How to avoid common money mistakes tradies make

Learn how Director’s Loan Accounts really work — and how to avoid costly Section 455 tax traps that catch many UK contractors off guard. This in-depth guide from Zeus Accountants breaks down everything you need to know in plain English: what counts as a loan, how to manage repayments, and when HMRC charges apply. Packed with real examples, expert tips, and practical steps to stay compliant, it’s your go-to resource for keeping your finances clean, efficient, and stress-free. https://lnkd.in/gbDGhCVj

💷 Thinking of taking a loan from your company? On the surface, it can look like a smart move – quick access to funds with no bank forms, no refusals, and no interest charged. But HMRC’s rules make things much more complicated. 👉 Fail to repay within nine months and one day, and your company could face a 33.75% tax charge. 👉 Repay and borrow again? The 30-day ‘bed and breakfast’ rule could stop it counting. 👉 And even small loans have conditions and hidden traps. We’ve explained the rules, the risks, and the exemptions in our latest blog – so you can borrow with confidence and avoid an HMRC headache. 🔗 https://lnkd.in/en8_6ijK

Maximise tax relief for bad debts Struggling with unpaid invoices or money you know will never come back? The good news is that businesses can often claim tax relief on irrecoverable debts. To qualify, you’ll need to show that the debt is genuinely unlikely to be recovered. For example, this could be a loan to a friend who has gone bankrupt or trade debts that remain unpaid despite repeated attempts to collect. HMRC will only allow relief if the debt has already been included in your taxable income, and you’ve made genuine efforts to pursue repayment. Good record keeping is essential here – without it, claims may be challenged. Handled correctly, claiming relief can ease the financial impact of bad debts and keep your business on track. At Ward Goodman, we help businesses make sure their tax position is fully protected. #BusinessTax #HMRC #TaxRelief #WardGoodman

I’ve seen many accountants (in Australia) stress about related party debit loans for Div7A and not realise there is probably no distributable surplus anyway. Make sure you always estimate the distributable surplus before deciding on the minimum repayments, interest and deemed dividends. Remember that Div7A is not actually about shareholders taking money from the company. It only cares about the company retaining profits at the company tax rate (on paper) and the shareholder receiving the money. It wants the tax at the shareholder’s tax rate if they hold the profits. The nuance is that if the money didn’t come from profits there is no Div7A problem. The complexity is that what you call profit on the P&L is not always what the legislation (or accounting standards) would call profits. So you can’t just use your retained profits figure from the equity section of the balance sheet to determine the distributable surplus. That’s only based on how you calculated the profits, not the way the legislation envisions profits. But nonetheless, looking at retained profits is a good place to start. If there is no distributable surplus the ATO is happy because the shareholder has not taken the profits (there are no profits) and they must have taken it from a creditor of some kind. But then again the ATO is usually not that happy because often they are the creditor! But that doesn’t make it a Div7A problem, it’s now a debt and insolvency issue.

Director’s Loan Accounts: Smart Cash Flow Tool or Hidden Tax Trap? 💼 Thinking of taking money from your company? A director’s loan account (DLA) can help with short-term cash flow — but only if managed carefully. Miss the repayment window, and HMRC’s 33.75% Section 455 tax could hit hard, along with potential balance sheet and credibility risks. ✅ Learn how to use DLAs wisely and keep your business tax-efficient. 👉 Get expert advice from Naail & Co Chartered Certified Accountants & Tax Advisors. #TaxPlanning #SmallBusinessUK #DirectorsLoan #HMRC #Accounting #NaailAndCo 🔗 Read more: https://lnkd.in/gvxtSuEw

Director’s Loan Accounts: Smart Cash Flow Tool or Hidden Tax Trap? 💼 Thinking of taking money from your company? A director’s loan account (DLA) can help with short-term cash flow — but only if managed carefully. Miss the repayment window, and HMRC’s 33.75% Section 455 tax could hit hard, along with potential balance sheet and credibility risks. ✅ Learn how to use DLAs wisely and keep your business tax-efficient. 👉 Get expert advice from Naail & Co Chartered Certified Accountants & Tax Advisors. #TaxPlanning #SmallBusinessUK #DirectorsLoan #HMRC #Accounting #NaailAndCo 🔗 Read more: https://lnkd.in/gP-RHgSk

HMRC's direct recovery of debts policy explained. Understanding how HMRC manages debt recovery is crucial for financial planning. This policy allows them to recover unpaid debts directly from your bank or building society account under certain conditions. Being informed ensures compliance and prevents unexpected actions. Staying proactive about tax obligations is key. #HMRC #DebtRecovery #Tax #Finance #Compliance

HMRC has recovered an unprecedented £107 million in unpaid taxes from buy-to-let landlords in 2024/25, the highest annual figure on record. The recoveries, made through the Let Property Campaign (LPC), highlight HMRC’s increasingly tough approach toward undeclared rental income. 💡 What this means for property investors and lenders: This record-breaking figure underscores the growing importance of transparency and compliance within the UK property market. For investors, staying on top of tax obligations is essential to avoid unnecessary penalties and to maintain financial stability in an evolving lending landscape. With an average repayment of £5,800, and higher amounts once penalties and interest are added, landlords and property investors must act early to review their portfolios and ensure full disclosure. ✅ Declare all rental income, including short-term lets and shared ownership. ✅ Use HMRC’s online tools or voluntary disclosure options under the LPC to reduce potential fines. At Hana Capital, we help clients navigate the complexities of property finance with transparency and efficiency. Whether you’re refinancing, expanding your portfolio, or exploring new opportunities, we’re here to support your growth every step of the way. #HanaCapital #PropertyFinance #BridgingLoans #BuyToLet #PropertyInvestment #Landlords #TaxCompliance #HMRC #PropertyLending #UKPropertyMarket #FinancialServices #RealEstateFinance #InvestmentProperty #LetPropertyCampaign #PropertyNews

Thinking of borrowing from your company? Make sure your director’s loan is set up properly. A director’s loan can offer short-term flexibility, but if it isn’t managed carefully, it can quickly create problems with HMRC. Key things to check: ✔️ Document the amount, purpose, and repayment terms ✔️ Ensure approvals are recorded properly ✔️ Keep accurate records in your accounts ✔️ Watch out for Section 455 tax if overdrawn at year-end ✔️ Understand the rules around beneficial loans and interest The bottom line? A director’s loan can be useful, but mistakes can be costly. HMRC holds the director responsible, not the software. If you’re unsure, speak to us - we’ll help you avoid the traps and stay compliant www.bernard-rogers.co.uk #DirectorsLoan #AccountingTips #SME #BusinessFinance #TaxAdvice #LimitedCompany

𝙊𝙡𝙙 𝙫𝙨. 𝙉𝙚𝙬 𝘽𝙖𝙙 𝘿𝙚𝙗𝙩 𝙍𝙪𝙡𝙚𝙨: 𝙒𝙝𝙖𝙩'𝙨 𝘾𝙝𝙖𝙣𝙜𝙞𝙣𝙜? Another update from the New Tax Act 2025! If you're a business owner, you need to know about the changes to bad debt rules. Here's a comparison between the old and new provisions: 👡 Old Provision: - Businesses had more flexibility in claiming tax deductions for bad debts. - Documentation requirements were not as strict. - This led to some inconsistencies and potential abuse. 👡 New Provision: - Businesses now need to provide more proof to claim tax deductions for bad debts. For instance: 1. Invoice or contract 2. Proof of delivery 3. Bill or statement 4. Letters or emails sent 5. Efforts to collect debt 6. Write-off record 7. Proof customer can't pay (if the customer is bankrupt) - Debts will be classified into different stages based on how long they've been outstanding. - The tax rules for bad debts are becoming clearer. 👠 Why is the new provision better? - Increased transparency: Clearer guidelines will help businesses understand what they can claim. - Improved accountability: Stricter documentation requirements will reduce potential abuse. - Better risk management: Businesses will be more proactive in managing their finances. 🩴What should businesses do? - Make sure you're following the new rules to avoid any issues. - Keep good records of your debts and payments. - Stay on top of your finances to avoid bad debts. Share this information with others! #tamunonemitekenah Business and Corporate lawyer