Business Tax Insider Monthly Newsletter

Where a business is run as a family or personal company, the company is separate from the shareholders and those who run it. This means that where funds are required outside the company to meet personal bills and suchlike, they have to be extracted from the company.

Sarah Bradford explains how to determine the optimal salary level for 2021/22 for personal and family companies seeking to extract profits in a tax-efficient manner.

Business asset disposal relief (BADR) is an important and valuable capital gains tax (CGT) relief. However, the relief conditions are such that BADR can be easily lost. Here is a selection of potential ‘traps’ for the unwary.

Peter Rayney highlights six potential traps that can lead to claims for business asset disposal relief being rejected on company share sales.

Where the same people are carrying on two or more different trades, for all kinds of reasons it’s often a good idea for those different trades to be carried on in different companies. 

Alan Pink considers whether different trades should be held in a group of companies or in stand-alone companies.

Many individual shareholders of owner-managed businesses have bought their shares in the company using a bank loan. Alternatively, they may have used the borrowings to inject funds into the company’s trade; or to refinance a loan for either purpose.

Mark McLaughlin looks at a potential tax pitfall for company shareholders gifting their shares.

Lee Sharpe considers what the personal tax freeze and the Corporation Tax hike mean, for people who are considering incorporating their trading businesses (or not).

As we emerge from the Covid pandemic, there is even greater focus on the Green agenda. The government aims to ban petrol, diesel and many types of hybrid car by 2040. To provide fiscal encouragement to make the ‘switch’ to electric, there are tremendous tax breaks for electric vehicles and this looks likely to continue for the foreseeable future. 

Peter Rayney reviews the tax efficiency of electric company cars and other eco-friendly vehicles.

Business interruption insurance provides cover to compensate for losses where the business is severely disrupted or required to close as a result. The policy will usually provide compensation for the loss of net income as a result of the full or partial suspension of business operations. It will also cover normal operating expenses that the business has to continue to meet, such as rent and payroll costs, despite the suspension of the business activities.

Sarah Bradford looks at a test case on business interruption insurance and considers whether and how receipts from successful claims should be taxed.

Whether you’re completely new to business or are simply opening up a new line of business, there’ll be an awful lot to think about and attend to as part of the process of getting the business off the ground. 

Alan Pink looks at key issues and opportunities to be considered by those starting up in business for the first time.

Various changes to the company car tax rules came into effect from 6 April 2020, including a new way of measuring carbon dioxide (CO2) emissions and changes to the taxation of low emission cars. One year on, there are further tweaks affecting the 2021/22 tax year.

Sarah Bradford looks at some changes to the company car tax rules taking effect from 6 April 2021.

A time honoured and straightforward way of reducing your tax bill on a business’s profits each year is to move a slice of the profits, by one means or another, to a member of the household who is paying tax at a lower rate. Very often this is a spouse – and throughout this article, where I use the word ‘spouse’ you can freely substitute the words ‘civil partner’ because the rules are the same. 

Alan Pink highlights the merits and dangers of involving spouses and ‘significant others’ in a business to save income tax.

Companies frequently provide assets for the private use of their directors and employees, ranging from mobile phones, computers, cars, bicycles, living accommodation to more exotic assets such as yachts, planes and helicopters.

Peter Rayney explores how benefits are calculated on company assets provided to directors and employees.

Taxpayers must play by the rules. HM Revenue and Customs (HMRC) enforces its vast powers to ensure this is so. Fortunately, those powers invariably also give taxpayers some degree of protection. 

Mark McLaughlin points out that HMRC must stick to the rules in exercising their powers when seeking information from taxpayers.