On 15 December 2021 the government passed an Act which at the time was effectively ‘under the radar’ for many company directors but could have far reaching implications should their company be dissolved with outstanding tax liabilities.

The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 was enacted to enable the Insolvency Service to apply for a court order requiring a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to a director’s…

With tax revenues down and a significant budget deficit arising from the Covid-19 pandemic, it will not come as a surprise to learn that HMRC are looking to undertake more enquiries into taxpayer’s affairs than ever before. For example, HMRC has a specialist ‘Offshore Co-Ordination Unit’ department staffed with analysts, technical tax experts and experienced investigators.

However, not only persons with offshore interests can attract HMRC’s unwanted attention. The ability of HMRC’s Connect database to identify links between businesses, shareholders, properties, families and across different…

Regardless of your business structure (sole trader or limited company) employing a spouse/ civil partner (or any other family member) can be one of the more efficient ways of reducing tax for your business. Such employment can take advantage of lower tax rates and personal allowances that may be available to your family member. If they are a shareholder of the company and also employed, a mixture of salary/bonuses, benefits, and dividends, could be paid thereby reducing the overall tax bill.

The work undertaken by the family member must…

Paying employees more than HMRC’s approved mileage allowances

It seems as though the price of fuel is increasing every day. If you have employees for which you pay their business fuel you may be finding that paying at the HMRC’s set mileage rates does not cover the cost to the employee. Paying above that rate has tax and NIC consequences.

These days few employees have petrol or diesel driven company cars or vans because the tax charged on the benefit in kind generally means that it is not cost-effective to…

Those businesses that have struggled through the pandemic may find that when they come to do their accounts where usually there is a profit, the business made a loss. Whether and how that loss can be utilised depends on whether the accounts are prepared using the ‘cash basis’ (recording revenue when cash is received, expenses when they are paid) or the ‘accrual basis’ (recording revenue when earned and expenses when incurred).

The ‘cash basis’ is how many businesses with turnover of less than £150,000 prepare their accounts. This method…