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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Self Assessment Tax Return Checklist 2014-15 tax return checklist for 2009 10 Self Assessment Tax Return Checklist 2014 15To help you collate the information you need to prepare your self assessment tax return we have prepared a useful checklist which you can download here.

In our experience, the list of income, deductions and capital transactions covers the majority of our clients but if you have other income, tax deductions or gains/losses not listed, you may need to include those on your tax return.

HM Revenue & Customs must receive your tax return by 31 January 2016 to avoid a penalty.

At HRBS we submit all tax returns and tax computations online. The earlier you prepare your accounts and tax return the better. You can claim any refunds promptly to help your cashflow and where tax is due; you will have plenty of time to plan your tax payments.

Read our guide on how your tax and NIC payments on account are calculated which explains the self assessment payment on account system.
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Flat Rate VAT For Affiliate Marketing 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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Save Tax and National Insurance with your limited company guide to saving tax and national insurance with a limited company 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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How to form a limited company guide to forming a limited company How to form a limited companyMany businesses are making the change from being a sole trader to running their business through a limited company to take advantage of the limited liability and also the opportunity for tax planning.

An extended version of this “How to form a limited company” guide can be downloaded as a free pdf here.

Click here for the “How to save tax and National Insurance” article.

Suppliers and customers often prefer to deal with a limited company as it can imply stability, longevity and also the company’s accounts and details of directors are in the public domain. This makes it easier for credit reference agencies and debt insurance providers to recommend credit limits. Unfortunately your competitors can find out about your company’s performance, ownership and mortgages etc at Companies House from only £1!
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A quick guide for your new limited company

hrbs quick guide to limited company A quick guide for your new limited companyGetting at your profits

Extracting your profits from your company can be by a mix of wage (ie under PAYE) and dividend. In order to pay a dividend the company must have sufficient after tax profits. ie for a £10,000 dividend to be paid the company must have at least £12,500 pre-tax profits (corp tax rate of 20%).

Do not be tempted to withdraw more than is legally available as dividend, as it would be void and treated as a loan repayable to the company. If the loan is to the director it would be a taxable benefit in kind if over £5,000 .

For more on how to extract your profits in a tax efficient way, read our article “Save tax and National Insurance with your limited company”.

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