Tax tips newsletter for professionals

Operating a business as a personal or family company is popular. However, if the profits are to be used personally by the directors and shareholders, they need to be extracted. There are various ways this can be done, some being more tax-efficient than others. Options include paying a salary or bonus, taking dividends, providing benefits-in-kind, and making pension contributions. 

Sarah Bradford explains how profits can be extracted from a family company as a salary or bonus and how to set the salary level.

Gifts are regularly and commonly used in many areas of tax planning. Gifts between family members are, not surprisingly, extremely common. Typically, there seems in practice to be little doubt in most situations whether a gift has or has not in fact occurred, and when it was made. Nevertheless, some cases do end up in the courts.   

Malcolm Finney examines the nature of a ‘gift’.

Unlike other HMRC approved share option schemes, enterprise management incentives (EMIs) can be tailored to each specific individual (e.g., for different performance conditions). They also do not need to be offered to every employee. 

Latha Rodgers provides a refresher of the qualifying conditions for enterprise management incentive share options and the tax benefits.

The payments on account scheme (PoA) is HMRC’s way of collecting VAT earlier from the very largest businesses. It helps the government’s cashflow at the expense of the business.

Andrew Needham looks at the VAT payments on accounts scheme and how to reduce the monthly payments.

Mark McLaughlin reviews two recent important tax cases:

When starting a business, it is not uncommon for a loss to be made in the early years of trading, particularly for capital-intensive businesses.

Joe Brough explains how traders can use the enhanced carry back and carry forward rules to relieve losses against other income and gains.

HMRC is working hard to make sure those businesses that are subject to income tax adopt the cash basis. This article looks at the background to the implementation of the new regime, and why HMRC seems so keen on it.

Lee Sharpe looks at why the cash basis is so popular with HMRC, even though taxpayers seem less impressed.