Tax Insider Newsletter Bundle

Tax Relief on Shareholder Loans: Are You at Risk of Losing It?

Tax relief can be claimed when an individual borrows money to invest in their company, if certain conditions are satisfied. The borrowed funds might be used (for example) to purchase additional ordinary shares in the company, or to lend money for the company’s business use.

Mark McLaughlin looks at a potential pitfall for individuals with outstanding loans to buy shares in their company.

Class 1 National Insurance contributions (NICs) are paid by employees and by employers on their employees’ earnings. For most employees, their (primary) contributions are deducted from their salary for each pay period, and the employer also pays a separate (secondary) contribution on top.

Directors may be employees if they have a contract or service agreement. If not, they will be classed as an office holder. For NICs purposes, a director is any person who is formally appointed as a director of a company, or who acts as a director, even if not officially registered as such. This includes executive and non-executive directors, shadow directors, and de facto directors. The director’s status is significant because it determines the method used to calculate their NICs.

Richard Curtis highlights some key points when considering a director’s National Insurance contributions liability.

Capital Goods Scheme: The VAT Implications of Selling an Asset

The capital goods scheme (CGS) is designed to adjust the amount of VAT claimed on a capital item during the ‘life’ of an asset to reflect its taxable business use. 

The CGS applies to certain commercial property, some computer hardware and certain ships, boats and aircraft, and adjusts for taxable or exempt and non-business use of the capital asset. The adjustment period for property is ten years, and five years for other items. For most businesses, the real impact of the CGS applies to commercial property over £250,000 on which VAT has been recovered. 

Andrew Needham looks at the VAT implication of selling a capital goods scheme item.

Capital Allowances Update: Finance Bill 2025-26 Changes to WDAs and Leasing

Over the decades, capital allowances for plant and machinery (P&M) have been one of the areas of tax that has undergone continual change. Following the abolition of the ‘super-deduction’ (i.e., 130% relief for qualifying expenditure) in April 2023, we seem to have entered an era of relative stability. 

Kevin Read explains the Finance Bill 2025-26 changes affecting writing down allowances and leasing companies.

UK Gilts: The Tax Benefits That Boost Your Investment Returns

Without planning, investment returns can be eroded by taxes.  

When investing, you always need to consider the tax implications and look at net-of-tax returns. Tax-advantaged wrappers can help with this (ISAs, LISAs, pensions etc), but sometimes the investment itself can be tax-efficient even without structuring. UK gilts are one such investment. 

Tristan Noyes explores the tax implications of investing in UK Treasury Stock and how the tax benefits can provide enhanced returns. 

Bad Debt Relief: The Tax Rules Every Accruals-Basis Business Should Know

With ongoing economic pressure across a number of business sectors, bad debts are becoming an increasingly frequent problem for businesses taxed on an accrual basis (i.e., when invoiced), rather than on a cash basis (i.e., when payment is received). Such businesses include companies and unincorporated traders above the £150,000 turnover threshold.

Jennifer Adams considers whether tax relief is available when a debt goes wrong.

What Counts as a Company Car? The Tax Rules for Employee Vehicles

The most common type of vehicle used by employees is a company car, rather than any other type of vehicle.  There is no statutory definition of a car within the direct tax legislation. However, VAT Input Tax Order 1992/3222 defines a car as: 
‘any motor vehicle of a kind normally used on public roads which has three or more wheels and either – (a) is constructed or adapted solely or mainly for the carriage of passengers; or (b) has to the rear of the driver’s seat roofed accommodation which is fitted with side windows or which is constructed or adapted for the fitting of side windows’. 

Chris Thorpe outlines how different vehicles are taxed on employees.

Q&As with Arthur Weller

Dividends or bonuses? We can work it out!

Consider the following scenario:

'On a wintry sunny morning, Alan was reviewing his company’s January 2024 management accounts. Alan was the sole director and 100% shareholder of Llandudno Hotels Ltd, which operated two large hotels in Llandudno. The business was on course to healthy pre-tax profit of around £650,000 for the year ended 31 March 2024. Alan had been planning to pay himself a substantial ‘bonus’ before the year-end'. 

What does Alan do?

Peter Rayney examines an owner-manager’s cash extraction following the numerous tax and National Insurance contributions changes.

Use them or lose them: 2023/24 tax allowances

As the tax year draws to a close, it is prudent to review one’s 2023/24 tax allowances and consider whether there is scope for utilising any unused allowances so they are not lost. 

Sarah Bradford explores options for using 2023/24 tax allowances so they are not wasted.

Record-keeping in a digital age

Lee Sharpe looks at taxpayers’ record-keeping obligations in light of HMRC’s inexorable march to digital everything (almost).

Historically, HMRC has been quite relaxed about whether original records must be maintained or digital facsimiles (scans, etc.). 

Trap for business owners seeking CGT incorporation relief

HM Revenue and Customs (HMRC) recently commenced a ‘One to Many’ campaign, targeting taxpayers who incorporated property businesses in the tax year 2017/18 but reported no capital gains tax (CGT) liability in their tax returns on the basis that ‘incorporation relief’ applied in full. 

Mark McLaughlin highlights a potential trap for business owners seeking capital gains tax incorporation relief.

Q&As with Arthur Weller