Tax Insider Newsletter Bundle

Spousal dividends: Tips and traps

When a married couple runs a business together through a limited company, proper tax planning would dictate that both spouses own shares to receive dividends.  

Chris Thorpe looks at some of the issues to be aware of when paying dividends to spouses. 

When starting a business, few people will give much thought to its end. However, after some years, even a small ‘one-man band’ business may have built up a valuable customer list with a goodwill value. It is therefore important that a business owner should consider how and when they might wish to retire from, sell or pass on their business. 

Richard Curtis looks at tax-efficient exit strategies for business owners.

Waiving director's remuneration: Tax issues

Being a director does not, in itself, make that individual an employee of the company. A directorship is an office, not necessarily an employment.  

Jennifer Adams considers some key tax implications where a director decides not to take their salary or to waive it. 

VAT: Electric cars and hybrid cars

There are some commonly held misconceptions about the VAT breaks for businesses buying electric and hybrid cars, even by car dealers trying to sell a new car. There have been a number of cases of businesses being advised by their car dealers that businesses can recover the VAT on the purchase of an electric car. 

Andrew Needham looks at the VAT treatment of electric and hybrid cars and dispels a few myths about tax breaks.

Important developments announced in the King’s speech

Pomp and pageantry aside, the King’s Speech on 17 July 2024 marked the opening of the UK Parliamentary session for the UK Labour government. It included four bills to highlight, though only two impact workers and employers.  

Ian Holloway points out some important developments announced in the King’s speech. 

A ‘dive’ into pool cars

The income tax legislation regarding pool cars (ITEPA 2003, s 167(3)) sets out the conditions for a car to be a pool car. 

Kevin Read discusses a recent tax case that also brought in arguments on ‘estoppel’ and ‘legitimate expectation’.

Availability of capital loss relief on irrecoverable loans.

Individuals (e.g., sole traders or company owners) often lend money to their business to help fund its day-to-day operations. Unfortunately, some businesses ultimately fail. Consequently, the loan may become irrecoverable, resulting in it being written off.   

Mark McLaughlin looks at the availability of capital loss relief when a loan to help fund an individual’s business becomes irrecoverable. 

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