Tax Breaks for Directors
Pay less tax, safely and easily
A Handy Guide about...
In a nutshell
This book explains how to take full advantage of the available tax breaks. It shows all the options, so you can make the right choice in your situation. Full of clear examples and sound advice, this book is a must-read for all directors that want to pay less tax – legitimately.
Directors are uniquely placed to manage how and when they take income from their companies for maximum tax efficiency. Knowing which tax breaks to claim can save you a small fortune, but as you'd expect it's not all plain sailing. With this book, you'll get a clear view of the various reliefs you can safely benefit from.
- Salary, dividends and benefits
- Employer-supported childcare
- The employment expenses exemption
- Salary sacrifice arrangements
- Using your home for business
- Income shifting
- Company cars
- Saving for your retirement
- Selling your company
In plain English, this book brings the tax breaks within easy reach of all directors. It allows you to choose the tax-reducing strategies that best suit your personal situation. Simple, safe, secure.
We've created this Handy Guide especially for...
Company directors/shareholders that want to:
- Keep their tax bill as low as possible
- Get a clear view on the various available tax breaks
Financial advisors and accountants that want to:
- Help clients choose the most appropriate tax-saving strategy for their situation
In this Handy Guide you'll read about...
Table of contents
Part 1 - Directors only
1. Compensation for being a director
1.2. What form of compensation?
1.3. Directors’ fees
1.4. Tax relief for the company
2. The higher tax rate regime
2.1. Basic rules - tax rates and allowances
2.2. How to maximise tax efficiency on income?
3. Your salary
3.2. Directors’ salary and the NMW and NLW
3.3. Low salaries
3.4. Higher salaries
3.5. What to put on your tax return?
3.6. How much tax will you pay?
4. Directors’ bonuses
4.2. What to put on your tax return?
4.3. What’s the NI cost?
4.4. At what rate will your bonus be taxed?
4.5. Deferring a bonus
4.6. Not drawing the cash
5. Company cars
5.2. Ownership and choice of the car
5.3. What to put on your tax return?
5.4. Making a contribution - cost of car
5.5. Making a contribution - private use
5.6. Optional extras
5.7. Car fuel
5.8. Second company car
5.9. Classic cars
5.10. Vans and posh pick-ups
6. Using company assets
6.2. What to put on your tax return?
6.3. Examples of using company assets
7. Loans to directors
7.2. How do you set up a company loan?
7.3. What to put on your tax return?
7.4. How much tax will you pay?
7.5. Alternative calculation
7.6. Your company’s tax position
8. Medical bills and insurance
8.2. What’s covered?
8.3. What to put on your tax return?
8.4. How much tax is payable?
8.5. When will you be taxed on medical expenses?
9.2. How do you set up a childcare scheme?
9.3. Are there restrictions or financial upper limits?
9.4. What to put on your tax return?
9.5. How much tax is payable?
9.6. The new Tax-Free Childcare scheme
10.2. Exemption since 6 April 2016
10.3. Advances for expenses
11. Working from home
11.2. The £4 tax-free allowance
11.3. Where no homeworking allowance is paid
11.4. Renting a room to your company
11.5. Claiming the cost of home broadband etc.
11.6. Homeworking business rates
11.7. Using your garage
12. Pension contributions
12.2. Company contributions
12.3. Carry-forward relief
Part 2 - Director shareholders
13.2. The tax break dividend
13.3. Higher rate dividends
13.4. Deferring higher rate tax
13.5. Waiving higher rate tax
13.6. Diverting dividends to save tax
13.7. Tax return entries
14. Tax-efficient salaries
14.2. Tax break - mixing salary and dividends
14.3. National minimum or living wage
14.4. Family salaries generally
14.5. Spouse’s salary - specific issues
14.6. Spouse’s pension contribution
14.7. Teen wages
15. Director’s loan account
15.2. Charging expenses
15.3. Charging interest on a DLA
15.4. Overdrawn loan accounts
15.5. Keeping your own records
16. As your company’s landlord
16.2. Charging rent
16.3. Entries on your tax return
16.4. Expenses you can deduct from the rent
16.5. Renting example
16.6. Recovering VAT
16.7. Special 10% CGT tax break
16.8. Selling your property to your company
17. Other NI breaks
17.2. Current NI rates
17.3. Royalties and licence fees
17.4. Director sells to company
18. Building up a pension fund
18.2. How much can you put in?
18.3. Carry-forward relief
18.4. The contribution bonus
18.5. Pension fund invests in company
19. Restructuring shares
19.2. Acquiring more shares
19.3. Transferring shares
19.4. Shares to spouse/civil partner
19.5. Shares to other family members
19.6. Share buy-back
19.7. Funding a share buy-back
20. Inheritance tax breaks
20.2. Keeping below the IHT threshold
20.3. Two nil rate bands for spouses
20.4. Business property relief
20.5. Transferring shares during your lifetime
20.6. Shares you transfer on death
20.7. Unwanted shares
20.8. Planning points for your will
21. Selling your company
21.2. Timing the sale
21.3. Sale of assets and trade
21.4. Selling your shares instead
21.5. The inheritance tax angle
21.6. Useful warranties and indemnities
21.7. Entrepreneurs’ relief (ER)
21.8. Before you dispose of your shares
21.9. Associated disposal tax break
22. Year-end planning for directors
22.1. Why is timing important?
22.2. That 5 April date
22.3. Key dates for your company
22.4. When will your company get a tax deduction?
The Scottish tax rates 2018/19