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Most owners of family or owner-managed companies extract profits from the business as a salary (and possibly bonus) or dividends. 

Mark McLaughlin looks at a potential tax implication on the release or write-off of an overdrawn director’s loan account balance. 

In tax terms, trusts have largely been poorly served, going back at least as far as the ‘reforms’ of April 2006 (and arguably years before then); which is strange, because they are commonplace and widely seen in pensions, life insurance products and property arrangements, for example.

Lee Sharpe looks at one of the most underrated tax-saving arrangements for the business.

There are two classes of National Insurance contributions (NICs) which may be of relevance to a self-employed earner – Class 2 and Class 4. 

Class 4 NICs are relevant where the self-employed earner has profits equal to or exceeding the small profits threshold. Class 2 NICs, which are voluntary, are only relevant where the self-employed earner’s profits are below the small profits threshold and the earner wants to pay a contribution to secure a qualifying year for state pension and contributory benefits purposes.

Sarah Bradford outlines the National Insurance contributions system for the self-employed and explains what to do if Class 2 contributions are being charged incorrectly.

Under English law, one does not normally become a participant in a fraud without acting dishonestly. It may therefore come as a surprise to businesses that, with regard to VAT fraud, they may (for some purposes) be treated as an accessory on the mere basis that they ‘should have known’ better. 

It is hence prudent for traders to develop awareness; how does one become an accessory in a VAT fraud? What are the potential consequences?

Fabian Barth discusses how the lower threshold that applies for involvement in VAT fraud, recently consolidated in Impact Contracting Solutions, can put even honest traders at risk of suffering severe financial consequences. 

A company is a separate legal entity, distinct from the shareholders that own it. Consequently, if the directors and shareholders want to use the profits made by the company for their personal use, they will need to extract those profits first. There are various ways in which this can be done; some are more tax-efficient than others.  

Sarah Bradford considers options for extracting profits from a company in a tax-efficient manner in the 2024/25 tax year.

HMRC recently undertook a ‘One to Many’ letter campaign, wherein HMRC’s skilled data analysts undertake to mine nuggets from a huge range of sources to test for omissions or errors in tax returns. 

Lee Sharpe reports on HMRC getting all ‘Nancy Drew’ with its sleuthing over company reporting and shareholders’ dividend income returns. 

Some company shareholders may either be unaware or have forgotten about a relatively unknown capital gains tax (CGT) relief that offers a reduced CGT rate of only 10% on qualifying gains of up to £10m during their lifetime, if certain conditions are satisfied.  

Mark McLaughlin highlights a relatively unknown and infrequently used but generous capital gains tax relief.

Owner-managers can spend a significant amount of time and energy building a successful and profitable trading company.

Joe Brough looks at tax issues for business taxpayers and their tax advisers when a company is coming to an end.