01/08/2025
Side Hustles & Tax: What you need to know before HMRC comes knocking
The side hustle scene in the UK is thriving, with over 1 in 4 Brits successfully generating extra income as TikTok creators, Vinted or Etsy sellers, and delivery riders (ONS, 2025).
HMRC is keeping a watchful eye on these activities, but you don’t need to worry. At Friendly Assist Accountancy, we equip our clients with the knowledge and tools they need to handle side hustle taxes confidently and effortlessly.
Do you need to declare your side income?
If you earn over £1,000 a year (your Trading Allowance), you must:
– Submit a Self-Assessment tax return (deadline: 31 Jan 2026)
– Pay Income Tax (usually 20%-45%)
– Pay National Insurance if self-employed
– Track expenses to reduce your tax bill
e.g. Earn £6,000 freelancing? After the £1,000 allowance and £1,200 in expenses, you’re only taxed on £3,800.
Common tax mistakes side hustlers make
1. Assuming HMRC Won’t Notice
From 2025, platforms like Etsy, Uber, and Vinted must report earnings to HMRC.
2. Mixing Business and Personal Accounts
Using your personal PayPal for Depop sales? It’s messy and risky. Open a separate account.
3. Overlooking Other Taxes
Renting a spare room? That’s property income, not covered by the Trading Allowance.
Selling crypto or NFTs? You may owe Capital Gains Tax.
Smart Tax Moves for Side Hustlers
– Use tools like QuickBooks to track income and expenses
– Set aside 25-30% of earnings for tax
– Check if you’re officially self-employed – we can help
What If You Haven’t Declared Past Income?
Don’t panic. HMRC’s Digital Disclosure Service lets you declare late with lower penalties. Waiting risks fines up to 100% of unpaid tax.
How We Can Help
At Friendly Assist Accountancy, we:
– Answer questions and help you understand taxable income
– Handle Self-Assessment returns from £89/year
– Offer specialist support for crypto, gig work, and creators
-Unsure if your side hustle is taxable? Let’s Talk!
https://www.gov.uk/guidance/reporting-rules-for-digital-platforms
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13/07/2025
The UK’s Finance Rules Are Changing Again: Here’s What You Need to Know About Your Money
The UK’s financial and tax systems are undergoing significant modernization. Whether you’re a business owner, freelancer, investor, or landlord, you will soon find that the way you manage your accounts, report your income, and interact with HMRC is changing rapidly.
With the rise of AI in bookkeeping and new tax regulations targeting cryptocurrency and digital side hustles, the period after May 2025 has marked a new chapter for UK taxpayers.
At Friendly Assist Accountancy, our goal is to help you understand these changes and prepare efficiently, rather than stressfully.
Cryptocurrency and Digital Assets
Welcome to the Era of cryptocurrency and digital assets. Currently, 1 in 4 small businesses in the UK use cryptocurrency, and that number jumps to 60% among mid-sized firms.
However, experts warn that over 60% of these businesses lack proper accounting systems for digital assets, leaving them vulnerable to tax penalties and compliance risks.
Starting in 2026, crypto investors will face stricter compliance rules under the OECD’s Crypto-Asset Reporting Framework (CARF).
What’s Changing?
-Global Reporting Standard:
Cryptocurrency platforms (exchanges, wallets, DeFi apps) will be required to share customer data with HMRC, similar to how banks report interest and capital gains.
-Increased Scrutiny:
Earnings from NFTs, staking rewards, and yield farming will now fall under clearer tax regulations.
-International Data Sharing:
HMRC will exchange information with tax authorities in other countries, which is especially relevant for those trading on global platforms.
What Can You Do?
-Keep a record of every transaction, from Bitcoin sales to DeFi lending. Consider using software like CoinTracking or Recap.
-Consult an accountant specialising in tax for assistance with fair market value assessments, particularly for less-liquid tokens and NFTs.
-If you’ve previously failed to declare crypto income, consider making a voluntary disclosure; this is often more cost-effective than waiting for a penalty.
HMRC is developing the infrastructure to monitor your activities. Ensure your records are thorough and defensible.
Changes to IR35:
IR35 rules are becoming stricter, with HMRC increasing audits—especially in sectors that rely heavily on freelancers, such as tech, logistics, and creative industries.
A new, clearer CEST tool will be introduced to help employers and contractors assess their status with greater confidence.
Agencies and intermediaries will bear more responsibility for accurately determining employment status. Freelancers using Personal Service Companies (PSCs), along with hiring businesses and recruiters, should regularly review contracts, maintain documentation of independence, and consider tax investigation insurance.
Tip: Avoid outdated templates. IR35 compliance requires a fresh, informed approach.
Enhanced Powers for HMRC: Investigations Made Easier
–Points-Based Penalty System: Missing a deadline results in a warning. Repeated delays lead to escalating penalties, even if your tax is accurate.
–Financial Institution Notices (FIN): HMRC can now request your account information without your knowledge or a court order, expediting investigations.
–Platform Reporting Mandates: Digital gig and resale platforms must report your earnings directly to HMRC. This affects sellers on platforms like Vinted, eBay, hosts on Airbnb, Deliveroo riders, Etsy creators, and others.
Many individuals with side hustles or digital income streams are unaware of their transparency to HMRC. Ignoring a small tax bill today could lead to a significant investigation tomorrow.
What Can You Do?
– If you earn more than £1,000 a year from non-employment income, you need to declare it.
– Log your side gig income just as you would with a salary or dividends.
– Hire an accountant to review your income streams annually to identify any reporting gaps.
-Remember: Side hustles are taxable. Ensure they are compliant.
Changes in Property Tax Landscape
-Potential Cost Implications: The property tax landscape is evolving, potentially increasing costs for some while decreasing them for others.
Key Changes:
– Business Rates Revaluation (April 2026): This will utilize updated rental data, and some properties may experience significant rate increases.
– Reliefs for retail, hospitality, and leisure are likely to continue, although the rules may tighten.
-Rumored Changes to SDLT: Buy-to-let investors could face higher charges to deter speculative purchases and address housing shortages.
If You Own Property:
– Review your rateable value and appeal if your valuation seems excessive.
– Plan your buy-to-let purchases ahead of the new SDLT rules.
– Explore options for green upgrades, which can enhance valuations and affect future tax treatment.
At Friendly Assist Accountancy, we specialize in helping UK individuals and businesses thrive through financial clarity. We’re here to guide you through these changes.
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27/05/25
High Inflation in the North East and the benefits of having an accountant
Inflation has been a hot topic recently, affecting everything from grocery bills to mortgage rates. It has even risen more then expected, especially here in the North East of England.
But beyond the immediate pinch on your wallet, high inflation also has long-term implications for tax savings, pensions, and property investments.
At Friendly Assist Accountancy, we want to break down these effects in simple terms and help you navigate these challenging financial times.
1. Inflation & Tax Savings: The Squeeze on Allowances
Inflation erodes the real value of money, which means your tax-free allowances don’t stretch as far as they used to.
Key Impacts:
– Frozen Tax Thresholds: Until 2028, income tax and inheritance tax thresholds remain frozen. With wages rising (but not always keeping up with inflation), more people in the North East are being pushed into higher tax brackets—a phenomenon known as: fiscal drag, stealth tax
-ISA & Pension Limits Unchanged: While the cost of living rises, the £20,000 ISA allowance and £60,000 pension annual allowance stay the same, reducing their real value over time.
2. Pensions: The Double-Edged Sword
Inflation affects pensions in two major ways:
a) State Pensions & Triple Lock
The triple lock ensures the state pension rises by the highest of:
– Inflation (CPI)
– Average wage growth 2.5%
In 2023, it increased by 10.1% due to high inflation—good news for retirees in Newcastle and Sunderland. However, if inflation stays high, future increases could strain public finances, leading to potential policy changes.
b) Private Pensions & Investment Value
Defined Benefit (DB) Pensions: High inflation can reduce the real value of fixed payouts.
Defined Contribution (DC) Pensions: If investments don’t outpace inflation, your retirement pot buys less.
North East Example: A retiree in Durham with a £250,000 pension pot might have planned for £10,000 yearly withdrawals.
But with inflation at 5%, they’d need £10,500 just to maintain the same lifestyle — forcing them to dip deeper into savings.
3. Property: Rising Costs, Mortgage & Rental Pressures
The North East has some of the most affordable property prices in the UK, but inflation still impacts homeowners and landlords.
a) Mortgage Costs
– Higher inflation leads to higher interest rates, increasing mortgage payments.
– A homeowner in Gateshead with a £150,000 tracker mortgage could see their monthly payments jump by £200+ if rates rise by 2%.
b) Rental Market Squeeze
– Landlords facing higher mortgage costs may pass these onto tenants.
– In Newcastle, average rents rose by **8% in 2023, outpacing wage growth for many locals.
c) Capital Gains Tax (CGT) Property
The CGT allowance dropped from £12,300 to £6,000 in 2023 and £3,000 in 2024.
– A landlord selling a buy-to-let in South Shields for a £40,000 profit now pays more tax due to the shrinking allowance.
What Can You Do? Tax Efficiency Tips
– Maximise ISA and pension contributions before allowances lose more value.
– Consider salary sacrifice schemes to reduce taxable income.
Pension Planning
– Review your investments to ensure they outpace inflation (e.g. equities over cash).
– If you’re near retirement, explore inflation-linked annuities.
Property Strategies:
– Landlords: Refinance early to lock in better rates.
– Homeowners: Overpay your mortgage while savings rates are high.
Inflation doesn’t just make your weekly shop more expensive—it quietly reshapes your tax liabilities, retirement plans, and property investments. The key is to be proactive and adjust your financial strategies accordingly.
At Friendly Assist Accountancy, we help individuals and businesses across the North East and beyond to navigate these challenges and to stay ahead.
https://www.ons.gov.uk/visualisations/housingpriceslocal/E08000021/
https://www.british-business-bank.co.uk/business-guidance/guidance-articles/business-essentials/seven-business-tips-for-dealing-with-high-inflation
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12/05/25
How Having an Accountant Can Help Your Business During Financial Struggles
In today’s competitive environment, it is essential for every business to monitor and manage its expenses effectively.
An accountant can offer invaluable insights into how your organisation can streamline operations and enhance efficiency. Additionally, keeping a robust cash flow is vital for sustaining business growth and stability, allowing companies to seize opportunities and navigate challenges with confidence.
Over 80% of small and medium-sized enterprises (SMEs) in the UK experience at least some months of negative cash flow, a risk often exacerbated by revenue volatility and delayed payments.
An accountant can assist in navigating these challenges and overcoming obstacles to enhance and optimise your cash flow. Liquidity is crucial for operational continuity, as it covers fixed costs such as payroll and rent while reducing the risk of insolvency. Strategic liquidity enables agility, allowing businesses to seize opportunities like discounted assets, pivot their business models, or invest in growth initiatives.
Proactive measures, including cash forecasting, expense optimisation, diversified revenue streams, and lean inventory management, can enhance resilience. Effective cash flow management not only ensures survival but also positions firms to take advantage of recovery and competitive edges.
Let’s explore six strategies to unlock cash from your balance sheet
Many small and medium businesses often overlook their balance sheet assets and liabilities as sources of liquidity. Before seeking additional credit, consider these six strategies to release cash effectively:
1. Optimise Your Receivables and Payables
It is helpful to analyse working capital gaps (e.g., slow invoicing, early supplier payments) and shorten your cash conversion cycle.
Many companies treat working capital simply as a cost of doing business. In our experience, few consider the adverse effects of extended customer terms, tight payment cycles, and high inventory levels on their true economic value.
A thorough analysis of past transactions often reveals process gaps, unfavourable terms with customers and vendors, and other immediate opportunities to improve working capital.
2. Divest Underperforming Business Assets
Identify assets that are costing more than they are returning (low return on invested capital) or business units that are suitable for sale or repurposing.
Significant opportunities to release cash may also exist within long-term assets like property, plants, and equipment.
By analysing the returns generated by these investments, you can identify stranded or non-core assets that detract from overall performance.
Selling or repurposing these assets can free up cash for more valuable activities and postpone planned capital expenditures.
3. Recover Trapped Cash
If your business operates through subsidiaries, take the time to thoroughly assess global cash balances and evaluate partnerships, including joint ventures.
This comprehensive review can help you identify and unlock funds that may currently be tied up, allowing for better financial liquidity and opportunity for growth.
4. Streamline Credit Support
Consider renegotiating and optimizing the terms of your credit and business loans to enhance your financial flexibility.
By doing so, you can save money and unlock additional cash flow, allowing you to invest in opportunities that drive growth and success for your business.
5. Reduce Long-Term Liabilities
Reassess obligations, such as environmental liabilities. While the requirements for compliance remain unchanged, a company may reduce or better manage its liabilities by re-evaluating underlying assumptions.
If credit support exists for a given liability, such as cash or letters of credit, a company may also improve its liquidity.
6. Rethink Pension Funding
Explore how your pension savings can help finance your business. Pension-led funding is unique in the UK as the interest paid on the finance goes back to the pension, enhancing the business owner’s wealth.
This can significantly impact your financial strategy by comparing the cost of this financing to other options.
An accountant helps businesses navigate financial struggles by optimizing cash flow, identifying cost-saving opportunities (such as streamlining receivables and payables or divesting underperforming assets), and unlocking trapped cash on balance sheets—especially critical given that 80% of UK SMEs face negative cash flow.
Friendly Assist Accountancy offers tailored guidance, from renegotiating liabilities to innovative pension-led funding solutions, ensuring liquidity, stability, and strategic growth without over-reliance on external credit.
https://www.alternativebusinessfunding.co.uk/funding-types/other-types-of-funding/pension-led-funding-use-your-pension-to-finance-your-business/
https://www.thegazette.co.uk/insolvency
https://www.unbiased.co.uk/discover/tax-business/running-a-business/what-is-a-balance-sheet-and-how-do-i-read-it
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25/04/25
Leading a Company Through Economic and Political Uncertainty
Doing Business in Times of Change
The global economy is currently experiencing another wave of disruption. International trade norms are changing, tariffs are emerging in real time, distribution networks are being revised, and input costs continue to rise unpredictably.
In this environment, it is crucial to prepare a business forecast and conduct a risk assessment.
We offer practical tips to help you plan effectively amidst this instability. Reach out to see how we can assist you.
Forecasting and Business Projection
Robust financial projections are essential for effective cash flow management and informed decision-making regarding income and expenses.
They are critical for securing future funding, as financial institutions and investors require these projections to assess risk and evaluate the company’s growth potential before committing their resources.
How to Create Financial Projections for a Business Plan: A Step-by-Step Guide
Step One: Sales Forecast
Estimate how much revenue you anticipate earning from the sales of your products or services.
Step Two: Profit and Loss Statement
Also known as an income statement, this document illustrates how profitable your company will be over a specified period.
Begin with your sales forecast, then include any costs you will incur. By combining your revenue projections with your expenses, you can calculate your profits and losses (or net income).
Step Three: Cash Flow Statement
A cash flow statement outlines how money will flow in and out of your business over a specific period.
Many businesses struggle with uneven cash flow, particularly in the early stages, because they must pay bills immediately, regardless of whether the necessary cash has come in.
Customers who do not pay invoices promptly can leave you in a difficult position when it comes to covering expenses unless you have sufficient liquidity in the business.
Step Four: Balance Sheet
This provides a snapshot of your business’s financial health at a particular moment in time.
Step Five: Capital Expenditure Budget
Capital expenditure refers to the funds required for large expenses and long-term assets such as property, equipment, land, machinery, furniture, computers, or software.
An expense only qualifies as capital expenditure if you are purchasing it rather than leasing it. If you lease an item, it should be classified as an operating expense instead.
Step Six: Break-Even Analysis
This analysis determines the amount of start-up capital you will need and, if you seek investment, it informs potential investors when the business might start generating profit.
It can also assist in deciding how much you need to charge for your products or services and when you might earn enough to draw a sustainable salary.
Though economic shifts and rising costs can be intimidating, Friendly Assist Accountancy simplifies financial planning.
We’ll help you forecast sales, manage cash flow, and plan for significant expenses—enabling you to remain agile and confident.
Whether it’s balancing budgets, securing funding, or preparing for growth, our team transforms complexity into clarity.
https://www.theguardian.com/business/2025/apr/22/imf-warns-trump-tariffs-are-putting-global-financial-system-under-strain
https://online.hbs.edu/blog/post/financial-forecasting-methods
https://www.money.co.uk/business/business-plan-financial-projections
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15/04/25
Important changes for everyone with international savings and investments
Big changes are happening for people who have money saved or invested in other countries. The UK’s non-domiciled (non-dom) tax regime is undergoing significant reforms, effective from April 6, 2025.
These changes will affect many people living in the UK who have foreign income and assets. It’s essential to prepare your international investments and savings now.
The current remittance basis, which allows non-doms to pay UK tax only on UK income and on foreign income brought into the UK, will be abolished.
Starting April 6, 2025, all UK residents will be taxed on their worldwide income and gains as they arise, regardless of whether the income is brought into the UK.
Individuals who come to the UK after being non-resident for at least 10 consecutive tax years can claim UK tax relief on foreign income and gains that accrue during their first four years of UK residency. They may also qualify for relief on foreign employment income through the Overseas Workday Relief.
Although the regime officially started on April 6, 2025, some people may already be eligible for the new resident status beforehand, if they arrived in or returned to the UK during the 2022-23 tax year or later.
A person’s nationality, previous domicile status, or ability to claim the remittance basis in the past does not affect eligibility for the Foreign Income and Gains (FIG) regime.
Claims must be made to access these reliefs, which will be available starting from the 2025-26 tax year. Most, but not all, types of foreign income and gains can receive relief under this regime.
Incomes relief can be claimed on includes:
– Profits from a trade conducted entirely outside the UK
– Profits from an overseas property business
– Dividends from non-UK resident companies
– Interest from foreign bank accounts
Individuals are not required to bring their tax-relieved foreign income and gains into the UK.
If they choose to do so, there will be no tax liability upon bringing that income or gains into the country.
Former remittance basis users who return to the UK after 10 consecutive tax years of non-UK residence and qualify for the FIG regime cannot claim relief for any foreign income and gains that accrued before April 6, 2025, when they were UK residents using the remittance basis.
This rule applies regardless of whether they repatriate that income and gains within the first four years of returning.
However, these individuals might want to use the Temporary Repatriation Facility (TRF) to benefit from a lower tax rate by designating their pre-April 6, 2025, foreign income and gains and paying the TRF charge.
At Friendly Assist Accountancy, we can provide advice on the financial implications.
The TRF charges
– 12% on the amount of qualifying overseas capital designated in a return for the tax years 2025-26 or 2026-27
– 15% on the amount of qualifying overseas capital designated in a return for the tax year 2027-28
Key Changes to the Non-Dom Tax Regime:
– Abolition of the Remittance Basis- Introduction of the Foreign Income and Gains (FIG) Regime
– Changes to Inheritance Tax (IHT)
– Transitional Provisions- Temporary Repatriation Facility (TRF)-Asset Rebasing
– Implications for Non-Doms and Expatriates
The non-dom tax regime will end, requiring all residents to pay tax on worldwide income and gains. Eligibility criteria for tax relief on foreign income will change, and claims for reliefs under the new regime must be made. Some foreign incomes can be relieved of taxes without requiring them to be brought into the UK. Former non-residents returning after 10 years may face restrictions on earlier income. The Temporary Repatriation Facility charges will also apply.
https://www.bbc.co.uk/news/business-32216346
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09/04/25
What to expect during tax investigations
Receiving a letter from HMRC about a tax investigation can be overwhelming, but you don’t have to face it alone.
At Friendly Assist Accountancy, we provide expert support and a clear plan to guide you through every step.
Whether you’re self-employed, running a small business, or trying to manage your finances, we will help you navigate the process confidently, aiming to avoid heavy fines. If you’re concerned about a potential investigation or simply want to stay ahead, contact us today
Why HMRC Might Investigate Your Taxes
HMRC may examine your tax return for several common reasons:
–Mistakes or discrepancies: This includes missed income or unusual deductions.
–Random checks: Sometimes, it just comes down to luck.
–Focus on specific sectors: Areas like the gig economy or trades are often scrutinized.
–Tips from third parties: Yes, this can and does happen.
Understanding these triggers helps you reduce your risk, and we’re here to assist you with that.
What a Tax Investigation Looks Like
Here’s what typically happens during a tax investigation:
1. You’re contacted: Usually by letter or phone call.
2. Documents are requested: This can include bank records, invoices, and receipts.
3. You may have a meeting: To review details with HMRC.
4. Resolution comes next: This could result in a fine, a correction, or a clean bill of health.
The whole process can be time-consuming and stressful—this is where we can support you. If you’re facing a tax investigation, reach out to u
How We Support You Through the Process
At Friendly Assist Accountancy, our mission is to alleviate the stress and make the process as smooth as possible. Here’s how we can help:
Prevention
We conduct proactive checks on your records to identify any issues early—before HMRC does.
Full Support During Investigations
From the initial letter to the final outcome, we represent you in communications with HMRC. We manage the details, explain anything that might be confusing, and ensure your rights are upheld.
Fighting Unfair Penalties
If you believe something is incorrect, we will intervene and challenge decisions, leveraging our deep knowledge of tax law to defend your interests.
Clear, Timely Updates
We ensure you are kept informed, on schedule, and ahead of deadlines—no more being left in the dark.
Why Work with Friendly Assist Accountancy?
– Less Stress, More Focus: You can concentrate on running your business or enjoying your life while we take care of the hassle.
– Smart, Affordable Advice: We help you prevent issues before they become costly problems.
Tax investigations are never enjoyable, but with the right support, there’s nothing to fear.
At Friendly Assist Accountancy, we protect your peace of mind, finances, and future. Whether you’re preparing for a possible check or are already in the midst of one, we’re here to support you every step of the way.
https://www.gov.uk/tax-compliance-checks
https://ifamagazine.com/hmrc-ramps-up-successful-investigations-into-tax-evasion-in-the-last-year-pinsent-masons/
https://www.theaccountant-online.com/news/hmrc-tax-fraud-investigations-decline/
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