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Free Guides for new and growing businesses from HRBS - fixed fee accountants and business advisors

Loans to directors

loans to directors Loans to directorsThe good news … a company can loan a director up to £10,000 without shareholder approval.

The bad news … HMRC consider interest free loans to directors as benefits in kind.

Where the loan (or total if more than one loan) is over £5,000 the benefit (interest), calculated at the HMRC official interest rate (currently 4% pa) is taxable and must be reported on form P11d by 6th July and included in the director’s personal tax return.

If the director pays the company interest (minimum 4% pa), there is no benefit in kind.
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Thinking of starting a business?

hrbs.biz guide to starting a business Thinking of starting a business?If you are turning a hobby into a business or starting a whole new venture, here are some tips to help you get up and running without falling foul of the (UK) tax authorities.

Bear in mind that your self employment income will be added on to your income from all other sources when calculating your tax bill.

However, if you make losses you can offset those against your other income for the tax year, thereby potentially getting a tax refund.

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Planning for your self assessment tax bill

hrbs.biz guide to paying your self assessment tax bill Planning for your self assessment tax billThe UK income tax year is 6 April to the following 5 April and so the tax year 2015/16 ran from 6 April 2015 to 5 April 2016.

You will need to complete a self assessment tax return if you are self employed, have untaxed income (eg rent), or if you, or your partner, have an individual income of more than £50,000 and one of you gets Child Benefit or contributions towards the upkeep of a child. Limited company directors are often required to submit a tax return.

A self employed person will pay both income tax and class 4 national insurance (NI) on their profits plus income tax on any other income and capital gains tax on any relevant capital gains in the tax year.

Student loan repayments collectable under self assessment (typically the self employed and directors receiving salary and dividends from their own company) are also included in the January self assessment payment but not in the payment in account.

Although the deadline is 31 January for e-filed tax returns, we suggest that your return is submitted to HMRC as early as possible.

Click here to download a useful pdf tax return checklist.

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Flat Rate VAT For Affiliate Marketing

hrbs.biz guide to the flat rate vat scheme for affiliate marketing Flat Rate VAT For Affiliate MarketingUsing the UK flat rate VAT scheme is quite often beneficial for affiliate marketeers. Many in the affiliate marketing sector have low overheads and in particular, small amounts of input tax (VAT charged on purchases).

Under the flat rate scheme, input tax is not reclaimable and the VAT paid to HMRC is calculated as a percentage of gross sales. Gross sales are net sales + the VAT charged to the networks.
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