax is an area many businesses overlook, and UK tax rules do not stop at the border.

In UK tax law, a directorship is an office, and directors are generally taxed under employment income rules. If a non-UK resident director performs duties in the UK, UK Income Tax and PAYE obligations can arise, even if the director is paid abroad. HMRC expects employers to get this right, with defensible records and a clear method for splitting UK and non-UK duties.

This guide explains the rules, flags common risk areas, and sets out practical steps UK businesses can take.

Tax Rules For Non-UK Resident Directors of UK

The starting point is simple: non-UK residents generally pay UK tax on UK income only.

For directors, the key question becomes: what duties were carried out in the UK?

HMRC’s Employment Income Manual includes examples showing that directors can be chargeable on earnings linked to duties performed in the UK, even where they are not UK residents.

UK Visits that Often Count as “UK Duties”

HMRC is cautious about treating director activity as “incidental”. The types of UK activity that usually create UK duties include:

  • Attending board meetings in the UK
  • Negotiating or signing UK contracts while in the UK
  • Meeting UK customers, lenders, or investors
  • Overseeing UK operations, staff, or projects during UK visits

Even if the director is in the UK for a short time, those duties can still be substantive for tax.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

What about “Merely Incidental” UK Duties?

There is a concept in HMRC guidance where, if an employment is carried on substantially outside the UK, duties performed in the UK that are “merely incidental” to overseas work can be treated as performed outside the UK. HMRC gives examples such as arranging an overseas meeting while physically present in the UK.

However, when applying the tax rules for non-UK resident directors of UK companies, this relief is often limited in practice. Directors should not assume it will apply automatically. Board meetings, decision-making, and governance activities carried out in the UK are rarely viewed as incidental and are usually treated as substantive UK duties for tax purposes.

PAYE: Why the UK Company can Still be Responsible

A frequent misconception is, “They’re paid by an overseas company, so the UK company has no payroll obligations.”

HMRC guidance is clear that PAYE can apply even where earnings are paid by someone other than the UK entity. The UK company may have to operate PAYE based on the UK work position, including where the relevant amount is treated as a notional payment for PAYE purposes.

What “Notional Payment” Means in Real Life

A notional payment is where PAYE income exists, but there is no matching cash payment from the UK entity. UK legislation sets out that tax still needs accounting for, and if tax cannot be deducted from the notional amount, it may need to be recovered from other actual payments or settled by the employer.

Practical Impact for Employers

If a non-UK director has UK duties, the UK company may need to:

  • Register and run PAYE (or use a payroll agent)
  • Obtain overseas pay and benefit details to calculate the UK-related portion
  • Apply a “just and reasonable” method to split UK and non-UK duties
  • Report through RTI where required
  • Deal correctly with benefits and reimbursed expenses

Expenses and Benefits: A Common (and Costly) Trap

Where the UK company pays or reimburses costs, those amounts may be:

  • Taxable employment income, or
  • Reportable benefits, unless an exemption applies

Typical pressure points include:

  • UK accommodation
  • UK travel and subsistence
  • Home-to-UK flights
  • Company car use in the UK
  • Private medical cover while in the UK

The right answer depends on the facts and the UK rules on business travel, temporary workplaces, and benefits reporting. The risk is not only the tax on the director but also employer reporting failures.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Can a Double Tax Treaty Remove the UK Tax Charge?

Treaties can help, but you must apply them carefully.

Many UK treaties follow an “employment income” article that can limit UK taxing rights when the individual is present in the UK for limited days and the cost is not borne by a UK employer. However, directors are an awkward category because of their status as office holders and the way costs are often connected to the UK company.

Treaty positions often turn on:

  • Where the director is resident for treaty purposes
  • UK day count (and how the treaty measures it)
  • Whether remuneration is paid by, or borne by, a UK employer
  • Whether the UK company recharges, reimburses, or otherwise carries the cost

If the UK entity bears the cost, treaty relief may be weakened.

STBV Agreements: Useful for Employees, Not a Safe Assumption for Directors

UK employers often use Short-Term Business Visitor arrangements to reduce admin. HMRC’s PAYE manual explains these arrangements and the idea of annual reporting, including deadlines for submitting returns by 31 May after the tax year.

However, directors should be treated as a separate workstream. Some STBV arrangements exclude office holder duties, and HMRC may refuse an STBV approach if the UK company is effectively the employer for PAYE purposes.

So, do not assume an STBV agreement “covers” a visiting director without checking the detail and getting specialist advice.

National Insurance: Separate Rules, Separate Exposure

National Insurance does not follow double tax treaties. It follows social security coordination rules and bilateral agreements, where they exist.

If there is a social security agreement or EEA-style coordination

You may be able to keep paying in the home system (or UK system) with the right certificate:

  • For EEA and certain related territories, HMRC issues certificates (commonly referred to as A1 in practice) for temporary postings.
  • For countries with a bilateral social security agreement, HMRC can issue a certificate of coverage.

If there is no agreement

There can still be limited relief in some cases, including a 52-week style exemption in certain circumstances, reflected in HMRC National Insurance guidance.

Social security agreements change over time

Agreements and coverage can change, and you should check the current position for the relevant country. GOV.UK publishes information on reciprocal agreements and related arrangements.

Practical Non-UK Directors Tax Checklist for UK Companies

If you have, or plan to appoint, a non-UK resident director:

  • Map UK duties: what will they do in the UK, and how often?
  • Track UK days properly: keep travel calendars and supporting evidence
  • Agree an apportionment method: document how pay is split between UK and non-UK duties
  • Review who bears the cost: check recharge agreements, expense policies, and intercompany arrangements
  • Check PAYE risk early: do not wait for the first board meeting to fix payroll mechanics
  • Assess NIC separately: confirm whether a certificate of coverage is available and valid
  • Review benefits and expenses: decide what is taxable, exempt, or reportable before payments start

How We Can Help Navigate Non-UK Resident Director Tax Rules & Compliance

Apex Accountants & Tax Advisors support UK companies with the employment tax and payroll compliance behind internationally mobile directors and senior executives. Our work typically includes:

  • PAYE and payroll setup for cross-border directors
  • UK duty reviews and defensible apportionment approaches
  • Advice on expenses and benefits reporting, including P11D considerations
  • STBV and annual reporting support where relevant
  • National Insurance and certificate of coverage support, including process guidance
  • Ongoing compliance health checks, so issues are picked up early
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Conclusion

A non-UK resident director can still create UK Income Tax, PAYE, and National Insurance risk when duties are performed in the UK. The hardest part is not the headline rule but the detail: UK day counts, apportionment, who bears costs, and how payroll should operate in practice.

If your business already has overseas directors, or you are considering an appointment, getting the structure right at the start can prevent avoidable HMRC challenges later.

FAQs on Tax Rules For Non-UK Director

1. If my director is not a UK resident, do they still pay UK tax?

Potentially yes, on UK duties linked to the directorship. Non-residents are taxed on UK income, and director duties performed in the UK can create UK employment income.

2. Is one UK board meeting enough to cause a problem?

It can be. UK duties can arise from a single visit if the activity is substantive (for example, a formal board meeting).

3. Do non-residents pay UK tax on dividends from a UK company?

Non-residents generally pay UK tax on UK income only, and dividends are often taxed in the country of residence instead. The position can vary based on individual circumstances and treaty rules, so it should be reviewed alongside the director’s wider UK exposure.

The Problems with the Mansion Tax: A Closer Look at Design Issues and Criticisms

Posted on by Nida Umair

Britain’s forthcoming High‑Value Council Tax Surcharge, commonly called the mansion tax, will start in April 2028. It adds an annual levy to homes in England valued above £2 million as at 1 April 2026. The current band‑based system lets some mid‑range properties pay more council tax than mansions, so ministers hope to raise about £0.4 billion a year from high‑value homes. However, the problems with Mansion tax, such as its blunt design, could distort behaviour and create unintended winners and losers.

Supporters argue that the new surcharge will correct an obvious unfairness and provide funds for public services. The charge sits on top of standard council tax and will be uprated with inflation, meaning bills could increase over time. Valuations are frozen for five‑year cycles to give homeowners certainty, but there is no official calculator yet, and guidance on reliefs is sparse, leaving many families unsure how much they will owe.

Read: Analysing the Impact of Mansion Tax on the Prime Property Market in UK

How it Works

  • Valuation date: The Valuation Office Agency (VOA) will estimate each property’s market value on 1 April 2026 and revalue every five years. Improvements after that date do not affect the first cycle.
  • Bands: Homes worth £2 m–£2.5 m pay £2,500; £2.5 m–£3.5 m pay £3,500; £3.5 m–£5 m pay £5,000; and those over £5 m pay £7,500.
  • Scope: The surcharge applies to each property, including second homes and rentals. Landlords pay the levy, while tenants still pay ordinary council tax. There are currently no statutory exemptions, though the government hints at future reliefs.
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Problems With Mansion Tax in UK

People widely criticise the mansion tax not for taxing high-value property, but for its flawed structure. Key issues with mansion tax include:

Cliff edges: 

Sharp bands mean a property just over £2 million pays the same levy as one far more expensive, while homes just under the threshold pay nothing. This encourages sellers to price just below the cut‑off. A proportional tax on value above £2m would avoid these distortions.

Complex valuations: 

Around 200,000 homes must be valued. The HomeOwners Alliance doubts the VOA’s automated approach can capture the nuances of unique properties and predicts most owners will appeal, potentially overwhelming the agency.

Regional and social inequity: 

More than 60% of £2 million-plus homes are in London and the South East, so the levy is a regional tax. Critics warn that many owners are asset‑rich but cash‑poor; for some pensioners, it could equal a year’s state pension and push them to move.

Knock-on effects: 

Banded property taxes discourage improvements and are priced into house values. Prime buyers are already rethinking London purchases, and landlords are expected to pass the cost on to tenants.

Read: Mansion Tax in UK to Affect 200,000 Homes Starting in 2028

How Apex Accountants Support Property Owners Facing the Problems with Mansion Tax

  • Valuations and Appeals: We arrange independent surveys and assist with challenging VOA assessments, helping homeowners ensure their property is accurately valued.
  • Tax and Portfolio Planning: We advise property owners on timing renovations or sales to stay below the £2 million threshold, and we model how the surcharge impacts rental yields and other strategies like downsizing.
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Conclusion

The mansion tax seeks to fix an inequity in council tax but may create more problems than it solves. Many of the mansion tax design issues, such as sharp bands, encourage price manipulation and discouraging improvements, while valuing unique homes, will be contentious, and appeals could overwhelm the VOA. Because most high-value properties sit in London and the South East, the burden lands on a narrow group, including pensioners who are wealthy on paper but not in cash. Landlords may pass costs to tenants, and rents could rise. A proportional levy on value above a high threshold, plus clear reliefs, would be simpler and fairer. Homeowners should prepare for valuations, gather evidence, and seek professional advice until the design improves.

A Guide to HMRC’s Advance Tax Certainty Service for UK Investment Projects

Posted on by Farazia Gillani

In December 2025, HMRC released the much-anticipated draft guidance on Advance Tax Certainty Service (ATCS), a new process legislated under the Finance Bill 2025-2026. Scheduled to launch in July 2026, the ATCS aims to provide businesses with pre-emptive tax clearances, offering certainty on complex tax matters related to significant investment projects. This guidance introduces a streamlined process for gaining clarity on tax treatment for major UK projects, covering areas such as Corporation Tax, VAT, Stamp Duty Land Tax (SDLT), Income Tax, PAYE regulations, and the Construction Industry Scheme (CIS).

What is the Advance Tax Certainty Service (ATCS)?

The ATCS offers businesses an opportunity to receive binding tax clearances on major projects. By applying for clearance, companies can obtain certainty regarding their tax position, ensuring a smoother and more confident investment process.

The service is primarily designed for substantial UK projects with tax uncertainties that could significantly impact a company’s financial planning. This includes projects that involve large-scale investments, such as those exceeding £1 billion in qualifying expenditure, which may encompass tangible and intangible assets like plant, machinery, and software.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Who Can Apply for ATCS?

HMRC has specified that a “qualifying person” can apply for a clearance. This can include any person who incurs the relevant expenditure or a person with control over it, such as an investment entity managing a joint venture or consortium.

Both UK-based and non-UK entities investing in the UK are eligible to apply for clearance. However, individuals involved in fraudulent activities, those who have received penalties for deliberate tax behaviour, and those whose previous clearance applications were declined are excluded from eligibility.

Financial Threshold and Project Scope

For a project to qualify for ATCS, it must involve at least £1 billion of new qualifying expenditure. This can include expenditure on assets such as plant, machinery, and software but excludes financing costs and equity investments, including mergers, acquisitions, and share buybacks. The £1 billion threshold applies to the entire life of the project or a group of similar projects with the same tax uncertainty.

It is important to note that the expenditure must relate to a new initiative rather than ongoing business activity. This ensures that routine operational expenses do not fall under the scope of the ATCS.

Key Steps in the HMRC’s Tax Clearance Process

Expression of Interest (EOI)

During the initial year of the ATCS, applicants will be required to submit an Expression of Interest (EOI). This will help HMRC manage capacity during the early stages of the service. Applicants must provide key project details such as scale, tax uncertainty areas, and deadlines. HMRC will prioritise projects with the highest levels of tax uncertainty and urgency.

Early Engagement Meeting

Once the EOI is reviewed, businesses are encouraged to request an early engagement meeting. This meeting allows companies to discuss the feasibility of the clearance process within their desired timeframes. HMRC aims for this meeting to take place within 10 working days of the initial contact.

Formal Application Submission

After the engagement meeting, businesses must submit a formal clearance application no later than 60 working days before the relevant filing date for the first tax return related to the project. The application must include:

  • A detailed assessment of eligibility.
  • An official business plan outlining project spend.
  • A tax treatment analysis for the transaction.

HMRC will review the application for completeness and may request additional factual evidence or clarification.

Scoping and Planning Meeting

Once the application is accepted, HMRC will arrange a scoping and planning meeting within 21 working days. This meeting will define the clearance scope and prioritise tax areas so HMRC can provide certainty within a realistic timeframe.

HMRC Evaluation and Decision

After the planning meeting, HMRC will evaluate the application and provide regular updates. A clearance decision will typically be issued within 31 working days of the scoping meeting or 49 working days from receipt of the full application.

Post-Clearance Monitoring

Once a clearance is granted, it is valid for a defined period, usually up to five years or until the project concludes. The applicant must monitor compliance throughout this period, submitting an annual review to ensure assumptions remain valid. Failure to inform HMRC of material changes could result in the revocation of the clearance and the imposition of penalties.

Scope and Limitations of HMRC’s Tax Clearance Process

The ATCS covers complex tax matters but excludes certain areas:

  • Routine tax issues or purely factual matters.
  • Asset valuations and main purpose tests in certain regimes.
  • Situations where there is already a clearance process in place, such as Advance Pricing Agreements.

Clearances issued under ATCS are binding for HMRC as long as the applicant adheres to the assumptions and conditions laid out. If the applicant deviates from the clearance, the tax authority may initiate an enquiry, and the clearance will no longer be valid.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

What Businesses Need to Know

To make the most of ATCS, businesses must maintain strong internal governance, ensure swift engagement with HMRC, and keep communication transparent. As the service progresses, HMRC will likely refine its process based on feedback and capacity constraints.

In the first year of operation, businesses will be encouraged to submit an EOI to manage demand. As the service matures, HMRC may lower the financial threshold or expand the scope to include additional tax issues.

Key Takeaways:

  • The ATCS offers certainty on complex tax issues for major UK investment projects.
  • Eligible applicants must demonstrate significant investment, with a minimum threshold of £1 billion in qualifying expenditure.
  • The process involves multiple steps, including EOIs, early engagement meetings, formal applications, and ongoing monitoring.
  • Post-clearance, businesses must remain diligent in ensuring continued compliance with the terms of the clearance.

At Apex Accountants, we offer expert advice and guidance on the advance tax certainty service process, ensuring your business complies with all requirements. Our team can help assess your eligibility, guide you through the application process, and assist in post-clearance monitoring. Contact us today for tailored tax planning and advisory services for your business’s investment projects.

HMRC has launched a £40 million enforcement campaign targeting sellers on Vinted and eBay.

Posted on by Farazia Gillani

As more UK residents turn to platforms like Vinted, eBay, and Etsy to declutter their homes and earn extra cash, HMRC has issued a stern warning regarding the tax implications of online selling. HMRC has launched a £40 million enforcement campaign on Vinted and eBay sellers aimed at ensuring compliance with UK tax laws. This initiative involves more data-sharing between online marketplaces and HMRC, focusing on sellers who may be failing to report income from their online activities.

What’s The New £40 Million Enforcement Campaign on Vinted and eBay Sellers 

Starting in January 2024, HMRC began receiving transaction data from platforms like Vinted, eBay, and Etsy. The reporting sellers’ data to HMRC requirement applies to anyone completing more than 30 transactions a year, regardless of whether they make a profit. This data-sharing effort is set to be fully effective by 2025, continuing into 2026.

Specifically for Vinted sellers, if you exceed 30 sales or £1,700 in gross revenue in a year, platforms are required to share your transaction details with HMRC. This HMRC tax crackdown on online sellers applies to both new and existing sellers, making it crucial for anyone regularly selling online to stay informed.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

When Do You Need to Declare Your Income?

Many sellers mistakenly believe they are exempt from taxes when selling unwanted personal items online. In most cases, selling personal goods at a loss is not considered trading and doesn’t need to be declared. However, the rules change if:

  • You make a profit from items bought specifically to sell at a higher price (e.g., dropshipping).
  • You manufacture new items for resale.
  • You engage in regular, commercial trading on platforms.

If your total sales exceed the £1,000 annual trading allowance, you must declare the income through the Self Assessment tax return. It doesn’t matter whether or not you make a profit — failing to report earnings over this threshold could lead to significant penalties.

Read our complete tax guide for online sellers in the UK to avoid common tax mistakes. It shows how to manage income, VAT, and HMRC reporting across major platforms.

How HMRC Will Be Monitoring Sellers

HMRC is now receiving detailed data from online platforms about sellers who exceed the 30-transaction threshold. This helps HMRC cross-check against tax returns. Key points about the new rules for reporting sellers’ data to HMRC include:

  • Platform reporting: Platforms like Vinted and eBay must report your sales details if you exceed 30 transactions or £1,700 in gross revenue in a year.
  • £1,000 trading allowance: If you exceed this threshold, you must declare the income to HMRC.
  • Data-sharing: The data sharing will assist HMRC in identifying potential non-compliance with tax obligations.

What Happens If You Don’t Comply?

Ignoring HMRC’s communications or failing to declare income can lead to hefty fines, penalties, and even criminal investigations. Penalties can sometimes exceed the amount of unpaid tax, especially if you fail to respond to HMRC’s nudge letters, which are warnings about unreported income.

To avoid penalties, it’s important to maintain accurate records of all transactions, including receipts for postage, packaging, and any other associated costs. These expenses can often be deducted from your total taxable income, reducing your overall tax liability.

Key Risks of Non-Compliance

  • Fines: Non-compliance can result in fines, often 30% or more of the unpaid tax.
  • Criminal investigations: Serious tax evasion could lead to formal investigations.
  • HMRC probes: Ignoring reminders and failing to provide information when requested increases the risk of a probe.
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

Tax Tips for Online Sellers

To ensure compliance with tax laws and avoid penalties, here are practical steps you can take:

  • Keep detailed records of all transactions: Document every sale, including the price you sold the item for, the cost of postage, packaging, and any other expenses.
  • Use online tax calculators: These tools help you determine if you need to register as a sole trader or a limited company.
  • Declare all income over £1,000: If your total online sales exceed £1,000 in a year, be sure to include this income in your Self Assessment tax return.
  • Claim allowable expenses: Keep receipts for postage, packaging, and any fees related to selling online. These can be deducted from your taxable income.

How We Help Online Selling Sellers

At Apex Accountants, we can guide you through the complexities of online selling and tax compliance. Whether you’re a casual seller or running a more commercial operation, our team offers:

  • Self-assessment tax return preparation: Ensure your income is declared properly, and avoid penalties.
  • Tax planning: We’ll help you plan your taxes and minimise your liabilities by claiming allowable expenses.
  • Business advisery: If you’re unsure about whether you should be registered as a sole trader or a limited company, we can provide strategic advice tailored to your business.

Contact us today for help with your online selling tax obligations, or book a consultation to learn how to stay compliant and minimise your tax liability.

1. Is HMRC going after eBay sellers?

HMRC isn’t targeting casual sellers selling unwanted personal items. However, data‑sharing rules introduced from January 2024 require platforms like eBay to report seller details if you exceed 30 sales or around £1,700 in gross revenue. HMRC can then match this to Self Assessment returns and may issue a “nudge” letter if nothing is declared, especially where trading income exceeds £1,000.

2. What are the new rules for sellers on eBay in 2025?

Platforms like eBay continue to share sales and user data with HMRC if thresholds are met. There are no new tax obligations for selling unwanted items, but HMRC can better monitor activity and match data to tax returns. Sellers exceeding the £1,000 trading allowance must declare income via Self Assessment.

3. What is the HMRC limit on Vinted?

There isn’t a strict “HMRC limit” for tax on Vinted sales. Vinted and other platforms report seller data if you make 30+ sales or £1,700+ gross revenue in a year. If your total trading income during a tax year surpasses the £1,000 trading allowance, you are required to declare your income.

4. Do I have to pay tax if I sell my clothes on Vinted or eBay?

Generally no—selling personal belongings at a loss (e.g., clothes you no longer wear) is not taxable. You only need to tell HMRC if you’re trading with intent to make a profit and your total income from online selling exceeds £1,000 in a tax year.

5. What counts as “trading” for HMRC?

Trading is when you sell goods you bought to sell at a profit, make items to sell, or regularly sell online. The occasional sale of personal items doesn’t usually count.

6. Will HMRC automatically tax me if I sell 30 items?

No—reporting triggers only data sharing. Your tax liability depends on whether you are trading and if your income exceeds the £1,000 trading allowance.

7. How do I tell HMRC about my online selling income?

If required, you register for Self Assessment and include your online trading income on your tax return.

8. Can I deduct expenses like postage?

Yes—allowable expenses like postage, packaging and marketplace fees can reduce taxable profit when you submit your Self Assessment.

9. What happens if I ignore an HMRC letter?

Ignoring it risks penalties, estimated assessments up to 100% of unpaid tax, and further compliance action.

What You Need To Know About New Charges for ISA Savers

Posted on by Nida Umair

In the Autumn Budget 2025, the UK government, led by Chancellor Rachel Reeves, introduced reforms to Individual Savings Accounts (ISAs) designed to encourage more investment in equities rather than low-yielding cash savings. These new charges for ISA savers, which will affect millions, aim to shift the focus from cash savings to more productive investments like stocks and shares.

This article provides an update on the confirmed reforms, proposed tax charges, and what UK savers should know in light of these significant changes.

New ISA Rules in the UK

The UK government’s ISA reforms aim to encourage savers to choose higher-growth investment options. Here are the key changes confirmed:

Cash ISA Limit Reduction: 

The annual Cash ISA allowance will be reduced from £20,000 to £12,000 for savers under the age of 65, effective from April 2027. This change encourages savers to move their funds into more productive investments such as equities, which tend to generate higher returns over the long term.

Over-65s Exemption: 

Savers aged 65 and above will retain the £20,000 limit for Cash ISAs, recognising the different financial needs of older savers and their retirement goals.

Transfers Between ISAs: 

Transfers between Stocks and Shares ISAs and Cash ISAs will be restricted to prevent savers from circumventing the new lower cash limit. However, Cash ISA-to-Cash ISA transfers will still be allowed, maintaining flexibility for savers with cash holdings.

These new ISA rules are designed to encourage greater investment in stocks and shares while maintaining a level of tax-free saving.

Read our guide on The Impact of UK Budget 2025 Changes to ISA and Savings Tax Rules on Women’s Financial Security to see how new rules affect long-term savings.

Proposed Tax Charge For ISA Savers

HMRC has also proposed a 20% tax charge on interest earned from uninvested cash in Stocks and Shares ISAs exceeding the new £12,000 allowance for savers under 65. The new tax charge for ISA savers is set to come into effect in the 2027-28 tax year and will mark a return to the pre-2014 tax regime.

Reverting to Pre-2014 Tax Treatment: 

The tax on interest from uninvested cash in Stocks and Shares ISAs will bring the system back to the treatment used before 2014, when cash interest was taxed at 20%.

Carve-Outs Under Consideration: 

HMRC is considering carve-outs for cash that is temporarily held while awaiting investment. For example, cash sitting in an ISA awaiting investment by a provider may not be subject to the tax.

Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

No Confirmed Higher Rate: 

Despite reports suggesting a 22% rate linked to income tax bands, this has not been confirmed by HMRC. The current proposal is for a 20% flat-rate charge on interest from cash holdings exceeding the £12,000 limit.

Why These Changes Matter

The government’s overarching goal is to encourage long-term investment in equities rather than cash savings, which typically offer lower returns. Here’s why these reforms are being introduced:

Boosting Retail Investment: 

The government aims to steer more savers into equities, which offer better long-term growth potential. The aim is to provide savers with better investment returns while also supporting UK business growth.

Protecting Tax Revenue: 

The proposed charge on interest from uninvested cash is designed to close a loophole where savers use Stocks and Shares ISAs to hold cash tax-free without actually investing it. This will help ensure a fairer system and protect tax revenue.

Encouraging Economic Growth: 

By redirecting cash savings into more productive investments, the government hopes to stimulate economic growth, support businesses, and improve market liquidity.

Industry Criticisms and Concerns

While the government’s intention is to encourage productive investment, the reforms have raised concerns within the financial sector. Some of the key criticisms include:

  • Reduced ISA Appeal: Critics argue that the new tax charge could discourage savers, especially those who are risk-averse or nearing retirement. For these savers, ISAs are often seen as a safe haven for cash, and the proposed tax on interest could make ISAs less attractive.
  • Increased Complexity: The changes could introduce complexity, especially with the new restrictions on transfers and the tax charges. Some fear that this added complexity could deter savers from using ISAs altogether.
  • Deterrence from Stocks and Shares ISAs: There is concern that the changes might discourage savers from using Stocks and Shares ISAs, as the introduction of taxes on cash holdings could make these ISAs seem less tax-efficient than they were previously.

What Does This Mean for Savers?

The reforms will gradually come into effect, with the reduced Cash ISA limit applying from April 2027. The proposed tax charge will start in the 2027-28 tax year. For savers, especially those with large sums in Cash ISAs or considering shifting funds into Stocks and Shares ISAs, there are several important considerations:

Key Takeaways for Savers:

  • Cash ISA Limit Reduction: For savers under 65, the new £12,000 limit for Cash ISAs will apply from April 2027, down from £20,000.
  • Tax Charge on Investment ISAs: If you hold cash in a Stocks and Shares ISA and the amount exceeds £12,000, interest earned will be subject to a 20% tax charge. This applies only to uninvested cash.
  • Strategic Review: It’s a good time to review your ISA contributions and consider whether you should be shifting your funds from low-yield savings into more productive investments. Diversifying into equities might be a good strategy in line with the new reforms.
Get Free Consultation
Phone
Call Anytime 0203 883 4777
Get Free Consultation

What Can You Do Now?

To navigate the upcoming changes, here are some steps you can take to ensure that your savings strategy remains tax-efficient:

  1. Review ISA Contributions: Ensure you understand the new limits and make sure you’re not exceeding them. If you have been transferring funds between ISAs, check whether this could affect your tax-free savings.
  2. Diversify Your Investments: The government wants savers to move away from cash savings and into equities. Now may be the time to consider diversifying your portfolio to ensure your investments align with your long-term financial goals.
  3. Consult a Tax Professional: Given the complexities of these changes, it’s advisable to speak with a tax professional or financial planner. They can help you understand how the reforms impact your individual situation and ensure you’re making the most of your tax-efficient savings.

How We Can Help Navigate New Charges for ISA Savers

At Apex Accountants, we are committed to helping you make the most of the changing savings landscape. Whether you need advice on managing Cash ISAs, Stocks and Shares ISAs, or diversifying your investments, our team is here to help.

Our services include:

  • Tax Planning and Advice: Tailored strategies to help you maximise your savings and investment returns while staying compliant with HMRC regulations.
  • Investment Strategy Consulting: Expert guidance on shifting funds into equities and other productive investments to ensure your financial growth.
  • ISA Management: Helping you navigate the complexities of ISA rules and optimise your tax-free savings strategy.

For personalised advice and to ensure you’re making the most of these reforms, contact Apex Accountants today for a free consultation.

Book a Free Consultation