Got ideas buzzing about your business? Let's talk! Schedule a hassle-free, commitment-free consultation at your convenience. Whether it's a Zoom call, MS Teams meeting, or a good old-fashioned phone chat, we adapt to your style. In this initial conversation, share your business vision and queries. From there, we'll whip up a tailored proposal, open for your comments and revisions until it's just right. Give us a shout — let's see what we can achieve together!
Jon Cooper, Director of CooperFaure Accountants covers the following:
Click here to read the article.
If you have any queries, please do not hesitate to contact us on tax@cooperfaure.co.uk.
John Warchus, partner in Moore Blatch’s Corporate group in Richmond, specialising in commercial and technology law has shared his knowledge and experience in the following fields:
Company Structure
Shareholder Agreements
Running the Business
Jon Cooper, Director of CooperFaure Accountants has outlined the following topics:
Business Plan
Investments
Grants
R&D Tax Credits
Is your Company Structure Optimal?
Incorporating a Limited liability company is normally the most suitable vehicle for your business. You need to consider the business name and carry out basic due diligence to ensure the name will not infringe existing rights.
Once the company has been set up you need to distinguish directors and shareholders as companies are owned by their shareholders, but managed by their directors.
Have you got a Shareholder Agreement in place?
Do not overlook Shareholder Agreements as they govern the relationship between the shareholders (owners of the company).
They are put in place to take care of the following:
Running the Business
NDAs (non-disclosure agreements) are essential to be put in place between your company and your clients to protect pure ideas/business concepts. In particular, if commercially sensitive information being disclosed to a third party.
Remember to use Heads of Terms wherever possible and the key terms in any commercial contract will be: precise obligations, price payable, any timescales, limiting liability if things go wrong.
Employment law issues must be considered in particular remember that employment law applies even before you have taken someone one – e.g. claims for discrimination in the recruitment process. Following the correct procedure is as important as the decision taken.
Employment contracts are not a case of “one size fits all” – e.g. in relation to restrictive covenants, they must be reasonable to be enforceable, so the covenant for a receptionist will need to be very different from that of an FD/sales director.
Remember that you need an IP policy that matches IP protection/exploitation with your business and its strategic aims, not the other way around.
Expanding your business may be dependent upon a mix of agency and/or distribution type agreements. The key terms within the agreements shall include the payment provisions, any targets for the agent/distributor and whether the third parties are appointed to work on an exclusive or non-exclusive basis for the business.
How to compose your Business Plan
A clear and comprehensive Business Plan is the vital component in raising finance from any source and there are four key elements:
Whilst by their nature, the Investment Teaser and the website are in the public domain, we would strongly recommend that you insist on a confidentiality agreement before sharing the Financial Plan and Investment Deck.
The Funding that is Available
There are individuals and organisations that are looking to invest in business like yours. The Investment Teaser is your chance to gain their attention, so it pays to make it clear, concise and attractive.
To make your overall proposal stand out, our five main points are:
SEIS and EIS
The UK offers some unrivalled tax breaks to individuals that invest in early stage businesses.
The Seed Enterprise Investment Scheme could allow your business to raise up to £150,000 and give your investors:
Even if your business is either too mature or has already secured funding under SEIS, EIS offers the same tax breaks except the Income Tax relief is 30% rather than 50%.
Grants
Both the UK government and the EU are supporting innovation by making grants through Innovate UK and Horizon 2020 respectively.
Under Innovate UK, as well as sector specific investments, there is an open programme for applications from any technology, sector or size of business.
Projects may last between 6 and 36 months and the total eligible project costs should range from £25,000 to £1 million depending on the type of R&D to be undertaken.
Under Horizon 2020, the EU can provide Phase 1 early stage funding of €50 000 and carry out a feasibility study. To apply, the business needs to submit an initial business proposal of around ten pages.
Horizon 2020 also offers Phase 2 funding to cover the period between proof of concept and market maturity with grants ranging between €0.5 million and €2.5 million. An application needs to be supported by a more detailed business plan.
R&D Tax Credits
If your business is investing time and money into R&D, the UK government provides some generous tax reliefs.
Although the process to claim the R&D relief may look daunting, do not be deterred. There is no minimum amount that you need to have spent to qualify and, according to official statistics, the average relief is £46,000.
If your business has not generated a profit, the tax relief can be claimed as a cash payment to boost cashflow.
If you would like a Business Review call where we will identify which areas you need to focus on and what the next steps are please email us directly at welcome@cooperfaure.co.uk and we will reply to arrange a time.
Jon Cooper, Director of CooperFaure Accountants and Company Secretary at SteelEye, a compliance tech and data analytic firm, discusses how businesses can begin preparations for GDPR’s impending deadline and the benefits they may see as a result.
Click here to read the article.
If you have any queries, please do not hesitate to contact us on tax@cooperfaure.co.uk.
Watch our ninety minute webinar on Fundraising for Start Ups here and you can download the presentation.
In addition, you can register here for our next webinar on the Next Level Funding for an Early Stage Business which will be on Tuesday 15th August at 7:30pm.
A traditional route for companies to raise investment in the start-up and early stage has been to offer investors shares in the business in return for their funding.
In the United Kingdom, this can usually be underpinned by the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) which offer the investor some hugely attractive tax breaks.
The downside of this approach is that, by offering a number of shares for the investment, the company is explicitly attributing a value to the business.
Whilst friends and family are likely to base their judgement on the people, proposition and plan, for private investors this business valuation is pivotal.
However, for start-ups and early stage businesses, quantifying this value is notoriously subjective. For instance, you have a great idea and have developed a prototype. You have worked out that you need £1m of investment to get to market and are prepared to offer a 25% equity stake in return. In essence, you have given your business at pre-money value of £4m even though you have not generated any revenue.
Until recently, the common alternative has been the use of Convertible Loan Notes. Here the investment is initially in the form of debt with the option to convert into to shares or for the loan to be repaid. The conversion is usually triggered by a future event such as the next funding round or an exit and the conversion price determined at that point. For example, the price per share at the next funding round discounted by 20%.
The beauty of Convertible Loan Notes is that this postpones the contentious issue of valuation plus it gives the investor some protection as the debt ranks above the shareholders in the event of an insolvency.
The problem is Convertible Loan Notes do not allow the investor to claim the tax reliefs under SEIS or EIS.
An Advance Subscription Agreement is a funding mechanism aimed to resolve this. In essence, the funds provided to the company at the date of the agreement convert to shares upon a future event.
However, the investment is not a loan with the right of repayment. Neither is there the right to earn interest. Essentially, it is a prepayment for share capital that must convert at some point. Should there be no next funding round nor exit, this would be on a defined date or on insolvency.
As the investment no longer has the downside protection of a convertible loan, if structured correctly, it could become eligible for SEIS or EIS relief.
An Advanced Subscription Agreement usually is underpinned with the following clauses:
The combination of the SEIS and/or EIS tax reliefs and safeguards plus a defined future share price is an extremely attractive option for the investor.
However, the structure of the Advanced Subscription Agreement is critical to ensure SEIS and EIS eligibility and HMRC look at this on a case-by-case basis. For instance, if the terms stipulate a conversion to anything other than Ordinary shares, the investment would automatically be outside the scope.
At CooperFaure, we have vast experience of helping business start-ups to secure funding and, in particular, benefit from government schemes. So far this year, we have supported clients in raising over £3m in investment finance through numerous channels.
If you would like an initial call or meeting to discuss your circumstances, please email us at startup@cooperfaure.co.uk to arrange a time. It is absolutely free and there is no obligation.
To read the latest regarding MTD, as of October 2021, read our blog post here.
Following intense lobbying from the Treasury Committees, business, software developers and the accountancy profession, including CooperFaure, the government have announced a delay and a reboot of Making Tax Digital.
In the Budget before the election, the intention was for it to be mandatory all businesses to report quarterly and keep records digitally starting in April 2018 with the self-employed and landlords with a revenue over the VAT threshold, currently £85,000.
Now the government has announced that:
Mel Stride, the Financial Secretary to the Treasury responsible for Making Tax Digital stated “Businesses agree that digitising the tax system is the right direction of travel. However, many have been worried about the scope and pace of reforms. We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.”
This deferral will allow much-needed additional time for software development and systems testing. CooperFaure is part of the HMRC pilot programme for this and will be keeping our clients updated in the run up to April 2019.
Making Tax Digital will be offered on a voluntary basis for the small businesses and landlords with a turnover below the VAT threshold but there is a clear pledge that this will not become mandatory until ‘at least’ 2020.
The Treasury also confirmed that a Finance Bill will be introduced as soon as possible after the summer recess to legislate for the policies that were dropped from the Finance Act before the sudden General Election in June.
As part of this, policies originally announced to start from April 2017 will be effective from that date such as the changes to non-domicile rules and loss relief reform.
If you have any questions or concerns over either Making Tax Digital or the measures in the Finance Bill, please email us at tax@cooperfaure.co.uk.
In the UK, we are in the fortunate position where most people earning a PAYE salary or wage or receiving a pension do not need to complete a tax return.
However, each year, as working and lifestyle patterns change, the number of tax returns increases. More than 11,500,000 were filed for the 2015-16 tax year.
For the 2016-17 that ran from 6th April 2016 to 5th April 2017 tax year, if any of the following apply to you, a tax return is required:
In some circumstances, you would need to submit a tax return to claim a tax rebate from HMRC. For instance, on:
If you have not completed a tax return before, for all except sole traders and partnerships, register online with HMRC at: https://online.hmrc.gov.uk/shortforms/form/SA1
For a new sole trader, register with HMRC at: https://online.hmrc.gov.uk/registration/newbusiness
For a new partner, register with HMRC at:
If you are the ‘nominated partner’, you need to register both yourself and the business partnership at:
https://online.hmrc.gov.uk/registration/newbusiness
HMRC target to post your Unique Taxpayer Reference that enables you submit a tax return within two weeks of registration.
With this you can either prepare and file a paper tax return before the deadline of 31st October 2017, enrol for the HMRC online service that grants a longer deadline of 31st January 2018 or appoint a tax advisor to act as your Agent.
To appoint CooperFaure, we would need is your Unique Tax Reference, National Insurance Number and Post Code to act on your behalf.
If you would like to arrange an initial free consultation to discuss your tax affairs or would like any further information, please email us at tax@cooperfaure.co.uk
Have you ever wondered why the tax year in the United Kingdom runs from 6th April to 5th April? The reason is steeped in history.
Prior to 1752, the New Year’s Day in Britain used to be in on 25th March, the Spring Quarter day, and the tax year started on the same day.
Back in 1582, Pope Gregory XIII had reformed the calendar from the Julian predecessor to the new Gregorian calendar. To improve accuracy, the length of a year was slightly reduced.
Britain was slow to adopt this change – by 1752 their calendar was eleven days out of sync from the rest of Europe.
To correct this, Wednesday 2nd September 1752 was followed by Thursday 14th September 1752, a change that literally led to riots on the streets due to the lack of compensation for the loss of income from the short working month.
The Treasury, mindful of this public fury, moved the start of the next tax year back by eleven days to 5th April 1753 so that the populous was not paying a full year of tax for only 354 days.
Although, as part of the change to the Gregorian calendar, New Year’s Day was moved to 1st January, the quarter days still are used in the determining when agricultural and commercial rents are payable.
The adjustment in the Gregorian calendar to slightly reduce the effective length of each year was to stop the century years from being a leap year, as they were under the Julian calendar. As a result, 1800 was a day shorter than it would have been. To reflect this, the Treasury moved the start of the tax year back by a day to 6th April 1800 and it has continued to be 6th April ever since!
One impact of the government’s decision to call an early General Election in June is that large swathes of the proposed legislation in the Budget has been dropped from the Finance Bill to enable the core measures to be passed yesterday. This included the provisions for Making Tax Digital.
Whilst many of the dropped measures, such as the reduction in the Dividend Allowance, are likely to be reinstated after the General Election, the future of Making Tax Digital is less certain.
Treasury Minister, Jane Ellison, stated that the decision to drop Making Tax Digital was made “in light of the pressures on time”.
As there are only a matter of weeks between the General Election and the summer recess and with the government committed to allow the time for a proper consideration of the measure, it seems inconceivable that the Making Tax Digital legislation could return before the Autumn Budget at the earliest.
However, the publication of the letter from Robert Chote, Chairman of the Office for Budget Responsibility, to the Rt Hon Andrew Tyrie MP, Chairman of the Treasury Select Committee, that stated the OBR had given HMRC revenue estimates “a ‘high’ uncertainty ranking”, casts doubt on the future of the project as a whole.
At CooperFaure, we will be monitoring the situation to keep our clients informed. However, if you have any questions or concerns, please email us at tax@cooperfaure.co.uk.
If you would like to read Robert Chote’s letter in full, please click here.
In May 2016, the General Data Protection Regulation (GDPR) was approved by the European Union to come into effect from 25th May 2018.
As a Regulation, it is directly applicable across all EU Member States without the need for national legislation and will replace all current data protection legislation. For the United Kingdom, GDPR will replace the 1998 Data Protection Act.
Despite Article 50 of the Lisbon Treaty finally being invoked in March, there is no doubt that the UK will still be a Member State of the EU on 25th May 2018 so this will happen and the Information Commissioner’s Office (ICO) is proceeding on this basis.
Indeed, although all EU Regulations would void on the date the UK leaves the EU, the early indications are the government would legislate to preserve much or all of GDPR.
In any event the territorial reach aspect of GDPR specifies that a company outside the EU which is “monitoring the behaviour of, or offering goods and services to, citizens in the EU” will be subject to the rules. As a result, many UK businesses and group will still be affected after Brexit whatever the UK government does.
GDPR has six defining principles:
GDPR has greatly broadened the rights of the data subject including the ‘right to be forgotten’ and to receive back their personal data in a structured and standard format so that it can easily be transferred, so called ‘data portability’.
For children under sixteen, GDPR states that the provision of personal data ‘information society services’ such as social networking sites will be subject to parental consent.
It is absolutely clear that this new regime will place much greater demands on businesses holding personal data to evidence compliance.
The concept of ‘data protection by design’ obliges the inclusion of explicit data protection controls at the blueprint stage of new projects involving the processing of personal data. Should the project be deemed potentially high risk under the ICO guidelines, a data protection impact assessment would be mandatory.
Internal records must be maintained for all personal data processed including the details of the purpose, the recipients, the time line for deletion and an overview of the technical and organisational measures in place to protect the data.
However, the most dramatic change is in the area of security breaches and the ensuing penalties. Under the Data Protection Act, there is no requirement to inform the ICO of a breach although there is an expectation for the ICO to be informed of “serious” breaches.
GDPR requires that, as soon as a company becomes aware a personal data breach has occurred, it should without delay and, ideally within seventy-two hours, notify the the ICO, unless the company can clearly demonstrate that the breach is unlikely to jeopardize the rights and freedoms of the data subjects.
If there is a high likelihood an individual’s rights and freedoms have been infringed by the breach, they must be notified promptly to allow them to take the requisite precautions and given guidance on the measures to take to mitigate potential detrimental effects.
Under the Data Protection Act, the ICO can issue penalties of up to £500,000 for the most serious breaches. GDPR will instigate a tiered mechanism for penalties that for the most severe breaches will be the higher of 4% annual worldwide turnover or €20m and for lesser breaches be up to 2% annual worldwide turnover or €10m.
As is frequently the case, although we are nearly halfway through the time until GDPR comes into force, many, probably most, companies have not started making preparations. Make no mistake, every company that holds personal data will to a greater or lesser extent be impacted.
Whether it is the transparency of your privacy notices and policies, reviewing the legal basis for using personal data, implementing in-house procedures or staff training to meet the requirements of GDPR, there is much to be done.
Data security needs to be at the heart. Systems that hold personal data must be reviewed to ensure that they are fit for purpose and secure from both internal and external breaches. We are in the age of two-step verification which should be the default minimum.
If a breach does occur, it is essential that the procedures are in place and understood to allow timely action.
The ICO have published a guide ‘GDPR: 12 Steps To Take Now’ that can be downloaded here. If you have any questions or would like any further information on how GDPR will affect your business, please email tax@cooperfaure.co.uk.
Today marks the beginning of the new 2017-18 tax year in the United Kingdom with some significant changes coming into effect. For our free, downloadable 2017-18 Tax Guide please click here.
The Chancellor of the Exchequer used the final Spring Budget in the UK to unveil some significant tax changes.
However, for the self-employed and landlords with an income under the VAT threshold, the best news was that the government has listened to the many representations, including those of CooperFaure, and deferred the introduction of Making Tax Digital by a year to April 2019.
Under Making Tax Digital, businesses will be required to use digital software to keep their tax records and to update HMRC on a quarterly basis.
Five of the key tax changes are:
For savers, the interest rate for the NS&I Investment Bond was confirmed at 2.2%. From April 2017, up to £3,000 can be invested in the bond over three years.
There was one small piece of good news for property investors. In light of consultations, the government is going to delay the reduction in the timeframe for the filing and payment of Stamp Duty Land Tax until the 2018-19 tax year.
However, deep in the Spring Budget document, the government is going to consult on the redesign of Rent-a-Room relief to ensure that it is targeted to support longer-term lettings. The insinuation being that it will no longer apply to Airbnb-type rentals.
To encourage innovation, there was a commitment to simplify the administrative burden of the R&D Tax Credit regime to increase certainty as well as improving the awareness of R&D Tax Credits in the SME community.
Over the weekend, we will be publishing a detailed review of the Budget together with our 2016-17 UK Tax Guide.
In the meantime, if you would like to discuss how the Budget or the new measures that come into effect from April 2017 will affect you, please email us at welcome@cooperfaure.co.uk.
The latest update from HMRC is that the Employment Status Service Tool is live here for contractors and engagers in the Public Sector.
As we outlined in our last newsletter, the concept is that by answering a number of questions around the relationship between the contractor and their Public Sector client, the tool will provide an assessment of whether IR35 rules should apply. HMRC has reiterated that it intends to abide by the outcome.
We have had the opportunity to review the private beta version of the software and, whilst no single answer will lead to a determination, the simplest way to achieve an outcome that the contractor is outside IR35 revolves around substitution.
As it stands, if there is a ‘Contractual Obligation For a Substitute’, the obligation is demonstrable and the contractor is liable for the payment to the substitute, the Employment Status Service tool will show that the contractor is outside the scope of IR35.
For those contractors looking to continue an engagement with a Public Sector client, our two key recommendations are to ensure that a new, appropriately worded contract is in place to come into effect from April and to make arrangements to support your ability to provide a substitute.
In our view, an addendum to your current contract is not sufficient and those engaged via an intermediary need to be in active dialogue with them on this.
There is no doubt that the new rules put an extra burden on the engager. However, Public Sector bodies are slowly awakening to the impact on their services should the latest surveys indicating that around 80% of contractors would move to the private sector rather than accept the PAYE deductions be accurate.
As a result, engagers are putting proper procedures in place to enable the contractor provide a substitute and, thereby, remain outside IR35.
To validate this, the contractor can aid their cause by making mutual arrangements with another contractor with similar skills and experience to provide substitution services. In this context, a substitute is not expected to be ‘on the bench’ waiting to be introduced.
For those working in an area that requires security clearance, it will be the responsibility of your Personal Service Company to ensure that the substitute has the appropriate level of security clearance.
At CooperFaure, we are working with a portfolio of contractor clients working in the Public Sector. If you would like any further information or to discuss your concerns, please contact us at tax@cooperfaure.co.uk.
Further to our newsletter in December, the HMRC consultation on the proposed introduction of a new VAT Flat Rate of 16.5% for ‘Limited Costs’ businesses has closed. As we expected, there has been no change to this policy which will come into effect from 1st April 2017.
The only concession is that companies will be allowed to leave the Flat Rate Scheme from the 1st April, even if it part way through a VAT cycle. As a result, for a company with a February to April VAT return, it makes sense to apply the current Flat Rate Scheme for the first two months and the Standard Scheme for the month of April.
The VAT Flat Rate Scheme was introduced in 2002 to simplify VAT and reduce the administrative burden on small businesses. Instead of paying across the VAT on sales and recovering the VAT on purchases, the business can apply a percentage to their gross revenue based on their trade sector.
The target of this change are labour-intensive businesses with little expenditure on goods, such as contractors, consultants and accountancy firms where, in the view of HMRC, the Flat Rate Scheme has been treated as a tax allowance which is not the intended purpose.
As we outlined in our original newsletter, the headline VAT Flat Rate of 16.5% is on the gross amount and this equates to 19.8% of the net. In other words, for a net £10,000 invoice, of the £2,000 VAT charged £1,980 will be payable to HMRC from 1st April for those under the scheme.
A Limited Costs business is defined as a company whose VAT inclusive expenditure on goods is either:
In this context, goods must be used exclusively for the purpose of the business and the list of excluded items has grown considerably and is now:
Controversially, the digital download of a software is deemed by HMRC as a service whereas the receipt of a physical disk is deemed a good.
In certain sectors, such as architects and surveyors, this distinction will have a profound impact on whether the business is treated as a Limited Costs.
If you are uncertain as to whether you are a Limited Costs business, HMRC have provided an online tool to check this.
The HMRC impact assessment indicated that they expect around 4,000 businesses to switch to standard VAT accounting. The compliance cost of switching to HMRC is estimated at £180 per business.
Our view is that HMRC have severely under-estimated the number of switchers. Since the announcement of this change, at CooperFaure we have run our own impact assessment with our clients that would be subject to the VAT Flat Rate of 16.5%, they will universally be materially better off switching to standard VAT reporting.
The key is making the process of recording and claiming this VAT as simple as possible. As a result, we have today begun client testing of OCR digital platforms to make the capturing of this data as simple as a click of a button.
If you are uncertain of whether you will be impacted or would like advice on the best course of action, please contact us at tax@cooperfaure.co.uk to schedule an initial call to discuss this further.
Changes to the tax regime are driving more and more people to incorporate their businesses.
For the self-employed and landlords who will be impacted by Making Tax Digital (MTD) in April 2018, the easiest way to obtain a two-year deferment is to incorporate, as MTD does not come into effect for a Limited Company until 2020.
Indeed, for landlords affected by the changes to mortgage interest relief that start to come into effect from this April, the imperative is more acute.
As we outlined in our submission to the HMRC consultation on MTD last summer, the effect of the ludicrous revenue threshold of £10,000 for mandatory quarterly reporting would be to reduce tax revenue.
Clearly, the Office for Budget Responsibility concurs as in the 2016 Autumn Statement Philip Hammond stated “…the OBR has today highlighted the growing cost to the Exchequer of incorporation”.
Mr Hammond went on to say “So the government will consider how we can ensure that the taxation of different ways of working is fair between different individuals, and sustains the tax-base as the economy undergoes rapid change. We will consult in due course on any proposed changes.” This has been interpreted to mean that money-boxing in a Limited Company and the differential rates of National Insurance contributions are under scrutiny.
This newsletter looks why now is the time to incorporate if you are self-employed. For the landlord, there are additional tax complexities around Stamp Duty, Capital Gains Tax and, potentially, the Annual Tax on Enveloped Dwellings. As a result, we will be publishing a separate newsletter on The Landlord and Incorporation next week.
For investors, incorporation is also an attractive option and the rise of Personal Investment Companies is growing. Offering a tax-efficient mechanism to grow your capital base, the opportunity to extract income as dividends and with the investment growth outside the scope of Inheritance Tax, this will feature in a third newsletter.
At the heart of the drive to incorporate is the declining rate of Corporation Tax. Currently at 20%, this reduces to 19% from April, then 18% from April 2019 and 17% from April 2020.
Even now, there are significant tax savings to be made from incorporation. In the 2016-17 tax year, a sole trader with taxable income of £30,000 would have an Income Tax and National Insurance bill of roughly £5,900.
On a basic model, under a company structure of a £18,000 PAYE salary, £7,000 additional allowable expenses and a £5,000 Dividend, the overall Corporation Tax, Income Tax and National Insurance liability would be just over £4,900.
Given that the differential rates of National Insurance contributions between the employed and self-employed of 12% and 9% respectively on income up to £43,000 are under review and the reducing rate of Corporation Tax, this gap can only widen.
This is before looking some of the other potential benefits a Limited Company can offer. For instance, in our scenario above, if your partner does not work and was employed by the business on a part-time basis for £6,000 a year thereby reducing your salary to £12,000, the overall tax burden would reduce to a little more than £2,200.
Other advantages include a wider basket of allowable business expenses, the ability for the company to contribute into a pension scheme which in itself is an allowable business expense, and the ability to lend money to the company.
Taking the last point, from the current tax year, a standard rate tax payer has a tax-free annual allowance of £1,000 for interest income. This reduces to £500 for a higher rate tax payer. As long as the loan into the company is structured with a commercial rate of interest, the resulting interest payments count towards this allowance.
For example, if you are a standard rate tax payer with £20,000 in an ISA earning 0.5%, this could be loaned to the company at an interest rate of 5.0% increasing the interest earned from £100 to £1,000. The interest is another allowable expense for the company reducing the Corporation Tax by £200 as well as adding £1,000 to the money available to extract from the company without tax.
Finally, although the Corporation Tax payment deadline of nine months and a day after the financial year-end is broadly similar to the Self-Assessment payment term, there are no advance payments for the current year.
Whilst there is an additional cost involved in running a Limited Company, the current and prospective tax and compliance benefits far outweigh this.
We await to see if Philip Hammond elaborates on his comments in the Autumn Statement in the upcoming Budget in March.
In the meantime, if you would like to discuss your circumstances, please email us at tax@cooperfaure.co.uk.