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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Maximise use of your basic rate tax band
I originally posted this article on the a4uforum in March 2007, and have updated it for the current tax thresholds.
As you know the end of the tax year is fast approaching and now is the time to consider maximising the use of your basic rate band. This can be done by declaring interim dividends to take your total taxable income upto the maximum at which the basic rate will still apply.
As dividends have a 10% tax credit attached, this tax credit can be used to effectively pay your personal tax liability on the dividend.
