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Company vehicles can be a valuable benefit, but they come with significant tax implications that employers and employees need to understand. In 2025, the tax treatment of company cars, vans, pickups, and fuel is largely based on CO₂ emissions, usage, and vehicle type. Low-emission cars, especially electric and plug-in hybrids, attract lower benefit-in-kind (BIK) charges, while diesel and high-emission vehicles are taxed heavily, up to 37% of the car's list price. Vans are generally more tax-efficient, but HMRC has tightened the definition, especially around crew-cab and dual-purpose vehicles. Fuel for private use also carries a hefty tax charge unless fully reimbursed. Staying informed on these rules is crucial for making cost-effective choices around business vehicles in the current tax landscape.
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Bad debts are loans or outstanding balances that are no longer recoverable and must be written off. These uncollectible debts significantly impact a company’s financial statements. Managing bad debts is crucial for maintaining financial health, and businesses should consult tax professionals to ensure compliance with relevant regulations. Preventing bad debts involves proactive measures to manage credit risk and ensure timely payments. Key strategies include conducting thorough credit assessments, setting clear payment terms, establishing credit limits, and maintaining regular communication with customers. Additionally, businesses should have well-defined collection policies and consider options like invoice factoring and credit insurance. By implementing these strategies, company directors and contractors can minimize the risk of bad debts and protect their financial stability.
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The freezing of tax thresholds has led to significant revenue for HMRC, with an estimated £63.2 billion in income tax projected for this year—£16.3 billion more than the previous year. Over 1.77 million individuals above the state pension age have been affected, and 4.4 million more people are expected to pay income tax due to earnings surpassing the frozen personal allowance. Additionally, more than 1 million people are estimated to pay the additional rate tax this year. HMRC also anticipates collecting £10.4 billion from people’s savings interest, emphasizing the importance of tax-efficient savings options like cash ISAs.
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Online platforms like Etsy, eBay, and Instagram are preparing for new disclosure rules on transactions. HMRC has already started compliance checks on the highest reported earners. Following the UK’s commitment to the OECD’s global data sharing objective, HMRC now has access to seller information from online platforms. Platforms must collect sales and income data from sellers and influencers to share with HMRC.
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Let’s discuss the tax-related advantages of offering electric vehicles (EVs) on company car schemes and how to reduce benefit in kind liability. The ZEV mandate and associated incentives are accelerating the transition to cleaner transportation, benefiting both businesses and the environment.
We are experienced certified accountants in Kent that are committed to helping small businesses achieve growth.
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