Business Tax Insider Monthly Newsletter

For the financial year 2021 (which started on 1 April 2021), companies pay corporation tax on their profits at a rate of 19%, regardless of the level of those profits. This remains the case for the financial year 2022 (which runs from 1 April 2022 to 31 March 2023). 

Sarah Bradford outlines how the corporation tax regime is changing from 1 April 2023.

It has often been commented that the tax benefits of running a business through a company can be more apparent than real. 

Alan Pink looks at some potential ways of taking money from a company without incurring income tax or capital gains tax.

Tax professionals often come across capital contributions where an overseas company wishes to inject money into its UK subsidiary or UK affiliate by way of a gift. Typically, they are a method of contributing capital into a company without taking an issue of shares or creating a liability. 

Peter Rayney reviews the legal status and tax treatment of capital contributions received by trading companies.

The substantial shareholdings exemption (SSE) is a valuable relief for companies. The SSE rules broadly provide that a gain on a disposal by a company of shares in another company (or an interest in shares, or certain assets related to shares) is generally not a chargeable gain, provided two conditions are met.

Mark McLaughlin highlights a situation where an important tax relief for companies may be inadvertently lost. 

Companies are often set up in a hurry, with no real thought being given to the commercial and tax efficiency of their shareholding structures. 

Peter Rayney looks at key considerations when structuring shareholdings in a family company.

The Covid-19 pandemic saw unprecedented numbers of employees working from home, many for the first time. Changes in working arrangements forced by the pandemic have led many companies to question whether they need their employees in the workplace full-time and whether they can reduce the amount of office space they have. 

Sarah Bradford outlines the reliefs available for employees who are working from home and how to claim them.

There has been an increase in interest in family investment companies (FICs), and a recent comment from the Chartered Institute of Taxation (CIOT) suggesting that FICs have now been given HMRC’s ‘blessing’. 

Sam Inkersole explores the pros and cons of using a family investment company.

HM Revenue and Customs (HMRC) promises in its ‘Charter’ to ‘treat you fairly’. However, in practice, HMRC can sometimes seem heavy-handed when applying its powers. 

Mark McLaughlin points out that if HMRC adopts a seemingly heavy-handed approach, an appeal can yield positive results. 

Many businesses are sitting on a kind of ticking time bomb in relation to tax. This is in the situation where profit and loss reserves build up because they are not being regularly cleared out by way of dividends paid to the shareholders. 

Alan Pink looks at the potential impact of allowing reserves to build up in limited companies.

In the current Covid-19 environment, we are seeing a lot more owner-managers liquidating ‘their’ companies. In many cases, business owners were already approaching or contemplating their intended retirement, and the impact of Covid-19 has simply accelerated these plans. 

Peter Rayney explains how to deal with overdrawn shareholder/director’s loan accounts in a winding-up scenario.

Many businesses have, unfortunately, incurred losses because of the Covid-19 pandemic. Tax relief is already available for losses, and there are various ways in which losses can be relieved. 

Sarah Bradford explains how the new rules that extend the period for which losses can be carried back might be used to generate a useful tax repayment.

Business property relief (BPR) is an important inheritance tax (IHT) relief. It shelters the value of eligible business property from IHT at current rates of 100% or 50%. The most common categories are a business (or interest in a business) and unquoted company shares, which potentially attract BPR at 100%. 

Mark McLaughlin looks at how inheritance tax business property relief may be ‘recycled’ in a family.