Archive:April 2021

Please find below all the articles from April 2021.

Tax relief for loans used for businesses

Thursday, April 1, 2021

There has been an unprecedented amount of support for businesses struggling due to Covid-19. However, back at the start of the crisis there were delays in the various schemes being set up. Additionally, a high number of newer businesses were completely ineligible. Many company owners used personal borrowings to help keep the business afloat and pay employees, as banks pulled credit products from the market.

Let’s take a simple case study of a company owner who has two employees. She and her husband (not involved with the company) remortgaged…

Dealing with an overdrawn Directors Loan Account

Thursday, April 1, 2021

Many companies use 31 March as the accounting reference date. As such, now is a good time to review the position of directors’ current accounts for close companies.

It is a common misunderstanding that if the company charges a commercial rate of interest on any loan made to the participators or employees there are no tax consequences. In fact, whilst doing this does protect against a benefit in kind arising, there is a further consideration for the company.

A charge arises under CTA 2010, s. 455 where amounts are owing…

Loss relief extension

Thursday, April 1, 2021

The Budget saw an announcement that the loss relief provisions available to both unincorporated business and companies are to be temporarily extended. There are differences in the way this will operate between the two types of business vehicle.

Unincorporated businesses

The affected rules are those in ITA 2007, s. 64, i.e. “sideways” loss relief. This permits a trader to set off losses suffered in a tax year against general income of the same year, the preceding year, or both years. This is not automatic, and must be claimed or…

Latest news round up

Thursday, April 1, 2021

Budget

The Budget finally took place on 3 March 2021. None of the speculated tax changes, e.g. raising CGT came to pass, although the main rate of corporation tax will increase in 2023. Several allowances, such as the personal allowance and CGT annual exempt amount have been frozen until April 2026. Further detail of the Budget announcements were included in our Budget newsletter.

Covid-19

In terms of Covid-19 measures, details of the fourth SEISS grant have now been published. Additionally, a fifth tranche for the period from May to September…