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The tax year 2025/26 started on 6 April 2025, resetting the tax ‘clock’. Now is the time to plan ahead to ensure that profits from a personal or family company during 2025/26 are withdrawn in a tax-efficient manner. 

Sarah Bradford explores what a tax-efficient profit extraction strategy might look like for personal and family companies in 2025/26.

When a brown envelope from HM Revenue and Customs (HMRC) lands on a taxpayer’s doormat, it is seldom good news. One of the most worrying communications contains a notice that HMRC is opening an enquiry into the taxpayer’s self-assessment return. Most enquiries are risk-based selections, but some tax returns are chosen at random.

Mark McLaughlin offers a selection of practical points for taxpayers facing a tax return enquiry from HMRC.

Fewer things in life are more annoying than someone, who actually owes you more money, demanding payment. But this is quite common with HMRC, across the various heads of tax: waiting for a refund to set against a liability elsewhere. To add insult to injury, HMRC will typically issue a penalty for late payment without regard to those repayments subject to its tender mercies.

Lee Sharpe worries that tribunals seem to have become increasingly indifferent to taxpayers who are struggling to pay HMRC while waiting for repayments, etc. – often from HMRC itself.

Henry was at home convalescing from a recent bad bout of flu. Being forced to take some time off away from his business gave a rare opportunity for Henry to think about the future of ‘his’ transport logistics business. 

Peter Rayney shares a recent succession planning story. 

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.