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News,May 2018

How To Build a Tax Efficient Business For Healthcare Professionals In 2026/27

Chris21/08/2026Healthcare , tax

For most high-earning healthcare practitioners, moving from a standard sole proprietorship to a corporate or specialised legal structure is the most effective way to protect income from high tax brackets. If you’re a doctor, dentist, physiotherapist, locum nurse or clinic owner, chances are tax wasn’t exactly covered in your training. So let us break down the core basics of building tax-efficient businesses for healthcare professionals that you need to know for the 2026/27 tax year! Why Your Business Setup Matters So Much This Year If you work purely as a sole trader or through standard NHS locum shifts, all your business profits get lumped onto your personal tax return. HMRC then taxes that income at your highest personal rate. For the 2026/27 tax year, the personal tax bands for England, Wales, and Northern Ireland look like this: Tax Band Taxable Income Range Income Tax Rate Personal Allowance Up to £12,570 0% Basic Rate £12,571 to £50,270 20% Higher Rate £50,271 to £125,140 40% Additional Rate Over £125,140 45% If your total income crosses £100,000, you also start losing your £12,570 personal allowance. That creates a hidden and painful 60% effective tax rate on the income between £100,000 and £125,140. This is exactly why building tax-efficient businesses for healthcare professionals is so essential for private consultants, dentists, and locums. How To Build a Tax-Efficient Business For Healthcare Professionals Here are the main steps you should take in order to build a tax-efficient business for healthcare professionals: 1. Shift Private Work to a Limited Company Structure When you are operating as a limited company, it means that your business is a separate legal entity. The company earns the money and pays Corporation Tax on the profits. After that you extract the cash as a mix of low salary and dividends. In 2026/27, Corporation Tax rates are split: 19% Small Profits Rate for company profits under £50,000 25% Main Rate for profits over £250,000 Marginal Relief: if your profits are between £50,000 and £250,000, things get a bit more complex. You do not instantly jump to a flat 25% tax rate. Instead, you get something called Marginal Relief. Even if your company pays 19% or 25% tax, that is often much lower than paying 40% or 45% straight away on your personal earnings. You can also leave extra cash inside the company. This is in order to invest or draw out in a later tax year when your income is lower. And this is something a sole trader simply can’t do since all profit is taxed as it’s earned. This is where tax-efficient business planning for healthcare professionals becomes important. 2. Get the Salary and Dividend Split Right If you run your healthcare practice through a limited company, how you pay yourself dictates your tax bill. Instead of taking a large, heavily taxed salary, the gold standard is balancing a low salary with high dividends. Dividends do not attract National Insurance. Also, their tax rates are much lower than standard income tax. For the 2026/27 tax year, the classic textbook strategy is: A salary of £12,570: This fills your tax-free Personal Allowance, triggers zero personal income tax, and reduces your company’s Corporation Tax. Dividends of £37,700: This takes your total personal income exactly to the basic-rate threshold of £50,270. Because basic-rate dividends are taxed at just 10.75% (after a £500 tax-free allowance), you can save thousands compared to an equivalent salary. 3. Manage the 2026/27 Dividend Tax Hike Strategically If you do run a limited company, you need to know about the recent changes to dividend taxes. From April 2026, HMRC raised dividend tax rates by 2% for basic and higher-rate taxpayers. The tax-free dividend allowance stays tiny at just £500. Here is what you will pay on dividends over £500 this year: Basic rate taxpayers: 10.75% Higher rate taxpayers: 35.75% Additional rate taxpayers: 39.35% Because of this hike, extracting money from your company requires more care. You cannot just pull money out randomly. You must balance your salary, dividends, and company pension contributions. 4. Max Out Your Professional Expenses Whether an expense is deductible depends on the circumstances and the type of work you undertake. In general, expenses must satisfy the relevant tax rules and, for trading expenses, be incurred wholly and exclusively for the purposes of the trade. Every pound spent wholly and exclusively for your work can lower your tax bill. When creating a tax-efficient business for healthcare professionals, make sure your business is paying for and claiming: GMC, GDC, NMC or HCPC registration fees Medical indemnity insurance and malpractice cover Professional course fees and travel for Continuing Professional Development (CPD) Specialised medical equipment, stethoscopes, scrubs or clinical software A proportion of home office costs if you handle admin or telehealth from home Mileage between different work sites (not your regular commute) Keep proper records as you go. Vague receipts and guesswork don’t hold up well if HMRC ever asks you to explain a claim. 5. Use Corporate Pension Contributions Instead of paying into a pension from your personal bank account, your limited company can pay directly into your pension as an employer contribution. This counts as an allowable business expense. Consequently, it reduces your company’s taxable profit and bypasses dividend and income tax completely on that money. However, if you are a member of the NHS Pension Scheme, you must tread carefully here. Your NHS pension growth already consumes a large portion of your tax-free allowance. That’s currently £60,000 for 2026/27. It is before you add a single penny of company contribution on top. And if your adjusted income is above £260,000 and your threshold income exceeds £200,000, that allowance starts tapering down. It can drop as low as £10,000 once adjusted income reaches £360,000. Stack a large company pension contribution on top of NHS pension growth without checking the numbers first, and you can easily breach your allowance. That triggers an unexpected tax charge on the excess. The Bottom Line Setting up a tax-efficient business for healthcare professionals is the smartest way to make sure your income actually rewards your hard work. The UK …

Specialist Tax Advisors For Medical Professionals: UK 2026/27 Guide

Chris20/08/2026Healthcare accountants , tax

Specialist tax advisors for medical professionals are accountants who focus specifically on doctors, dentists, GPs, surgeons, nurses and other healthcare workers, rather than general practice clients. For medical professionals, they matter. Because a specialist understands NHS pay slips, locum income, private practice, and pension tax traps in a way a generalist accountant often doesn’t. This guide covers why specialist tax advice for UK medical professionals is important! Why Do Medical Professionals Need Specialist Tax Advice? If you are a doctor, a surgeon, or a regular locum GP, you might have a primary NHS contract. You probably do some private clinic consultations on the side. You might even have a lectureship or a bit of clinical research funding. Every single one of these income sources can be taxed differently. The records needed can differ too. That is precisely why you need a dedicated partner to keep things straight and why specialist tax advisors for medical professionals can be useful. Who Can Benefit From Specialist Tax Advisors For Medical Professionals? Specialist tax advisors supporting UK medical professionals can help people at different stages of their career. NHS consultants with private practice income GP partners and salaried GPs Locum doctors working through agencies or directly for practices Dentists, associates and practice owners Pharmacists and pharmacy business owners Nurses, advanced clinical practitioners and healthcare contractors Therapists, psychologists and allied health professionals Medical practice owners and clinic directors Healthcare professionals with rental income or investments Retiring clinicians considering pension, succession or practice-sale issues The right advice, of course, will depend on how you work. That is where specialist tax advisors supporting UK medical professionals can provide more than just annual tax return preparation. What Can Specialist Tax Advisors for Medical Professionals Help With? A medical tax adviser may help with several parts of your financial and tax affairs, depending on your circumstances. This is where specialist tax advisors for medical professionals can be particularly useful. 1. Managing NHS and Private Income One of the most common reasons doctors go looking for specialist tax advisors for medical professionals is that they want someone who can manage the NHS and private income for them. NHS employment income is generally dealt with through PAYE, while private professional income may need to be reported through Self Assessment. If you mix a regular salary with self-employed income, your tax codes can easily get completely messed up. That is why working with specialist tax advisors is important. Expert tax advisors serving medical professionals UK look at both sides of your earnings together. They make sure that your NHS tax codes are accurate. They also calculate your private profits correctly. 2. Managing NHS Pension Growth and Annual Allowance Limits The NHS Pension Scheme is valuable, but calculating its growth for tax purposes is not that easy. In fact, it is quite difficult. In 2026/27, the pension annual allowance is £60,000, but HMRC evaluates the mathematical growth of your benefits rather than your cash contributions. Specialist tax advisors check your Pension Savings Statement properly each year They monitor your pension growth and identify spikes that are triggered by pay scale shifts or extra sessions. Also, they guide you on using options like “Scheme Pays” so that you do not have to pay large tax bills out of pocket. 3. Claiming Full Tax Relief on Mandatory Professional Expenses Here are the main things specialist tax advisors for medical professionals claim for you: Professional Registrations: GMC fees, BMA membership, and Royal College dues. Medical Defence Fees: MDU, MPS, or MDDUS indemnity insurance premiums. Exams and Training: Fees for mandatory postgraduate training exams like MRCP, FRCS, or RCGP. Work Mileage and Travel: Travel between different hospital sites or home visits during locum work. Uniforms and Equipment: Stethoscopes, clinical gear, and washing your scrubs. The best part is that you can claim back for the current tax year and the four previous tax years. If you have never claimed before, specialist tax advisors for medical professionals can help you with it. 4. Evading the Hidden 60% Income Tax Trap If your total income goes over £100,000, you step into one of the most expensive tax traps in the UK tax system. For every £2 you earn above £100,000, you lose £1 of your £12,570 tax-free personal allowance. Because you are paying 40% income tax on that money and losing your allowance at the same time, your real tax rate jumps up to 60% on income between £100,000 and £125,140. A good medical tax advisor monitors your income during the year. They show you safe and legal ways that can help you bring your adjusted income back below £100,000. For example by adjusting your pension contributions or shifting the timing of your private billings. How Can Specialist Tax Advisors Help Dentists and Dental Professionals? Dentists can have several different working arrangements. You could be: an associate dentist a self-employed dentist a practice partner a practice owner a company director someone combining NHS and private dental work A specialist tax advisor can help with the tax consequences of your particular structure. For practice owners, advice may also cover Corporation Tax, payroll, dividends, equipment, business expenses and VAT where relevant. For associates and self-employed dentists, the focus may be more on income, expenses, Self Assessment and tax planning. How Do You Choose the Right Specialist Tax Advisors for Medical Professionals? Before choosing an adviser, ask a few straightforward questions. Do they regularly work with doctors? Experience with ordinary self-employed clients is not necessarily the same as experience with NHS doctors. Do they understand the NHS and private income? This is one of the most common issues medical professionals face. So the tax advisor you hire must understand the NHS and private income. Do they understand NHS pension tax? If your pension is significant, you must ask them if they regularly deal with annual allowance calculations and related tax issues. Do they work with GP partnerships? This is really important if you are a GP partner or practice owner. Can they advise on companies? If you are considering incorporation, you want someone who …

What is Inheritance Tax Threshold: The Complete UK Guide 2026/27

George21/07/2026tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

The standard Inheritance Tax threshold in the UK is £325,000 per person. This is legally known as the Nil-Rate Band (NRB). Any part of an estate that exceeds available thresholds is generally taxed at a flat rate of 40%. That is the short answer. The longer answer is where things get interesting. Because the amount of inheritance tax payable depends on the value of the estate, who inherits it, whether a home qualifies for the Residence Nil Rate Band, and what planning was carried out before death. This guide explains everything about the current inheritance tax threshold. You’ll get to know: What is the current inheritance tax threshold Inheritance tax threshold for married couples Inheritance tax when second parent dies, and Much more… Let’s get into it! What Is Inheritance Tax? Despite its name, the UK’s Inheritance Tax actually behaves like an estate tax. It is a specific type of tax imposed on the estate of a deceased person before it is transferred to their beneficiaries. Know that “estate” is just a legal term for everything you own. It includes your house, your savings accounts, your investments, and your car. It even includes your personal assets like jewellery or art. When you die, HMRC assesses the value of the deceased’s estate. Then they deduct any outstanding liabilities you may have left behind. These liabilities can include a mortgage, credit card debts, or funeral costs. After that, whatever value is left over is what gets assessed for tax. The estate is only subject to Inheritance Tax if its value exceeds the available tax-free thresholds. Your total estate value needs to cross a specific inheritance tax threshold before the estate may become liable to Inheritance Tax. So only the wealth that is above that tax-free allowance faces a bill. What Is The Inheritance Tax Threshold? The standard Inheritance Tax threshold in the UK is £325,000. This baseline is legally known as the “Nil-Rate Band.” If the total net value of your estate is under this amount, your beneficiaries won’t owe a single penny to HMRC. But anything over this £325,000 mark is generally taxed at a flat rate of 40%. However, remember that the “true” threshold is not the same for everyone. Depending on your marital status and who you leave your assets to, your personal inheritance tax threshold can easily double or even triple. For 2026/27, here’s what the inheritance tax threshold UK looks like: Allowance Amount 2026/27 Standard nil rate band £325,000 Residence nil rate band £175,000 Combined threshold (with home to descendants) £500,000 Married couple combined threshold Up to £1,000,000 Taper threshold (estates over this lose RNRB) £2,000,000 That £325,000 figure has been sitting there since April 2009 and there is not even a single penny of increase in over 16 years. And it’s not moving any time soon either. The Autumn Budget confirmed the freeze will now run until April 2031. So if you were hoping the standard inheritance tax threshold might creep up with inflation, that’s not happening for a while yet. What Is the Residence Nil Rate Band? The Residence Nil Rate Band (RNRB) was introduced to help families pass on their homes. It is worth £175,000. It is actually an extra £175,000 tax-free threshold given by the government. This means when you add this £175,000 home allowance to your standard £325,000 allowance, your personal inheritance tax threshold jumps to £500,000. But it comes with a few strict conditions. Yes, you only get this boost to your inheritance tax threshold if: You own a home (or did at some point and downsized) That home passes to direct descendants, meaning children, grandchildren, step-children or adopted children Note: Nieces, nephews, siblings, friends, and charities do not count for this particular allowance. What Is Inheritance Tax Threshold For Married Couples? For married couples in the UK, the combined Inheritance Tax threshold can be as high as £1 million tax-free. However, the exact amount depends entirely on how your estate is distributed. It also depends on who inherits your assets. When one spouse or civil partner dies, anything left to the surviving partner is completely exempt from inheritance tax. Yes. It does not matter how much it’s worth. There’s just no threshold on that transfer at all. Then, when the second partner dies, any unused portion of the first partner’s nil rate band and residence nil rate band can be transferred across. So if the first spouse used none of their allowance (because everything went to the surviving spouse), the survivor’s estate can claim both. That means: £325,000 x 2 = £650,000 standard nil rate band £175,000 x 2 = £350,000 residence nil rate band Total inheritance tax threshold for married couples: up to £1,000,000 It is worth remembering that this transfer is not at all automatic. The executors must actively claim it following the death of the second partner. They can do it by using the correct HMRC forms. If you miss this step, it can lead to losing out on hundreds of thousands of pounds of allowance that was rightfully yours. However, it is entirely avoidable with the right guidance. What Is The Inheritance Tax When A Second Parent Dies? As we just discussed, when the first parent dies and leaves everything to the surviving spouse, there’s usually no IHT to pay at that point. This means anything that is left to the surviving partner is completely exempt from inheritance tax. Inheritance Tax is assessed when the second parent dies. This is because that is when the estate actually passes down to the children. At that stage, HMRC looks at the combined nil rate bands and also at the residence nil rate bands of both parents. This is in order to determine the final inheritance tax threshold. If the family home is being left to children, and both allowances transfer properly, a couple can shelter up to £1 million before tax kicks in. And above that, it’s 40% on the excess. If you are an adult child dealing with the estate of your second parent, this is the exact moment the Inheritance …

Is There VAT on Books?

George20/07/2026tax , VAT

Books have long been recognised as essential tools for education, learning, and personal development. Whether you’re purchasing a novel, a university textbook, a children’s storybook, or an eBook, you may wonder whether VAT applies to books in the UK. The good news is that most books are zero-rated for VAT, meaning you do not pay the standard 20% VAT charged on many other goods and services. However, the rules become more complex when you consider items such as stationery, printed materials, magazines, and printing services. Not every product associated with books qualifies for the same VAT treatment. Understanding these VAT rules is important for consumers, businesses, publishers, schools, charities, and retailers. Charging the incorrect VAT rate can lead to accounting errors and compliance issues with HM Revenue & Customs (HMRC). In this guide, you’ll learn: Is there VAT on books in the UK? Are books VAT exempt or zero-rated? Which books qualify for VAT relief? Do eBooks and audiobooks have VAT? Which stationery products are subject to VAT? Are printing services VATable? Common VAT mistakes businesses should avoid. Are Books Exempt From VAT? In the UK, books are indeed exempt from VAT, making them more affordable for readers and book lovers. This exemption applies to physical books, e-books, and audiobooks, including fiction, non-fiction, children’s books, and academic texts. The UK government has chosen to zero-rate books under the VAT system. Recognising the importance of reading and access to knowledge for individuals and society as a whole. This means bookstores, online retailers, and publishers do not charge VAT on book sales, passing the savings on to consumers. However, it’s worth noting that some related products or services, like bookbinding or book cover design, may still be subject to VAT. The VAT exemption for books has been a longstanding policy in the UK. Supporting the country’s rich literary culture and ensuring that books remain widely available and accessible to all. Are Books VAT Exempt or Zero-Rated? One of the biggest misconceptions is that books are VAT exempt. In reality, most books are zero-rated, not exempt. Understanding the difference is important. Zero-Rated VAT Exempt VAT is charged at 0%. No VAT is charged because the supply is exempt. Businesses can usually reclaim input VAT on related costs. Businesses generally cannot reclaim input VAT on related costs. Counts as a taxable supply. Does not count as a taxable supply. Therefore, if someone asks “Are books VAT exempt?”, the technically correct answer is: Most qualifying books are zero-rated for VAT rather than VAT exempt. This distinction is particularly important for publishers, printers, bookshops, and VAT-registered businesses. Is There VAT on Books in the UK? No. Most books sold in the UK are zero-rated for VAT. This means that books are taxable supplies for VAT purposes, but the VAT rate charged is 0% rather than the standard rate of 20%. Customers therefore do not pay VAT when purchasing qualifying books. The UK Government applies this zero rate to encourage education, literacy, and access to information by keeping books affordable for individuals, schools, colleges, universities, and businesses. Unlike VAT-exempt supplies, zero-rated goods still count as taxable supplies. This means VAT-registered businesses can generally reclaim the VAT they incur on related business expenses, provided the normal recovery rules are met. Do We Have To Pay Any Stationery VAT In The UK? In the UK, most stationery items are subject to VAT at the standard rate of 20%. This means that you’ll pay VAT on top of the price of the stationery items you buy. The following stationery items have VAT: Pens, Pencils, and Other Writing Materials Paper, Cards, and Other Printing Materials Notebooks, Journals, and Binders Stickers, Labels, and Other Adhesives Tapes, Glues, and Other Fasteners Office Supplies like Staplers, Scissors, and Rulers Are There Any Stationery Items Exempt from VAT? Yes, some stationery items are exempt from VAT: Books, Booklets, and Pamphlets (as we discussed earlier) Newspapers and Journals Cards and Letters for Personal Use (like greeting cards and writing paper) Wrapping Paper and Gift Tags Why Do Some Stationery Items Have VAT While Others Don’t? The UK government decides which items are essential or beneficial to everyday life and exempts them from VAT. Books, newspapers, and personal stationery are considered important for education, information, and personal expression, so they don’t have VAT. Other stationery items are considered taxable because they’re used for general purposes or business activities. VAT rates and rules can change, so it’s always a good idea to check for updates. Why Are Books Zero-Rated for VAT? Books have traditionally received favourable VAT treatment because they support education, literacy, research, and lifelong learning. The Government introduced the zero rate to: Encourage reading. Improve access to education. Support schools, colleges, and universities. Promote literacy. Make educational resources more affordable. Support the publishing industry. This policy helps reduce the financial barrier to accessing knowledge and educational materials across the UK. Which Printed Publications Qualify for Zero-Rated VAT? HMRC extends zero-rated VAT beyond traditional books to several other printed publications. Depending on their content and purpose, qualifying publications may include: Newspapers Academic journals Educational magazines Printed manuals Booklets Pamphlets Certain leaflets Printed music books (subject to specific rules) Government publications However, qualification depends on several factors, including the publication’s design, intended purpose, and content. Purely promotional material or advertising publications may not qualify for zero-rating. Do eBooks Have VAT? Yes, but at 0% VAT. Since changes to UK VAT legislation, electronic publications such as eBooks now receive the same zero-rated VAT treatment as printed books, provided they meet the qualifying conditions. This means customers purchasing digital books generally do not pay VAT, helping to create consistency between printed and digital publications. Examples include: Kindle books PDF books Online educational books Downloadable textbooks Digital reference guides This change has benefited publishers, educational institutions, and consumers who increasingly rely on digital learning resources. Is VAT Charged on Audiobooks? In many cases, qualifying audiobooks are also zero-rated for VAT. Whether supplied as a digital download or another qualifying format, audiobooks generally receive the same VAT treatment as printed books …

inheritance tax when a second parent dies

How Much is Inheritance Tax When Second Parent Dies?

George20/07/2026Accounting , tax , Tax Issues , Taxation

Losing a second parent is one of life’s most emotional and challenging experiences. Alongside coping with grief, families are often faced with the responsibility of administering the estate, applying for probate, and understanding inheritance tax when the second parent dies. Many people ask questions such as: How much inheritance tax is payable on second death? Can inheritance tax be avoided when the second parent dies? What is the inheritance tax threshold? Can the unused allowance from the first parent be transferred? The good news is that UK inheritance tax rules provide several valuable allowances and reliefs that can significantly reduce—or even eliminate—the tax due. However, understanding how these rules work is essential to avoid costly mistakes and ensure the estate is administered correctly. This guide explains everything you need to know, including: What inheritance tax is. How inheritance tax works when the second parent dies. The inheritance tax threshold. Transferable nil-rate bands. Residence Nil-Rate Band. Available exemptions and reliefs. How to reduce inheritance tax legally. Common mistakes families make. Frequently asked questions. Let’s begin with the basics. What Is the Current Inheritance Tax Threshold? Many people searching for inheritance tax when second parent dies UK want to know how much of an estate can be passed on before tax becomes payable. The answer depends on the available inheritance tax allowances. Nil-Rate Band (NRB) Every individual has a tax-free allowance called the Nil-Rate Band (NRB). The current allowance is: £325,000 This means the first £325,000 of an estate can usually be passed to beneficiaries without inheritance tax. Residence Nil-Rate Band (RNRB) An additional allowance may be available where the family home is left to direct descendants, such as: Children Stepchildren Adopted children Foster children Grandchildren This additional allowance is known as the Residence Nil-Rate Band (RNRB). The current maximum allowance is: £175,000 When combined with the standard Nil-Rate Band, an individual may have tax-free allowances of up to £500,000, depending on their circumstances. What Is the Current Inheritance Tax Threshold? Many people searching for inheritance tax when second parent dies UK want to know how much of an estate can be passed on before tax becomes payable. The answer depends on the available inheritance tax allowances. Nil-Rate Band (NRB) Every individual has a tax-free allowance called the Nil-Rate Band (NRB). The current allowance is: £325,000 This means the first £325,000 of an estate can usually be passed to beneficiaries without inheritance tax. Residence Nil-Rate Band (RNRB) An additional allowance may be available where the family home is left to direct descendants, such as: Children Stepchildren Adopted children Foster children Grandchildren This additional allowance is known as the Residence Nil-Rate Band (RNRB). The current maximum allowance is: £175,000 When combined with the standard Nil-Rate Band, an individual may have tax-free allowances of up to £500,000, depending on their circumstances. What’s Exempt From Inheritance Tax? Following are the scenarios where Inheritance Tax is exempted: Residence Inheritance If you leave your property or estate to your civil partner or your spouse, no inheritance tax is payable on it. However, if they pass it on to someone else, tax may be due. Charity or Funds Anything you leave for charity, doesn’t apply Inheritance Tax. If you leave either 10% or more of your estate to charity, then the reduced rate of inheritance is from 40% to 36%. Business Property Some estates that run a business, or its assets, another relief is applied. This is totally depending on the nature of your business and how long all factors and interest had been held out. This business relief is applied at either 50% or 100%. Gifts Relief Gifts of prices up to £3000 in each tax year are exempt from the Inheritance Tax, as they are considered small gifts, like civil partnerships gifts or wedding gifts. Paying Inheritance Tax When Second Parent Dies Inheritance Tax is due within 6 months after the second parent’s death. In some scenarios, it can also be paid in installments. If your estate includes property, or any other non-liquid assets like vehicles, equipment or machinery etc, you may be able to delay these payments until they are sold. If in any case, none of these are available it can also be possible to get an inheritance tax loan from any private finance company. This can help provide some relief during this stressful time. You must complete an inheritance tax return, which will require details about the deceased’s assets, liabilities and any gifts made seven years prior to their death. The type of return required depends on the complexity of the estate: IHT205 – A simpler form used for estates below the nil-rate band and without any tax due. IHT400 – A more complex form for estates exceeding the nil-rate band or involving trusts. You can specify and claim the unused nil-rate band from the first parent against the estate of the second parent on these forms. Once submitted, HMRC will process the return and issue you with a code to use to apply for probate. Managing Inheritance Tax When a Second Parent Dies Managing Inheritance Tax when a second parent dies, involves professional skills and steps. They are explained in detail below: Consulting a Professional It is advised to consult a professional if you are unaware about the inheritance tax when a second parent dies. Probate solicitors can help you explore all the necessary available allowances, exemptions and ensure the unused nil-rate banks from the first parent are claimed properly. Gathering Necessary Documentation Collecting all the necessary documents like the will, property deeds and bank statements. This information is crucial for accurately recording the estate’s value and calculating the owed tax. Maintaining Accurate Records Keeping the records of all the financial transactions, valuations of the assets and communications about the estate would be really beneficial. This documentation will be baseless when preparing the inheritance tax return and can easily complete the process when dealing with HMRC. Future Plans with Estate Planning When the second parent is alive, discussing the estate planning options with an expert can be beneficial. Planning for the future …

How to Reduce Company Car Tax?

George20/07/2026tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

For many employees and business owners in the UK, a company car is a valuable workplace benefit. It can eliminate the cost of purchasing a personal vehicle while providing access to a reliable car for business travel. However, this benefit often comes with an additional tax liability known as Company Car Tax, also referred to as Benefit-in-Kind tax. The amount of Company Car Tax you pay depends on several factors, including the vehicle’s list price, carbon dioxide (CO₂) emissions, fuel type, and your personal Income Tax band. As a result, some company cars can become significantly more expensive than expected, particularly if they have higher emissions or a high P11D value. In many situations, leasing or purchasing a vehicle personally may prove more tax-efficient than receiving one through your employer. However, the right option depends on your individual circumstances, the type of vehicle you choose, and how it will be used. The good news is that there are legitimate ways to reduce your Company Car Tax bill. Choosing a low-emission or fully electric vehicle, understanding HMRC’s Benefit-in-Kind rules, and selecting a vehicle with a lower P11D value can all help minimise your tax liability. In this guide, we’ll explain: What Company Car Tax is Who needs to pay it Which vehicles may qualify for tax exemptions Whether company vans are taxed differently Practical ways to reduce your Company Car Tax How the P11D value affects your tax bill Whether you’re an employee, company director, or business owner, understanding these rules can help you make more informed financial decisions. If you need tailored advice about Company Car Tax, our experienced tax advisers at CruseBurke can help you understand your obligations and identify the most tax-efficient solution for your circumstances. What Is Company Car Tax? Company Car Tax is the Income Tax employees pay when an employer provides a vehicle that is available for private use. HMRC treats this private use as a Benefit-in-Kind (BiK), meaning it is considered part of your taxable employment income. Even if you primarily use the vehicle for work, you may still have to pay Company Car Tax if the car is available for personal journeys. For HMRC purposes, personal use includes: Travelling between your home and your normal workplace Weekend and holiday driving Shopping and leisure trips Family or personal travel The amount of tax payable depends on several factors, including: The vehicle’s P11D value Its official CO₂ emissions The fuel type Your Income Tax band (Basic, Higher or Additional Rate) Whether your employer also pays for private fuel Because electric and ultra-low emission vehicles attract much lower Benefit-in-Kind rates, they generally result in significantly lower Company Car Tax than petrol or diesel vehicles. What are the Company Car Tax Exemptions in the UK? The exemptions of company car tax are implemented to the cars that are purchased through the company and you are paying tax over it. Yes, you heard it right, there are possible exemptions in this regard. However, you will have to meet certain criteria to be eligible for the exception. You will be expected to the following listed conditions of company car tax: You do not use the company car for private use. You have adapted the company car for the reasons of mobility. You are in the role of the proprietor of your own business. You are a partner of the limited liability partnership. You are in a position to be the partner in a partnership. Moreover, if you are using the company car for the reason of business purely, you will not have to deal with the hefty amount of company car tax. This is more likely to be like leaving the car on your business premises overnight as well as over the weekends. The car will only be used when you have to meet a client for a business meeting or any other purpose of business travel. The training days are also part of this. According to HMRC commuting to work comes under the category of personal use. Company Car Tax Exemptions in the UK Although Company Car Tax applies in most situations where an employer provides a vehicle, HMRC does allow certain exemptions. If the relevant conditions are met, the benefit may not be taxable. Some of the most common situations include the following. The Car Is Used Exclusively for Business A company car may be exempt where: it is only used for business journeys; it is not available for private use; private use is prohibited by the employer; and any private use is insignificant. For example, a vehicle kept at business premises overnight and only used for client meetings, site visits or temporary workplace travel may qualify, provided it is not available for personal use. It’s important to remember that ordinary commuting between home and your permanent workplace is treated as private use by HMRC, even if the journey is work-related. Adapted Vehicles for Employees with Disabilities Certain vehicles that have been permanently adapted to meet the mobility needs of a disabled employee may qualify for specific tax reliefs, depending on the circumstances and HMRC rules. Business Owners and Partners If you operate your own business, the tax treatment of vehicles depends on your business structure. For example: Sole traders generally claim allowable vehicle expenses instead of paying Company Car Tax. Limited company directors receiving a company-owned vehicle are usually subject to Benefit-in-Kind rules. Members of Limited Liability Partnerships (LLPs) and traditional partnerships may be taxed differently depending on ownership and use of the vehicle. As the rules can be complex, professional advice is often recommended before purchasing a vehicle through your business. Company Vans: Are They Taxed Differently? Yes. HMRC applies different rules to company vans than to company cars. A company van is generally subject to a separate Van Benefit Charge rather than the standard Company Car Tax rules. However, many employees will not pay tax on a company van if it is used almost entirely for business purposes. You may qualify for an exemption where: the van is only used for business …

Is There VAT on Car Parking in the UK? A Complete Guide (2026)

George16/07/2026tax , Tax Issues , Taxation , VAT

Understanding whether VAT applies to car parking in the UK can be confusing. While the general rule is straightforward, there are important exceptions depending on who provides the parking, the type of parking involved, and whether the charge is a parking fee, an excess charge, or a penalty. If you’re a business owner, employer, or motorist, knowing the VAT treatment of parking charges can help you remain compliant with HMRC rules and avoid costly mistakes when reclaiming VAT. This guide explains when VAT applies to car parking, when it doesn’t, and how different types of parking charges are treated for UK VAT purposes. Is There VAT on Car Parking in the UK? In most cases, off-street car parking provided by a VAT-registered business is subject to the standard rate of VAT (20%). This means that if you pay to park in a commercial car park operated by a VAT-registered company, the parking fee will usually include VAT. However, not every parking charge is treated in the same way. The VAT position depends on factors such as: Who operates the car park. Whether the operator is VAT-registered. Whether the parking is on-street or off-street. Whether the payment is a parking fee, excess charge, or penalty. Understanding these distinctions is essential, particularly if you’re a business looking to reclaim VAT on parking expenses. How Does VAT Apply to Car Parking? VAT is charged on most goods and services supplied in the UK. Car parking is generally treated as a taxable supply, meaning the provider must charge VAT if they are registered for VAT. Where VAT applies: The customer pays the parking fee, including VAT. The parking operator collects the VAT. The operator reports and pays the VAT to HMRC through its VAT Return. For businesses that are VAT-registered, the VAT element of eligible parking costs may be recoverable, provided the expense relates to taxable business activities and a valid VAT invoice is available. Do You Pay VAT for Off-Street Parking? Off-street car parking is generally subject to VAT in the UK, which means that the price of parking includes an additional 20% tax. The VAT on off-street car parking is paid by the customer, and the car park operator is responsible for collecting and remitting the tax to HMRC. However, there are some circumstances where VAT may not be charged on off-street parking, such as if the car park operator is not VAT-registered. Is VAT Charged on On-Street Parking? The VAT treatment of on-street parking is slightly different. Parking spaces provided directly by local authorities are often supplied under statutory powers rather than commercial arrangements. Depending on the circumstances, these charges may fall outside the scope of VAT or be treated differently from private parking services. However, if parking is managed by a private VAT-registered operator, VAT may apply to the parking charge. Because the VAT treatment can vary depending on the contractual arrangement and the organisation providing the parking, businesses should always review the VAT shown on the receipt before attempting to reclaim it. Is Car Parking VAT Exempt or Zero-Rated? A common misconception is that car parking is either VAT exempt or zero-rated. In reality, most commercial parking is neither exempt nor zero-rated. Instead, it is normally subject to the standard rate of VAT (20%). The terms have different meanings: Standard-rated – VAT is charged at 20%. Zero-rated – VAT is charged at 0%, but the supply remains taxable. VAT exempt – No VAT is charged, and the supplier cannot normally reclaim VAT on related costs. Most private parking operators supply standard-rated parking services. Certain specialist situations may receive different VAT treatment, but these are exceptions rather than the rule. Is On-Street Parking VAT Exempt? Parking provided by local authorities may not always follow the same VAT rules as commercial parking operators. In many cases, local authority parking charges are treated differently because they are supplied under statutory powers rather than as commercial activities. Where a private company manages parking on behalf of a landowner or operates under a commercial arrangement, VAT is generally charged if the operator is VAT-registered. Because these rules can vary, businesses should always rely on the VAT information shown on the receipt or invoice rather than making assumptions. Is There VAT on Parking Fines? Parking fines are issued by local authorities or private parking companies when a vehicle is parked in contravention of parking regulations. These fines are not considered to be a supply of goods or services, as they are not provided in exchange for payment. Instead, parking fines are considered to be a penalty for breaking parking regulations and are therefore exempt from VAT. This means that the price of a parking fine does not include VAT, and VAT cannot be reclaimed on the cost of paying a parking fine. Are Excess Parking Charges Subject to VAT? The VAT treatment of excess parking charges depends on the nature of the charge. For example, additional fees for: Staying beyond the paid parking period. Purchasing extra parking time. Upgrading to a longer stay. may be treated as additional payment for parking services and could therefore be subject to VAT. However, where the charge represents a contractual penalty rather than payment for additional parking, the VAT treatment may differ. Since the VAT position depends on the specific circumstances and contractual terms, businesses should review the documentation provided by the parking operator. Can Businesses Reclaim VAT on Parking Charges? If your business is VAT-registered, you may be able to reclaim VAT on parking expenses where: The parking relates to business activities. VAT has actually been charged. You hold a valid VAT invoice or receipt. The expense complies with HMRC’s input tax recovery rules. However, VAT cannot usually be reclaimed on: Parking fines Penalty Charge Notices Charges where no VAT has been applied The Bottom Line Now that we have gathered a fair amount of information regarding what is VAT on car parking in the UK, we can bring the discussion towards wrapping up. parking fines in the UK are not subject to VAT, as they are considered to be a penalty rather than a supply of …

How Do I Cancel Road Tax?

George16/07/2026tax , Tax Issues

If you’ve sold your vehicle, declared it off the road, scrapped it, or exported it overseas, you may be wondering how to cancel your road tax and whether you’re entitled to a refund. In the UK, road tax, officially known as Vehicle Excise Duty (VED), is administered by the Driver and Vehicle Licensing Agency (DVLA). Vehicle tax is generally required if you keep or use a vehicle on public roads. However, there are several situations where your tax liability ends, and you may be eligible for a refund of any full unused months you’ve already paid for. This guide explains when you can cancel road tax, how the process works, and what you need to do to receive a refund, helping you stay compliant with DVLA requirements. What Is Road Tax? Road tax, officially called Vehicle Excise Duty (VED), is a tax charged on most vehicles registered in the UK. The amount you pay depends on several factors, including: The type of vehicle. The vehicle’s age. CO₂ emissions (where applicable). Fuel type. The date the vehicle was first registered. Although many people refer to it as “road tax”, the official term used by the DVLA is Vehicle Excise Duty (VED). Important: Even if your vehicle qualifies for a £0 rate of Vehicle Excise Duty, you may still need to tax the vehicle with the DVLA unless it is officially exempt. Understanding of Road Tax Cancellation How do I cancel road tax? Road tax, commonly known as vehicle excise tax, constitutes a significant proportion of revenue for the UK government. While in the UK, it is essential to pay tax to the HMRC, even if no road tax is applicable; this tax is important for vehicle registration. The tax can be paid to the HMRC through debit or credit cards. The amount of road tax varies according to the region and vehicle type, involving the legal framework regarding vehicle taxation in the UK. Why Do You Need to Pay Road Tax? Vehicle Excise Duty is a legal requirement for most vehicles driven or kept on public roads in the UK. Failure to tax your vehicle can result in enforcement action by the DVLA, including: An £80 out-of-court settlement (reduced if paid promptly). Penalties of up to £1,000 for using an untaxed vehicle. Vehicle clamping or seizure in serious cases. Keeping your vehicle correctly taxed helps ensure you remain compliant with UK vehicle registration laws. Reasons for Cancelling Road Tax The road tax imposed by the DVLA can be cancelled if the following conditions are met: If you have sold the car or transferred it to someone else. If you are not using a car on the road and declare it as an off-road vehicle (SORN). If the car is damaged and it is unsafe to drive it, the insurance company write off such vehicles. The repair cost of such a vehicle is more than its actual cost, which is totally uneconomical. If the car is stripped of its parts in other vehicles. The car has been stolen. If the car you own is exempt from road tax. You have exported the car to another country. How Do I Cancel Road Tax? The following steps need to be followed while applying for road tax cancellation: You will need a logbook for your vehicle (V5C). From the logbook, you will need the 11-digit number mentioned in the yellow section labelled as “Sell, transfer or part-exchange your vehicle to the motor trade” in the logbook. You may also need the 16-digit number mentioned on your V11 reminder form. Your vehicle registration number, name, and address. The road tax cancellation process is made easier by DVLA’s online service. You can select the scenario from the list provided and then follow the prompts that appear on your screen. There are different conditions for the options you choose, which may be: If the car is sold or transferred to someone else, you need to give the details of the new owner and other necessary paperwork to the DVLA. You need to declare the Car an off-road vehicle and update the DVLA. The DVLA should be updated if the car is scrapped. If the car is stolen, you should call the police about the theft, and the police will update the DVLA. The insurance should also be updated about the theft. The road tax can also be cancelled by other conventional ways, such as post or phone. Refund Eligibility and Process Below are the eligibility criteria for the road tax refund The amount of the refund will be calculated by the DVLA from the date you apply to cancel your road tax. This process is done automatically and does not need anything else from you. The road tax is paid annually in advance to the DVLA in the UK. The refund amounts will be for the remaining months of the year after you have applied for the tax cancellation. For example, if you apply for a road tax cancellation after six months in a year, you will get the refund for the remaining six months. The DVLA will not refund the charges paid, such as credit or debit card fees. If the tax is paid by direct debit, the DVLA cancels your regular payment. If the refund is requested on the first annual tax payment, the DVLA will calculate the difference between the first and second road tax payments and refund whichever is lower. Tax Refund Payment The amount of tax refund is paid by cheque by the DVLA. The tax refund will be sent to the name and address provided by the V5C logbook of your vehicle. The refund amount is received within 6 to 8 weeks of your request. If the name or address on the cheque is wrong, you can correct it by sending it back to the following address: Refund Section, DVLA, Swansea, SA99 1AL If the refund amount is not received within the mentioned period, you must inform the DVLA. Conclusion The road tax imposed by the DVLA is the tax that is paid …

What are the Advantages and Disadvantages of Retained Profit?

George16/07/2026tax , Tax Issues , Tax News and Tips , Tax Saving Tips , Taxation

Every profitable business faces an important financial decision: Should profits be distributed to shareholders, or should they be retained within the business? The answer depends on your company’s financial objectives, future growth plans, and cash flow requirements. While paying dividends rewards shareholders, retaining profits gives your business the financial resources to expand without relying heavily on external funding. For many UK businesses, retained profit is one of the most cost-effective sources of finance. It can be used to invest in new equipment, recruit employees, launch products, improve technology, reduce debt, or build a financial buffer against unexpected challenges. In this guide, you’ll learn what retained profit is, how it is calculated, its advantages and disadvantages, and how businesses can use retained earnings strategically to support long-term success. What is Retained Profit? Retained profit, also known as retained earnings, is the portion of a company’s net profit that remains in the business after dividends have been paid to shareholders. Rather than distributing all profits, the company keeps part of its earnings to strengthen its financial position or finance future investment. Retained profit appears within the shareholders’ equity section of the company’s balance sheet and accumulates over time. Each year’s retained earnings are added to the existing balance after accounting for profits, losses, and dividend payments. Why Is Retained Profit Important? Retained profit provides businesses with financial flexibility and reduces their dependence on borrowing or external investment. Companies that consistently generate and retain profits are generally viewed as financially stable because they have internal funds available for expansion and unexpected expenses. Retained earnings can help businesses: Finance business growth Purchase new equipment or technology Recruit additional employees Expand into new markets Develop new products or services Improve cash flow Reduce business debt Build financial resilience during economic uncertainty Strong retained earnings also improve confidence among lenders, investors, suppliers, and other stakeholders. Formula Of Retained Profit Calculating the retained profit in the UK is simple, you need to subtract the dividends paid to shareholders from the company’s net income. Formula for retained earnings is: Retained Earnings = Opening Retained Earnings + Net Profit (or Loss) – Dividends Paid Where: Opening Retained Earnings refers to the retained earnings from the previous period (i.e., the balance carried forward). Net Profit (or Loss) is the current period’s profit (or loss) as per the income statement. Dividends Paid is the amount paid out to shareholders. Example of Retained Profit Calculation Imagine you’re running a small tech company. You make £100,000 in net income, and your company has £50,000 in opening retained earnings. After paying out £40,000 in dividends, your retained earnings would be: Retained Earnings = £50,000 + £100,000 – £40,000 = £110,000 So, you’re left with £110,000 in retained profit, which you can reinvest in product development, marketing, or paying off existing debt. This is a great opportunity to grow your business without relying on outside investors. Why Is Retained Profit Important For Your Business? Retained profit can be found on a company’s balance sheet under the equity section. It is important for analysts and investors as it provides an insight to the company’s financial health. It can be invested into the business to fund new hirings, upgrading the equipment or do marketing, A company that has a higher percentage of profits may be viewed as having a stronger financial position as it shows more money for future growth opportunities. Advantages of Retained Profit There are several advantages that retained profit can provide for a UK-based company. They are as follows: Flexibility Retained profit provides a company with more financial flexibility to invest in growth opportunities, pay off debt, or distribute to shareholders at a later date. Control By retaining profits, a company can maintain greater control over its financial position and investment decisions. Cost Savings Retaining profits can be more cost-effective than raising capital through debt or equity financing, as there are typically fewer transaction costs and fees associated with using retained earnings. Stability Retained profit can help to stabilize a company’s financial position, as it provides a cushion against unexpected expenses or downturns in the market. Improved Creditworthiness Retained profit can improve a company’s creditworthiness, making it easier to secure financing on favourable terms. Furthermore, retained profit can be an important tool for companies looking to grow and maintain financial stability over the long term. Disadvantages of Retained Profit Like advantages, retained profit also has some disadvantages. The prominent ones are as follows: Opportunity Costs By retaining profits, a company may miss out on other investment opportunities that could provide higher returns. Shareholder Dissatisfaction If a company retains too much profit, shareholders may become dissatisfied and push for higher dividends or other changes in the company’s financial strategy. Reduced Liquidity Retained profits are typically less liquid than cash or other assets, which can reduce a company’s financial flexibility. Increased Risk Retained profits can increase a company’s risk exposure, as it may be more dependent on a single business or investment strategy. Tax Implications Retained profits can have tax implications for a company, as they may be subject to corporate income tax or other taxes. Moreover, the decision to retain profits or pay dividends is a complex one that depends on a variety of factors, including the company’s financial position, growth potential, and shareholder preferences. Advantages And Disadvantages Of Retained Earnings To make it easier to compare, here’s a concise summary of the advantages and disadvantages of retaining profit: Advantages Disadvantages Provides financial flexibility to invest in growth opportunities and paying off debts. Missing out on investment opportunities that can provide high returns. Control over financial position and investment decisions. By retaining too much profit, shareholders become dissatisfied and push for higher dividends. They are cost-effective with fewer transaction costs and fees. They are less liquid than other assets and can reduce the company’s financial flexibility. Stabilising the company’s financial position provides a cushion against unexpected expenses and downturns. It can increase a company’s risk exposure and can be dependent on a single business or investment strategy. …

How Much is Emergency Tax in UK? Complete 2026/27 Guide to Rates, Codes, and HMRC Refunds

George08/07/2026Accounting , tax , Tax Saving Tips , Taxation

Emergency tax is a temporary tax code (e.g., 1257L followed by W1, M1, or X) applied when HMRC lacks your income details. It taxes you without considering previous pay or your full annual allowance. Usually, on an emergency tax code, you end up paying more than you actually owe. The good news? If you have overpaid tax, HMRC will usually refund the overpayment once your tax position is corrected. Let us break down exactly what emergency tax is and why it happens. What Is Emergency Tax? Emergency tax is a temporary way of collecting Income Tax when HMRC does not yet have enough information about your earnings or tax position. Basically, when you get paid, your employer or pension provider uses a tax code to deduct tax. That code is given to them by HMRC. That tax code tells your employer or pension provider how much of your income is tax-free and how the rest should be taxed. The problem is that sometimes your employer simply does not have that code yet. Maybe you’ve picked up a second income. Maybe you didn’t hand over your P45 from your old job. Maybe you’re a pensioner taking your first withdrawal from a private pension. Whatever the reason, HMRC steps in with a placeholder code. So that you are not left untaxed. That placeholder is what we call emergency tax. Instead of delaying tax completely, Why Do You Get Put on Emergency Tax? You usually get put on emergency tax when your employer doesn’t have the information needed to apply your correct tax code. The common reasons that might get you on an emergency tax include: You start a new job and don’t give your employer a P45 from your last one You didn’t complete HMRC’s Starter Checklist properly You’ve taken on a second job or a new pension alongside your existing income You’ve moved from self-employment into employment partway through the tax year You take your first taxable withdrawal from a pension pot Your circumstances changed. For example, you started getting a company car or other taxable benefit How Does Emergency Tax Work? Usually, HMRC’s PAYE system calculates your tax cumulatively. This means looking at everything you have earned and all the tax you have paid since April 6th. For the 2026/27 tax year, the standard UK Personal Allowance remains at £12,570. In a normal cumulative system, this annual tax-free safety net is divided smoothly across the year. This gives you a £1,048 tax-free allowance each month (or £242 a week). If you are unemployed for a few months, your unused tax-free allowances build up, and then it rolls over. As a result, it lowers your future tax bills. But when you are put on an emergency tax code (like 1257L M1 or W1), the system operates completely on a non-cumulative basis. Non-Cumulative tax completely ignores what happened in earlier months. So in case you start a job halfway through the year, it does not care that you were unemployed earlier. It only gives you one single month’s tax-free allowance (£1,048) and taxes the rest. You may temporarily pay more tax than you ultimately owe because unused tax-free allowances from earlier in the tax year are ignored until your tax code is corrected. Common Emergency Tax Codes in 2026/27 The most common emergency tax codes for 2026/27 are 1257L W1, 1257L M1, and 1257L X. Let’s look at them in detail: 1257L W1 This is one of the most common emergency tax codes. The “1257L” part represents the standard Personal Allowance code used for many taxpayers. The important part is W1. It means a week 1 basis. Instead of looking at your earnings since the start of the tax year, payroll only considers the current week’s pay. Previous earnings are ignored. Yes, until HMRC issues your correct cumulative tax code. 1257L M1 This works in exactly the same way as 1257L W1. The difference is that it’s calculated on a Month 1 basis instead of Week 1. Each month’s salary is treated independently. Your earlier earnings don’t affect the calculation. 1257L X It is applied if your pay interval is irregular (e.g., fortnightly, four-weekly, or casual piecework). Some payroll software systems automatically print “X” on your slip instead of writing out “W1” or “M1”. Just like W1 and M1, it completely locks your tax calculation to that single pay packet. It prevents the system from balancing out your tax over the whole year. Other Flat-Rate Emergency Codes Beyond the 1257L variants, HMRC uses other flat-rate codes if your previous job history or income details are entirely missing. BR: This stands for Basic Rate. It taxes all income from this job at a flat 20%, and it gives you zero tax-free Personal Allowance. It is commonly used for second jobs where the Personal Allowance is already being used elsewhere. 0T: This code removes your Personal Allowance entirely. It taxes all of your earnings without giving any Personal Allowance, applying the normal tax bands from the first pound of taxable income. It can trigger 40% or 45% tax on larger paychecks. D0: This taxes all income from this specific source at a flat 40%. It is used for taxpayers in England, Wales, and Northern Ireland if HMRC thinks your total combined income exceeds £50,270. D1: This taxes all income from this source at a flat 45%. It is used if HMRC estimates your total annual income exceeds £125,140. That said, the letters W1, M1 and X are often the biggest clue that you’re on emergency tax. Why Am I Being Charged an Emergency Tax? There are a few common reasons why an emergency tax might be applied: Starting a New Job: If you’re starting a new job and HMRC hasn’t given your new employer your tax details yet, you could be placed on emergency tax. Not Having a Tax Code: If HMRC doesn’t know your income or if they don’t have up-to-date information about you, you’ll be placed on emergency tax until they can sort things out. Multiple Jobs: If you have more than one job and your employers don’t know about each other, they might apply emergency …