Busy Bee Accountancy

Busy Bee Accountancy Expert accountancy and bookkeeping services for small and micro businesses. Book a free dicovery call: https://calendly.com/busy-bee-accountancy/20min

10/10/2026

🧾 Can your limited company claim expenses before it starts trading?

In many cases, yes.

If you have set up a limited company but have not started trading yet, some costs may still qualify for Corporation Tax relief once the business starts.

Under the pre-trading rules, certain qualifying expenses incurred up to 7 years before trading begins can potentially be treated as if they were incurred on the first day of trading.

Examples may include:

• advertising and marketing
• business insurance
• certain software costs
• professional fees
• some business travel
• certain premises costs

The important question is:

Would the cost have been allowable if the company was already trading?

If the answer is no, the fact that it was incurred before trading started does not make it allowable.

⚠️ It is also important to understand the difference between pre-trading costs and pre-incorporation costs.

Pre-trading costs are incurred after the company has been formed but before it starts trading.

Pre-incorporation costs are incurred before the company legally exists, and these may need to be treated differently.

Equipment, stock and other capital items can also have their own tax treatment.

The key point?

Keep your invoices and receipts from the very beginning.

Even if your company has not started making sales yet, those early costs could still be important when the first accounts and Corporation Tax return are prepared.

🐝 Busy Bee Accountancy
Helping limited company owners stay compliant and tax efficient.

03/10/2026

💷 Do you have other income as well as your limited company?

If you take a mixture of salary and dividends from your company, it is important to look at your total personal income before deciding how much to take.

Your salary and dividend strategy should not be based only on income from your company.

Other income can include:

• salary from another job
• rental income
• pension income
• self-employed profits
• savings interest
• dividends from other companies or investments

Dividends are generally taxed after your other income.

This means your other income may already have used some or all of your Personal Allowance and basic-rate band before you take dividends from your company.

For example, if you already earn £40,000 from another job, any additional salary or dividends from your company will sit on top of that income.

You should also watch important tax thresholds.

⚠️ £50,270 – higher-rate tax may start to apply

⚠️ £60,000 – the High Income Child Benefit Charge starts

⚠️ £100,000 – your Personal Allowance starts to reduce

For 2026/27, dividend income above the £500 Dividend Allowance can be taxed at 10.75%, 35.75% or 39.35%, depending on your total income.

Sometimes it may be worth considering whether to:

• leave some profits in the company
• delay a dividend to another tax year
• make company pension contributions
• or simply take less money from the company for now

The main point is:

Do not use the same salary and dividend strategy for every director.

The right mix depends on your whole personal tax position, not just your company income.

🐝 Busy Bee Accountancy
Helping limited company owners stay compliant and tax efficient.

12/09/2026

🏠 **Can your limited company pay you rent for working from home?**

If you are a company director and genuinely use part of your home for business, it may be possible to put a **formal licence agreement** in place.

Under this type of arrangement, your company pays you rent for the use of office space or other business facilities in your home.

The company may be able to claim tax relief on the rent, provided the arrangement is commercial, reasonable and properly documented.

You would need to declare the rent you receive personally, although you may also be able to claim a fair proportion of relevant household costs against that income.

⚠️ This is not something to set up by simply transferring yourself money each month.

You should have:

• a written licence agreement
• board minutes
• a reasonable rent calculation
• clear evidence of how the space is used

You also need to think about **Capital Gains Tax**.

If part of your home is used exclusively for business, this could affect the tax position when you later sell the property.

For this reason, a **non-exclusive licence arrangement** is important.

The key point?

**Set it up properly from the start.**

A home rent arrangement can work well, but it needs to be reasonable, documented and suitable for your circumstances.

🐝 **Busy Bee Accountancy**
Helping limited company owners stay compliant and tax efficient.

06/09/2026

💷 **What is a dividend?**

If you run a limited company, it is important to understand the difference between taking a **salary** and taking a **dividend**.

A dividend is a payment made to shareholders from the company’s available profits.

It is paid because you **own shares in the company**, not because you work for it.

This means dividends:

• are not processed through PAYE
• are not subject to National Insurance
• are not a business expense
• do not reduce the company’s Corporation Tax bill

Most importantly, a company can only pay dividends if it has enough profits available for distribution.

⚠️ Having enough cash in the bank does **not** automatically mean you can pay a dividend.

The company must first have sufficient available profits.

A simple way to remember it:

**Salary reduces company profit.
Dividends do not.**

Before taking money from your company as a dividend, make sure the company has enough profits and that the dividend is properly recorded.

🐝 **Busy Bee Accountancy**
Helping limited company owners stay compliant and tax efficient.

30/08/2026

📢 **HMRC is looking more closely at dividends**

If you are a director and shareholder of a small limited company, there are some important changes to be aware of.

From the **2025/26 Self Assessment tax return**, directors of close companies will need to provide HMRC with more information about their company and dividends.

This includes:

🏢 The company name and registration number

💷 The amount of dividends received from the company

📊 Your highest percentage shareholding during the tax year

A **close company** is broadly a company controlled by five or fewer shareholders, or by shareholders who are also directors.

This means that **most small owner-managed limited companies are likely to be affected**.

HMRC has also proposed going further by asking companies to provide more detailed information about payments and transactions involving shareholders, including:

• Dividends
• Director and shareholder loans
• Cash withdrawals
• Transfers of assets
• Other payments to shareholders

⚠️ **These wider company reporting requirements are currently proposals and are not yet in force.**

The key message?

Make sure your **dividend vouchers, board minutes, director’s loan account and company records are kept up to date**.

HMRC is receiving more information about how money is taken from limited companies, so keeping accurate records is becoming even more important.

🐝 **Busy Bee Accountancy**
Helping limited company owners stay compliant and tax efficient.

23/08/2026

🎁 Can your limited company claim the cost of business gifts?

Business gifts can be a little confusing because the tax treatment depends on who receives the gift, what it is and why it is being given.

As a general rule, gifts to customers and suppliers are not normally allowable for Corporation Tax.

However, there are some exceptions.

✅ Free product samples may be allowable if they are given to promote the products your business sells.

✅ Branded promotional gifts may also be allowable if they:

• clearly advertise your business
• cost no more than £50 per recipient in the accounting period
• are not food, drink, to***co or exchangeable vouchers

So a branded pen, mug or notebook may qualify.

But a bottle of w**e, box of chocolates, hamper or gift voucher will normally not qualify, even if it has your company branding on it.

👥 What about gifts to employees and directors?

These are treated differently.

A gift costing £50 or less may qualify as a tax-free trivial benefit, provided it is not cash, not a reward for work, and is not part of the employee’s contract.

For directors of close companies, there is an overall limit of £300 per tax year.

And remember — VAT has separate rules, so this may also need to be considered.

Before putting a business gift through your company, make sure you know how it should be treated.

🐝 Busy Bee Accountancy
Helping limited company owners stay compliant and tax efficient.

15/08/2026

What happens to your Personal Allowance when your income exceeds £100,000?

The standard Personal Allowance is £12,570. However, once your adjusted net income exceeds £100,000, this allowance starts to reduce.

For every £2 of income above £100,000, you lose £1 of your Personal Allowance.

This means:

At £110,000 of income, your Personal Allowance is reduced to £7,570.
At £120,000, it is reduced to £2,570.
At £125,140, the Personal Allowance is lost completely.

This creates a particularly high effective rate of tax on income between £100,000 and £125,140.

There are some ways to reduce adjusted net income, depending on your circumstances. For example, pension contributions and qualifying Gift Aid donations can help.

For company directors, it is also important to consider the timing and amount of salary and dividends before they are taken.

Tax planning is most effective when it is done before the end of the tax year, rather than after the income has already been received.

#60%taxcharge

08/08/2026

What is a marginal tax rate? 🐝

Many business owners know that Corporation Tax can be charged at 19% or 25%, but what happens when your company’s profits fall between the two thresholds?

For companies with taxable profits between £50,000 and £250,000, Marginal Relief may apply. In this range, the effective marginal Corporation Tax rate can be 26.5%.

In simple terms, this means that for every additional £1 of allowable business expenses, your company could save up to 26.5p in Corporation Tax.

For example, an allowable expense of £1,000 could potentially reduce the Corporation Tax bill by £265.

This is why understanding which expenses are allowable, and planning ahead before the year end, can make a real difference to your tax bill.

The £50,000 and £250,000 limits can be reduced if you have associated companies or a shorter accounting period.

🐝 Let Busy Bee take the sting out of accounting.

01/08/2026

Tax is rarely as simple as it first appears.

Take VAT registration as an example.

A business may exceed the £90,000 VAT registration threshold on 7 July. Under the normal rolling 12-month test, its VAT registration would usually take effect from 1 September.

However, if the business knew on 7 July that its taxable turnover would exceed £90,000 in the next 30 days alone, the registration date could instead be 7 July.

The same turnover threshold. The same date. Two very different outcomes.

Getting this wrong could mean failing to charge VAT from the correct date, having to pay VAT from your own funds, issuing corrected invoices and potentially facing interest or penalties.

This is just one example of how complicated tax can become for small businesses. The rules depend on the individual circumstances, and what seems like a small detail can completely change the answer.

At Busy Bee Accountancy, we take the time to understand your business, monitor important thresholds and explain your responsibilities in plain English.

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Ashley Park House, 42-50 Hersham Road
Walton-on-Thames
KT121RZ

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