HMRC are currently attacking a marketed tax avoidance scheme using unfunded pension arrangements to avoid Corporation Tax, Income Tax and National Insurance contributions. HMRC strongly believes these arrangements do not work and will seek to challenge anyone promoting or using these arrangements and make sure the correct tax is paid.…
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Pension contributions to approved pension funds on behalf of employees and directors continue to be a tax-free benefit provided the annual input limit is not breached. The contributions are also deductible for the employer provided incurred wholly and exclusively for the purposes of the trade and paid before the end…
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Rent-a-room relief aims to encourage those with spare rooms in their homes to let them out to increase the supply of furnished rental accommodation. Under the scheme, a person can earn up to £7,500 each tax year tax-free from letting out furnished accommodation in their own home. The limit is…
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The numerous changes in the method of calculating CJRS furlough grants will no doubt have resulted in errors by some employers. Remember that you are required to tell HMRC about overclaimed CJRS grants as part of your next claim. You will be asked when making your claim whether you need…
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For personal and family companies, a tax efficient strategy for extracting profits is to take a small salary and to extract any further funds needed outside the company in the form of dividends. However, while there are no restrictions on taking a salary if the company is making a loss,…
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Where a close company (or LLP) makes a loan (otherwise than in the ordinary course of a business) to an individual who is a participator or an associate of a participator, a tax charge of 32.5% is payable by the company should that loan remain outstanding nine months after the…
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Dividends can only be declared out of a company’s available undistributed profits, and if the payments are to be legal then the correct administrative procedures need to be followed. If a director sanctions illegal dividend payments, there can be significant tax implications for both the individual concerned and the company…
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When starting a new property rental period there will usually be a preparatory phase during which expenses will be incurred. To what extent is relief available for expenses incurred before the property is let? Start of the property rental business A property rental business usually starts when the letting first…
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What happens if your business is ‘chosen’ for an HMRC enquiry? HMRC has the power to enquire into any return and request any information to establish whether that return is correct. No reasons need be given and invariably will not be disclosed. What happens if your business is ‘chosen’ for…
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Dividends are paid at the same rate for each category of share according to the number of shares held. However, such inflexibility could mean the distribution of profits not being made in the most tax efficient manner or produce difficulties for a shareholder who does not want or need the…
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