Tax-efficient income from your company
There are broadly three ways to extract income from your company but none of them is singularly the most tax efficient. What factors should you be considering when deciding which one to use? Topping up your income Choosing tax and NI-efficient types of income to draw from your company can make a big difference to […]
Pros and cons of employing family
Pros and cons of employing family. Sharing your business income with your family is good for them and can be tax efficient for you. However, you might have to justify their salaries to HMRC. What arguments can you use to help your case? Tax deductible or not A particular area of contention between businesses and […]
Sell your shares to your spouse to save tax
Giving a share of your business to your spouse can reduce the tax bill on its profits. Alternatively, you could sell part of the business to them which can save even more tax. How’s it done? Family (tax) planning Owning your company jointly with your spouse, rather than on your own, is standard planning where […]
Clearing a director’s loan account tax efficiently
Writing off an overdrawn director’s loan account can be tax efficient. The trouble is it can come with a large NI bill. Is there a more tax and NI efficient option? Director’s loan accounts You probably already know about the tax that can result if you borrow money from your company. But to recap, you’ll […]
Working from home – what’s the tax position when you sell?
You switched from working in the office to working at home a while ago. You’ve heard that this can result in a tax bill if you move home, is that the case? Do your homework Working from home is increasingly commonplace and misunderstandings about the capital gains tax (CGT) and VAT consequences when you sell […]
The ins and outs of reclaiming pre-registration VAT
The rules regarding pre-registration VAT have always been a source of confusion. HMRC’s tinkering of its own internal guidance has made matters worse. What do you need to know to ensure you reclaim all that you’re entitled to? HMRC’s guidance HMRC’s guidance manuals are supposed to provide in-depth information about the tax rules, primarily […]
What’s the right way to treat entertainment costs for tax purposes?
Special tax rules block relief for business entertainment costs. However, the rules can be applied in different ways. What are the dos and don’ts? Business entertainment As you probably know, both income and corporation taxes rules block businesses from claiming a deduction from profits for expenses they incur on entertainment, such as taking customers […]
Is tax relief due on pre-trading expenses?
You’re devoting a lot of time to getting your brand new company up and running. If it pays you for your efforts will HMRC allow it to deduct the cost of this pre-trade expense from its taxable profits? Start-up costs The amount and type of start-up costs which businesses incur vary widely, as can the […]
Capital allowances – to claim or not to claim?
Your latest business accounts show a loss which means it will have no tax to pay. Is it therefore worthwhile claiming extra tax deductions in the form of capital allowances or should you hold back until the business becomes profitable? Capital rules As you probably know, the timing of tax deductions for the cost of […]
Claiming rent-a-room relief while you’re away
You’re about to be posted to another part of the country for an extended period. You’re going to let your home to a friend while you’re away. Will you be entitled to claim rent-a-room relief against the rent you receive? Rent-a-room HMRC’s simplified method for working out taxable profits from letting part of your home […]
