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What Is Capital Gains Tax in the UK?

When you sell an asset that has increased in value, such as property, cars or even shares, you will have to pay a tax on the profit, called Capital Gains Tax (CGT). In the UK, the current CGT rates are 10% or 20% for individuals (not including residential property and carried interest).

Why do you need to pay CGT?

If you’ve sold an asset which had increased in value and the gain, or profit, is greater than your annual CGT allowance – this is currently £12,300 for the 2022/23 tax year – you will need to pay CGT on the difference. 

If the gain is less than your annual allowance, you don’t need to pay CGT but you will still need to report the gain on your next tax return. 

When don’t you need to pay CGT?

If you’ve sold an asset which had increased in value and the gain, or profit, is greater than your annual CGT allowance – which for the 2022/23 tax year is £12,300 but will drop to £6,000 for the 2023/24 tax year – and you will need to pay CGT on the difference between your annual personal CGT allowance and the sale price.

If the gain is less than your annual allowance, you don’t need to pay CGT but you will still need to report the gain on your next tax return.

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How to calculate your CGT bill

To calculate your CGT bill, you need to know how much your gain (profit) is by subtracting the original cost of your asset from the sale price.

For example, if you bought a share for £100 and then sold it for £150, your gain would be £50.

Now you know your gain, apply the relevant tax rate to calculate how much CGT you will need to pay. For the 2022/23 tax year, outlines the CGT rates as:

● 10% and 20% tax rates for individuals (excluding residential property and carried interest)
● 18% and 28% tax rates for individuals for residential property and carried interest
● 20% for trustees or for personal representatives of someone who has died (excluding residential property)
● 28% for trustees or for personal representatives of someone who has died for the disposal of residential property
● 10% for gains qualifying for Business Asset Disposal Relief (previously known as Entrepreneurs Relief)
● 28% for Capital Gains Tax on a property where the Annual Tax on Enveloped Dwellings is paid, the annual exempt amount is not applicable
● 20% for companies (non-resident Capital Gains Tax on the disposal of a UK residential property)

As you can see the rates vary depending on whether you’re an individual or a business and what it is that CGT may apply to. If you’re unsure what rate your gain is subject to, we’re always here to help.

How to pay CGT

How you report and pay your Capital Gains Tax depends on whether you sold a residential property in a residential property in the UK on or after 6 April 2020 or any other asset that’s increased in value in the time between purchasing and selling it.

To report your gain you’ll need to know:

● how much you bought and sold the asset for.
● when you bought and sold the asset.
● any other relevant details, like any costs associated with the purchase, improving the asset and any tax reliefs you’re entitled to.

Here to help

CGT can be a complex and confusing tax but to make sure you’re paying the right amount, it’s important to understand how the tax works. That way you will avoid paying more tax than you need to.

If you’re planning on selling an asset that has increased in value but are unsure whether you need to pay CGT, or how much CGT you owe, our experienced, professional tax advisers at Norwich Accountancy are on hand to help you.

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How Long Should You Keep Your Tax Records in the UK?

There are a few factors that determine how long you should be keeping tax records, from your income to your employment status and the type of records you have. Let’s look at the what, when and for how long in more detail.


For individuals, it is recommended you keep your tax records for a minimum of 22 months after the end of the relevant tax year. For example, if you file your 2022/23 tax return by the filing date, you should keep your records until 2025.

However, in case you find yourself chasing a tax refund or are tackling a tax dispute, it’s a good idea to keep your records for even longer.


For businesses, it’s recommended you keep your tax records for a minimum of five years following the end of the relevant accounting period. For example, if your accounting period ends on 31 December 2022, you should keep your records until 31 December 2027.

Like individuals, in case you should be faced with a tax dispute or want to claw back some tax through a refund, keep your records for longer.

What records should you keep?

The types of records you should be keeping to support your tax return include:

● Sales and income.
● Eligible business expenses.
● If you’re registered for VAT, then your VAT records.
● If you employ people, your PAYE records.
● Details about your personal income.
● Details of any grants you’ve claimed, such as COVID-19 business grant schemes.

If you’re self-employed, as well as the above, you should also keep records like:

● Travel expenses.
● Eligible meals and entertainment expenses.
● Business equipment expenses.
● Professional fees.
● Details of any grants you’ve claimed, such as the Self-Employment Income Support Scheme.

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Where should you keep your records?

Make sure you keep your records in a safe and secure place, whether that’s a safe deposit box, at home or even with your accountant in their office. (We’d advise against shoe boxes under the bed). It’s also a good idea to keep them organised to make it easy to find any evidence you may need in the future for tax purposes.

What if I lose my tax records?

If you lose your tax records, get in touch with HMRC as soon as possible. They may be able to help you reconstruct them for you.

You may also be able to get a copy of your tax records from your employer, bank or other financial institutions.

Work smarter, not harder

Keeping your tax records for the recommended length of time will help you avoid any penalties and interest if HMRC decides to audit your tax return. You can also make sure you’re claiming all the relevant tax reliefs and deductions you’re entitled to, as well as resolve any disputes if they arise.

Need somewhere safe and secure to keep your tax records? Get in touch with Norwich Accountancy today.

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What Are the Benefits of Being CIS Registered?

The Construction Industry Scheme (CIS) is a government initiative that has been designed to help contractors and subcontractors pay the right amount of tax to HM Revenue and Customs (HMRC). It’s applied to lots of different types of construction work that’s carried out in the UK and can apply to companies of various sizes and turnover. 

If you’re a construction business then you must register as a contractor with the Construction Industry Scheme ( CIS ) if you pay subcontractors to do construction work or if you’ve spent more than £3 million on construction in the 12 months, even if they’re not in the construction industry.

Whether you’re a sole trader, in a partnership or own a limited company, the rules above still apply but if you’re not sure if you need to register, take a look at the’s list of who’s covered by CIS.

They also set out some rules you must follow including:

Beyond staying on the right side of the HMRC, there are several benefits to being CIS registered, including:

  • Peace of mind. As a CIS registered contractor, you can be confident you’re paying the right amount of tax and are not at risk of being investigated by HMRC. 
  • Reduced risk of fraud. The CIS scheme helps to reduce the risk of fraud in the construction industry. It does this by making sure contractors are properly vetted and that payments are made via a secure payment system.
  • Improved cash flow. CIS can help to improve your cash flow by making sure payments are made in full and on time.
  • Increased opportunities. Contractors that are CIS-registered can be more likely to be considered for hire by major contractors as it shows a commitment to compliance. 

If you’re a contractor working in the construction industry, we’d always recommend becoming a registered member of CIS. It’s a simple process to join with lots of rewards to reap.

How to register for CIS

To register for CIS, you’ll need to give HMRC some basic information about you, your business and your tax reference number. You can register via the phone or post, as well as online. 

Once you’ve registered, you will receive your own unique CIS registration number, which must be added to all the invoices you send to contractors.

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Here to help

Are you a contractor in the construction industry? Have you registered for CIS? If you need help navigating the process then we’re here to help you make the most of the benefits that come with it from reduced risk of fraud, better cash flow, more opportunities and, of course, peace of mind that everything is as it should be.

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What Are Earlier Year Corrections (EYC)?

We all make mistakes and unless you’re in the tax trade it can be especially true for your self-assessment tax return. Earlier Year Corrections (EYC) are a way to correct any errors from previous years on your self-assessment tax returns. They can be used to adjust errors in your income, expenses or any other information you reported to HMRC via your tax return.

When can I use EYCs?

EYCs can be used to correct any errors on your self-assessment tax returns as long as the year of correction is still open for HMRC to investigate. This means you can use EYCs for any errors in your current tax year, and for previous tax years.

How do I use EYCs?

To use EYCs, complete a form called Earlier Year Correction Notice, which can be found on HMRC’s website. This form will ask for information about the error you want to correct. You’ll also need to provide evidence that supports your EYC claim. 

When completed, submit the form and the evidence to HMRC who’ll investigate your claim. If they agree you’ve made an error, they’ll make the necessary adjustment to your tax return and either send you a refund or a bill, whichever applies, preferably the former of course.

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What are the benefits of using EYCs?

There are lots of benefits to using EYCs to correct any errors on your self-assessment tax return, including:

  • Peace of mind. EYCs can put your mind at ease in knowing that you’ve put right any errors on your tax returns.
  • Reduced penalties. By correcting your errors using EYCs, it is possible to avoid paying any HMRC penalties.
  • Improved cash flow. If you believe you’re due a refund from HMRC, EYCs can help your case so you can get your refund earlier.

Here are a few top tips for using EYCs:

  • Make sure you keep detailed records of your income and expenses as this makes it easier to identify and correct any errors.
  • If you’re not sure whether or not you can use EYCs to correct any tax return errors, always seek professional advice from a tax adviser or accountant.

Noticed an error?

Do you think you’ve made an error on your self-assessment tax return? Not sure if you can use an EYC or not? Get in touch with us at Norwich Accountancy. 

We’ll help to identify the error, advise if you can use EYCs, help you fill out the HMRC’s form and put your mind at ease.

If you need to understand corporation tax further and its implications on your business, our tax experts at Norwich Accountancy in Norfolk can provide professional tax advice. Whether you’re needing basic tax information, want to reduce corporation tax, help with calculating your tax liability, or any other tax-related task then feel free to put us to the test.

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Top 5 Ways an Accountant Can Save You Money

Here are our top 5 ways in which our tax accountants in Norwich can help you reduce your personal tax bill in the UK.

1. Identify tax reliefs and deductions

There are a number of tax reliefs and deductions available to UK taxpayers but it can sometimes be difficult to know which ones you may be eligible for. A personal tax accountant will help you identify which tax reliefs and deductions may be applicable to you, and then make sure you claim them correctly.

2. Prepare your personal tax returns accurately

Because the UK’s tax system is so complex, just the smallest mistake on your tax return can leave you facing added interest fees or even incur penalties. Our tax accountants in Norwich will help you prepare your personal tax returns correctly, as well as make sure they are submitted on time. This gives you complete reassurance and peace of mind that you are meeting your tax obligations. 

3. Advise on tax planning

Tax planning is the process of taking the right steps to reduce your tax liability. But if you’re not sure how to do this, a tax accountant will help you develop a tax plan that is tailored to your own individual situation. They will also be able to help you make better informed decisions about your financial circumstances.

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4. Represent you at an HMRC enquiry

Being contacted by HMRC about a tax enquiry can be very daunting and scary. In these situations, it’s important you seek financial advice and support. This is where a personal tax accountant can help by representing you at the HMRC enquiry and, therefore, resolving the problem as quickly and efficiently as possible.

5. Provide tax advice

An accountant has the necessary knowledge and experience to give you general tax advice on a wide range of topics, including pensions, investments and inheritance tax. This can help you reduce your tax liability and that you are able to make informed decisions about financial matters personal to you.

As well as these top 5 ways an accountant can help you with your tax, here are some extra tips for reducing your personal tax bill:

  • Make sure you are claiming all the tax-free allowances and reliefs you are entitled to.
  • Keep detailed records of your income and expenses.
  • Think about using a tax-efficient savings or investment product.
  • Make sure you are aware of the latest changes to the UK’s tax system.

Follow our tips and you will be able to reduce your personal tax account. By identifying the right reliefs and deductions applicable to you, you can make sure your tax returns are accurately completed and on time and an accountant can help you keep more of your hard-earned money.

Are you looking to reduce your personal tax bill but not sure where to start? Norwich Accountancy’s tax advisors and accountants are on hand to help you with all your personal tax obligations. Let us take care of it for you so that you can spend more time with family and friends and less time tackling taxes.

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How inheritance tax works in
the UK

Losing a loved one can be a difficult time without having inheritance tax (IHT) to contend with. But unfortunately, it’s something that beneficiaries of a deceased person’s estate, which includes their property, possessions and money, have to pay. Currently, the standard IHT rate in the UK is 40%. This rate is only applied to the value of the estate that is above the tax-free threshold of £325,000.

Who pays inheritance tax?

In most cases, the beneficiaries of the deceased person’s estate pay the inheritance tax. However, if the estate is valued at less than the tax-free threshold, there won’t be any IHT to pay.

What is the tax-free threshold?

To reiterate, the tax-free threshold applied to inheritance tax is currently £325,000. This means that if the value of the deceased’s estate is below this figure, the beneficiaries don’t need to pay any tax. However, if the value of the estate is above £325,000, they will need to pay inheritance tax but only on the amount above the tax-free threshold. For example, if an estate is worth £400,000 and your tax-free threshold is £325,000. The Inheritance Tax charged will be 40% of £75,000 (£400,000 minus £325,000).

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What are the inheritance tax exemptions?

There are a number of exemptions from inheritance tax. Gifts given whilst the deceased person was still alive may still be subject to IHT depending on when you received the gift but ‘taper relief’ might mean the Inheritance Tax charged on the gift is less than 40%. You can find out what counts as a gift here.

Business Relief means that some assets can be passed on free of Inheritance Tax or, at least, with a reduced bill.

How to reduce your inheritance tax bill

Planning ahead for inheritance tax will help towards reducing the tax bill your family and/or beneficiaries will have to pay upon your death. Ways you can do this include:

  • Making gifts to charity.
  • Using trusts.
  • Inheritance tax advice and planning. 

Here are some other inheritance tax considerations to think about:

  • The tax-free threshold may rise in 2026.
  • There is a Residence Nil Band Rate (RNBR) of £175,000 which can be used to reduce the amount of inheritance tax payable on the family home.
  • The RNRB is likely to rise in 2026.

If you’re concerned about inheritance tax, Norwich Accountancy always recommends seeking professional advice from an experienced tax adviser. We can help you understand the implications of inheritance tax in respect of your estate, and help you plan for the future so get in touch to find out more. 


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preparing your finances for a rainy day


We all strive for financial security. Just knowing you have enough money to cover your expenses, an emergency fund for those unexpected events and maybe a piggy bank, too, gives you peace of mind. 

Here are Norwich Accountancy’s eight simple steps to improving your financial security and preparing for a rainy day.

1. Create a budget

Tracking your incomings and outgoings, and setting a budget for each week or month, is a good place to start. Once you know what comes in and goes out, you can work out where your money is being spent each month. From here, you can start to make some big changes or even tiny tweaks to help you save money for the future, or for a rainy day. 

2. Pay off debt

If you have any debt, prioritise paying it off as quickly as possible. If you’re not sure where to start, there are a number of different debt repayment strategies available. Chat with a financial adviser to understand your options and get help finding the right approach for you and your circumstances.

3. Save for emergencies

Unexpected events happen, but if you have an emergency fund then dealing with them is easier and less stressful. Aim to have enough in your fund to cover your expenses for at least three, if not six, months plus a little extra. An emergency fund means you won’t have to borrow money should an unexpected event happen, saving you the interest on repayments.

4. Invest for the future

Grow your money by investing it for the future to help you reach your financial goals, like buying a house or early retirement. There are plenty of investment options depending on how much you have to invest, the level of risk you want to take and what you want to achieve. It’s a good idea to get sound financial advice before you invest any money.

5. Get professional help

If you’re struggling to improve your financial position, an experienced financial adviser can help you create a budget plan to pay off your debt, save for emergencies and invest for the future. They’ll also be able to help you understand your options and guide you in making the best decisions for your financial situation. 

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Other actions to consider include:

6. Live below your means

Aim to spend less than you earn. Perhaps cut back on takeaways or eat out less, cancel unnecessary subscriptions, switch utility providers or cut back on those nice-to-haves for a bit. 

7. Make a financial plan

Once you have a budget, make a financial plan to include short and long-term goals. This will help keep you on track to reaching your financial goals and give you greater security. It’ll help you work out how much you have to spend on the things you need and what’s left to spend on the things you want.

8. Review your finances regularly

This will make sure your budget and financial plan are still right for you and keep you focused. This applies to any investments you’ve made, too. What was right for you a year ago may no longer be so, so review your finances regularly to make sure they suit you now.

Follow our five simple steps, and our bonus tips, to improve your financial security and get the peace of mind that you’re prepared for the future.

We’re here to help with a range of different aspects of personal tax and we’re adding new tips and advice all the time so take a look at our other personal tax articles or get in touch with the team.

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second job tax explained

Whilst having a second job is a great way to earn some extra income, it’s important that you’re aware of the tax implications. In the UK, you’re taxed on the total amount of your income earned from all sources. So, if your total income from all your jobs exceeds your personal allowance, you’ll be paying tax on your second job income as well as your principal income.

The amount of income tax you have to pay depends on which tax band your total income falls into. Currently, an individual’s personal allowance – the money you can earn before you have to start paying tax – is £12,570 for the 20232/24 tax year. You will pay tax on all your earnings above this allowance threshold at the following rates:

  • Basic rate: 20% on earnings between £12,571 and £50,270.
  • Higher rate: 40% on earnings between £50,271 and £150,000.
  • Additional rate: 45% on earnings above £150,000.


You may have to pay National Insurance (NI) contributions on your second job earnings, which is currently at a rate of 13.8%. If you’re self-employed, don’t forget it’s your responsibility to ensure you pay your NI contributions to HMRC. The Class 4 NI rate for the self-employed is 9% on profits between £12,570 and £50,270 and 2% on profits over £50,270.

However, for a second job, make sure you’re paying the right amount of income tax and NI contributions as they may be different from the rates you pay on your primary job income. HMRC’s website has all the relevant details about the tax implications regarding second job earnings.

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Here are our tips to think about regarding the tax implications of a second job:

  • You may be able to claim tax relief on expenses you incur while carrying out your second job. For example, if you use your car for work purposes you may be able to claim a mileage allowance.
  • If you’re self-employed, you may be eligible to claim tax relief on some business expenses, such as a deduction on the cost of materials, equipment or uniforms.
  • Be prepared to complete a self-assessment tax return – an HMRC form for declaring your income and expenses.

By following this advice and handy tips, you can make sure you’re paying the right level of income tax and NI contributions on your earnings from your second job and protect your pennies as much as possible.

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How Much Does It Cost a UK Business to Have Employees?


This is the biggest cost that comes with having employees and of course, the salary you pay each employee depends on their skills, experience and what they’ll be doing for your business. 

National Insurance contributions

As well as employee salaries, employers in the UK also pay employee National Insurance (NI) contributions. NI is a tax that is used to fund the National Health Service (NHS), State Pensions, Jobseekers Allowance, Maternity Allowance and a whole host of other benefits. 

The level of Class 1 NI contributions paid by the employer depends on the employee’s earnings. The rates for most people for the tax year 2023 to 2024 are 12% for those earning £1,048 to £4,189 a month for example. Employees will pay less if they’re married, a widow, have a valid ‘certificate of election’ or are deferring National Insurance because they’ve got more than one job.


On top of salaries and NI contributions, UK employers may also give employees certain benefits to help attract and retain staff, like health insurance, pension contributions, paid leave, gym memberships and other reward schemes. 

Taxes and business costs to an employer

On top of the cost of salaries, National Insurance contributions and employee benefits, employees will also be subject to income tax.

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Income tax

This is a tax paid on the earnings of individual employees. How much income tax they pay depends on the person’s income – the more they earn, the more tax they’ll pay. 

If you’re thinking about taking on someone, it’s important to factor in the ‘true’ cost of adding new talent to your team. That way, you can be sure you’re ready for the financial commitment having employees requires and their jobs are as secure and sustainable as possible. 

If you employ people then you not only need to know what they’ll cost, but how you pay them. You’ll find plenty of advice on payroll in our articles so take a look around our website or get in touch to find out more.

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How to Protect Your Construction Business Through the UK’s Cost of Living Crisis

The UK is in the middle of a major cost of living crisis with inflation hitting a 40-year high. This has had a significant impact on businesses of all sizes but is particularly challenging for construction companies.

The construction industry is labour-intensive and the cost of living crisis has made it tricky for companies to attract and retain staff. Add this to the rising cost of materials, it puts a strain on businesses, their profits and on the people who run them. 

Here are seven tips to help you help your construction company weather the storm.

1. Review your expenses

Look carefully at your business expenses and see if there are any areas where you can cut back. For example, negotiating better deals with suppliers, reducing unnecessary spending or reducing waste.

2. Increase prices

Think about whether you’re able to put your prices up to offset rising costs. However, be careful not to put them up too much or you could lose customers who are also feeling the pinch.

3. Look for new revenue streams

Think about how you can generate new revenue, like expanding into new markets, launching new products or services or partnering with other companies to offer more services to more customers.

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4. Get help from the Government

Have a look at government-funded programmes designed to help businesses struggling with the cost of living crisis. They can provide financial assistance, tax breaks and other resources that may have a few helpful tips that could end up transforming your business’s fortunes.

5. Build up your cash reserves 

A healthy cash reserve gives you a cushion to fall back on if your revenue takes a hit so try and work out how you might be able to give yourself a buffer you can turn to in tougher times.

6. Negotiate with creditors

Don’t be afraid to talk to and re-negotiate with your suppliers and agree on new payment plans that are beneficial for your business as well as theirs.

7. Get help from a business advisor 

A business adviser can help you develop a plan to weather any storm and come out stronger on the other side.

Here are a few more short but sweet tips specifically for construction businesses:

  • Focus on efficiency: identify ways to streamline operations and reduce waste, like using more efficient materials, equipment and processes.
  • Invest in technology: new technologies can help improve efficiency, productivity and safety.
  • Partner with other companies: collaborating with others shares resources and expertise, helping to save money and improve your bottom line.
  • Stay up-to-date with industry trends: the construction industry is constantly evolving so it’s important to keep up with the latest trends. This will lead to better decisions and help you give your customers what they want and word will soon spread. 

You’ve worked hard to build your business, so we’re here to help you protect it from the ups and downs of the UK’s economy, and the cost of living crisis. For more help and advice, take a look at our collection of construction-related articles.

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