Save Tax and National Insurance with your limited company
It is possible to reduce your (UK) personal tax and national insurance by running your business via a limited company.
The amount of tax and NI you can save will depend upon several factors including the company’s profitability, your personal circumstances and the amount of funds you wish to withdraw from the business.
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Popularity: 31%
Claim a tax refund for your failed company
Has your limited company hit hard times?
It is a sad fact of business that many companies fail and the owner/directors lose the money invested in the shares and loans made to the company. The shares in the company become worthless i.e. have negligible value and the owner has made a, sometimes substantial, loss.
Make a negligible value claim
If you are in this situation, you can make a claim to offset the loss against your other income. If you are a higher rate tax payer or have been in recent years, you may receive a tax refund of upto 40% of the loss.
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Popularity: 17%
Cut red tape … get a P11d dispensation
For those of you who are one-person limited companies and/or have employees, you may be aware that reimbursements of expenses (excluding mileage within approved rates) should be reported to the Inland Revenue on P9d or P11d and included within the claimant’s tax return. This can add quite a burden onto the company’s administration and also incur fines if returns are not completed correctly or submitted late.
However, there is an easy way to reduce this administrative burden – apply for an expense dispensation.
Depending upon the type of business, various business expenditure can be included within the dispensation and may remove the need to complete p9d/p11d for some employees (car, fuel, health insurance etc benefits must still be reported).
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Popularity: 10%
How to dissolve your limited company from £10.00
If your limited company is no longer required, for example if the company was set up for a specific project which has now finished, you can apply to have it struck off from the register at Companies House.
This brief guide relates to striking off formerly trading companies which have now stopped trading and are no longer required. It does not refer to a formal insolvency process.
To quote Companies House …
“A private company can apply to be struck off if, in the previous three months, it has not:
- traded or otherwise carried on business;
- changed its name;
- for value, disposed of property or rights that, immediately before it ceased to be in business or trade, it held for disposal or gain in the normal course of its business or trade (for example, a company in business to sell apples could not continue selling apples during that three-month period but it could sell the truck it once used to deliver the apples or the warehouse where they were stored);
- engaged in any other activity except one necessary or expedient for making a striking-off application, settling the company’s affairs or meeting a statutory requirement (for example, a company may seek professional advice on the application, pay the costs of copying the Form 652a, etc). However, a company can apply for striking off if it has settled trading or business debts in the previous three months.”
This course of action, known as a Section 652 striking off, is applicable where all creditors have been paid and final accounts and tax computations have been prepared, otherwise creditors can oppose the striking off and alternative, more expensive methods of dissolving the company would need to be taken.
Other things to consider before an application is made include closing the company’s bank account, transferring domain names, paying any professional fees involved with the striking off etc. These should be done before you apply for striking off, otherwise the assets may become the Crown’s property (see below) .
For example if your company ceased trading on 31 July 2008, you can apply under S652 from 1 November 2008. You can (and should) however distribute the assets prior to this date.
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